To make matters worse, Bill C-69, which is currently under Senate review, will add a large number of subjective criteria to the review process including the “social” impact of energy investment and its gender implications, which will likely increase uncertainty, further politicize the regulatory process and lengthen approval times. And that adds to the narrative from critics that Mr. Kenney and his United Conservative Party government prioritize (male-heavy) oil and gas and finance jobs above all others. “And it was all but complete before the outbreak of the coronavirus.”, He insisted the project will not be a distraction from his government’s focus on slowing the spread of coronavirus and its resulting COVID-19 disease, but “construction season starts now. In a stunning result, 73 per cent of respondents cited Alberta’s cost of regulatory compliance as a deterrent to investment this year compared to only 10 per cent for Texas and seven per cent for Kansas. “We are 100 per cent invested in Canada given highly attractive valuations and improving takeaway capacity and it’s interesting that Saudi Arabia agrees with us.”. Its core tenets—namely, that Canada’s legal, environmental and regulatory standards make our oil more inherently virtuous—are practically articles of faith in the oil and gas industry. – piecing together an oil transportation system that will give Alberta a new route to refineries on the U.S. Gulf Coast. But while Kenney was quick to call out Norway’s alleged hypocrisy in selling their shares of oil sands companies, he has so far remained silent about the news that Saudi Arabia’s Public Investment Fund was busy buying them. “Canadian and American energy independence is at stake. © Copyright 2020 The Globe and Mail Inc. All rights reserved. The 'ethical oil' argument is dead. After all, as Jason Kenney will tell you, nobody likes a hypocrite. But Kenney’s affiliation with it goes back much further than that. The federal government recently renegotiated a $14 billion deal that will allow the sale of Canadian-made light-armoured vehicles to the kingdom (a deal that was originally struck by the Harper government back in 2014). “Our post-COVID recovery is at stake," Mr. Kenney said. , Nancy Southern, the CEO of Atco and a founding member of the Business Council of Alberta, was quick to invoke it: “I think it is time for people to stand up and demonstrate true moral leadership about the fact that the world is better because of petroleum products,” she said. “To be blunt,” Kenney told reporters last week, “I find that incredibly hypocritical.” After all, he said, Norway continues to develop its own oil and gas resources, including the 2.7 billion barrels that are contained in the new Johan Sverdrup field that is already producing 430,000 barrels of oil per day. So far, though, they’ve been conspicuously silent. Prices are so low for Western Canadian Select, a blend from Canada’s oil sands, that producers could be paying others to take their output. But politically, the optics of borrowing money to invest in a pipeline just days after announcing the layoff of thousands of Alberta teaching assistants, school secretaries and janitors are awful. It’s money for pipelines but not school workers during one of the worst economic periods the province has faced. Investment in Alberta’s oil patch to stay flat until next year. As Premier, Kenney has been at the forefront of recent efforts to paint Canadian oil and gas as more “ethical” and therefore more worthy of investment. Stockpiles of unneeded oil are building in tanks and ships around the world. As the Notley government announces plans to buy rail cars to get Alberta oil to market and perhaps cut oil production, there’s more breaking news. Saudi Arabia is buying shares of Alberta's oil sands companies. According to a new survey of oil and gas executives, Alberta is one of the least-attractive places to invest in Canada, which means fewer jobs, less revenue to pay for public services, and less prosperity and opportunity overall. If Norway is already producing oil and benefitting from the tax revenue and jobs it creates, there’s no need for them to double down by also investing their one-trillion-dollar nest egg in companies that also depend on the price of oil. Appeared in the Calgary Sun, December 1, 2018, Associate Director, Natural Resource Studies, Fraser Institute, Elmira Aliakbari, Ashley Stedman, Jairo Yunis, Ontario Government Perpetuates Poor Electricity Policy, Stimulating Economic Growth through Abundant Energy, Canada should rethink its carbon-pricing policies, Trudeau government deals another blow to Newfoundland and Labrador. Max Fawcett: If Canadian oil and gas companies are going to accept Saudi Arabia’s money, it’s probably time for their proxies to retire arguments about the immorality of their oil, By Max Fawcett St. Joseph Communications uses cookies for personalization, to customize its online advertisements, and for other purposes. I'm a print subscriber, link to my account, is an unparalleled case study in gamesmanship, Avoid the use of toxic and offensive language. Non-subscribers can read and sort comments but will not be able to engage with them in any way. May 19, 2020, Alberta Premier Jason Kenney speaks during a press conference in Edmonton on Feb. 24, 2020. But its economic wallop will be brutal. Kenney is hardly alone in his fondness for Levant’s narrative, though. Ironically, it also added to its position in Equinor, the Norwegian company