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April 2012

Vol. 17, No. 18 Week of April 29, 2012

Alison Redford rules Alberta

Posts 12th successive victory for Progressive Conservative party, gains mandate to seek Canadian backing to ship oil sands crude

Gary Park

For Petroleum News

Alison Redford gave Alberta’s governing Progressive Conservative party its 12th successive election victory since 1971 on April 23, earning a ticket to negotiate a pan-Canadian energy strategy which she hopes will open the door to wider domestic and international markets for her province’s oil sands crude and natural gas.

In the process she left pollster’s scratching their heads and fumbling for explanations after they had consistently forecast a victory for the upstart Wildrose party, or, at the very least, a tight finish.

“We were all wrong,” said Ian Large of Leger Marketing. “We were all equally wrong.”

Voters, about 20 percent of whom were listed as “undecided” before voting day, apparently decided they were not prepared to swing as far to the right as Wildrose leader Danielle Smith, many of them transferring their votes from the minority Liberal party to Redford, who has emphasized the progressive, rather than conservative element of her party’s name.

Some observers have even suggested that, given Redford’s political leanings, Alberta has effectively elected its first “Liberal” government in 91 years.

61 or 87 seats

At the latest count, the Progressive Conservatives will occupy 61 of 87 seats in the provincial legislature, backed by 44 percent of the vote. Wildrose elected 17 legislators with 34.3 percent voting support, the Liberals five and the left-leaning New Democratic Party four.

Wildrose was formed four years ago in a breakaway from the Conservatives after a disastrous attempt by Redford’s predecessor, Premier Ed Stelmach, to overhaul Alberta’s royalty regime — a mishandled plan that cost billions of dollars in investment and thousands of jobs.

The electorate wasn’t even swayed by Smith’s promise to return 20 percent of all provincial budget surpluses to Albertans, starting at an estimated C$300 per person in 2015, giving everyone a “direct share in the success of the province’s energy sector.”

Nor were voters deterred by Redford’s commitment to increase health and education spending, despite a recent run of budget deficits that will not be eliminated until 2015.

Keystone immediate priority

Having swept to victory, Redford can now seek cooperation among Canada’s 10 provinces and three territories and lay the foundation this summer for a Canadian Energy Strategy to open the way for pipelines and infrastructure to handle a tripling oil sands production to 3.5 million bpd by 2020.

Her immediate priorities are to secure approval for TransCanada’s Keystone XL pipeline to the U.S. Gulf Coast, plans by Enbridge and Kinder Morgan to export crude bitumen to Asia and moves by TransCanada and Enbridge to increase pipeline capacity to Eastern Canada to reduce current imports of 500,000 barrels per day to that region.

In less than seven months as premier, Redford has struck conciliatory tone carrying her message in support of Keystone XL to Washington, D.C., emphasizing her respect for the “sanctity” of the U.S. regulatory process.

She has also made a case for the economic benefits across North America of oil sands development and outlined her government’s efforts to tackle the environmental challenges facing the sector.

Redford said during the election campaign she believes that offering “honest, workable solutions will make it harder for people to say ‘no’.”

In her victory speech, she said the election was “about choice, a choice to put up walls or build bridges … tonight Alberta chose to build bridges.”

Smith had talked about building a “firewall” around Alberta to protect the province from outside attempts to limit growth of the oil sands and scorned Redford’s push for a national energy strategy, arguing Alberta alone could “lead the world in responsible, safe and reliable energy development.”

Redford’s campaign platform included an investment of C$150 million a year for 20 years to develop new environmental technologies through a recreated Oil Sands Technology and Research Authority.

The agency’s goals include clean gasification of feedstocks, such as bitumen bottoms, petroleum coke, biomass, waste and coal and transforming them into synthetic gas and value-added products such as heat, electricity and petrochemical feedstock.

It will also be charged with expanding the alternative energy sector and strategies in biofuels and developing commercial exports for Alberta’s clean energy.

A spokesman for the Canadian Association of Petroleum Producers said Alberta has an opportunity to “demonstrate leadership for policy and regulation that enables responsible oil and gas development.”

He said the issues of “vital importance” for Alberta include increasing access to key markets in the U.S. Gulf Coast, Eastern Canada and Asia and improving the industry’s “environmental and social performance and the transparency of performance reporting.”

Davis said there should also be a focus on “communications and outreach to national and international interests.”






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