Oil & Gas
Alberta Global Energy Centre touted by provincial panel
- Details
- Category: Oil & Gas
- Written by Elsie Ross
A blue-ribbon panel appointed by Alberta Premier Ed Stelmach to look at what Albertans need to do today to ensure the province’s long-term prosperity is proposing that non-renewable revenues help fund the creation of a Global Energy Centre in Alberta.
The centre would be designed to be a catalyst and funder of collaborative research, a meeting place of diverse interests and a showcase of achievement in the area of high-carbon energy (bitumen, natural gas and coal), says the Premier’s Council for Economic Strategy in its report, Shaping Alberta’s Future, which was released in May.
“Make Alberta internationally respected for pioneering research with authoritative evidence and industrial-strength solutions,” the group advises.
In its report, the 12-member council says that Alberta has the potential to become the world’s leading base of knowledge, technology and accomplishment in that area.
“There will probably be three or four or maybe five more decades where carbon fuels like that are going to continue to be in big demand, but there’s going to be a real requirement to search for them, to extract them, to mitigate environmental impacts as they go forward, and we believe Alberta can be the world’s best [at that],” David Emerson, chair of the council, said at a news conference following the release of the report.
A PENNY SAVED...
In what Emerson acknowledges may be one of the more problematic recommendations, the council is calling on the government to phase out funding ongoing day-to-day expenses from non-renewable resource revenue.
“What we are saying is that is not sustainable,” Emerson says. “It’s a little bit like selling bits of the farm year after year to pay for the groceries and the new cars. You just don’t do that.”
Over the past 10 years, the Alberta government has funded on average about 30 per cent of its ongoing programs from the proceeds of the sale of those resources (mainly royalties). This creates unacceptable levels of volatility in the revenue base, and it cannot be assumed that today’s prices for resource and energy revenue are going to continue forever, he says.
This is not because oil will run out, but rather because high resource prices will provide an incentive for the development of other technologies and ways of producing energy that can eventually displace oil to a significant degree, says Emerson, a former federal cabinet minister. “And tarsands oil, which is 95 per cent of what we are talking about here, is very expensive oil.”
Alberta needs to gradually make adjustments so that expenditures are brought more in line with other provinces and to look at all possible revenue alternatives, “and there are many, not just sales taxes,” says Emerson. “If you do that over five to 10 years, we believe you can do that without draconian measures.”
The council has proposed the creation of a “Shaping the Future” fund that would be used intentionally to secure prosperity for future Albertans. The proposed fund would be similar to the Heritage Savings Trust Fund, but “a little bit different and [with] greater rigour around the governance and the decision-making to make it a much less political fund,” Emerson explains. Council members see the fund as one in which experienced people would do a rigorous analysis in terms of what kinds of projects and infrastructure would make a strategic difference in transforming the Alberta economy.
The fund, for example, might invest in the establishment of a Global Centre for Energy to transform environmental and operational performance or provide core funding for an Alberta Institute of Advanced Technology to create new products, processes, services and companies.
Another investment might be in public-private partnerships to build and operate the infrastructure necessary to advance a strategic priority (for example, an underground demonstration facility for second-generation in situ bitumen recovery technology).
CHALLENGE ISSUED
The Shaping the Future Fund is one of five key initiatives in the wide-ranging report by the 12-member council that challenges Albertans to become engaged in a discussion of how they can become involved in shaping the province of 2040.
The report is organized under five themes:
• Realizing the full potential of the province’s energy resources, with the oilsands at the centre, ensuring that Albertans benefit from energy development as long as possible while addressing environmental impacts and entering new markets;
• Broadening the economic base—delivering new products and services into new markets outside the United States;
• Preparing to prosper in a global economy—ensuring Albertans are lifelong learners, healthy and globally informed;
• Providing a strong platform to sustain economic growth—wise management of water and land, and reliable transportation and communication systems to support global interaction; and
• Investing in shaping the future—a strategic, disciplined approach to managing resource wealth.
Only lethargy can stop Albertans from getting to where they need to go, Emerson says.
“If Albertans put the report in a filing cabinet and let it gather dust or people say it’s too hard or, ‘I can’t deal with this politically because Albertans aren’t ready to deal with this…,’ then the seismic shifts are going to take their toll on us,” he says. “We can adapt and be ready and take advantage of the opportunities and mitigate the threats, but if we do nothing, I can guarantee you we are going to have some tough years ahead.”
It may not be immediately, he admits, but the province could see harder times in the not-too-distant future.
Emerson pleads with Albertans to “talk about the report, take the report, tear it apart, criticize it, create better ideas, but get going on shaping the future.”
“Let’s make it politically advantageous for our elected leaders to do the things that have to be done,” he says. “That’s the only way that’s going to happen.”
The report is a “report for all Albertans,” Stelmach says in his introduction. “It’s a report to foster dialogue, to have conversations across Alberta involving our youth in creating their future.”
“The world is changing and Alberta needs to change too,” the premier says. “We need to think long term, and it’s all about how to leverage our advantages such as energy resources into sustainable long-term growth and stability and how we will equip future generations.”
