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Vol. 15, No. 26 Week of June 27, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Wild West turns friendly

Energy ministers from Canada’s key petroleum provinces — Alberta, British Columbia and Saskatchewan — are talking harmonization to allow the oil and gas industry to operate more freely across their borders.

But that doesn’t mean they’re ready to give up competing.

As fast as they were discussing common permitting and regulatory rules, the three ministers were making it clear that their efforts to offer the most competitive royalty holidays and drilling incentives were not about to end.

The Alberta government established the tone by releasing a 90-day progress report on its regulatory review task force that claims the industry will save up to C$170 million a year as a result of slashing regulatory red tape.

To lure more upstream activity, Alberta projected it will sacrifice C$27 million in royalties in 2010-11, C$311 million in 2011-12 and C$1.2 billion in 2012-13.

‘Significant opportunities’

However, despite the competition for investment, the three ministers agreed “there are some significant opportunities for us to collaborate,” said Alberta Deputy Energy Minister Peter Watson.

“There’s no question in my mind that in the natural gas environment we need to increase demand and markets in a number of areas, not only inside our own jurisdictions and across North America, but also export markets,” he said.

Paul Wieringa, British Columbia’s acting assistant deputy minister, said that establishing natural gas as an end-use fuel for transportation is a critical area of possible cooperation under the New West Partnership signed in April to eliminate trade barriers and boost economic activity.

“It would be really neat in the three provinces if we could try to promote more of that and be somewhat of a leader in that area,” he said.

Wieringa said the three provinces could learn from each other as they try “slightly different things to improve out regulatory atmosphere within each province.”

“Cooperation is going to be paramount,” said Saskatchewan Enterprise Minister Ken Cheveldayoff.

He said the premiers of the three provinces recently went on a mission to China and Japan and opened a joint trade office in Shanghai to promote their collective interests.

Alberta Premier Ed Stelmach said his counterparts plan to discuss whether they can increase the partnership — which has also involved discussions with Canada’s three territorial governments (Yukon, Northwest territories and Yukon) — to strengthen their competitive position in a dramatically changing world.

Federal priorities also discussed

The premiers are also discussing federal government priorities in Canada and the United States on issues such as climate-change strategy, trade and agriculture.

Alberta Energy Minister Ron Liepert said the move toward oil and gas harmonization is intended to make sure “we do what we can to make sure the transitions from one province to another are as smooth as possible.”

He asked the industry to identify permitting or regulatory areas which are essentially the same in each province but which require separate applications.

Bill Bennett, newly appointed energy minister in British Columbia after the surprise resignation of Blair Lekstrom, who parted company with Premier Gordon Campbell over sales tax changes, said “one set of rules and regulations makes eminent sense. B.C. would definitely be interested in having that discussion.”

Saskatchewan Energy Minister Bill Boyd said his province and Alberta have had preliminary talks about harmonization, including streamlining environmental regulations.

David Collyer, president of the Canadian Association of Petroleum Producers, said there is scope in the regulatory policy area to establish consistency among the provinces.

He said that could extend to consultations with aboriginals in pipeline projects to the B.C. coast.

Liepert said Alberta is committed to opening new markets for its crude oil and natural gas and is ready to “take whatever action we feel is appropriate to get those markets opened up.”

—Gary Park



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