Warrack is a professor emeritus of business economics at the University of Alberta and former minister of lands and forests in then-premier Peter Lougheed's cabinet in the early 1970s. Warrack then served as utilities minister and on the energy cabinet committee. He also authored a detailed history on the Heritage Savings Trust Fund and was a key player when the province famously revamped the royalty regime and set up the arm's length oil wealth fund to benefit future generations.
"Since time immemorial, the use of other people's property has been on a two thirds, one third split," said Warrack. "The owner gets a third and the operator gets two thirds... If you interpret that in terms of oil or natural gas or oil sands, there should be a third of the value to the owners and in the case of oil sands that is 100 per cent owned by the public."
The royalty rate collected on oil sands projects before "payout" is currently one per cent, which according to Warrack is so low it is "like a rounding error from zero."
He feels the lack of government oversight and fair royalty collection for the oil sands is creating a massive restoration liability. "There is going to be a thousand years of carnage left up there and we are not even getting fair money for it... I mean this is crazy, just crazy."
As far as pledges to restore the area around Fort McMurray, Warrack is not optimistic. "Anybody who thinks the environment [at oil sands operations] is going to get fixed is smoking something. I mean they will just declare bankruptcy and they are out of Dodge. Is there any doubt?"