Natural gas rose to prominence on the Alberta government agenda Tuesday, when newly elected Premier Jason Kenney created a seat dedicated to promoting the resource in his inaugural cabinet.
Kenney’s appointments, made at a swearing-in ceremony in Edmonton, confirmed his United Conservative Party (UCP) will act on campaign promises to be a force -- “the bully pulpit” -- for reviving the wounded Alberta fossil fuel industry.
When the UCP ended New Democratic Party (NDP) rule by winning 63 of 87 legislature seats on April 16, “Albertans gave our new government a huge democratic mandate for bold change that gets our economy back to work and stands up for this province,” said Kenney.
The new gas czar Dale Nally, a businessman from Edmonton satellite community St. Albert, ranks as a specialist associate to Kenney’s new Energy Minister Sonya Savage, an industry veteran of regulatory and political affairs.
As a lawyer who moved from private practice into senior roles at Enbridge Inc. and the Canadian Energy Pipeline Association, Savage’s credentials include earning a master’s degree in law with a thesis on the National Energy Board (NEB).
While the UCP agenda for Savage focuses on advancing stalled oil pipeline projects, the party plan for Nally charts a parallel course for improving gas prices by accelerating notoriously slow additions to transmission service.
“Lack of pipeline access is forcing natural gas producers to sell their product at a massive discount,” said the UCP election platform. “We are practically giving away this valuable resource that belongs to all Albertans.”
The 2018 Alberta Reference Price (ARP), the weighted average for all provincial sales, was only C$1.28/gigajoule (GJ), or $1.00/MMBtu, 68% below the 2018 average $3.17/MMBtu for the Henry Hub benchmark.
The UCP’s pointed reference to resource ownership was a reminder that, unlike in the United States, most Alberta gas and oil is public, Crown property that generates government royalties to sustain a rare combination of high provincial budgets yet low taxes.
The Alberta wealth formula has stalled, with by gas down 85% from its 2005 peak at C$8.30/GJ ($6.54/MMBtu). The gas royalty, formerly the government revenue champion, shrank by 95% to an estimated C$466 million ($350 million) for the 2018-19 fiscal year that ended March 31 from C$8.5 billion ($6.4 billion) in 2005-2006.
The UCP election platform committed the new cabinet gas specialist and a dedicated civil service deputy to chart a recovery course with a late-2018 report that the former NDP regime commissioned from retired TransCanada Corp. Chairman Hal Kvisle.
Plans include working with producers, the NEB and TransCanada on accelerating additions to the Nova Gas Transmission Ltd. (NGTL) Alberta grid to match supply field evolution and open up spare capacity for swift responses to market trends.
The UCP’s “bully pulpit” agenda also includes a well funded “war room” of research, communications and legal experts to counter environmentalist “dirty oil” campaigns against Alberta oilsands production and pipeline projects.
The UCP election platform declared, “It is time for Alberta to move from a defensive, passive, and apologetic approach to a strong, assertive, and strategic defense of our economy, our workers, and our way of life.”