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Monday, September 28, 2009 

Tired Old 'Privatization' Solutions From Saskatchewan's Right

"Does anybody really think it's a good idea for a Crown corporation to be buying natural gas wells and playing around on natural gas markets with public dollars?"
Bruce Johnstone
Regina Leader-Post

Bruce Johnstone is the financial editor of the Regina Leader-Post, a paper that has decided to give Brad Wall's right wing government its subtle support and cheer leading expertise.

One of the key refrains from Saskatchewan's Right is that the province should not go 'back to the past' with the New Democrats led by Dwain Lingenfelter. Lingenfelter was a deputy Premier under Roy Romanow and has served in a number of key cabinet positions.

But what the MSM is not saying is that Brad Wall and his Saskatchewan Party are all about going 'back to the past' with their failed concepts of private operation of Saskatchewan utilities ... notably ... natural gas.

Saskatchewan is the largest producer of natural gas in Canada. Under 16 years of New Democratic administration, Sask residents enjoyed the lowest cost utilities (including natural gas) in the nation. It was guaranteed by the Calvert administration but was one of the first things dropped by the incoming Saskatchewan Party administration.

This past winter, on Brad Wall's watch, Sask residents paid the highest rates for natural gas in Canada. I suppose when you hate a Crown utility and you would like to turn your population against it, one way is to gouge your consumers and hope that they start demanding 'choices' from the private sector.

Now who’s looking at the past? Throughout the 1980’s, right-wingers like Maggie Thatcher and Ronald Reagan and Grant Devine pushed the privatization agenda. That idea is about 30 years out of date, Bruce.

If the NDP hadn’t stopped Devine in his tracks in the 1980’s, he would have completed his plan to sell off SaskEnergy to the private sector. Since that time, SaskEnergy has functioned as well as can be expected with the limited tools it has to hedge natural gas prices, and store natural gas supplies, to try to keep natural gas prices down in Saskatchewan. However, how much better a job could SaskEnergy do if it actually owned a portion of its natural gas supplies and could provide those supplies to Saskatchewan people at a reduced cost? This is an idea that is being used today across the globe. Mr. Johnstone should take note of the fact that 29 of the world’s 50 largest oil and gas companies are at least partially state-owned. Places like Norway and Brazil have strong economies built on public ownership of their natural resources. It’s an idea that works well, and protects people from being at the mercy of the world price.

Johnstone’s criticism is that if SaskEnergy owned a portion of its natural gas supplies, then it would probably start selling that natural gas to Saskatchewan people at less than the world market price. Well, duh! Isn’t one of the benefits of owning a commodity the ability to use that commodity to your own advantage? Why shouldn’t Saskatchewan natural gas, owned by Saskatchewan people in the first instance, be sold to Saskatchewan people at less than the world price?

Unfortunately for Wall, the gig is up and public sentiment in this province still leans strongly towards public ownership of key utilities. The Saskatchewan Party lost the 2003 election over the concept of Saskatchewan's crown corporations. In fact, they lost so badly, the party adopted a non-privatization policy which helped them go over the top and actually win the 2007 campaign.

But what do you do when you are ideologically bound to privatization? Well, for starts, you get friends in the MSM to start harping and demanding privatization.

Nice try ...

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