Energy
Government policies diminish Alberta in eyes of investors
From the Fraser Institute
By Julio Mejía and Tegan Hill
Canada’s economy has stagnated, with a “mild to moderate” recession expected this year. Alberta can help Canada through this economic growth crisis by reaping the benefits of a strong commodity market. But for this to happen, the federal and provincial governments must eliminate damaging policies that make Alberta a less attractive place to invest.
Every year, the Fraser Institute surveys senior executives in the oil and gas industry to determine what jurisdictions in Canada and the United States are attractive—or unattractive—to investment based on policy factors. According to the latest results, red tape and high taxes are dampening the investment climate in the province’s energy sector.
Consider the difference between Alberta and two large U.S. energy jurisdictions—Wyoming and Texas. According to the survey, oil and gas investors are particularly wary of environmental regulations in Alberta with 50 per cent of survey respondents indicating that “stability, consistency and timeliness of environmental regulatory process” scared away investment compared to 14 per cent in Wyoming and only 11 per cent in Texas.
Investors also suggest that the U.S. regulatory environment offers greater certainty and predictability compared to Alberta. For example, 42 per cent of respondents indicated that “uncertainty regarding the administration, interpretation, stability, or enforcement of existing regulations” is a deterrent to investment in Alberta, compared to only 9 per cent in Wyoming and 13 per cent in Texas. Similarly, 43 per cent of respondents indicated that the cost of regulatory compliance was a deterrent to investment in Alberta compared to just 9 per cent for Wyoming and 19 per cent for Texas.
And there’s more—41 per cent of respondents for Alberta indicated that taxation deters investment compared to only 21 per cent for Wyoming and 14 per cent for Texas. Overall, Wyoming was more attractive than Alberta in 14 out of 16 policy factors assessed by the survey and Texas was more attractive in 11 out of 16.
Indeed, Canadian provinces are generally less attractive for oil and gas investment compared to U.S. states. This should come as no surprise—Trudeau government policies have created Canada’s poor investment climate. Consider federal Bill C-69, which imposes complex, uncertain and onerous review requirements on major energy projects. While this bill was declared unconstitutional, uncertainty remains until new legislation is introduced. During the COP28 conference in Dubai last December, the Trudeau government also announced its draft framework to cap oil and gas sector greenhouse gas emissions, adding uncertainty for investors due to the lack of details. These are just a few of the major regulations imposed on the energy industry in recent years.
As a result of these uncertain and onerous regulations, the energy sector has struggled to complete projects and reach markets overseas. Not surprisingly, capital investment in Alberta’s oil and gas sector plummeted from $58.1 billion (in 2014) to $26.0 billion in 2023.
The oil and gas sector is one of the country’s largest industries with a major influence on economic growth. Alberta can play a key role in helping Canada overcome the current economic challenges but the federal and provincial governments must pay attention to investor concerns and establish a more competitive regulatory and fiscal environment to facilitate investment in the province’s energy sector—for the benefit of all Canadians.
Authors:
Energy
A Wealth-Creating Way of Reducing Global CO2 Emissions
From the C2C Journal
By Gwyn Morgan
It is Prime Minister Justin Trudeau’s contention there’s no “business case” for exporting Canada’s abundant, inexpensively produced natural gas as LNG. But Canadians might do well to politely decline management consulting advice from a former substitute drama teacher who was born into wealth and has never had to meet a payroll, balance a budget or make a sale. Bluntly stated, someone who has shown no evidence of being able to run the proverbial lemonade stand. And one whose real agenda, the evidence shows, is to strangle the nation’s most productive and wealth-generating industry. With the first LNG ship finally expected to dock at Kitimat, B.C. over the next year and load Canada’s first-ever LNG export cargo, Gwyn Morgan lays out the business and environmental cases for ramping up our LNG exports – and having them count towards Canada’s greenhouse gas reduction targets.
