- DAILY GPI
- MEXICO GPI
- SHALE DAILY
A roving campaign of high-profile public appearances by Alberta Premier Rachel Notley, courting national and international support for oil and natural gas pipelines originating in her province, is a case of doing what comes naturally.
Notley stepped forward into the chief official promoter role during her New Democratic Party’s (NDP) first months in power after beating Alberta’s 44-year-old Progressive Conservative government in a May 2015 election.
She set an example of NDP care for the livelihood of Canada’s chief natural gas and oil-producing jurisdiction. The premier, a lawyer, personally wrote the Alberta government’s brief urging the National Energy Board to approve tripling oil capacity on Kinder Morgan Canada’s Trans Mountain Pipeline to the Pacific coast of British Columbia.
Notley’s top priority is the Trans Mountain expansion to fill overseas tankers, as a path to diversify Alberta exports beyond near-total reliance on the United States and minimize price discounting on its saturated markets. She urges the federal government to enforce its 2016 approval of the Trans Mountain project against avowedly environmental obstruction by BC provincial and municipal permitting authorities.
But her government also supports increasing flows to new U.S. outlets for Alberta with TransCanada Corp.’s Keystone XL project and Enbridge Inc.’s Line 3 renovation. The pipeline project trio would add 1.8 million b/d to Canadian export capacity.
Notley’s NEB brief stated in a nutshell a position adopted by Alberta leaders of all political stripes since creation of the province in 1905.
“Alberta’s commitment is to responsibly develop our natural resources and deliver those resources to world markets in a safe and responsible manner,” wrote Notley. “Pipelines remain the safest and most economical method to move oil and gas to market.”
Her administration shares views among industry and international agencies that far from stalling and decaying, global oil demand remains strong and possibly rising towards 100 million barrels per day while natural gas use also continues to rise.
Notley predicted, “There will be ample crude oil supplies as well as attractive premium markets that are very interested in accessing Canadian oil to diversify supply sources, to benefit Albertans as resource owners and all Canadians.”
In energy consumer regions, the pipeline support campaign emphasizes a record of ever-stricter conservation, safety and anti-pollution enforcement since the 1938 birth of the Alberta Energy Regulator’s ancestor. NDP innovations include a climate change policy that collects a consumer carbon tax, caps greenhouse gas emissions from oil sands production and accelerates replacement of coal-fired power stations with renewable energy sources.
In Alberta, supply-side economic benefits solidify popular support of Kinder Morgan Canada, TransCanada and Enbridge. Fossil fuel market growth affects a cornerstone of government revenues for public health, education and welfare services rated as musts by all political factions.
Notley’s use of the words “our” and “owners” in talking about Alberta oil and gas is a matter of provincial popular faith. Unlike the private property status of onshore mineral rights in the U.S., oil and gas in Canada have been reserved out of surface land title grants as buried public or “Crown” treasure since the late 19th century.
The result is great public wealth in Alberta, where 81% of mineral rights by area are Crown. By energy content, the figure nudges 100% because virtually all the 142,000-square-kilometer (57,000-square-mile) northern oil sands are Crown.
Since the modern Alberta industry began with a 1947 discovery well, the provincial treasury has collected nearly C$240 billion (US$192 billion) in oil and gas royalties plus sales of drilling and production leases.
The government is under severe pressure to maintain performance as a result of changed industry conditions. The gravy train dried up since the onset of “shale gale” gas surpluses across North America 10 years ago followed by the 2014-15 global oil price plunge. Notley has begun warning Albertans to expect public spending cuts in 2019, in a painful course change by the left-leaning NDP administration as the next election looms in 2019.
At the peak of the energy price cycle in Alberta’s fiscal year ending March 31, 2006, the provincial treasury’s resource revenues hit C$14.3 billion (US$11.4 billion). The gas- and oil-good times take covered 52% of the C$27.7 billion (US$22.2-billion) 2005-06 provincial budget and enabled the treasury to declare a C$8.7-billion (US$7-billion) surplus for the year.
The current 2017-18 lean-times budget forecasts resource revenues of C$3.4 billion (US$2.7 billion) -- only 7.4% of C$45.8-billion (US$36.6-billion) expenditures -- and a deficit of about C$10 billion (US$8 billion).
In Alberta hot popularity duels between the NDP and a reviving United Conservative Party include a contest over who is the toughest supporter of pipeline projects. While Notley’s crew fights B.C. opponents before the NEB and in the law courts, UCP leader Jason Kenney says “talk is cheap,” and “there should be actions. There should be repercussions.” Hard-liners on the Alberta political right have suggested supply boycotts against pipeline opponents.