Alberta energy sector waits for policies from NDP

From pipelines to fracking, Alberta's newly elected New Democratic government will have to explain the energy policies it believes in. Here's a look at five.

'We don't have any facts, we just have the platform'

Alberta's energy industry is anxiously waiting to hear details on the Alberta New Democratic Party's policies. (Kyle Bakx/CBC)

The word "fear" has been spoken repeatedly in recent days in the corporate towers of downtown Calgary as the oil and gas sector tries to figure out what a new NDP government will bring to Alberta.

The concern is largely because of the unknown.

"We don't have any facts, we just have the platform," Steve Laut, president of Canadian Natural Resources, told analysts Thursday. "We will respond appropriately when we understand what the platform and policies will be."

Besides saying everything will be A-OK, here are five policy areas that the energy industry is anxious to hear about from premier-designate Rachel Notley.

1. Royalties

Clearly, this is the big concern for energy companies.

Notley made no bones about this subject during the election campaign. If elected, she said she would hold a review of the province's royalty structure to ensure Albertans are getting a fair return for their non-renewable resources. It's uncertain if she actually wants to make immediate changes. If so, how much would she be looking to increase royalties?

On Thursday, Crescent Point Energy CEO Scott Saxberg told analysts on a conference call that his company could easily shift its investments to either Saskatchewan or Utah, if the New Democrats hike royalties in Alberta.

The sector has recent memories of the pain felt during the last hike to royalties. The government of former premier Ed Stelmach increased rates in 2007. The move proved to be temporary as royalties were rolled back after major criticism from the oil and natural gas industries and a significant loss of investment in Alberta. 
Rachel Notley, who will soon be Alberta's new premier, will have to explain her party's policies to the energy industry. (CBC)

2. Pipelines

During the campaign, Notley addressed certain proposed pipeline projects, saying she would take a hands-off approach with the Northern Gateway pipeline, which would take oil from Alberta to tankers on the B.C. coast.

Similarly, she would let the Keystone XL pipeline debate play itself out in the United States. The project would take oil from Alberta to refineries and ports on the Gulf Coast.

Notley seemed much more enthusiastic about the potential for Energy East, which would take product to refineries in Eastern Canada.

Market access is a top priority for the oil industry.

3. Fracking

​The process of using sand, water and chemicals to break up underground rock is commonplace throughout Alberta and North America. In fact, over 90 per cent of the wells drilled and completed are hydraulically fractured, according to Mark Salkeld, CEO of the Petroleum Services Association of Canada.​ 

"It is absolutely necessary," said Salkeld. "It's not new, our members are world experts in fracking."

Fracking concerns are well documented, including the threat to groundwater and the potential for earthquakes.

Any added environmental protections will increase the cost of fracking.

4. Taxes

Notley has called for the largest, most profitable corporations to pay their fair share. She has said the wealthiest Albertans should pay more as well.

Specifically, she campaigned on raising the corporate tax rate to 12 per cent from 10 per cent. Between the higher tax rates and better collection, the NDP estimates it can raise more than $800 million in 2015-16

Industry will also keep a close eye on other taxes and fees, such as the Well Drilling Equipment Tax. 

5. Environment

The NDP pledged in its election platform to "phase out coal-fired electricity generation to reduce smog and greenhouse gas emissions." The party also campaigned on a promise to "strengthen environmental standards, inspection, monitoring and enforcement to protect Alberta's water, land and air."

The Pembina Institute, an environmental think-tank, is hoping Notley will increase the price on carbon, currently at $15 a tonne, in order to motivate industry to reduce emissions. The group would also like to see the Alberta government speed up the process to phase out existing conventional coal plants. Pembina wants Notley to strengthen environmental regulations, a move it says could help industry.

"Some of the concern with regards to pipelines coming from the oilsands have been with Alberta and whether Alberta is doing its fair share in regards to climate change," said Ed Whittingham, executive director of Pembina.

The oilsands were rarely discussed during the election campaign. Over the years, Notley has suggested the government needed to take more responsibility for the environmental performance of the oilsands and has talked about the need for a strong environmental protection regime.


To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Member

Join the conversation  Create account

Already have an account?