EDMONTON - When Premier Alison Redford talks about "a bitumen bubble," she's referring to the record amount of Alberta bitumen for sale, and the low price it's fetching in the U.S. these days.

That is partly because of competition from new supplies of higher quality crude oil from the U.S.

The price of bitumen dropped another $20 this month, so Redford's treasury will be short $6 billion by the end of this fiscal year.

Is this price gap between conventional oil and bitumen normal?

The fact is there has always been a gap between the North American price of conventional oil (West Texas International) and a barrel of sticky, thick bitumen, known as Western Canadian Select. (The world price, known as the Brent price, is another benchmark set by North Sea oil).

WTI is hovering around $95 a barrel, Brent slightly higher around $110 while bitumen, usually about $20 less, dropped to $50 last month.

Bitumen fetches a lower price partly because it needs more upgrading before it can be turned into gasoline, says Michael Moore, energy expert in the University of Calgary school of public policy. That costs money, so refineries won't pay as much for bitumen.

Usually the gap has hovers around 20-25 per cent, and in the last few months it went higher. But the gap has been higher in the past.

The lack of pipeline capacity makes it more difficult to get bitumen to market and using rail is expensive, says Moore.

But there are other challenges, he adds.

The new supplies of lighter, easier-to-use oil from North Dakota are more attractive to refiners.

Then, not all U.S refineries can handle bitumen, says Moore. Alberta bitumen has to get to specially adapted refineries on the U.S. Gulf coast.

But there's competition at those special refineries too — from heavy oil from Venezuela and Mexico which can get there cheaper, says Moore.

"So the refiners call the shots and they establish the discount. Our oil always had to go a long way and takes more processing."

So will more pipelines help?

Yes, the Keystone pipeline to the U.S Gulf coast will be a big help, says Moore — "though we will still be trading in competition with other heavy oil like ours from Mexico. Right now, there's a lot of competition."

Gil McGowan of the Alberta Federation of Labour says there's no doubt Alberta is facing a glut in the oil market and that puts downward pressure on the price of bitumen.

The low price is a sign the market doesn't want to buy more Alberta bitumen, he says.

The better solution is to upgrade the bitumen into synthetic crude in Alberta, "so we can sell a product the market wants."

"For Redford to suggest the only solution is to build more pipelines is not only simplistic, it is misleading. There are many other options," McGowan said.

Synthetic crude (upgraded bitumen), produced by a handful of oilsands companies, can be used in any refinery to make jet fuel or gasoline and it has occasionally fetched higher than the WTI price of oil, he noted.

McGowan also disputed Redford's view that today's deeper discount on bitumen prices is new.

The discount was worse in 2005 at 36 per cent and in 2006 it was 33 per cent — yet in both those years, the province had record surpluses because it had the cushion of high natural gas prices.

"It's true the gap has increased dramatically over the last few months, but if you look at average over last year, it was not out of line at 22 per cent. So the argument that all these budget problems are caused by the differential ring hollow," said McGowan.

U of C economist Ron Kneebone said the government has created its own problems by continuing to rely on volatile oil and gas revenues — despite frequent warnings from economists and its own advisers.

"The bubble is unfortunate, but the government invited disaster into the budget," said Kneebone.

"The bubble means the government won't be collecting as much revenue as it thought but that need not be a problem if they budgeted in sensible ways."

In 2002, the Klein government's Financial Management Commission advised the treasury to use just $3.5 billion in oil and gas royalties and put the rest into savings to build up a fund that would provide stable revenue from investments.

"They did that for one year, then raised the ceiling to $4 billion in royalties and then $4.75 billion. Then they dropped the plan and began to spend all royalties. That's where we are today."

"We need to have an adult conversation about raising taxes or decreasing spending," he added.

The Edmonton Journal, Friday, Jan. 25, 2013Byline: Sheila Spratt

ST. ALBERT - A Canadian subsidiary of Chinese state-owned oil giant Sinopec has been ordered to pay $1.5 million in penalties for failing to ensure the safety of two Chinese workers killed in a 2007 tank collapse at a work site in northern Alberta.

Sinopec Shanghai Engineering Company Canada Ltd. pleaded guilty to three charges under the Occupational Health and Safety Act in September. It was given the maximum $500,000 fine for each charge in a St. Albert courtroom Thursday.

