Alberta

Alberta Keeps Low Oil and Gas Royalties, Committing 'Profound Political Mistake,' Critics Say

This article originally appeared on The Tyee.

The recommendation of an Alberta review panel not to raise royalty rates paid by oil and gas companies to the province is an economic disaster and represents a capitulation to Big Oil and its financial backers, say a variety of critics.

Released last Friday, a five-month review into the royalty system argued that low global oil prices had placed Alberta in an existential quandary and that no increases should be considered in royalty rates.

Royalty rates are not costs or taxes, but a price a company must pay to the owner for the right to develop the resource.

For 35 years, the former Tory government of Alberta consistently lowered royalty rates to among the lowest in the world. At the same time it saved almost nothing for future generations.  

But the long-delayed review, commissioned by the new NDP government in 2015 as the result of an election promise, concluded that the “current share of value Albertans receive from our resources is generally appropriate.”

The review added that Albertans should stop focusing “on questions of 'are the rates right,'” and look more “on what changes need to be made to our royalty framework to position Alberta and our energy industry to address the challenges of a very different environment and outlook for the future.”

The review then recommended maintaining current royalty rates for wells drilled before 2017 and setting a generic rate — five per cent — for all new oil and gas wells drilled after 2017, a policy equivalent to grading and selling all cuts of beef as hamburger.

Calgary Mayor Nenshi, Premier Wall Blast Montreal’s Energy East Opposition

Several prominent western Canadian politicians came out firing at Montreal Mayor Denis Coderre’s announcement yesterday that Montreal-area municipalities will oppose TransCanada’s Energy East oil pipeline project. The outraged western leaders were not exactly polite in their criticism either.

He’s wrong on this one. There’s no better way to put it,” Calgary Naheed Nenshi told CTV’s Power Play. “The alternative is more oil by rail and people in Quebec know the dangers of oil by rail, tragically.”

I trust Montreal area mayors will politely return their share of $10B in equalization supported by (the) west,” Saskatchewan Premier Brad Wall said on Twitter.

The 82 municipalities of the Communauté Municipale de Montréal (Montreal Metropolitan Community) voted yesterday to oppose the 1.1 million barrels a day proposed pipeline going through their jurisdictions. The environment risks outweighed the meager economic benefits of the project, according to the political body representing nearly four million Quebecers.

Alberta Is Way More Progressive Than Alberta Thinks, According to New Poll

Albertans are more politically progressive than assumed, according to findings collected by Ottawa’s Abacus Data and published in a recent report titled “The Quiet Majority.”

Commissioned by Progress Alberta — a brand new left-leaning, non-partisan organization based in Edmonton — the poll discovered that 59 per cent of Albertans self-describe as “progressive” and tend to vastly overestimate the percentage of other Albertans who self-describe as conservatives.

We had a hunch that Albertans were a little more progressive than the perception out there, but the results were pretty incredible, to be frank,” says Duncan Kinney, founder of Progress Alberta. “Really, what surprised me the most was just how much Albertans overestimate how conservative other Albertans are.”

To be fair, the definition of “progressive” seems fairly nebulous: some 72 per cent of people who voted for the Alberta NDP in May harnessed the label to describe their political affiliations, but 47 per cent of those who backed the far-right Wildrose Party also used it.

Canada Subsidizes the Fossil Fuel Industry by $2.7 Billion Every Year. Where Does That Money Go?

Canada’s fossil fuel industries are the recipients of $2.7 billion US ($3.6 billion CDN)  in handouts each year, despite a promise from all G20 nations, including Canada, to eliminate subsidies in 2009.

About $1.6 billion US of those subsidies came from the federal government with the rest distributed by the provinces, according to a new report from Oil Change International.

The report finds G20 countries spend about $452 billion US each year to prop up their oil, gas and coal industries.

The Liberals promised to “fulfill Canada’s G20 commitment to phase out subsidies for the fossil fuel industry,” in their election platform. The party singled out the Canadian Exploration Expenses tax deduction as too generous to industry, saying the tax break should only kick in if companies are completely unsuccessful in their resource exploration.

The saving will be redirected to investments in new and clean technologies,” the party platform says.

But the Canadian Exploration Expenses tax deduction isn’t the only place where companies can take advantage of a generous subsidy system.

So were else is the money coming from and going to?

Is it the Beginning of the End for the Alberta Oilsands?

A new report from Oil Change International challenges industry’s common assumption that the continued production of oilsands crude is inevitable.

The report, Lockdown: The End of Growth in the Tar Sands, argues industry projections — to expand oilsands production from a current 2.1 million barrels per day to as much as 5.8 million barrels per day by 2035 — rely on high prices, public licence and a growing pipeline infrastructure, all of which are endangered in a carbon-constrained world.

As the report’s authors find, growing opposition to oil production — especially in the oilsands, which is among the most carbon intensive oil in the world — has significantly altered public perception of pipelines, a change amplified by the cross-continental battles against the Enbridge Northern Gateway, Kinder Morgan Trans Mountain, TransCanada Energy East and TransCanada Keystone XL pipelines.

