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Greetings. In this presentation, I will discuss the ongoing oil crisis with an emphasis on how Alberta has been affected.

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This video by CBC’s The National explores the impact of the oil crisis on the small Alberta town of Drayton Valley, which sent 6,800 letters to Prime Minister Justin Trudeau in December 2018 explaining how the formerly prosperous town is negatively impacted by low oil prices. I chose to include this video in my presentation because it vividly illustrates the plight small businesses face because of the crisis & the Alberta economy’s heavy reliance on fossil fuels. I found the discussion of how eastern Canada favours imported oil from nations such as Saudi Arabia over energy from the same country to be especially illuminating.

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Meet the Alberta oil town that's hurting to stay alive

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Another clip from CBC’s The National, this one discusses how the precipitous drop in oil prices in early 2020 further damaged Alberta’s oil-based economy. This devastated several major important energy companies & eradicated billions of dollars of wealth; Cenovus was hit particularly hard, losing more than half of its market value. One important point raised in the video is that it is easy to assume that this problem only affects Alberta when its impacts have dire implications for all of Canada. Another theme discussed in the video is Western alienation – the people of Western provinces (most notably Alberta) often express disillusion with their role in Canada.

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Drop in oil prices another blow for Alberta

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In this video, then-Alberta Premier Rachel Notley discusses plans to boost Alberta’s economy by building a new oil refinery. This video also discusses the root causes of the oil crisis in more detail. One reason for this is the price differential (the lower price of Canadian oil compared to American oil). This exists because Canadian oil is more expensive to refine. Another factor is transportation – the farther oil is transported, the less it is worth. This became an important factor in November 2017 when the Keystone pipeline spilled in South Dakota. This caused Albertan oil facilities to fill up, leading to a surplus & price drops.

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Alberta's oil crisis: Can a new oil refinery fix the problem? | Power & Politics

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This video discusses the history of the oil industry in Alberta. It begins by noting that the average price of oil in 2019 was significantly lower than it was prior to the 2008 recession, when oil prices cratered. It then notes that the current crude oil market is even weaker now than it was during the recession, turning negative in April 2020 for the first time in history. This resulted in sellers paying prospective buyers to take their oil. One reason for this is the travel restrictions imposed by the ongoing COVID-19 pandemic, causing demand for crude oil to drop precipitously. This illustrates the fact that the laws of supply & demand apply to oil just as much as any other commodity.

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A timeline of Alberta oil: From major boom to COVID-19 bust

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This CBC article discusses the early history of the energy industry in Alberta. The province’s first major strike occurred in 1947, but the industry really took off in the 1970s after Middle Eastern oil producers reduced their oil consumption as leverage to reduce foreign commitments to Israel. This resulted in oil prices increasing fivefold overnight & Alberta’s population increasing by a third. This success ground to a halt in the early 1980s when Dome Petroleum was bailed out & unemployment more than doubled. The province would start returning to its previous success in the late 1980s & early 1990s when royalty revenues were used to expand into the lumber industry. This illustrates the fact that the current situation is not unprecedented or necessarily permanent.

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In this article, environmentalist advocates Vanessa Corkal & Aaron Cosbey argue that bailing out the energy industry is the wrong approach to take during the ongoing COVID-19 pandemic. They maintain that an appropriate emergency response should address the underlying causes & achieve crucial public policy goals. They argue that bailing out the energy industry does not meet the first criterion since it was struggling long before the pandemic. Finally, they argue that the province should instead invest in industries such as healthcare & renewable energy that will be more resistant to future shocks. In conclusion, this article illustrates the need for Alberta’s economy to diversify.

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In times of unprecedented crisis, government leadership means being bold. But as Canada and its provinces prepare to roll out record-breaking emergency responses to help the newly jobless and throw lifelines to drowning sectors, it's becoming clear that not all support is created equal.

