Growing Power Hairy Hill could become 11
times larger on the Chrapkos’ watch, from
a value of single-digit millions to tripledigits of millions of dollars in five years.
That would be a decisive achievement in
any sector, let alone renewable energy,
and this would be the Chrapko brothers’
second similar-magnitude, tangible valuecreation feat after their earlier internet
deal (the US$568 million exit of their 30
month-old startup).
It can be hard to interview men of few
words. And when they do speak, you can
easily miss their message because it comes
in such a concentrated package. But one
message that is impossible to miss from
these YPOers is that they honor those
who’ve gone before them. The mantra of
Evan and Shane’s organic-farmer pioneer
parents was always to leave the world a
better place than it was before you came
into it. That doesn’t mean you can’t do
well for yourself along the way. In fact,
that might be part of the challenge and
the reward. As they put it, “The 3 Ps of CSR
stand for People, Planet, Profit. Profit is
not a dirty word as long as it’s not standing
alone.”
Evan had a recent, very public assignment
from the Premier of Alberta (equivalent to a
State’s Governor) which bore directly on this
issue of profit and a sector’s ‘social license to
operate.’ Chrapko joined five other energy
policy experts on the province’s first ever
publicly conducted Royalty Review Panel.
They held public hearings over a year.
Sessions were overseen by armed guards,
and the panel’s private deliberations were
held in rooms that were swept for bugs and
recording devices. Why the fuss? Because
Alberta is home to the world’s second largest
oil deposits after Saudi Arabia, known as the
Athabasca (Fort McMurray) tar sands. The
region was recently visited by the worldfamous movie director James Cameron,
cementing rumors that he modeled
Avatar’s story line after what is happening
in Northern Alberta. The panel’s mandate
on behalf of all Alberta citizens, who own
the oil and gas, was to evaluate the $15
billion (average) annual revenue stream to
the Alberta treasury from royalties, fees and
corporate income taxes.
The panel issued a unanimous report
called Our Fair Share. They recommended
that Alberta should ‘negotiate’ with big
oil and big gas like Sarah Palin did in
Alaska. Which is to say that she didn’t;
she raised royalty rates when she became
governor, shortly after the preceding
administration had also raised them. The
panel’s recommendations would have
raised Alberta’s royalties from being stuck
in the bottom quartile of ‘government take’
percentages in the world on a true applesto-apples basis. Chrapko’s reasoning is
that Alberta is owed more of a ‘market’
rate given its vast, high quality reserves,
political stability, direct access to the US
market, publicly-paid roads and hospitals,
and an educated workforce – among other
advantages over jurisdictions that are more
hostile to oil and gas companies. The panel
wanted Alberta’s royalties to be closer
to those in Texas or another capitalist,
democratic ‘owner’ with extremely
challenging extraction conditions: Norway
and its US$275 billion sovereign wealth
fund. Even if entirely adopted, the Our Fair
Share recommendations would have left
Alberta in the bottom third or lower half
of the global pack on royalty rates. For its
own reasons, the Alberta government didn’t
ultimately act on much of the panel’s report
and in fact, lowered royalties even further
in some respects. Chrapko summarizes
the outcome this way, “Not smart. Not
necessary. And to this day the industry still
complains all the way to the bank anyway.”
The interview ends toward sunset at the
tasting room of the family’s organic winery
and meadery. Chrapko’s father was killed
in a farm accident two years ago but his
mother and two sisters have taken www.
enSanteWinery.com to a whole new level
of success in his honor, with the help of the
two brothers. It’s the world’s most Northern
organic winery and meadery and they are
gratified for the overwhelming deman