Alberta reaps oil, gas windfall

Gary Park, Petroleum News Calgary correspondent

It’s harvest time in Alberta — wheat, barley, canola ... and, the bumper crop of all, oil and natural gas.

Awash in cash from robust crude and gas prices, Alberta Finance Minister Patricia Nelson said the budget surplus could ratchet up by C$1.7 billion. In the process, Alberta has raised its forecast commodity prices for the 2003-04 fiscal year to US$25 a barrel for West Texas Intermediate crude from US$23.30 and to C$5 for a thousand cubic feet of AECO spot gas from C$4.05.

But the province’s expectation of bulging revenues coincided with regulatory approval for ATCO Gas to boost average consumer gas bills by 50 percent to C$6.21 a gigajoule.

The only consoling thought for homeowners is the Alberta Natural Gas Protection Act, which requires the government to reimburse Albertans if they pay more than an average C$5.50 per gigajoule over the full fiscal year. Premier Ralph Klein said the rebate program was under study and “hopefully consumers won’t be hurt.”

He said an announcement in another month or so should clarify whether a rebate would be paid in winter, or based on a yearly average. In the meantime, Nelson said the growing surplus should see the new Alberta sustainability fund — established to cushion the province against volatile energy prices — reach C$3.4 billion by the end of the fiscal year, up from the budgeted forecast of C$2.2 billion.

Once the fund reaches C$2.5 billion, cash can be used for debt repayment, disaster assistance and natural gas rebates.

Meanwhile, the Alberta Heritage Savings Trust Fund — Alberta’s near-relative of the Alaska Permanent Fund — bounced back from a dismal showing earlier this year. For the quarter ended June 30, the fund assets were valued at C$11.7 billion, up C$600 million.