Tis an ill wind that blows nobody any good

By Ivan Morgan

As I write this some mainstream media outlets had yet to say anything about the huge rise in the price of oil we are currently benefitting from. 

No one wants to say anything good about any war, but the U.S. attack on Iran has not been such a bad thing for oil producing nations.

Is balanced news coverage a thing of the past? I have seen coverage of protesters decrying the attack on Iran and saying the Americans and Israelis aren’t helping. That’s great. Canada is still a free country, and we still enjoy freedom of speech, and I celebrate the right of those 100 or so folks to have a public protest. I’m less clear on why they got so much coverage.

And I am mystified as to why there was no coverage of the sudden huge influx of revenue hundreds of thousands of us are getting from this military action on the other side of the world.  

The price of Brent Crude – the type of oil we produce – is trading at U.S. $106.80 a barrel. In Canadian money that’s $146. That has the potential of bringing billions more dollars to our treasury. Money we desperately need.

I check the price of Brent crude every morning. For the longest time its hovered around $60 – $70 bucks a barrel. Not now. Over the last month it has soared. Oil is 50 per cent of Newfoundland’s exports. Oil brings in between one fifth and one quarter of our provincial revenue. Oil is very important to our well being. For better or worse, right now we need the cash. Desperately.

Here are a few facts. We as a province are broke. Our deficit this year was just under a billion dollars. That’s money we had to borrow to keep the lights on. We spend far more than we take in. And now this.

You would think this extra cash would be good news. You would think it would be cheered from the rooftops. Not a peep so far. But oddly lots of concern for an undemocratic medieval theocracy that has been slaughtering its own people for decades. Go figure.  

All this unexpected extra income is marvellous. It just is. Regardless of why. This is a windfall, and one would think a cause for great relief.

But it’s not all good news.

The rising price of oil is going to drive up the price of everything, as everything we use is dependent on it. Everything we have in Newfoundland gets here by boat, truck or plane. It will cost more to get it here; it will cost more to buy it.

You would think that the government we elected would ensure the extra revenue collected from our resource would be used to protect us from these price surges. It won’t.

You would think that when the price of oil eventually drops other prices will follow suit and also drop. That’s not been our experience.

What I know will happen is the people you have elected to manage your money will congratulate themselves for the prudent fiscal management they have performed, when the truth is they just happened to be in power when we hit this windfall. How do I know this? I have seen it before.

When my kids were teenagers, they had a sarcastic little cheer they would use to show how underwhelmed they were about something. It was a way of expressing fake enthusiasm. They would say, in a flat deadpan voice, “Woot.”

We are getting a big cash injection through rising oil prices, but that big windfall is unlikely to benefit you and I, other than as a drop in the bucket of our horrendous public debt and a possible communications boost for the government in power.

Woot.

Ivan Morgan can be reached at ivan.morgan@gmail.com