Alberta’s opposition leader outlines his energy vision at Global Petroleum Show

By KURT ABRAHAM, Editor on 6/15/2017

CALGARY -- The organizers of Canada’s largest oil and gas event, the Global Petroleum Show (GPS), tried something new this year by staging a speaker series directly on the exhibition floor, in Hall E. There, on a makeshift stage, “thought leaders” would share their ideas, opinions and expertise on a variety of topics facing the energy industry. On the first day, Tuesday afternoon, they were rewarded with a barnburner speech by Brian Jean, a member of the Alberta provincial parliament, who is also the official opposition leader and head of the Wild Rose party.

Jean lambasted the regime of provincial Premier Rachel Notley and its record on energy issues since unexpectedly gaining power two years ago. He rattled off a detailed list of the Notley administration’s failings, and also articulated his own vision for fixing and restoring Alberta’s oil and gas sector.

Alberta’s challenges. Jean noted that Alberta faces a number of significant challenges. One of these, he said, is a growing lack of market access. “Politicians across the country continue to try and hold our country’s best economic interests hostage.” In addition, said Jean, Alberta now has a 7.9% unemployment rate, the fifth highest in Canada. The four provinces that have higher unemployment numbers are all in the maritime region of East Canada.

Most shocking, continued Jean, is that “since last month, Alberta has lost 7,800 jobs in professional, scientific, and technical services. Downtown vacancy rates here in Calgary remain between 25% and 30%. And finally, it’s an issue our government has chosen to ignore, but in just two short years, Alberta’s competitiveness is on a steep decline. A recent survey of petroleum industry executives from the Fraser Institute placed Alberta 43rd out of 96 jurisdictions, worldwide, as a safe place to invest in oil and gas, a drop of 18 spots.”

Jean also claimed that Alberta now has the highest overall business taxes in Western Canada. He said that if this doesn’t change, Alberta will continue to be less competitive.

The American effect. Jean contrasted Alberta’s situation with the Trump administration “removing burdensome, unnecessary, and costly regulations on the American petroleum industry.” He pointed out that Trump has made it clear that he plans to pursue tax reform, including a significant reduction of business taxes.

Jean said that Alberta’s policies look especially bad next to jurisdictions (the U.S.) that actually want to encourage economic development. “Alberta is heavily reliant on the American market. In 2014, out of the $121 billion exported from Alberta, 90% went to the United States.

In contrast, he decried the policies of Notley and federal Prime Minister Justin Trudeau, which he said have worsened the situation. Among the petroleum-related miscues that he cited are increased taxes on businesses and income; mandated wage increases on businesses in the middle of a downturn; implementation of royalty reviews; instituting a punitive cap on oil sands; adding further delays to the pipeline approval process; and introducing and mandating a carbon tax in Alberta.

Per recent media reports, Jean said a disturbing trend may become permanent. Traditionally, small oil and gas companies played a significant role in discoveries and smaller production quantities. Back in 2007, Alberta had 94 companies producing between 500 boed and 10,000 boed. Yet, today that number of companies has dwindled to 25, with 17 lost in just the last two years. “There just isn’t as much room to exist with the market as it is, and the government as it is,” lamented Jean. He said that the only way to restore greater investment in Alberta’s oil and gas sector is to change which party is in charge of the government.

Jean’s “vision.” The Wild Rose leader said that Alberta has plenty of resources to thrive—they just need to be harnessed properly. “Our people are strong, innovative and resourceful. We have skilled and intelligent workers, engineers, and executives. We have an abundance of wind, sun, geothermal technology, and even hydro. And we sit on the third-largest oil reserve in the world, including the biggest proven reserve available to private investment.”

Jean also reaffirmed his commitment to oil and gas. “Let me be clear on one thing,” he said. “Regardless of a noisy minority of anti-jobs and anti-energy activists, the world will need oil and gas for decades to come. Western and developing economies will rely on hydrocarbon fuels to meet their energy needs over the next century. So why not develop our renewable industries while still growing our oil and gas industry? The world needs more Alberta energy and Alberta innovation, not less of it. We have nothing to apologize for. An outstanding environmental and human rights record. We develop strategies to store carbon and produce cleaner fuels.”

The Wild Rose leader also pointed out an often-forgotten fact. “Let’s remember, oil and gas royalties pay for hospitals, schools, teachers, and nurses, averaging nearly C$15 billion a year to governments across Canada between 2013 and 2015.” And, he added, “Let’s as a nation, strive to achieve true energy independence and reduce Eastern dependence on foreign dictator oil that comes to our shores every day.”

The environmental angle. Jean balanced his vision by calling for responsible development. “Let’s do this responsibly. Alberta must play a role in reducing global emissions. Some people believe that Alberta’s greatest contribution to this end will be simply turning off the gas. Cutting our emissions is the end game, and less activity is the quickest way to get there. But that’s no answer. That just shifts revenues to other jurisdictions that don’t care about human rights or protecting the environment.”

Jean said that the industry should continue to lead an effort to implement new technologies that reduce the impact from emissions, “and government should be a supportive partner. In and around Fort Saskatchewan, we have the largest petrochemical sector in Canada. It’s growing, but it can grow faster and feed off the synergies and by-products of our oil and gas extraction and refining.”

The Wild Rose leader said he doesn’t think that “partnering” can include an economy-wide carbon tax, “particularly when the United States doesn’t have one. I can tell you, after the next election, I will introduce legislation to repeal the carbon tax within 30 days, so our economy can begin to prosper again, and government can take its rightful place as a promoter of industry, not a leg iron to restrain the most industrious Albertans.”

He decried what he says is the intent of the federal government in Ottawa to unilaterally impose a carbon tax across the country. Noting that the majority party in Ottawa might change in 2019, Jean said, “I’m not going to simply let Ottawa enforce new taxes on our resources and industries. We will devote every effort possible to defend Alberta’s interests by partnering with some of Alberta’s strongest defenders in Ottawa and across Canada.

Jean reiterated his support for increased market access. “We would push for streamlining the pipeline approval process. We would advocate for the expansion of the role of the Major Projects Management Office to ensure uniformity of decision-making, coordination with provincial regulators and industry partners, and enhanced engagement and accommodation of our First Nations communities.”

He continued, “We would support industry working with concerned landowners and indigenous peoples on any pipeline consultations, and send a clear message that our government will always have your back. When a radical anti-industry politician tries to smear our industry, we will be the first to push back and defend it.”

In his closing, Jean said, “There’s nothing preventing Alberta from becoming the leading job creator in this country again. I firmly believe this is the best path for Alberta, and I hope Albertans agree.”

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