The total penalty is the biggest workplace safety fine in Alberta's history and one of the biggest in Canada.

Two charges were related to the deaths of the two temporary foreign workers and the third was connected to two workers who were seriously injured.

As part of a creative sentencing agreement between Crown prosecutors and SSEC lawyers, $1.3 million of the fine will be used to educate temporary foreign workers on their legal rights.

Workers Ge Genbao, 28, and Lui Hongliang, 33, were killed on April 24, 2007 when the roof structure of a multi-storey metal holding tank collapsed at a work site 70 kilometres north of Fort McMurray. The site was part of the Canadian Natural Resources Ltd. $10.8-billion Horizon project.

Court has heard that SSEC Canada did not get the tank construction plan certified by an engineer. The wires securing the tank were not strong enough to hold up in even moderate winds, according to an agreed statement of facts.

"The accident almost had a sense of inevitability to it," said provincial court Judge John Maher. The judge said he was struck by the extent of the failure to comply by safety standards.

"This is a particularly egregious case," Maher said. "The size of the penalty is directionally proportional to the consequences of the act. It's hard to imagine in this case why it would not be a maximum penalty."

Crown prosecutor Marshall Hopkins said he was confident such a massive penalty would be an effective deterrent for other companies.

Kevin Flaherty, executive director of the Alberta Workers' Health Centre, said the money enables his group to "do some good work with a bad situation."

The $1.3 million will be used in a three-year program to train 45 people to educate temporary foreign workers about their rights and Alberta's workplace health laws. Flaherty said such workers are particularly vulnerable because they fear loss of their work visas if they speak up.

"They can't just walk across the street and get another job," Flaherty said. "We need to be a much better job of treating these workers as people when they arrive."

Flaherty expects the education program will reach 5,500 workers and spread further by word of mouth.

The Alberta Federation of Labour was not impressed by the court decision and called the fine "a slap on the wrist" that will not be a deterrent.

"One-and-a half-million dollars doesn't even amount to a rounding error in the annual budget of a monstrous global corporation like Sinopec," AFL president Gil McGowan said in a prepared statement. "This fine does nothing to dissuade them from playing fast and loose with the safety of their workforce."

SSEC was the direct employer of the workers and contracted by CNRL. SSEC recruited 132 Mandarin-speaking Chinese workers for the tank project.

The original plan was to build the tank walls first, then use them to support the roof while it was under construction. That plan changed when the project fell behind schedule.

CNRL approved the construction change, but SSEC did not prepare any formal written procedures that should have been certified by a professional engineer.

The construction of 13 tanks began on April 2, 2007. The collapse occurred three weeks later.

Hongliang, an electrician, was struck by a steel girder while standing on the partially completed wall. He died at the scene. His son, in China, was only a year old at the time. Genbao, a scaffolder, was on the floor of the tank and was crushed by falling steel. He died on the way to hospital. He is survived by four older sisters in China.

On Thursday afternoon, SSEC Canada issued a statement that expressed regret for the deaths and said it accepted Maher's ruling.

Sinopec had tried to appeal to the Supreme Court of Canada on the grounds that it had no official presence in Canada and was not under the jurisdiction of a provincial justice system. The nation's top court refused to hear that appeal.The Edmonton Journal, Thursday, Jan. 24, 2013Byline: Ryan Cormier

Processing oilsands output in Alberta will create jobs, ND leader argues

New Democrat Leader Brian Mason would move forward with four upgraders planned for the Industrial Heartland area northeast of Edmonton, saying on Saturday that keeping bitumen in Alberta creates more jobs and stronger communities.

"We need to not just be the exporter of unprocessed raw materials for the rest of the world to create employment, but to create employment right here in our province," Mason said.

This follows Mason's earlier campaign announcement to increase royalties from bitumen production by 25 per cent, a raise the NDP said would bring in $1.4 billion annually and could be used to improve public services.

"It would be a 25 per cent increase in royalties on bitumen as opposed to refined or upgraded synthetic crude oil. That would have the impact of creating the investment here in our province, instead of in other parts of the world, and I think that's what Albertans expect and demand," Mason said on Saturday.

The NDP announcement comes after organizations, including the Alberta Federation of Labour and Alberta's Industrial Heartland Association, called on party leaders to address plans for the province's petrochemical sector.