Energy
Anti-LNG activists have decided that they now actually care for LNG investors after years of calling to divest
From Resource Works
Qatar is building or chartering 104 LNG carriers, and plans to double its LNG output by the end of 2030. It would then produce 142 million megatonnes of LNG a year — more than 20 times the 7 million from the LNG Canada plant.
Strange to see activists opposed to LNG development in Canada publicly worrying about whether such projects are economically viable for investors.
One group has been arguing “the reality is that in the coming years the world may no longer need BC.’s LNG” and that could mean “the risk of future stranded assets.” Of course, they aren’t at all concerned about investors; they’re just desperately throwing every brick they can think of in organized and well-funded political campaigns to influence government.
Meanwhile, two of their prime targets proceed with their government-approved plans: LNG Canada moves steadily toward overseas exports in 2025, and Woodfibre LNG is moving toward construction, and shipping pre-sold exports in 2027. BC has also approved Fortis BC’s planned marine LNG terminal on the Fraser, which would provide LNG as fuel for visiting ships, and could also handle export cargoes from an expanded FortisBC plant in Delta.
And First Nations are working on the Haisla Nation’s Cedar LNG project, and the Nisga’a Nation’s proposed Ksi Lisims LNG operation. Odd how the activists refrain from criticizing the First Nations Peoples who want to export LNG to help their communities thrive .
And, somehow, the activists’ messages fail to impress LNG developers in the U.S., Australia, the United Arab Emirates, Russia, and Qatar. For context, Qatar is building or chartering 104 LNG carriers, and plans to double its LNG output by the end of 2030. It would then produce 142 million megatonnes of LNG a year — more than 20 times the 7 million from the LNG Canada plant.
The critics’ climate issues and concerns are indeed legitimate, no argument. World emissions hit a record high in 2023, the International Energy Agency reports. Emissions in advanced economies fell to a 50-year low, but rose in China and India.
China in 2023 accounted for 35 percent of global carbon-dioxide emissions. The U.S. stood at 12.5 percent and India at 7.7 percent. While China has indeed made much progress on renewables, it and India continue to burn more and more coal.
Why Canadian groups think they can solve world issues by focussing on relatively modest LNG proposals in Canada is beyond us.
Our Canadian LNG will be environmentally cleaner than LNG from many rival suppliers. And buyers can use it to generate more of their electricity, replacing coal-powered generation that produces far more emissions. That’s an environmental plus.
LNG Canada will have an emissions intensity of 0.15 percent of carbon dioxide per tonne of LNG produced, less than half the global industry average of 0.35 percent per tonne, and 35 percent lower than the best-performing facility.
Woodfibre LNG will be the world’s first net-zero LNG export facility — 23 years ahead of government net-zero goals. Woodfibre LNG will have an emissions intensity of just 0.04 percent — and that’s less than one sixth of the global industry average.
The Haisla’s Cedar LNG project will have an emissions intensity of just 0.08 percent of CO2 per tonne of LNG. That’s less than a third of the global average. Its plans call for emissions to be near zero by 2030.
And the Nisga’a Ksi Lisims project promises to be operating with net-zero emissions within three years of the project’s first shipment.
Our LNG has another advantage over U.S. LNG: The shipping distance from BC to prime Asian buyers is about 10 days compared to 20 days from U.S. Gulf Coast LNG plants. That means 50-60 percent lower emissions from the ships carrying the LNG.
Canada produces only 1.5 percent of world greenhouse-gas emissions. As Canada’s independent parliamentary budget officer reported in 2022: “Canada’s own emissions are not large enough to materially impact climate change.”
Thus the First Nations LNG Alliance points out: “You could shut the entire country down — no energy, no industry, no jobs, no transportation, no heat, no light — and that reduction of 1.5 percent of emissions could be wiped out by new energy development and new emissions in other countries in a matter of some months or perhaps a few years.”
And so the Alliance says: “So we have government punishing taxpayers, First Nations and industry by putting on blinkers when it comes to LNG. Ottawa views Canada as a geographical silo in which we must meet our emissions targets, regardless of what others do.
“It’s long past time, indeed, to act locally — but think globally.”
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