Welcome to our world. Again

Sometime last week, Alberta premier Alison Redford picked up her special premier's-issue smartphone — the one with all the hotline numbers for all the other premiers pre-loaded. She thumbed down the list to “W” for Saskatchewan premier Brad Wall, and hit the Call button.

Wall, seeing that it was Redford on the call display, answered on the second ring.

“Welcome to my world,” said Redford. “Again.”

A year or so back, Alberta was suffering from the so-called “bitumen bubble,” the price discount on oilsands bitumen that our producers must absorb because it's harder to refine than conventional crude, but notably because of lack of pipeline capacity to deliver it in the amounts producers expect when their new big projects come online.

A discount on bitumen meant a discounted royalty paid to the province, which led to a $6-billion revenue shortfall in the provincial budget.

That was then. Today, an increase in rail shipping of crude oil — how's that been going so far? — has sliced a big chunk off the discount.

Today, Alberta has a “gas bubble.” Experts call it a “basis differential” but those of us who know pain, know it's gas.

Again, because of the higher cost of shipping gas east to Ontario and Quebec, the discount on Alberta gas has grown by 85 per cent, compared with the benchmark price in Henry Hub, La. Who knew?

Compared with the price of gas from new northeastern U.S. fields, the discount measured east of Sarnia, Ont., has more than doubled in the last two months.

Because of the discovery of newly-accessible reserves on the eastern side of North America, this discount may become permanent.

The cost of shipping gas by pipeline has shot up recently, leading producers who do not have long-term shipping contracts to avoid selling to Central Canada.

We know what happens when gas doesn't move, don't we?

Even with our twin bubbles, Alberta's non-renewable resource revenue continues to climb, as production numbers rise while oil goes back over $100 a barrel.

Last fiscal year, Alberta's non-renewable resource revenues climbed to $11.64 billion, up from $6.77 billion in 2009/2010. Credit the railways, I guess.

But let's examine Saskatchewan's pain.

Globally, oil has its OPEC. Potash has Belarus Potash in Europe, and Canpotex everywhere else. Canpotex has three big members: Agrium (which is just plain big), Mosaic, and Saskatchewan's own Potash Corp.

There's a big fight going on in Belarus. Major partner OAO Uralkali is Russian-owned, and they're about as reliable a trading partner as, well . . . forget the analogy, I don't want to insult the Arabs of the 1970s like this.

Together, the two cartels control 70 per cent of the world's potash, and just like Alberta with oilsands, Saskatchewan has the world's largest deposits. If cartel members start a price war, it gets ugly for everyone.

Potash accounts for two per cent of the province's economy and 20 per cent of total provincial revenues, which, as in Alberta, is more than is collected in tax revenues.

Saskatchewan’s total non-renewable resource revenue is $2.61 billion, and the province cannot absorb a price war without some pain. Potash prices are expected to drop by 25 per cent in the coming year.

Haven't we seen this sort of thing in our province before? Like, a dozen times?

During the good times (early this year), Saskatchewan was projecting a surplus budget. Pretty hard to deliver on that, now. We've seen this movie before, too.

And the price drop threatens to cancel or delay the building of a megamine near the town of Jansen. BHP Bilton is casting a wary eye on proceeding with a $14-billion potash mine that would be twice the size of its nearest competitor.

Ooooh, megaprojects in distress. We've had a few of those. Taxpayers, watch your wallets.

In fact, all of Canada has bubble pain. Bitumen, natural gas, potash, it matters not. Our two provinces lead the nation in GDP growth, because of resources prone to bubbling out.

In good old 2011, Alberta's GDP growth was 5.2 per cent, and in Saskatchewan it was 4.8 per cent. Nationally, it was two per cent. Where does Ottawa's money come from?

I see no remedy to replace the kind of economic numbers resource extraction produces. Like gas pain, this is something you have to endure, till it passes.