AFL President Gil McGowan said the question of whether bitumen should be upgraded in the province or exported in its raw form is one of the most important economic issues facing Alberta today.

"More upgrading makes sense because it keeps jobs, profits and tax revenue here in Alberta, instead of sending all of those things to places like the U.S. or China," McGowan said.

He was pleased with Mason's plans to move forward with the upgraders, if the NDP are elected, and noted he has been "profoundly disappointed" that other party leaders have not addressed the question of upgrading. The Alberta Liberals, Tories and Wildrose parties have all said they will not increase oil and gas royalties if they are elected.

Mason targeted both the Progressive Conservative and Wildrose parties in his announcement, noting the Conservatives are allowing an increasing amount of bitumen to be shipped out of the province, while the Wildrose is "bankrolled by oil companies hoping to keep royalties low and profit margins at record highs."

"The Conservative government has allowed bitumen to be exported from this province without being upgraded here, despite the promise made in the last election by former Premier Ed Stelmach, who likened the export of unprocessed bitumen from the province to scraping off the topsoil from your farm and selling it," Mason said.

By moving forward with the four proposed upgraders, which have been stalled since 2008, Mason said 4,000 permanent operations jobs and 12,000 jobs in service and related industries would be created.

Calgary Herald, Sat Apr 14 2012 Byline: Cailynn Klingbeil

A move by the province to increase bitumen upgrading on this side of the border has at least one labour group saying it's too little to be of any significance.

The Alberta Federation of Labour has long been asking the government to plug what it calls a "bitumen superhighway" taking Alberta jobs and bitumen south to the U.S., and says this plan does little to stem the flow. However, the Canadian Chemical Producers Association and Alberta's Industrial Heartland Association are applauding the government's action on the value-added program. But the Canadian Association for Petroleum Producers doesn't see it having much of an impact yet for oilsands operators.

On Tuesday, the provincial government issued a request for proposals to process a share of royalty bitumen in-kind in a move it says will increase bitumen upgrading capacity, enhance Alberta's value-added activity and strengthen Alberta's economy.

Simply put, Alberta will be taking up to 75,000 barrels of bitumen as royalty payment instead of cash and selling it to an operator at commercial prices to upgrade it in Alberta at no additional costs to taxpayers.

"If we take our royalty in cash, we get the cash, and that's the benefit the tax payers get out of it. That's it," said Jerry Bellikka, Alberta Energy spokesman. "If we take it in kind, like we do with conventionals, we have the opportunity to leverage that not only in jobs and economic growth, in upgrading potential, but also some downstream, some petro-chemical potential there as well. So we have the opportunity to leverage it several times and that's what we're trying to do."

Dec. 2 is the deadline for proposals.

"We've been waiting for two years for the Stelmach government's new plan for the oilsands, and now that we've seen it, the best word to describe it is 'underwhelming,'" said Gil McGowan, president of the AFL, one of the province's strongest proponents of an Alberta-first oilsands policy. He predicts thousands of jobs will continue to be "lost down the pipeline" to places such as the U.S. Midwest and Gulf Coast as a result of government's failure to adopt more aggressive policies.

Admitting he didn't have high hopes for the program to begin with, McGowan added he thought once it was rolled out it would provide larger volumes of bitumen for Alberta-based upgrading.

"When I saw the figures, 50,000 to 75,000, I was completely shocked because that's ... a drop in the bucket when it comes to the overall volume of oilsands production." He points out that it represents only 6.25% of the 1.2 million barrels per day produced annually from the Alberta oilsands. McGowan added bitumen collected under the program will, at most, provide feedstock for one new upgrader, and a small one at that. Comparisons with the capacity of existing upgrading facilities put the government's promised bitumen reserve in perspective: Syncrude Canada currently processes 300,000 barrels of bitumen per day; Suncor Energy processes 275,000 barrels and Shell Albian Sands-Scotford processes 155,000 barrels.

"The government's rhetoric on this issue has been big but the program they delivered is shockingly small," said McGowan. "If this is all the Stelmach government has to offer, then Albertans should get used to losing refining jobs to the U.S. because this program is not going to turn the tide."

