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Alberta

Alberta’s Energy Road Ahead Has Never Been More Important: Brian Jean – Minister of Energy and Minerals

Published

9 months ago

6 minute read

From EnergyNow.ca

By Brian Jean – Minister of Energy and Minerals of Alberta 

Recently I had the opportunity to speak at The Road Ahead, Alberta Energy 2024, presented by EnergyNow at the Calgary Petroleum Club.

The road ahead for Alberta in 2024 is an important one. Alberta is at the crossroads on many key energy issues which I wanted to expand upon.

Let me start with some quotes from the last Throne Speech that will give you a sense of where Premier Smith wants Alberta’s world leading energy industry to go.

This is a key one: “Alberta’s government will ensure the entire world understands that the words “Alberta” and “energy” are inextricably linked for generations.”

All credible energy forecasters see the oil and gas industry as being the globally dominant energy player for decades to come. This means that Alberta, which produces energy in a better way than any other jurisdiction, will have opportunities and jobs in the energy industry for the children and grandchildren of those who are its current employees. Not only is Alberta’s resource one that will last, but it is also one that will lead the world.

Again, from the Throne Speech: “Our province is the fourth-largest producer of oil and gas in the entire world – and is, far and away, its most environmentally responsible one. Alberta will not be content with fourth place – not when our province’s energy reserves and environmental technologies are second to none.”

Our Premier recognizes that not only do we have  globally significant oil and gas resources in the ground, but we also possess the significant knowledge and skills of Alberta’s energy workers and energy companies. That said, as we continue to develop energy projects of all types, more skilled trades will be needed and Alberta is committed to developing these skilled trades “in province” where possible.  This will allow Alberta to continue to develop oil and gas in the most responsible way possible which will continue to evolve as new technology is developed.

All that heads us towards success. As a government we need to be bold enough to create the mechanisms of success for our energy industry and we are committed to do this.

Also from the Throne Speech: “Not only will Alberta be the greenest energy producer in the world, our government will ensure we create one of the most efficient, timely and red-tape free jurisdictions on the planet to invest in energy – whether that be conventional, non-conventional, renewable or otherwise.”

Premier Smith has tasked our government with improving our regulatory capacity. She wants us to create the flexibility and nimbleness to have world class results in all our energy spaces. We will take bold steps in the oil sands as we work with Pathways Alliance to create the world’s first carbon abated major oil field.

We will take bold steps with non-conventional producers to make the most of our gas and liquids industries in the Montney and Duvernay. And we will continue to take bold steps to use our energy industry to drive economic opportunities and reconciliation for our indigenous communities.

We will take bold steps to make sure that Alberta continues to be one of the top global places to build wind and solar, while protecting farmland and viewscapes.

We will use the skills and Alberta know-how that spring from our oil and gas expertise to make breakthroughs in lithium development and helium exploration.

Alberta is the ideal place for energy investments in established energy sectors and emerging energy-related sectors like petrochemicals, hydrogen, ammonia, lithium, and helium.

We will continue to lead the world in carbon capture, utilization and sequestration. A technology that we have deployed at scale faster than almost any other jurisdiction.

Finally, Alberta will take advantage of our tremendous natural gas resources to make Alberta a global centre for petrochemical production in general. But more than that, we will specifically be the global leader in green petrochemicals made from our energy resources and greened by sequestering the carbon used in their production.

These are the bold ambitions that Premier Smith and our government have for Alberta’s energy sector. Alberta has the expertise, and the duty, to remain a major global energy supplier.

And allow me to end with one last quote from the Throne Speech: “The world needs more Alberta energy – not less – and Alberta’s government intends to empower Albertans to deliver it!”

Our government isn’t afraid to declare that Alberta is energy and energy is Alberta!

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Alberta

Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn

Published on November 21, 2024

By

From the Fraser Institute

By Tegan Hill

According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.

The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.

For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).

And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.

In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.

This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.

Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.

Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.

Of course, if the government falls back into deficit there are implications for everyday Albertans.

When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.

According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.

Author:

Tegan Hill
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Alberta

Premier Smith says Auto Insurance reforms may still result in a publicly owned system

Published on November 21, 2024

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Better, faster, more affordable auto insurance

Alberta’s government is introducing a new auto insurance system that will provide better and faster services to Albertans while reducing auto insurance premiums.

After hearing from more than 16,000 Albertans through an online survey about their priorities for auto insurance policies, Alberta’s government is introducing a new privately delivered, care-focused auto insurance system.

Right now, insurance in the province is not affordable or care focused. Despite high premiums, Albertans injured in collisions do not get the timely medical care and income support they need in a system that is complex to navigate. When fully implemented, Alberta’s new auto insurance system will deliver better and faster care for those involved in collisions, and Albertans will see cost savings up to $400 per year.

“Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable. When it’s implemented, our new privately delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”

Danielle Smith, Premier

“High auto insurance rates put strain on Albertans. By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”

Nate Horner, President of Treasury Board and Minister of Finance

Albertans who suffer injuries due to a collision currently wait months for a simple claim to be resolved and can wait years for claims related to more serious and life-changing injuries to addressed. Additionally, the medical and financial benefits they receive often expire before they’re fully recovered.

Under the new system, Albertans who suffer catastrophic injuries will receive treatment and care for the rest of their lives. Those who sustain serious injuries will receive treatment until they are fully recovered. These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence, such as impaired driving or dangerous driving, or conviction of certain offenses under the Traffic Safety Act.

Work on this new auto insurance system will require legislation in the spring of 2025. In order to reconfigure auto insurance policies for 3.4 million Albertans, auto insurance companies need time to create and implement the new system. Alberta’s government expects the new system to be fully implemented by January 2027.

In the interim, starting in January 2025, the good driver rate cap will be adjusted to a 7.5% increase due to high legal costs, increasing vehicle damage repair costs and natural disaster costs. This protects good drivers from significant rate increases while ensuring that auto insurance providers remain financially viable in Alberta.

Albertans have been clear that they still want premiums to be based on risk. Bad drivers will continue to pay higher premiums than good drivers.

By providing significantly enhanced medical, rehabilitation and income support benefits, this system supports Albertans injured in collisions while reducing the impact of litigation costs on the amount that Albertans pay for their insurance.

“Keeping more money in Albertans’ pockets is one of the best ways to address the rising cost of living. This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province.”

Nathan Neudorf, Minister of Affordability and Utilities

Quick facts

  • Alberta’s government commissioned two auto insurance reports, which showed that legal fees and litigation costs tied to the province’s current system significantly increase premiums.
  • A 2023 report by MNP shows
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