that’s developing the Johan Sverdrup field. If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. This is a space where subscribers can engage with each other and Globe staff. The impact to Alberta's energy sector due to COVID-19 and oil prices could put the country on the "brink of recession," the Conference Board of Canada said Tuesday in their spring outlook report. The government says this infusion of cash gives the project steady financial backing and will lead to the immediate creation of construction jobs at a time when tens of thousands in the province have been, or are about to be, laid off. So why is this happening? We have offices in Calgary, Montreal, Toronto, and Vancouver. The pipeline would also act as a small rebuke to Saudi Arabia and Russia, who are trying to squeeze higher-cost oil producers, including U.S. shale producers, out of business with a global market share battle that is an unparalleled case study in gamesmanship. Contact us  About us  Our experts  Careers. Audio for this article is not available at this time. Since last year, Alberta dropped from 33rd (out of 97) in 2017 to 43rd (out of 80) in 2018, falling from the top half of jurisdictions to the bottom half, and for the second straight year, retaining its status as the second-least-attractive Canadian province for investment. Why are investors souring on Alberta’s energy sector, and instead, looking south of the border? Peter Munk Centre for Free Enterprise Education. Alberta Premier Jason Kenney delivers a statement on the construction of the long-delayed 8 billion dollar Keystone XL crude oil pipeline project, in Calgary, on March 31, 2020. Get the latest news from the Fraser Institute on the latest research studies, news and events. Max Fawcett is a freelance writer and the former editor of Alberta Oil magazine. According to a new survey of oil and gas executives, Alberta is one of the least-attractive places to invest in Canada, which means fewer jobs, less revenue to pay for public services, and less prosperity and opportunity overall. Once again this year, oil and gas investors are sending a clear signal that Canada’s energy sector has serious problems. That money comes from the sale of its own ethically-challenged oil. Coronavirus won’t hit Alberta as hard as others. As Bloomberg reported last week, it now owns 2.6 per cent of Canadian Natural Resources, and two per cent of Suncor, which makes it the eighth and 14th largest shareholder in the two companies respectively. © Copyright 2020 St. Joseph Communications. It was his former director of communications and parliamentary affairs, Alykhan Velshi, who created the “Ethical Oil Institute” in July 2011, and his former executive assistant, Jamie Ellerton, served as its executive director between January 2012 and April 2013. Ironically, it also added to its position in Equinor, the Norwegian company that’s developing the Johan Sverdrup field. MORE: Jason Kenney in conversation with Paul Wells: Maclean’s Live Replay. This isn’t a philosophy that’s particularly popular in Alberta, mind you, given Alberta Investment Management Corporation’s well-documented history of being more heavily exposed to the energy sector than other pension funds. Consider this. The government put out news of the funding cut with little notice on Saturday, after promising this month to hold the flow of dollars to school boards steady this year – even after schools were closed and classes cancelled because of the pandemic on March 15. Mr. Kenney said his government has been working on the deal with TC Energy, formerly called TransCanada Corp., for more than six months. The troubling results are from the 2018 Fraser Institute Global Petroleum Survey, which tracks the perceptions of oil and gas investors by spotlighting policies that affect investment attractiveness including royalties, taxes and regulations. And we cannot afford to lose another season.”. But even Mr. Kenney, a near-constant energy booster, acknowledges there are other risks, too. With Western Canadian heavy oil priced around US$5 a barrel, and worldwide consumption of crude down by as much as 25 per cent, Jason Kenney’s decision to put billions of public dollars on the line for the building the Keystone XL pipeline is the ultimate in countercyclical fiscal policy. Just like Ottawa wants to unload its ownership of the Trans Mountain pipeline if and when the expansion project is completed, Mr. Kenney said Alberta will sell its preferred share position once the project is completed, when “it will be a very attractive utility.”. Beyond the Premier’s concerns, the investment doubles-down on the province’s economic reliance on its plentiful bitumen reserves at a time when, even pre-COVID-19, the world wasn’t exactly clamouring for more heavy crude from Alberta. riers to investment in oil and gas exploration, development and production. Alberta’s economy is stable and growing slowly, but it faces challenges in several areas — particularly with respect to the province’s oil industry. Continuing pipeline challenges are hurting the province’s prospects for competitiveness By Leo Almazora. The Fraser Institute is an independent, non-partisan research and educational organization based in Canada. That means: Comments that violate our community guidelines will be removed. Please log in to listen to this story. Alberta's oil industry is a key component of the provincial economy accounting for thousands of jobs.

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