Alberta Premier Jason Kenney in liquidity for oil and gas producers. This came on the heels of the has said unemployment could rise to at leas t 25 per cent, or upwards of 500,000 workers. To bolster Alberta's economy, he called for the federal government to commit at least $20 to $30 billion calls for the federal government to purchase oil and gas sector accounts receivable at a discount. province's announcement of almost $8 billion in equity infusion and loan guarantees for the Keystone XL oil pipeline. There have also been

There's no question that people across Alberta need urgent help. In the accommodation and food service sector alone, nearly 100,000 workers have already lost their jobs, and similar numbers seem likely in retail trade. The oil and gas sectors have seen thousands of layoffs and postponed labour as the province's companies limit production and shelve all plans for expansion, upgrades and maintenance.

But is injecting tens of billions into oil and gas corporations the right kind of help? As well as addressing immediate needs, strategic emergency response should have two critical features:

1. It should address the root causes of the crisis and reduce vulnerability to future crises;

2. It should take advantage of the dynamism that crisis creates to build back better and achieve important public policy goals that may have been harder to reach in more settled times.

Would the proposed assistance address the root causes of the crisis? Alberta's economic hardship started before COVID-19 and is grounded in over-dependence on those inherently cyclical commodities. But rather than pursue diversification that could shelter Albertans from the pain of future shocks, these sorts of investments double down on the status quo, hitching the wagon firmly to volatility and uncertainty.

There will be future shocks, whether it's another 2008-style financial crisis, a climate-induced crisis such as the 2016 Fort Mac fires, or - dare we say it - another COVID-19-style pandemic. Placing heavy bets on the oil and gas sector nearly guarantees we will be here again, with similar social and economic pain for people across the province.

Bets like these assume the oil and gas sectors will return to business as usual after COVID-19, that demand will be strong for decades in spite of increasing climate change mitigation efforts, that pipelines will be built despite sustained opposition or political delays, and that Saudi Arabia and Russia will back down and reverse measures designed to do exactly what they are doing - squeeze out high-cost producers like the U.S. and Canada.

Even if all those assumptions prove right, and the bet pays off, that success doesn't address the underlying problem of over-dependence - it aggravates it.

Would the proposed assistance take advantage of the opportunity to build Alberta back better? We know that, whether through market forces or government policies, Canada's oil and gas sector will eventually decline, hopefully to be replaced by more diversified and sustainable economic drivers. As the head of the International Energy Agency, the United Nations Secretary-General and others have recently argued, our response to the current crisis must accelerate this urgently needed transition. If Alberta is to rebuild its damaged house after this unprecedented crisis, why not build a stronger house?

For Alberta and the federal government, this should mean investing tens of billions of dollars in sectors that can bring long-term prosperity for Alberta's workers and families, such as hydrogen, health sciences, renewable energy, clean transport, sustainable agriculture, innovation in oil and gas well reclamation, and prevention of fugitive methane emissions, building on the province's world-class institutions and infrastructure, and the strengths of its people.

The coming economic downturn will swallow up the unprecedented torrents of fiscal support we're assembling, and still call for more. But let's remember that this spending can be a historic force for positive change to ensure that when we come out the other end, our society is more equitable, sustainable and resilient - ready for whatever the future might throw at us.

10 things you need to know as a barrel of Alberta oil is valued at less than a bottle of maple syrup
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Doubling down on Alberta's oil and gas sector is a risk Canadians can't afford to take | The Narwhal

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In times of unprecedented crisis, government leadership means being bold. But as Canada and its provinces prepare to roll out record-breaking emergency responses to help the newly jobless and throw lifelines to drowning sectors, it's becoming clear that not all support is created equal. Alberta Premier Jason Kenney in liquidity for oil and gas producers.

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This article discusses Alberta Premier Jason Kenney’s negative reaction to President Joe Biden’s 2021 executive order revoking the permit for the Keystone XL pipeline, calling it a “gut punch” and “an insult directed at the United States' most important ally and trading partner”. It also includes unfavorable reactions from other Canadian politicians & businesses, including Prime Minister Justin Trudeau. University of Alberta political scientist Greg Anderson argues that the province has more pressing issues than the pipeline. This illustrates the fact discussed in the previous article that the Alberta economy must diversify if it is to survive in the long term.

