September 14, 2012 / 3:10 PM / 6 years ago

Peter Lougheed, defender of Alberta's interests, dies

CALGARY, Alberta (Reuters) - Peter Lougheed, the Alberta leader who battled the Canadian federal government’s encroachment into the energy industry in the 1970s and 1980s and later became a cautionary voice against unchecked oil sands development, died late Thursday. He was 84.

Lougheed, Progressive Conservative premier of Canada’s biggest oil-producing province from 1971 to 1985, was hailed as both a staunch defender of Alberta’s interests and patriotic Canadian, best known for butting heads with former Prime Minister Pierre Trudeau over energy policy during the era’s energy crises.

In a statement, Lougheed’s family said he died of natural causes in the Calgary hospital that was named after him. Tributes poured in from across the country.

“He was a driving force behind the province’s economic diversification, of it having more control of its natural resources and their development, of Alberta playing a greater role in the federation and of improving the province’s health, research and recreational facilities,” Prime Minister Stephen Harper said in a statement.

One of his most notable creations was the Alberta Heritage Savings Trust Fund, a rainy-day kitty of money extracted from energy revenues that is now valued at C$15.9 billion ($16.4 billion).

Lougheed, a lawyer and MBA who played professional football as a young man, led his Progressive Conservatives to victory in 1971, presenting his team as a young and modern alternative to the long-governing Social Credit Party. His party has been in power ever since in the province of 3.5 million people.

He gained national stature as Trudeau’s Liberals sought greater benefits across the country from Alberta’s booming energy industry as oil prices surged, marking the start of an East-West political divide that still simmers.

Controversy crescendoed in 1980 following the second global oil shock, when Trudeau introduced the National Energy Program, which regulated oil prices, imposed greater revenue sharing between Alberta and the rest of the country, levied new taxes and promoted more Canadian ownership of the energy industry.

Lougheed retaliated by mounting a legal challenge over jurisdictional control over resources, vowing to slash production and halting new oil sands projects. The Supreme Court eventually sided with the premier, ruling that Ottawa could not impose taxes on oil and gas wells within the province.

The protectionist measures were loosened over time and the program was dismantled by the Conservative government of Prime Minister Brian Mulroney as crude prices sank in 1985.

In recent years, Lougheed took on the role of moral compass for many in Alberta as development of the tar sands, the third-largest crude deposit in the world, pushed forward at a fevered pace, driving up costs, stretching the work force thin and raising concerns around the world over environmental impact.

Though he fostered research to boost production of the vast unconventional resource during his time in office, he clashed over the past decade with more conservative voices by saying that development should be slowed to keep inflationary and environmental effects in check, and that more of the bitumen should be refined within Alberta.

Alison Redford, Alberta’s current premier, described him as a friend, mentor and role model. Lougheed supported her election campaign last spring.

“His forward-thinking, progressive vision gave us the tools to succeed today and helped to propel Alberta into a leadership role in Canada,” she said in a statement.

Editing by Peter Galloway

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