They’re calling him ‘Prudent Paul,’ but it could just as well be Mr. Political Smoothie.

Oilpatch analysts are applauding the federal budget announcement to sell Ottawa’s remaining 18.7-per-cent stake in Petro-Canada, while investment bankers counting on a piece of the action are merrily singing “Anticipation.”

In a shrewd bit of strategy, Prime Minister Paul Martin also pre-empted any oil and gas sector criticism about how the government will use the proceeds from selling its 49 million-plus Petrocan shares – worth about $2.8 billion as of last week.

He did it by allocating at least $200 million of the proceeds to develop new environmental technologies to improve air quality, reduce greenhouse gas emissions and clean up water supplies and contaminated soil.

Predictably, some National Post columnists, afflicted by feverish rhetoric whenever they hear the word ‘green,’ lambasted such spending. One even complained that the money would be wasted on a technology “for which there is no demand.”

That will come as news to Alberta’s oil and gas industry, which every year invests millions of dollars – sometimes hundreds of millions – in new technology to reduce airborne pollutants such as sulphur dioxide, as well as greenhouse gases.

Another Post prognosticator opined that funding environmental initiatives won’t be popular in the West, especially among the energy sector.

But most Albertans don’t share such a myopic view. In fact, Alberta’s energy sector has consistently told the federal government that the best way to reduce greenhouse gas emissions, without damaging the economy, is through more research and development of new technologies.

Pierre Alvarez

New technology development also underpins the Ralph Klein government’s climate-change plan, not to mention the province’s long-term energy strategy.

That’s why Pierre Alvarez, president of the Canadian Association of Petroleum Producers, actually welcomed Ottawa’s investment in new technologies as “an important step in the climate-change debate.”

By the way, half of the proceeds from the sale of the government’s stake in Petrocan will go toward paying off the national debt – a cause near and dear to the conservative heart.

Knee-jerk criticism of spending on environmental technologies – ideology disguised as insight, really – overlooks surveys by the Canada West Foundation and other organizations that show Albertans place a high priority on protecting the region’s natural assets, including those above ground.

Paul Martin is a seasoned politician. He knows it’s not sufficient to simply dismantle a predecessor’s unwanted program – you have to lay the foundation for a better idea.

In selling the remaining shares of Petrocan, a former Crown corporation, he erases the last remaining symbol of the much-loathed National Energy Policy of the Trudeau era.

Just as important, Martin is also investing money to put the Liberals’ ‘new brand’ on future technologies that will benefit the oilpatch.

WIND INCENTIVE STALLS

The federal government’s plan to invest $200 million in environmental technologies didn’t impress one green energy group.

The Clean Air Renewable Energy Coalition had been hoping that Ottawa would enhance an existing federal incentive to encourage more wind-power production.

The government also didn’t heed the coalition’s recommendation that Ottawa develop a national renewable energy strategy, in co-operation with the provinces, territories and other stakeholders.

The coalition includes oilpatch firms (BP Energy Company, Enbridge, Shell Canada Ltd., Suncor Energy Inc.), utilities (BC Hydro, ENMAX), renewable energy firms (Canadian Hydro Developers), environmental groups (the Pembina Institute, which has offices in Alberta and Vancouver) and the Federation of Canadian Municipalities.

John Keating, CEO of Calgary-based Canadian Hydro Developers, says that without stronger incentives for renewable energy, green power investors, companies interested in the power, and consumers “will not be persuaded that the federal government sees a legitimate role for green power to compete with conventional power . . .”

Robert Hornung, president of the Canadian Wind Energy Association, says Ottawa’s failure to enhance the federal wind energy incentive “sends a negative signal” at a time when wind turbine manufacturers are looking for investment opportunities in North America.

But the federal government, with its current incentive, has at least taken the first step to encouraging more renewable energy. It’s now up to the provinces to take the next step by matching Ottawa’s money.

SIR RALPH TILTS AT DEBT DRAGON

Verily, Alberta’s budget barrel doth runneth over with oil and gas revenue, as a poet of olde might say.

Even if the government chose to spend a bit of its expected $7.4 billion in fossil fuel royalties on incentives to encourage a renewable energy industry, it would still have lots of money for pre-election goodies.

But don’t bet on it. These Knights of the Klein Table seek to slay the Dreadful Dragon of Debt.

Their quest is within reach, if oil and gas prices remain in the stratosphere and exceed the government’s 12-month forecast.

And after the dragon is dead, then what is this government’s vision, especially if commodity prices collapse as they have in the past? In fact, almost all of Alberta’s debt was accumulated in the decade between 1982 and 1992, when oil prices crashed.

Well, the budget allocated a 22-per-cent increase in a horse-racing subsidy compared with 5.7 per cent for education. At least Sir Ralph the Debtslayer will have lots of steeds to ride.

TALK NOW OR PAY LATER

The Alberta government is finally following the B.C. Liberals’ lead in trying to work with aboriginal communities on resource development.

But is the effort too little, too late?

Alberta will spend $6 million to develop and implement a new program to consult natives on oil and gas, forestry and other development, according to a report out of Edmonton.

Legal experts are warning that without a meaningful consultation process, First Nations could challenge permits and leases for oil and gas development, forestry projects and even the oilsands.

Another WestGrid research project is examining space weather patterns to determine the economic impact on such ground-based infrastructure as telecommunications and pipelines. This is an example of pure research that doesn’t involve collaboration with business but which will probably benefit certain industries. Schaeffer is director of a company called BioTools Inc. that has teamed with researchers in the past to further its R&D using the WestGrid system. BioTools is a University of Alberta spinoff company that provides software and consulting to the biotechnology, pharmaceutical and agricultural industries. BioTools has also branched into the gaming world and educational software. WestGrid will support research in a variety of areas, including medical research, astronomy, animation and pharmaceuticals. There are more than 200 researchers currently affiliated with WestGrid. But businesses should also be aware of the R&D capabilities of WestGrid, because as Schaeffer points out, this new computer-powered research tool doesn’t give Canada a leading edge – it merely allows Canada to be competitive. “This is not a luxury, it is a necessity,” says Schaeffer. “(WestGrid) allows us to be competitive. If we want to attract world-class researchers, we have to provide an environment for them to do their research.”