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Alberta Premier Jason Kenney said U.S. President Joe Biden's decision to revoke the permit for Calgary-based TC Energy's Keystone XL pipeline was a "gut punch," characterizing it as a direct attack on the trade relationship between the two countries.

"Sadly, [this is] an insult directed at the United States's most important ally and trading partner," Kenney said during a press conference held Wednesday.

Kenney said he was calling on Prime Minister Justin Trudeau to sit down with the new administration, suggesting that the federal government impose trade and economic sanctions should those efforts be refused.

As a part of the broader climate order, the Biden administration wrote that the Keystone XL pipeline "disserves the U.S. national interest," citing challenges surrounding climate and the pursuit of a clean energy economy.

In the order, the administration indicated that its analysis concluded that approval of Keystone XL would "undermine U.S. climate leadership" by undercutting the influence of the country on other nations to take climate action.

"Leaving the Keystone XL pipeline permit in place would not be consistent with my Administration's economic and climate imperatives," the order reads.
WATCH | Alberta Premier Jason Kenney reacts to Keystone decision:

Prior to Kenney's comments, both Trudeau and Canadian Ambassador to the United States Kirsten Hillman indicated that while disappointed with the decision, they were resigned to live with it.

The 1,897-kilometre pipeline, first announced in 2005, would have carried 830,000 barrels of crude a day from the oilsands in Alberta to Nebraska. It would then have connected with the original Keystone pipeline that runs to U.S. Gulf Coast refineries.

Biden's revoking of the permit was part of a series of executive orders aimed at tackling climate change that also included re-entering the Paris climate accord.

The Alberta government agreed last year to invest about $1.5 billion as equity in the project, plus billions more in loan guarantees. As a result, the Canadian leg of the project has been under construction for several months with about 1,000 workers in southeast Alberta.

Trudeau pledges support for energy workers

In a statement, Trudeau said he had spoken directly with Biden about the project in November, and Hillman along with others in the government had made Canada's case to high-level officials in the administration.

Trudeau said his government did welcome the new administration's moves to rejoin the Paris Agreement and the World Health Organization, and to temporarily suspend oil and natural gas leasing in the Arctic National Wildlife Refuge.

Kenney said that if the federal government doesn't approach Keystone XL discussions on the same level it did aluminum and steel tariffs, then the province would be forced to "go further in our fight for a fair deal in the federation."

The comment appeared to be a reference to Alberta's so-called fair deal panel, a series of measures being studied by the province that would help the province better assert its standing within Confederation.

In a statement, Alberta Opposition leader Rachel Notley called the cancellation of Keystone a "difficult day" for Alberta workers but criticized the provincial government's approach to the project.

"This decision is made far worse by the premier's reckless gamble of at least $1.5 billion on a project that most people understood was at great risk and over which he had no authority," Notley said.

TC Energy says it's considering its options

Conservative Party Leader Erin O'Toole called the cancellation of the pipeline "devastating."

"We need to get as many people back to work, in every part of Canada, in every sector, as quickly as possible. The loss of this important project only makes that harder," O'Toole said in a statement.

"Justin Trudeau should have done more to stand up for our world-class energy sector and the men and women who depend on it to provide for their families."

In a statement released Wednesday morning, TC Energy said it was disappointed in the move and warned it would lead to the layoffs of thousands of unionized workers.

"TC Energy will review the decision, assess its implications and consider its options," the statement reads. "However, as a result of the expected revocation of the presidential permit, advancement of the project will be suspended."

The company said the decision would "overturn an unprecedented, comprehensive regulatory process that lasted more than a decade."

The company struck a deal with four labour unions to build the pipeline and has an agreement in place with five Indigenous tribes to take a roughly $785-million ownership stake.

Contractors association 'disappointed'

The Progressive Contractors Association of Canada said in a news release it is disappointed that Biden is "putting politics before reason."

