THANK YOU, MR. IGNATIEFF, FOR YOUR POSITIVITY ON OIL SANDS – ALBERTANS AND CANADIANS APPRECIATE IT!!

Canada’s Federal Liberal party leader Michael Ignatieff has come out with some very sensible views on oilsands – an issue on which his predecessor (Stephane Dion) had championed a revenue-neutral carbon tax which, oilpatch observers were worried, would have inflicted disproportionate damage on Alberta's carbon-based economy, and consequently on Canadian economy.

Dion’s party fared poorly in Federal elections last year and along with him went out of the door his thought-less policy too.

In an interview to a radio station on 16th Jan, Ignatieff admitted that any policy that comes from Ottawa can't jeopardize the oilsands - which is one of the only industries propping up the Canadian economy right now. "When you're in St. John's airport and you see a guy in cowboy boots and a cowboy hat getting on the plane you know what the oilsands mean to the entire Canadian economy," Ignatieff reportedly said.

The present Liberal leader admitted his party made mistakes with energy policy in the past, including the national energy plan. He said his goal was to develop environmentally and socially sustainable policies for the oilsands.

While speaking to a newspaper last week, Ignatieff went on to insist the federal government must consider offering the oil and gas sector a stimulus package in its Jan. 27 budget, comparable to the multi billion-dollar bailout of the Ontario-based auto industry. "The West should be rightly angry if we assisted only Central Canada," Ignatieff told the newspaper. "We can't put money into the auto sector in Central Canada without considering the legitimate concerns of the B.C. forest industry and the Alberta oil industry. There has to be regional fairness in the stimulus package."

Ignatieff’s views clearly go above partisanship, beyond petty politics; they are patriotic, pro-Canada. Ignatieff’s pan-Canada outlook got further articulated when he said that while oilsands has its environmental challenges, oilsands are a lucrative tool, both financially and politically, that increases Canada's stature around the globe and allows the country to stand its ground on several policy fronts against the U. S.

The above bodes well for not only for Alberta but the whole of Canada. His views are now more or less along the lines of views held by Alberta’s Premier Ed Stelmach, and Canada’s Prime Minister Steven Harper. These statements will no doubt be providing much needed hope to the people of Canada who can now justifiably look towards political stability in Ottawa.

Canada’s federal budget will come up for voting on Jan 29, and Harper’s minority government needs support of at least one opposition party to survive the voting. Harper has indicated that he will listen to Ignatieff’s suggestions on the upcoming budget with an open mind.

If Harper can accommodate some of Liberal party’s suggestions, he can undoubtedly rest assured that Liberals won’t let his government fall. That will mean stability in Ottawa, and political stability is what encourages the potential investors, including the big oil companies, who are currently sitting on the fence in wait-and-watch mode.

It is important to note that the sudden slow down in investment in oilsands projects was not prompted by slumping oil prices alone; in fact, it is farcical to believe that any short-term drop in oil prices should have disrupted many oil companies' investment plans, as it did; oil companies which are run by people of decent dose of competence base their decisions on the WHOLE life span of the project. The life span of oilsands projects range from 20-40 years, even more.

It does not require much intelligence to grasp that given the aggressive production cutting stance taken by OPEC countries (plus drop in non-conventional oil production), and stimulus packages announced by the G-7 countries, China and India, the aggregate demand of oil will start picking up by Q3 of this year. Coupled with the impact of production cuts, by the end of 2009 price of oil is expected to be any where between 60-100 dollars per barrel, probably more likely upwards of $70. The price of oil will remain on an upward looking curve thereafter.

So, the price of oil was not so much of a concern for the likes of Shell, TOTAL or Statoil et al. It was the uncertainties on policy level of both Canada and the new US administration regarding oilsands that impelled these companies to adopt more circumspect approach. Unless these companies are sure of policies on oilsands – of both Canada and US – and sure of a stable government in Ottawa ,which has a balanced view on oilsands, the oil companies would remain on the fence.

It may be mentioned for the benefit of those not familiar with Canadian politics that leader of an opposition party, known as NDP, had gone on record to say that given the chance his party will stop all oilsands projects. Such intellectually-challenged people were willing to cut their noses to spite their faces. Their political aspirations got better of whatever amount of intelligence they have to ignore the vital importance of a resource, like, oilsands to Canada as a whole – on economic and political fronts.

However, Liberal party’s aforementioned views on oilsands will certainly help Harper’s folks in formulating bi-partisan policy on environment, including policies relating to carbon capture. Once there is clarity on Federal environment policy, again, that will provide necessary confidence to the investors to finalize their investment decisions in regard to oilsands projects.

It is hoped that taking cue from Ignatieff, leaders of other Canadian opposition parties will set aside petty-minded politics and rally together to do what is in the best interest of the country. They will do well to remember there is much to gain, nationally and politically, in a prosperous Canada rather than in an economically and politically weak Canada.