Alberta natural gas associate minister aims to bring stability to an industry in turmoil

Image: AltaGas

This article is part of the Fall 2019 Alberta Oil & Gas Quarterly, which you can download for free here.

This spring’s election saw the election of a new government in Alberta, along with the appointment of Alberta’s first-ever Associate Minister of Natural Gas.

It’s a positive sign that the province intends to focus on an important sector that has faced significant challenges over recent years. Dale Nally, MLA for Morinville-St. Albert, holds the key government role, supported by the Department of Energy.

Why is it important for the Government of Alberta to focus on the natural gas industry?

We have a natural gas industry that is in absolute turmoil. We have natural gas producers on the brink of bankruptcy, and we have natural resource owners – that’s Albertans – who are not being adequately compensated for their resources.

We’re talking about an industry that used to generate over $8 billion in royalties to the province that is currently generating a little less than $500 million. We need to bring some focus and stability to this important industry so that we can bring prosperity back to Alberta.

What is your top priority area?

My first priority is going to be bringing stability to the industry. That starts with the Natural Gas Advisory Panel’s Roadmap to Recovery report; there were 48 recommendations in there and we are working through those as diligently as possible to bring as many of those to fruition as we can.

For example, we worked with industry to support a change to the storage protocol on our pipelines that will allow our producers to access storage during periods of maintenance. This will help with the volatility, because right now if natural gas is trading at $2 it’s collapsing down to 10 cents often because of the storage protocol that’s currently in place.

We’re very happy that the Canadian Energy Regulator recently approved this change, which will be very substantial in bringing some stability to the AECO price.

How is Alberta working with British Columbia to advance LNG exports, given that the two provinces are at odds over oil transportation?

Obviously we do not see eye to eye on the Trans Mountain Expansion, but when it comes to LNG we have a long history of agreement and collaboration with the British Columbia government. We have been working and will continue to work together at the administrative level on shared priorities for our two governments.

Although I have not yet met with Minister [Michelle] Mungall, I could foresee this happening in the very near future because LNG is of great importance to both of our provinces.

What is Alberta doing to optimize the regulatory environment for natural gas producers?

In September, Energy Minister Sonya Savage announced a review of the Alberta Energy Regulator, along with the appointment of a new interim board. We’re not looking for the Wild West here, but we need to make sure the province’s resources are being developed efficiently and in an environmentally responsible manner.

We anticipate this review will identify enhancements to the AER and ensure that Alberta remains a predictable place to invest and a world leader in responsible energy development. We’ve also got the Ministry of Red Tape Reduction that will be looking to reduce more than 30 percent of the red tape in this province, and that includes the energy industry. That is going to go a long way in shortening approvals.

Will Alberta continue to invest in projects such as petrochemical facilities to diversify markets for natural gas?

We made it clear in our election platform that this government is committed to diversifying our economy. That includes investments in the petrochemical sector, and we have been vocal in saying we will continue to support this sector where it makes sense.

How is Alberta building Indigenous participation in natural gas projects?

The Premier made it very clear from day one that this government is going to be an ally of Indigenous peoples. One of the very first things that he did was host a meeting between the 48 First Nations chiefs and cabinet.

We’re also in the process of creating the Alberta Indigenous Opportunities Corporation, which is going to backstop up to $1 billion in loans in the energy business for Indigenous companies, and it’s probably the single biggest thing this government can do for reconciliation right now.

How will you measure your success as Alberta’s Associate Minister of Natural Gas?

I’ll know that I’ve been successful when natural gas producers are turning a reasonable profit, when resource owners are being adequately compensated for their resources, and lastly, when Alberta contributes in a meaningful and substantial way to global emissions reductions by getting LNG to India and China.

I want to send the message that Alberta is absolutely open for business. We are reducing red tape, which is going to make it easier and friendlier for energy companies to do business in this province; we have reduced corporate taxes to encourage investment, and we are very optimistic about the future.

This article is part of the Fall 2019 Alberta Oil & Gas Quarterly, which you can download for free here.

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