The "government take" and environmental protection

Suncor oilsands mine near Fort McMurray (Todd Korol, Toronto Star)

Though Israel's coming elections revolve around other issues (and non-issues), a major political issue in Israel over the last decade has been how to divide the profits of the country's natural gas finds between the developers and the public (the legal owners of the resource). While environmental groups have argued - and this has also been my natural inclination - that the public's ownership should be expressed with a relatively large "government take" (the percentage of revenue paid over to the state in the form of royalties and taxes), I have also noted that increasing the government's financial interest in the gas decreases its motivation to effectively regulate the environmental aspects of its development.

Hereward Longley's recent article in Environment and History, "Conflicting Interests: Development Politics and the Environmental Regulation of the Alberta Oil Sands Industry, 1970–1980", provides historical support for this argument. The abstract:

This article examines the relationship between development politics and environmental regulation and research during the first commercial development phase of the oil sands industry. As demand for oil grew after the Second World War, and oil supplies from the Middle East became less stable, oil companies began building facilities to produce synthetic oil from the bitumen deposits in north-eastern Alberta. The commercialisation of the oil sands industry coincided with the formalisation of environmental policy at both the provincial and federal levels. When the Progressive Conservative Party, led by Premier Peter Lougheed, formed a government after winning the 1971 election, it strengthened and expanded the scope of environmental regulation into the mid-1970s. The 1973 oil crisis changed the economic viability and importance of the oil sands industry. For Lougheed, the oil sands industry became a cornerstone of the PC government’s goals to diversify the Alberta economy. To save the Syncrude project after Atlantic Richfield withdrew its thirty per cent stake in the consortium in December 1974, the Alberta government bought a ten per cent position along with the federal government and Ontario. This article argues that investing in the oil sands industry created a conflict of interest for the Alberta government, as it became both the regulator and the developer of the resource. Using a range of archival sources and oral history, it shows how Alberta’s environmental policies and research programmes were sidelined by the Lougheed government in the latter half of the 1970s, culminating in the cancellation of the Alberta Oil Sands Environmental Research Program in 1980. The marginalisation of environmental regulation and research has contributed to the environmental impacts of the oil sands industry on ecosystems and Indigenous communities, and limited public awareness of environmental change.