Energy

 Originally posted 12 July 2016

Energy drives politics in Alberta.  Since the early days of the twentieth century when natural gas (1911) and oil (1914) was discovered in the Turner Valley, the politics of Alberta have been influenced by the growing wealth of the oil and gas sector. Three pillars of the Calgary establishment- Sir James Lougheed, R.B. Bennett and W.H. McLaws – created the Calgary Stock Exchange in 1913.  Like so many Alberta financial stories, the stock exchange grew by leaps and bounds until its building was foreclosed upon. While Alberta’s premiers have not come directly from the oil patch, premiers ignore the oil patch at their peril.

The table below illustrates the growth of production over the past 31 years.  Production has grown significantly in the past decade as crude bitumen production has displaced light crude as the dominant form of oil extraction. Synthetic crude oil production is also rising, but without a further investment in upgraders, prices obtained for the resource will be substantially less than standard industry benchmarks like WTI.

Oil production_3898_image001

A key factor in pricing is the cost of transportation and the availability of transportation. With the failure by industry (and governments?) to gain approval for new pipelines, transportation bottlenecks are occurring. Rail transport of oil products is more expensive and dangerous than conventional pipelines, however industry has been unable to gain regulatory approval (and social license) for these endeavours.

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This entry was posted in Energy on by .

About albertarecessionwatch

Former Director, Institute for Public Economics, University of Alberta and currently Fellow of the Institute. Former executive with Alberta Treasury Branches. Worked for the Alberta government for 12 years with Federal and Intergovernmental Affairs and Alberta Treasury. Areas of focus: financial institutions legislation and policy, government borrowing, and relations with credit rating agencies. Ph.D in Political Science (Uof A), Masters of Public Administration and BComm. (Carleton University). Author of Politics and Public Debt: The Dominion, the Banks and Alberta's Social Credit. Presently working on study of Alberta provincial agency board appointments.

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