Industry, government collaboration key to competitiveness of Alberta’s energy sector


CALGARY -- The provincial government and the energy industry could create more than 24,000 new jobs for Albertans and grow the province’s economy by nearly $5 billion over the next three years by working together to enhance the competitiveness of Canada’s leading trade sector, according to report, A Competitive Policy and Regulatory Framework for Alberta’s Upstream Oil and Natural Gas Industry, by the Canadian Association of Petroleum Producers (CAPP).

Industry continues to face mounting costs and barriers to growth due to changes in provincial and federal government policies and regulations, such as methane emissions, carbon pricing, municipal and corporate tax increases, wetland policy, well liability and closure, and caribou management, among others. In addition, low global commodity prices, rapidly changing market dynamics, and new policy directions in the United States have led to negative impacts on oil and natural gas investment and competitiveness in Canada. 

The report outlines how new competitiveness measures could be created to attract investment and create jobs in Alberta’s oil and natural gas sector, while protecting the high standards already in place for health, safety and environmental regulation.

CAPP estimates the cumulative costs associated with the changes in provincial and federal government policies and regulations to conventional and unconventional development could range between $450 million and $760 million annually in the near term. Overall capital spending in Canada is forecast to be $44 billion in 2017, a 46% decrease from $81 billion in 2014. Meanwhile, spending in the U.S. is expected to rise 38% to $120 billion this year.

Through collaboration with government on essential policy challenges the energy sector can attract new investment to Alberta and improve our competitiveness. It is critical Alberta and Canada compare their policies and regulatory regimes with the U.S., our only major market for oil and natural gas exports, and our biggest competitor for capital. We need a made-in-Alberta approach to competitiveness.

By working together, CAPP estimates unemployment in Alberta can be reduced nearly 25%. As well, we can generate $4.5 billion in gross domestic product, $207 million in additional income tax, and $79 million in additional royalties in the near term on an average annual basis.

Canada’s upstream oil and natural gas industry needs to rebalance the playing field and restore investment while maintaining Alberta’s position as a leader in responsible development. 

CAPP continues to review the competitiveness of Canadian jurisdictions.

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