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Varcoe: Oilpatch says the elections in Alberta have to deal with the industrial crisis

Several hours after United Nations Conservative Party leader Jason Kenney urged oil refinery directors to speak more energetically for their sector, leaders of five industrial groups laid their electoral cards on the table Wednesday.

And as leaders of oil producers, oil pipeline operators, and the oil field service began talking in Calgary, Prime Minister Rachel Notley announced that Alberta would increase oil production levels in February and March, alleviating the goal of reducing the province.

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

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

What I'm saying is that provincial elections are behind the corner – voters will be put to the voting box by the end of May – expect to see pipelines, oil shortages, greenhouse gas emissions levels, carbon tax, and industry competitiveness become the main topics of the campaign.

Energy will not be on the ballot box.

But this is Alberta. This will not be far from talking, as all sides are looking for ways to launch investment and employment in the largest and most powerful sector in the province.

"This is indeed a breakthrough moment," Chris Bloomer, executive director of the Canadian Energy Systems Association, said in an interview.

"We get shocks from all parts, pushing is not diminishing and we have to hear our voices."

An unusual joint press conference for industrial groups was designed to discuss the role of energy issues in the upcoming electoral campaign.

The sector is struggling with a number of concerns: the difficulties in obtaining oil and gas on the market, weak commodity prices, relocating plant to the United States, reducing capital programs, reducing drilling activities, and attracting investment challenges.

The most probable problem is obtaining pipelines built for the transportation of oil and natural gas from Alberta, although the government has limited ability to influence federal approval of projects crossing provincial borders.

The gap that is currently facing Trans Mountain and Keystone XL pipeline projects, along with the deaths of Northern Gateway and Energy Eas, left the industry with too much production – about 3.9 million barrels a day in Alberta – and insufficient ways to deliver it.

This put an emphasis on regulatory and legal obstacles to building energy infrastructure in Canada.

The narrow throat in traffic led to a sharp fall in Canadian oil prices last autumn, which led the Notley government to limit oil production by 325,000 barrels a day, starting this year, to restore market equilibrium.

The province announced Wednesday that it will increase industrial output by 75,000 bpd to a total of 3.63 million barrels a day in February and March. This is an encouraging sign that oil stocks around Alberta have fallen by about 15 percent since December.

"What we discovered was the stock (oil) we had was pulling off a little bit faster than expected," Energy Minister Marg McCuaig-Boyd said in an interview.

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

Many manufacturers have called for a restriction to support the decline in prices, although oil-based oil companies are affected by capital spending.

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

"The idea of ​​finding a rational way to get out of the limit would be a good idea," said PSAC President Gary Mar.

"This is not a hypothetical question, it's people who lose their jobs. , For people who are energy service workers, the limit was not a good program. "

Carbon Restrictions and Tax Rates in the Province – Some major oil producers, such as Suncor Energy and Shell Canada, have supported it, while the Canadian Association of Researchers and Producers (EPAC) opposes taxation – emphasizing the fact that the industry is not monolithic.

However, there is a lot of common concern, such as concerns over time-limits regarding the regulation of moving large projects through government approval process.

For example, Imperial OIL took nearly five years from the moment he first reported for his Aspen Oilands project worth $ 2.6 billion, while the regulators did not approve it in October last year.

Tim McMillan, the president of the Canadian Oil Manufacturers Association, believes that improved efficiency could reduce the regulatory costs in Alberta by $ 2 billion. The disbursement is that the industry by 2020 could double its investment in oil refueling in the province, he said.

For the drilling and service sector, the financial pressure is intense. If producers do not spend money, petroleum service companies are not working.

In 2014, the industry had a fleet of about 850 buckets in the country. The Canadian Oil Refinery Contractor expects to fall to 500 by the end of the year.

"It's the function of poor economies, raw material prices are certainly falling, but they also fall into government policy," said CAODC president Mark Scholz.

The effect of these interconnected issues ranges from oil fields to central offices in the city center. Every active platform drill directly and indirectly employs around 140 people.

ATB Financial announced on Wednesday that employment at Calgary's office fell by almost eight percent between 2012 and 2017, while Edmonton fell by five percent.

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

– Here teachers get their dollar. ,, provides good health care. It's the real economic motor that drives us ahead – and is now in a crisis. "

It is often said that you can never spend a good crisis.

The upcoming elections should test this theory, with a great opportunity to examine the future of energy development in Alberta.

Chris Varcoe is columnist Calgary Herald.

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