Alberta Premier Rachel Notley announced a new carbon tax break Thursday for the oil drilling sector.
“The system right from the very outset allows for exemptions in trade-exposed sectors … to ensure that they could remain competitive while at the same time bringing in an incentive to have them reduce their emissions,” Notley told reporters in Calgary. “So we’re striking the right balance.”
The premier made the announcement while speaking to the Canadian Association of Oilwell Drilling Contractors at the Petroleum Club.
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Companies in the drilling sector were already exempted from paying an Alberta carbon levy on fuels necessary for on-site drilling. Thursday’s announcement expands what fuels are recognized as necessary for oil and gas development, taking in clear fuels too, and provides for a rebate on carbon taxes paid on clear fuels since January 2017.
Notley said the estimated annual cost of the change will be $1.5 million.
She told reporters that the change puts those in the drilling sector on equal footing with other kinds of work already exempted, and noted there are also rebates in place for individual consumers.
The ‘fight of our lives’
Notley also announced that the province is considering six project proposals for partial oilsands bitumen upgrading, and again called upon Prime Minister Justin Trudeau’s government to invest more money in trains to move Alberta oil by rail.
“I know many pipeline opponents don’t want to hear this, it’s not what they wished for, but I guess you have to be careful what you wish for,” Notley said.
“I am also asking the federal government to prioritize the shipment of crude by rail after grain until new pipelines are built. The bottom line: Ottawa needs to join Alberta to help ease the economic pain that Alberta played no part in causing, but in fact the same pain that is affecting the wellbeing of this entire province and quite frankly this entire country.”
Currently, Alberta oil fetches less money when shipped through the United States. Notley pegged that differential, or loss to the economy, at $80 million a day on Thursday. The proposed Trans Mountain pipeline expansion – now owned by the federal government – would allow Alberta oil to reach international markets.
In Calgary Thursday to meet with the Chamber of Commerce and oil and gas executives, Trudeau said he knows Albertans are worried. "This is a very difficult context right now with the (oil price) differential being where it is, piled on top of years of struggling with low oil prices."
While both levels of government have discussed problems facing the oil industry, there has been little discussion of the oilpatch's financial liabilities and possible solutions despite the recent revelation Alberta taxpayers could be on the hook for as much as $260 billion in cleanup costs.
Asked about Alberta's rail request in Ottawa, federal Finance Minister Bill Morneau said pipelines are his preference, vowing to continue to push to build the Trans Mountain expansion.
Notley called oil, “the natural inheritance of each and every Albertan,” and said it will find its way to market, even if that means Alberta will need to buy trains to make it happen.
Meantime the effort to expand upgrading in the province is meant to add value to Alberta’s oil and foster new jobs. Together, the six projects could lead to 10,000 construction jobs and about 500 jobs in operations.
“Every Albertan knows that once those resources come out of the ground, we can do more,” Notley said. “We must take more control of our economic destiny. We are not a branch plant for the U.S. economy.”
– With files from The Canadian Press
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