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Varcoe: Oilpatch says elections in Alberta must tackle the industrial "crisis"



Several hours after the head of the unified Conservative Party, Jason Kenney, called for oil chiefs chiefs to make a stronger talk of their industry, top representatives of five industrial groups put their election cards on Wednesday.

As well as representatives representing oil producers, oil and oil fields, Calgary talked, Prime Minister Rachel Notley announced that Alberta would raise its oil levels in February and March, making it easier for the region.

I do not say there is a direct link between these events.

(Kenney spoke to the Calgary Real Estate Board, while Notley responded to the data showing that Alberta's oil reserves were falling faster than expected.)

What I'm saying is that in the regional elections around the corner – voters are going to the electorate before the end of May – they expect to become the main topics of the oil pipeline, oil cuts, greenhouse gas emissions, carbon tax, and industrial competitiveness.

Energy will not be in the polling station.

But this is Alberta. It will not be far from the conversation because all parties are looking for ways to run investment and employment in the largest and most powerful province.

"It's really an instant," said Chris Bloomer, CEO of the Canadian Energy Association.

"We get a stomach from all sections, the pushback does not get worse and we have to hear our voices."

The unusual joint press conference of industry groups was designed to discuss the role that energy issues should play in the future election campaign.

The sector faces a number of concerns: the oil and gas market, volatile commodity prices, sail relocations to the United States, capital cuts, reduced drilling and investment-enhancing challenges.

The most problematic problem is building up oil and gas pipelines from Alberta, although the government has limited ability to influence federal approval of projects that cross provincial borders.

The smart man who is now facing the Trans Mountain and Keystone XL gas pipeline projects, along with the death of the North Gate and Energy Exit, has left the industry too much – about 3.9 million barrels per day (bpd) of capacity in Alberta – and inadequate ways to ship it.

It focuses on regulatory and legal barriers to the construction of energy infrastructure in Canada.

The barrier to transport has led to a sharp price cut for Canadian oil last fall and has led Notley's government to cut production by 325,000 bpd since the beginning of this year to offset the market.

The government announced that in February and March it will increase production by 75,000 bpd to a total of 3,63 million bpd. It is an encouraging sign, as oil reserves in Alberta have fallen by about 15 percent since December.

"What we found was the storage (oil) we had a little faster than expected," Energy Minister Marg McCuaig-Boyd said in an interview.

"But we're not out of the woods yet."

Many manufacturers have demanded a cutback to support fallen prices, although firms operating in the oil field have been damaged by their impact on capital programs.

Earlier this week, the Canadian Oil Services Association cut the drilling forecast by 15 percent to 5,600 boreholes per year.

"The idea of ​​finding a rational way to get a cut would be a good idea," said Gary Mar.

"This is not a hypothetical problem, people are losing their jobs … For people who are workers in the energy services, curtailment was not a very good program."

A discussion of the mining and coal tax in the province – some major oil producers, such as Suncor Energy and Shell Canada, supported it while the Explorers and Producers Association of Canada (EPAC) refers to tax – they emphasize the fact that the industry is not a monolithic one.

However, it has a lot in common, Concerns over the regulatory time horizons for the transfer of large projects through government approval processes.

For example, Imperial Oil lasted nearly five years from the time it first applied for its Aspen project between 2006 and 2006 until it was approved by the regulators in October.

Tim McMillan, Chairman of the Canadian Oil Manufacturers Association, believes higher efficiency could reduce Alberta's regulatory costs by $ 2 billion. The advantage is that the industry could double the investment in oil products in the province by 2020 if the conditions are right, he said.

In the drilling and service sector, financial pressure is strong. If manufacturers do not spend money, oil companies do not work.

In 2014, the industry had around 850 drilling platforms in the country. The Canadian oil drilling association expects to drop to 500 by the end of the year.

"It is a function of a bad economy, commodity prices have dropped, but they also fall directly on government policy," said CAODC President Mark Scholz.

The effects of these interconnected issues range from oilfields to central headquarters. Each active drilling device directly and indirectly employs approximately 140 people.

ATB Financial on Tuesday noted that employment at headquarters in Calgary fell by almost eight percent between 2012 and 2017, while it fell by 5 percent in Edmonton.

"It's not just about energy companies, it's about production," said Tristan Goodman, president of Canada's Explorer and Producers Association.

"This is where the teachers earn their dollars … it provides good health care, it is the real economic engine that leads us forward – and right now it is in crisis."

It is often said that she has never left a good waste of the crisis.

Upcoming elections should test this theory with a great opportunity to explore the future of energy development in Alberta.

Chris Varcoe is the editor of the Calgary Herald.

cvarcoe@postmedia.com


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