A year of gutted prices and revenues, described as “crushingly low” by industry, has prodded the government in Canada’s top natural gas supplying province into going to bat for struggling producers.

The Alberta Department of Energy is urging swift approval for a discount toll deal proposed to raise the volume and value of sales via TransCanada Corp.’s cross-country gas Mainline to Ontario, Quebec, New Brunswick, Nova Scotia and the United States.

In an intervention before the National Energy Board (NEB), the province supports requests by the pipeline and shippers for use of an accelerated regulatory procedure for uncontested deals known as “streamlined.”

The new package grants 10- to 21-year transportation contracts for 630 MMcf/d at a negotiated discount toll of C$.093/gigajoule ($0.78/MMBtu). Deliveries would grow in stages with start dates of Nov. 1 in 2019, 2020 and 2021.

“It will retain and attract long-term, long haul contracts on the Mainline using existing facilities, and will attract additional revenue,” predicts the Alberta department’s NEB filing.

“As the owner of a significant crown resource, Alberta has a direct interest in maintaining the safe, responsible, fair, economic and efficient transportation of natural gas.”

The constitutional mineral resource ownership interest --  81% by area, nearly 100% by energy content -- also makes the provincial treasury the biggest casualty of lows on gas and oil price cycles.

Alberta budget accounts for the government’s fiscal years, starting every April 1 and ending the following March 31, record a long and deep decline.

In the fattest fiscal year, 2005-2006, Alberta gas fetched an average C$8.42/MMBtu ($6.32). Gas royalties alone hit C$8.5 billion ($6.4 billion).

Total 2005-2006 royalty and drilling rights sales revenues of C$14.3 billion ($10.7 billion) equaled 52% of C$27.2 billion ($20.4 billion) in provincial spending. The treasury booked a C$8.7 billion surplus. Alberta had Canada’s lone debt-free provincial government.

Fiscal 2018-2019 is shaping up to be lean to the point of anorexic by comparison.

For gas, the current year Alberta Reference Price, a weighted average of production for all markets, is forecast to be C$1.50 per gigajoule ($1.18/MMBtu). Gas royalties are projected to be C$718 million ($538.5 million) -- down by 92% from 2005-2006.

Total 2018-2019 royalties and drilling rights sales are forecast at C$5.3 billion ($4 billion) -- down by 63%  from 2005-2006 and only equal to 9% of the C$56.6 billion ($42.4 billion) current year budget.

The provincial treasury expects to book a C$7.5 billion ($5.6 billion) deficit for fiscal 2018-2019. Government debt has returned as a growing Alberta fixture and figures among issues emerging for a scheduled spring provincial election.

The Alberta energy department’s NEB filing follows guidance in a December report from a government-appointed gas advisory panel of former TransCanada president Hal Kvisle, former Alliance Pipeline president Terrance Kutryk, and former Canadian Energy Pipeline Association president Brenda Kenny.

“Prices, and therefore industry and government revenues, are crushingly low and have been increasingly volatile locally since the summer of 2017,” reported the panel. Surpluses, Canadian regulatory delays and rival U.S. shale gas were blamed.

The Alberta industry and the provincial treasury are squeezed by “ever decreasing [profit] margins due to ‘close-to-market’ U.S. production increasingly capturing traditional Canadian gas customers,” said the panel report.

“The industry needs much stronger and more vocal support from the Government of Alberta,” said the report. “The Government of Alberta is well-positioned to address issues within provincial jurisdiction and exert pressure to address issues at the federal level. Such pressure is urgently needed today.”

For the regulatory review of TransCanada’s proposed gas delivery bargain, the Alberta energy department is aligned with the Canadian Association of Petroleum Producers (CAPP).

“This service continues to respond to the game changing market dynamic of growing US natural gas production increasingly displacing Canadian natural gas in eastern markets,” says a CAPP filing with the NEB.