"We're disappointed that the new president has lost sight of the huge economic and strategic advantages of this project," said PCAC president Paul de Jong.

The association, whose member companies employ thousands of Alberta and B.C. construction workers, said the pipeline would have generated as many as 60,000 direct and indirect jobs in Canada and the United States.

Canadian producers, who have struggled for years from low prices partly related to sometimes-congested pipelines, have long supported Keystone XL.

In a statement, Suncor Energy said it backed expanding market access to the U.S. through pipelines such as KXL, which, it said, would provide responsibly sourced oil to U.S. refineries for the benefit of U.S. consumers.

But a Canada Energy Regulator report in November said western Canadian crude exports are expected to remain below total pipeline capacity over the next 30 years if KXL and two other projects proceed, prompting environmental groups to question the need for all three.

Biden signalled plan for months

For months, Biden had said he intended to cancel the project if elected.

Hillman said she was disappointed but that Canada would accept the decision.

"We respect that that's the decision he's made," she said. "He had made a commitment during his campaign, and he lived up to that commitment, and I think we have to accept that and move forward."
WATCH | Canadian Ambassador to the U.S. Kirsten Hillman reacts to Keystone decision:

Greg Anderson, a political scientist at the University of Alberta, says Canadians tend to look at narrow trade conflicts as a sort of barometer for the larger relationship with the U.S. but added "that just isn't the case."

He also says the province faces bigger challenges than the loss of one pipeline.

"I think a lot of Albertans were hoping that maybe this could just kind of slide by and the pipeline would get built," said Anderson.

"But the Keystone pipeline is not the Alberta economy. You know, it's not going to save Alberta or solve Alberta's problems. It might have helped on the margins, but Alberta has bigger fish to fry."

The pipeline has become emblematic of the tensions between economic development and curbing the fossil fuel emissions that are causing climate change.

The Obama administration rejected it in 2015, prompting TC Energy in 2016 to launch a lawsuit and a multibillion-dollar North American Free Trade Agreement claim against the U.S. government.

The company changed course after Donald Trump revived it once he became president four years ago and gave it strong support. Construction has already started in the United States.

TC Energy could now take similar action in order to prevent walking away from Keystone XL empty-handed after a dozen years of setbacks, billions of dollars spent and thousands of pages of filings.

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Alberta premier calls Biden's XL cancellation a 'gut punch' for U.S.-Canada trade relationship | CBC News

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Alberta Premier Jason Kenney said U.S. President Joe Biden's decision to revoke the permit for Calgary-based TC Energy's Keystone XL pipeline was a "gut punch," characterizing it as a direct attack on the trade relationship between the two countries.

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This article details Alberta Premier Jason Kenney’s attempts to diversify the province’s economy in the wake of the ongoing COVID-19 pandemic His plan includes the delay of a business tax cut, $10 billion for infrastructure spending, $175 million in assistance to startups & the creation of an agency to encourage companies to do business in the province. Kenney initially promised to maintain a balanced budget, but the pandemic has forced a change of plans. Yet again, this illustrates the need for Alberta to diversify its economy; in fact, the province arguably should have started this process well before the pandemic hit.

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By Kevin Orland on 6/30/2020

CALGARY (Bloomberg) --Alberta Premier Jason Kenney is using the Covid-19 pandemic to accelerate efforts to diversify his oil-dependent economy, a change of emphasis for a leader who once pledged to return the Canadian province to fiscal discipline.

Kenney's government announced an economic-recovery blueprint on Monday that includes moving up a cut in the province's general business tax rate by 18 months. The cut from 10% to 8% would come into effect July 1 instead of Jan. 1, 2022. The province also is planning C$10 billion ($7.3 billion) in infrastructure projects to create construction jobs, investing C$175 million to expand startups' access to venture capital and creating a new agency to persuade companies to open offices in Alberta.

A conservative elected in 2019, Kenney had promised that barring a global economic crisis he would balance the budget, and made promoting the oil and gas industry and building new pipelines the centerpiece of his economic strategy. But the Covid-19 crisis has forced a huge pivot. Even before Monday's plan was unveiled, Kenney's government had already announced C$14 billion of measures to blunt the effects of the crisis.