According to the report’s authors, production growth in the oilsands hinges on the construction of these contentious pipelines because the existing pipeline system is currently at 89 per cent capacity.

Alberta’s Climate Consultations: The Good, The Bad and The Downright Crazy

Much of the country is understandably pre-occupied with Monday’s federal election. But while we have all been watching the national drama unfold, something monumental happened in Alberta.

In a nutshell: big coal is pushing for renewable energy and big oil is re-iterating its push for a carbon tax.

Close to 500 individuals (including at least one alien — more on that to come), companies and NGOs submitted proposals to Alberta’s Climate Change Advisory Panel (chaired by University of Alberta economics prof Andrew Leach) about the kind of policies they think the new government should introduce to address spiking greenhouse gas emissions.

The significance of this for Alberta’s climate politics cannot be overstated. After years of stalling or stifling meaningful conversations, the province has now pulled off one of the country’s most important and interesting climate consultation processes.

The submissions, now accessible online, largely consist of the classic combo of recommendations from the usual suspects: phasing out coal-fired power plants, incentivizing renewable energy sources and introducing a proper carbon tax.

But there were also some fairly surprising sources of support for such recommendations.

River Supplying Water To Alberta Oil Sands Operations At Risk From Drought

A new study casts doubt on the long-term ability of the Athabasca River to supply the water Alberta’s oil sands industry relies on.

Water is allocated to oil sands operations based on river flow data collected since the 1950s, but that doesn’t necessarily represent an accurate assessment of the Athabasca River’s flow variability over the longer term, according to a report published this week in the Proceedings of the National Academy of Sciences.

Andrew Nikiforuk’s Latest on the Fracking Craze should be Required Reading for MLAs

This is a guest post by Ben Parfitt, resource policy analyst with the Canadian Centre for Policy Alternatives. It orginially appeared on policynote.ca.

Well, I won’t back down
No, I won’t back down
You can stand me up at the gates of hell
But I won’t back down

— Jeff Lynne, Tom Petty

In the mid 1960s, the world’s two superpowers hit on a novel idea to try to coax more oil and natural gas from the ground. In what they hoped would prompt the release of “endless fountains of fossil fuels,” first the Union of Soviet Socialist Republics and then the United States of America detonated nuclear bombs belowground.

The hoped-for geysers of fuel never materialized. Instead, nearby oil and gas wells became contaminated with radioactive gases that in some cases later broke to the surface and swept over the homes of unsuspecting residents. Groundwater was polluted. And giant subterranean craters filled with cancer-inducing gases that no public power utility in its right mind would touch.

Half of Albertans Think Oilsands are Large Enough, Majority Want Stronger Climate Policies, According to New Poll

A poll of more than 1,800 Albertans conducted by EKOS Research Associates shows more than half the population wants the province to take stronger climate action by introducing policies that limit carbon emissions.

The poll, commissioned by the Pembina Institute, also found 50 per cent of Albertans are in support of a broad price on carbon that would apply to both consumers and producers. Support for a price on carbon jumped by another 10 to 20 per cent if the money generated from the tax were to go towards carbon reducing technologies or projects.

Results also show a large portion of Albertans (66 per cent) want to diversify the province’s economy rather than up the competitiveness of the oil and gas industry (29 per cent). Forty-eight per cent of Albertans who took the poll said they feel the oilsands are large enough or should be downsized.

It’s encouraging to see such strong support among Albertans for action on climate change,” Simon Dyer, Alberta regional director for the Pembina Institute, said.

This poll shows that the public is open to many of the solutions being considered, such as an economy-wide price on carbon pollution, or phasing out coal power and replacing it with renewables.”

Celebrities and the Oilsands: Help or Hindrance?

By now, it’s an almost entirely predictable routine: a celebrity takes a tour of the Alberta oilsands for a day or two and quickly harnesses apocalyptic rhetoric in press conferences to detail the experience. Chagrined industry spokespeople lash out. News coverage dissipates after a few days. Rinse and repeat. Thus far, Neve Campbell, Leonardo DiCaprio, Darren Aronofsky, Desmond Tutu and James Cameron have partaken in the ritual.

Now, at long last, we can add Bill Nye to the already stacked roster, thanks to his recent two-day stint in the area for a climate change documentary he’s working on.

Producing all this oil that’s producing all this carbon dioxide, that’s not good from a global stand point,” the Science Guy said in an interview with the Aboriginal Peoples Television Network, which was tweeted by the likes of Bill McKibben and 350.org.

Nye’s statement is very true. Alberta’s oilsands represent fossil fuel development on an unprecedented and highly visible scale. Canada won’t meet its 2020 emissions reduction targets as a result of the growing sector (by that year, the oilsands are expected to churn more carbon dioxide into the atmosphere annually than all the passenger transport in the country).

But do celebrity visits help push the dialogue out of gridlock?

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