The grand plan to gain $1.4 billion in new royalties could be in trouble. At today's oil prices, many companies will pay not just less royalty cash, but lower royalty rates.

The government will say that's the point of the regime-- to give relief when prices fall.

That might work in normal times, but industry leaders are deeply pessimistic these breaks will encourage much new activity in today's bleak conditions.

It's now apparent Alberta went a bit crazy when the regime was conceived. Trapped in a classic bubble, few believed prices would fall radically.

The industry grew greedy and showy, the government fed on the resentment and the public wanted more money to pay for roads, schools and hospitals. Out came a royalty structure designed more for oil at $120 than $45 a barrel.

In a very general way, the government made exactly the same assumption Prime Minister Pierre Trudeau inflicted on Alberta in 1980.

The National Energy Program and the compromise deal that emerged from the great oil wars that followed, were based on the belief prices would never drop again.

The agreement with Alberta projected prices above $70 per barrel. In the real world, they never rose above $39, and by 1986 dropped as low as $11.

The NEP by that time was an utterly meaningless imaginary policy, but the wreckage it left behind was all too real to Albertans.

Stelmach is no Trudeau and his regime is hardly the NEP, which was deliberately crafted to draw large parts of the industry out of Alberta to federal lands.

But the results are starting to look eerily similar. Producers have fled to other provinces, private and public revenues are falling, and the dislike of Stelmach in some Calgary quarters is as intense as anything aimed at Trudeau.

Other factors besides royalties are at work, of course--but they were in Trudeau's day, as well. Then as now, the oil-price crash was universal. The government just made it worse.

Little of this was foreseen when Stelmach rolled out his royalty regime at the McDougall Centre on Oct. 25, 2007.

The average price that month--$86.20 US per barrel -- stood on a giddy height above every era before, ever since prices were first recorded in the mid-19th century.

Yet, prices kept rising month by month until the summer of 2008, when the average topped $133 per barrel for 60 straight days. Analysts were forecasting oil at $200 a barrel.

Riding the bubble, Stelmach announced $4 billion in environmental spending from "unanticipated surpluses."

Those revenues never arrived. Oil plunged to the mid-$30 range in December and closed Tuesday at $48.58.

The spooky thing is that even $45-oil is historically high. Prices had never seen $40 a barrel until mid-2004. Who knows where they go next?

Alberta needs the government to be both smart and practical. If that means stimulus through serious adjustments to the royalty regime, bring them on. Nearly everyone else on the planet is doing such things.

No Alberta premier should end up like Trudeau, defending a policy brought in at the wrong moment, even as conditions worsen. The province can't afford it, either.

Meanwhile, the rest of us should never again let a bubble block our view of history.