But Bellikka defended the amount, saying, "We don't want to be the sole supplier of product to an upgrader. ... This is a reasonable figure to look at as an initial supply. It would guarantee a base level of supply to an operation. We would expect that they would go out there and find other sources as well, well beyond the 75,000 we're going to guarantee."

He explained the program has been introduced because it's an opportunity to build some more economic growth into the province to stimulate value more so than the industry hurting in this economic downturn.Initially, bitumen volumes will not include Alberta's integrated operations such as Petro-Canada, Shell Albian and Syncrude Canada but there's some discussion with industry which may broker change to the program slated to start in 2012.

With the government getting in the upgrading game, Bellikka says government doesn't see it as competing with the major energy players."Looking out at the volumes that are being forecast five, 10, 20 years out, he sees a lot of room for a lot of players here," said Bellikka of Energy Minister Mel Knight's take on Alberta's participation.

Even if the program is successful in kick-starting one small upgrader, McGowan predicts it won't do anything to move the province toward the more ambitious goal of refining a greater proportion of Alberta oil into more valuable products like gasoline, diesel and jet fuel. He said the program sets its sights too low both in terms of volume and in terms of how high the government wants to climb the value ladder. He is still calling for more aggressive policies are needed, policies such as export restrictions, conditional lease agreements for companies working in the oilsands and even the creation of a Crown energy corporation to spearhead the construction and operation of Alberta-based upgraders and refineries.

With two-thirds of oilsands bitumen already being upgraded in Alberta, CAPP oilsands and markets vice-president Greg Stringham said the plans are to continue on as a number of operators plan to have upgraders included in expansion plans.

Meanwhile, Alberta's $13.3 billion a year petro-chemical sector is looking to bitumen upgrading as a opportunity to provide valuable feedstock for existing chemical facilities plus potential new investments.

"We recognize the challenges of implementing this vision," said Richard Paton, CCPA president, in a statement. "But a firm commitment to upgrading bitumen here in Canada is a step towards what we hope will be a sufficient series of projects that in the aggregate will represent world scale feedstock opportunities for the petrochemical industry."

Fort McMurray Today, Thurs July 23 2009Byline: Carol Christian

EDMONTON — Ed Stelmach's program to stimulate drilling during the recession cost taxpayers $2.9 billion and failed to create promised jobs, new wells or new investment in the oilpatch, says the Alberta Federation of Labour.

AFL president Gil McGowan said Friday the program merely padded the profits of oil and gas companies while depleting the treasury of revenue that could have been used to fund health care and education.

He has passed on AFL's findings to Alberta's auditor-general and also requested the all-party legislature public accounts committee investigate the program.

"When Albertans learn about this they will see this for what it is, which is an outrageous misuse of government funds," he said.

Hugh MacDonald, the Liberal MLA who chairs public accounts, said he will canvass the 17 members of the committee to determine whether they wish to call a special meeting to examine the program. Conservatives have 13 seats on the committee.

MacDonald suggested the auditor general's officer might have a better mandate to determine whether the program met its goals.

But Auditor General Merwan Saher tossed the ball back, noting his office has audited the program.

"At this moment, I don't have a compelling reason to launch a particular audit," Saher said.

He said McGowan's request for a public accounts review is "a legitimate request."

"He is asking the public accounts committee to do what public accounts committees do — examine how policy is being put into effect and whether Albertans are getting value for money."

McGowan said someone should investigate where the royalty tax credits went because a loophole in the program created a "grey market" that enabled companies that had more credits than they needed to sell them to other companies. The program allocated $200-per-meter drilling credits on a sliding scale based on how much the companies drilled in 2008.

Companies that purchased extra credits were able to defray the amount they paid in royalties owed to Albertans without having to hire more workers or drill new wells, McGowan said.

But Albertans won't know who cashed in the credits because Alberta Energy keeps that information secret, he complained.

The AFL produced charts showing the number of new wells being drilled decreased steadily during 2009 and 2010 and over the same period the province lost about 8,000 jobs.

Capital investment in the oil and gas industry swooned, but industry profits increased, the AFL said.

Alberta's rate of well completions for that period mirrored Saskatchewan and B.C., which didn't have programs as generous, and seemed to climb and fall with the price of oil, despite the drilling stimulus program, the AFL reported.

