Tuesday, January 26, 2010

Taylor Energy Policy

The Alberta Liberal Party begins to discuss issues Albertans are interested in.

The new energy policy hits the mark. The document as presented;

Our relationship with the oil and gas industry is vital. Alberta’s oil and gas resources belong to the people of Alberta, and we rely on the industry to develop those resources. The oil and gas industry is the backbone of Alberta’s economy. With that in mind, over the last several months we have consulted in detail with members of the oil and gas industry. We have offered proposals, we have asked for suggestions, and we have listened to their advice.

The Principles

Our consultations have led us to five principles:

That the health of the Alberta economy is inextricably tied to the health of the energy


That the Alberta Liberals view the energy industry as a positive force in Alberta.

That the energy industry requires certainty, sustainability, consistency and effectiveness in regulation and policy.

That energy policy and royalty rates should be determined in consultation with the industry, be based in fact, and be competitive.

That a responsible government and the Alberta energy industry will work together to be good stewards of the environment.

Defining the Process

We believe the process of developing sound energy policy must include the following:

• both industry and all other interested and affected parties must be consulted on an ongoing basis and at every stage of policy development, and their perspectives taken seriously

• policy must reflect an understanding of the industry’s need for an adequate return on investment, that reflects the level of risk undertaken.

• policy must reflect an understanding of the industry’s need for stability, certainty and the need to be competitive on a global scale

• policy must balance the recognition of the importance of a healthy energy industry with that of taking responsibility for climate and the environment

• policy must commit industry, government and the people of Alberta in partnership to continuous improvement in clean energy, conservation, and reduction of our environmental footprint

• policy and regulations must be effective, efficient, consistent, and based in fact

Royalties and Resource Revenues

• Government will sit down with the energy industry and the financial industry to define a process for setting royalties that are competitive and allow for a return on investment.

• This determination will take into account the full spectrum of government revenue generated by the energy industry

• We would consider using the royalty system to incentivize lower environmental impact behaviours.

Regulatory Reform

• We would have a simplified regulatory system with a quicker, more effective process.

• We would ensure that the resources in the ERCB are deployed to the maximum effect.

• We would institute a one-window approach to approvals, permits, inspections and so on.

• We would improve co-ordination on oil and gas matters between the ERCB, Alberta Environment, Alberta Energy and Sustainable Resource Development, and also with the Federal Government and First Nations.


• Where infrastructure is demonstrably related to industry activity, we would work with industry to determine their appropriate funding contribution.

Distinctions Within the Oil and Gas Sector

Conventional Gas

• We would take into account the mature state of Alberta’s conventional gas reserves in designing its royalties and incentives with the goal of preserving the ongoing viability of the sector for as long as possible

• One option we would consider is to start royalties low, raising them as risk is reduced and costs come down, and then reducing them as production wanes to encourage protracted development.

Unconventional Gas: Tight Gas, Shale Gas, Coal Bed Methane (CBM)

• We would rework royalties on unconventional gas so that government is not
maximizing its “take” on the front end, when development costs are the highest.

• We also recognize the need to be competitive with other jurisdictions, while being careful not to get caught in a race to the bottom.

• To better enable development of unconventional natural gas resources in northwest Alberta, we would ensure that the appropriate infrastructure is in place, either by directly building it with public funding, or by incentivizing industry to do so privately.

Conventional Oil

• Recognizing the costs of further development, we would institute a royalty system and a simplified regulatory process that encourages the horizontal multi-stage fracturing needed to unlock both tight oil and a lot of unrecovered conventional oil

• We would provide strong and continued support for systems to distribute and use carbon dioxide for enhanced oil recovery.

• We would consider applying drilling credits as an incentive for both tight oil and conventional oil investment.

Oil Sands

• Contracts will be honoured for their duration, with the intention of reviewing and improving licenses at times of renewal.

• Conditions of license will be used to promote best practices and optimal development

• We would sit down with industry to remove the cap on royalties at the top end of oil prices (over $120 a barrel).

Adding Value, Adding Markets

• We believe that adding value is important, and our target would be that current proportions of Alberta-based bitumen upgrading are at least maintained as oil sands development grows.

• We would undertake a detailed study of Alberta’s petrochemical sector to identify capacity, potential for expansion, technology needs, capital availability, and market opportunities.

• We would work with British Columbia to prioritize the west-coast pipeline project, particularly the environmental approvals.

• We would make this project a point of particular emphasis at the federal level.

What if Alberta’s Oil Sands Could Produce the Cleanest Oil in the World?

• We see this as a Race-to-the-Moon-scale quest to discover, develop, and apply the technologies that will unlock the oil from the sands in a carbon-free or carbon-reduced, environmentally-sustainably, earth-friendly way

• We would revive the Alberta Oil Sands Technology and Research Authority, a specific body that revolutionized oil sands development before, and will do so again.

• We would implement a 2 to 3 cent per barrel levy on bitumen production to fund the expansion of R & D spending [Climate change points to be included once determined independently]


  1. Taylor's problem has never been policy. (See his Housing Policy, or his leadership policy - http://www.tayloralberta.ca/index.php?a=10 - all GREAT policy).

    And it's not his media presence. That is undeniable.

    So how the hell did this guy not win the leadership? Is he that much of an asshole, or is his party that out of touch? A combination of both?

  2. So anonymous, if you like his policy and you like his media presence, you must be a fan.

    Would you support him for Leader?

  3. I did support Dave Taylor for the leadership. I was surprised by the result. What did we learn from that experience?

  4. Not to count chickens when they are only eggs.