Study
| EST. READ TIME 2 MIN.Oil and gas sector losing confidence in Alberta as a place to invest
Alberta’s new government has implemented, or plans to implement, many policy changes that will affect the oil and gas sector. Some of these changes include increases to the corporate income tax (CIT), increases in the carbon levy, and a panel review of the province’s oil and gas royalties and climate change policies.
The 2015 edition of the Global Petroleum Survey was conducted from May 29, 2015 to July 31, 2015, presenting a unique opportunity to assess how Alberta’s policy changes have affected investor confidence.
Alberta experienced a large negative shift from 2014 to 2015 in the Global Petroleum Survey. On the Policy Perception Index, a comprehensive measure of the extent of policy-related investment barriers within each jurisdiction, where a high score reflects negative sentiment on the part of respondents and indicates that they regard the jurisdiction in question as relatively unattractive for investment, Alberta’s score deteriorated from a value of 26.57 in 2014 to 34.21 in 2015. The province’s rank in 2014 was 16th (of 156 jurisdictions), deteriorating to 38th (of 126) in 2015.
The investment driver that experienced the largest shift in negative sentiment from 2014 to 2015 was political stability. In 2014, only 5% of respondents viewed political stability as a deterrent to investment; that increased to 51% of respondents in 2015.
Another large negative shift was in the fiscal terms policy category, which includes the royalty framework. In 2014, only 14% of Alberta’s respondents found this factor to be a deterrent to investment; that rose to 39% in 2015.
These negative shifts may not bode well for Alberta considering that the province’s immediate geographical competitors are perceived to be either attractive jurisdictions to invest in, or are improving.
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Kenneth P. Green
Senior Fellow, Fraser InstituteKenneth P. Green is a Fraser Institute senior fellow and author of over 800 essays and articles on public policy,published by think tanks, major newspapers, and technical and trade journals in North America. Mr. Green holds a doctoral degree in environmental science and engineering from UCLA, a master’s degree in molecular genetics from San Diego State University, and a bachelors degree in general biology from UCLA.Mr. Green’s policy analysis has centered on evaluating the pros and cons of government management of environmental, health, and safety risk. More often than not, his research has shown that governments are poor managers of risk, promulgating policies that often do more harm than good both socially and individually, are wasteful of limited regulatory resources, often benefit special interests (in government and industry) at the expense of the general public, and are almost universally violative of individual rights and personal autonomy. Mr. Green has also focused on government’s misuse of probabilistic risk models in the defining and regulating of EHS risks, ranging from air pollution to chemical exposure, to climate change, and most recently, to biological threats such as COVID-19.Mr. Green's longer publications include two supplementary text books on environmental science issues, numerous studies of environment, health, and safety policies and regulations across North America, as well as a broad range of derivative articles and opinion columns. Mr. Green has appeared frequently in major media and has testified before legislative bodies in both the United States and Canada.… Read more -
Taylor Jackson
Independent ResearcherTaylor Jackson is an Independent Researcher and a former Senior Policy Analyst with the Fraser Institute. He holds a B.A. andM.A. in Political Science from Simon Fraser University. Mr. Jackson is the coauthor of a number of Fraser Institute studies, including Safety in the Transportation of Oil and Gas: Pipelines or Rail?, and the Fraser Institute's annual Global Petroleum Survey, and Survey of Mining Companies. He is also the coauthor of a book chapter on the past, present, and future of Canadian-American relations with Professor Alexander Moens. Mr Jackson's work has been covered in the media all around the world and his commentaries have appeared in the National Post, Financial Post, and Washington Times, as well as other newspapers across Canada.… Read more