While some components of the plan announced Monday are aimed at stimulating short-term demand, the program also represents an acceleration of Kenney's efforts to persuade companies to invest in Alberta or relocate their head offices to the province. The goal is to foster the growth of industries like technology and finance that can cushion the periodic blows suffered by the province's energy sector.

Kenney said many business leaders are rethinking all aspects of their operations right now, and he wants Alberta to be an attractive destination for their future investments.

"We could have just stuck in the short-term lane and focused on classic, Keynesian, countercyclical, shovels-in-the-ground kind of projects, but we wanted to take a step back and really prepare for the years to come," Kenney said Monday in an interview. "As markets return to something like normal post-Covid, we want to be at the top of the list for shifting operations and capital."

Alberta's energy-dependent economy has been hit particularly hard by the global pandemic, with lockdown measures and travel restrictions hammering demand for oil products like gasoline and jet fuel. Benchmark U.S. oil prices plunged earlier this year and even briefly fell into negative territory, making all of the province's production unprofitable.

Those low prices have prompted oil producers to cancel at least C$8.5 billion in labor-intensive capital projects, like drilling new wells and building new facilities, in order to conserve cash. They've also caused companies including oil and gas producer Ovintiv Inc. and oilfield-services provider Mullen Group Ltd. to cut thousands of jobs. Alberta's unemployment rate surged to 15.5% in May, topping Canada's national rate of 13.7%.

The crash has dashed Kenney's ambitions of returning Alberta's budget to balance in his first term as he has spent heavily to cushion the economic blow of the crisis. In February, his government had projected the province would run a C$6.8 billion deficit in the fiscal year that ends in March 2021. Just two months later, Kenney said the deficit would be about C$20 billion.

Even before the announcements on Monday, Kenney had more than doubled planned spending on capital projects like roads and bridges to C$1.9 billion in the current budget year and loaned a local group C$100 million to clean up abandoned oil wells. Kenney's government also faces decreased revenue from income taxes and oil and gas royalties as well as from other levies and fees that he has deferred to help companies weather the crisis.

The plan announced Monday was built on feedback from a panel that Kenney convened in March to provide advice on how to protect jobs during the crisis and come up with strategies for a long-term recovery. The panel was chaired by Jack Mintz, an economics professor who also has served on a number of Canadian corporate boards. The group included former Prime Minister Stephen Harper, Mainstreet Equity Corp. founder Bob Dhillon, Atco Ltd. Chief Executive Officer Nancy Southern and Canadian Western Bank CEO Chris Fowler.

To Kenney, Alberta's economic challenge is still daunting, though not as dire as it first appeared at the depths of the crisis. The province has managed to weather the pandemic with less stringent shutdowns than other jurisdictions, and oil prices have rebounded to a "survival price" for Alberta's producers, he said.

"It's not the total Armageddon scenario we were looking at in April," Kenney said. "I believe we'll get through this."

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Kenney pushes to diversify Alberta's oil-dependent economy

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By Kevin Orland on 6/30/2020 CALGARY (Bloomberg) --Alberta Premier Jason Kenney is using the Covid-19 pandemic to accelerate efforts to diversify his oil-dependent economy, a change of emphasis for a leader who once pledged to return the Canadian province to fiscal discipline.

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This graph illustrates how Alberta has fallen behind Texas in oil production over the last decade. This phenomenon was further exacerbated by the ongoing COVID-19 pandemic & the mass unemployment occurring as a result.

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This graph vividly illustrates how oil prices sharply dropped in 2014 & have yet to fully recover. Note that the all-time low occurred after another precipitous drop during the ongoing COVID-19 pandemic.

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1. I was surprised to learn that booms & busts in Alberta's energy industry have occurred before.

2. I am interested in politics & public policy, which includes energy policy.

3. I would emphasize the importance of diversifying your portfolio - a lesson just as important for individuals as it is for major industries.