When a respected former political leader speaks, people take note. Last month, Peter Lougheed, Alberta’s premier from 1971 to 1985 and a still widely respected elder statesman, gave a pair of interviews to the Calgary Herald.

Although it pains me to say this, almost every important point he made struck me as misplaced, revisionist or plain wrong. Unfortunately, Lougheed’s gloomy view reflects a growing current of boom-time pessimism in Alberta. Unchallenged, it could become the official narrative of this province’s stunning success.

In the interviews, Lougheed slammed the Ralph Klein government’s oilsands development record. He called it a “mess,” demanded that Klein “reassess” his policies and called for more “orderly development” — by which one project would be completed before another was started. Lougheed is well familiar with the one-plant-at-a-time approach. During his 15 years as premier, exactly two major oilsands projects got built: Syncrude Canada Ltd.’s project and Imperial Oil Ltd.’s Cold Lake operation. Syncrude was almost stillborn, requiring years of wrangling and massive public subsidies. In Lougheed’s era, as many oilsands plants were delayed or cancelled as built. That’s orderly?

In today’s “mess” we have dozens of projects on the go, worth more than $100 billion if you include projects completed, under construction, approved and proposed. Tens of thousands of jobs have been created, and the province is experiencing wealth unimaginable 30 years ago.

Sure, there are bottlenecks, problems, too much traffic, people who have fallen through the cracks or can’t find housing. But does Lougheed prefer the 12% unemployment, the bankruptcies, the mortgage foreclosures of the National Energy Program years? I remember the early 1980s — I worked for $7 an hour and considered myself lucky. Today, the lowest-paid oilsands workers — the camp cooks — haul in $65,000 a year.

Lougheed also complained that Albertans “are not getting the royalty return they should be getting with US$75 oil.” He criticized Klein’s “generic” royalty structure, which holds down the rate until a new oilsands plant recovers its capital costs. But after that, the royalty ratchets to 25% of cash flow. Here’s what happened at a single project: in 2003, following a major expansion, Suncor Energy Inc.’s oilsands royalty was a paltry $21 million. The next year, it reached payout and royalties shot to $261 million.

However, this year, Suncor paid $285 million — in the first quarter alone. That’s more than the entire industry’s oilsands royalties in any year before fiscal 2005. This year, oilsands royalties are budgeted at $1.7 billion. They’ll probably come in much higher. By 2020, they could hit $7 billion. Without the low, pre-payout royalty structure, many projects might not be launched, so long-term royalties would be much lower.

Third, when asked if he ever thought crude oil would touch US$75 a barrel, Lougheed said — in three different ways: “I never expected it.” Assuming he was quoted accurately, this is revisionism. In the early 1980s, Lougheed’s government officially based its planning on world oil prices climbing forever. Perhaps he has forgotten Sept. 1, 1981. That was when he signed a five-year pricing agreement with the federal government. The oil price was predicted to hit US$77.48 a barrel by the summer of 1986. (I love the technocratic lunacy of forecasting down to 48¢.) Symbolizing the bargain, Lougheed clinked champagne glasses with then-prime minister Pierre Trudeau.

What happened? World oil prices collapsed in stages, touching US$10 a barrel in 1986. Lougheed’s deal with Trudeau became moot and Alberta entered a decade-long economic funk. Now, that was a mess. Alberta didn’t climb out until the 1990s, after that stunningly inept Klein fellow came along. Today, oilsands production is five times what it was under Lougheed; royalties, 10 times.

Yet Klein is being knocked about from all sides for failing to have a “plan.” The Lougheed-Trudeau pricing episode shows the futility of any government trying to “plan” a free-market economy.

Thanks for the offer, Pete, but I’ll take Klein’s “mess” any day. IE