University of Alberta energy economist Andrew Leach said the program was likely not as successful as the government claims and likely not as dismal as the AFL contends, because it can't be determined how many more jobs might have been lost without it.

"I think the truth is probably somewhere in the middle," Leach said. "What you really need is an account of what would have happened in Alberta in the absence of the program."

But Leach said the provincial government has an obligation to be open and accountable to Albertans since they own the resource.

"I think the government should be providing information on who is drilling and what they are paying in royalties," he said. "I can't really see a downside in releasing those numbers."

Alberta Energy spokesman Derek Cummings said the steps to encourage energy investment in Alberta "undoubtedly worked."

"Drilling activity declined from an all time high with the price collapse but would undoubtedly been even lower had it not been for the royalty credit," he said.

He said giving companies the ability to sell the credits ensured that new companies and companies with small production volumes would be able to participate in the program to drill wells and employ Albertans.

"The program also encouraged new technologies such as horizontal drilling that have played a large role in the increased activity today," he said.

Cummings pointed out that the province set records in petroleum and natural gas land sales for the last fiscal year.

Travis Davies, a spokesman for the Canadian Association of Petroleum Producers, said the programs were successful at keeping drilling rigs working during the downturn in the economy.

Hours of operation for drilling rigs jumped from 47,000 hours in 2009 to 76,000 hours in 2010, he said.

"I don't know how that equates to reduced employment in the oil and gas sector," he said. "If you increase operational hours, I don't understand how you have reduced employment."

Calgary Herald, Fri Jul 15 2011 Byline: Darcy Henton

CALGARY - The Obama administration's decision to delay its approval of the Keystone XL pipeline could have serious consequences for the Alberta economy, and the energy sector that drives much of it, Premier Alison Redford warned Thursday.

"It is disappointing that after more than three years of exhaustive analysis and consultation on this critical project, we find out that a decision will be delayed until early 2013," she said.

TransCanada Corp.'s (TSX:TRP) proposed pipeline would carry millions of barrels of crude each week from the northern Alberta oilsands — and some U.S. oilfields along the way — to Texas refineries. The Gulf Coast is a coveted market for oilsands producers, many of which are in the midst of expanding their bitumen production.

The State Department said earlier Thursday it wants TransCanada to explore other routes for the controversial pipeline so it skirts ecologically sensitive areas of Nebraska. That will delay the US$7-billion project by years, and could kill it outright if TransCanada customers lose patience and find other alternatives.

The Alberta government respects the fact that the decision over the pipeline rests with U.S. authorities, but said Keystone XL is a key piece of infrastructure for Alberta.

"Our energy industry supports this province and this country, and it is imperative that we can move our products to market," Redford told a news conference.

Redford was already scheduled to visit Washington next week for the first time since becoming premier, and said she will press U.S. officials on the Keystone decision when she meets with them.

Her itinerary hasn't been altered in light of Thursday's developments, though that may change.

"There is a possibility, because dynamics are changing so quickly, that opportunities can present themselves. We'll assess that as this goes on."

It's hard at this point to pin down what revenue impact Alberta coffers may see if Keystone is delayed for a long time, or killed all-together.

"At this point in time...it is a project that is not currently on the books or providing revenue to the province of Alberta," she said.

"No doubt it would have an impact on our revenue, but at the end of the day, it's not detailed work that we've done in the absence of the project actually operating."

TransCanada CEO Russ Girling said he's confident Keystone XL will ultimately be approved.

"This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed," Girling said in a statement.

Travis Davies, spokesman for the Canadian Association of Petroleum Producers, said his group is also optimistic Keystone XL will go ahead on its own merit eventually.

"It's good for Canada, and it's good for the U.S. It makes sense economically, environmentally and from an energy supply standpoint," he told reporters.

The Canadian Chamber of Commerce said the United States risks missing out on the opportunity to create jobs and to wean itself off of crude imports from unfriendly regimes.

"There is no doubt that the rich energy supplies from Canada's oilsands will be brought to market. The only question now is whether the U.S. will be among the beneficiaries."

Unions in Canada have come out against Keystone because they say it would ship high-paying refining and upgrading jobs south of the border along with the raw bitumen.

Dave Coles, president of the Communications, Energy and Paperworkers Union of Canada, cheered the decision to delay a pipeline he called a "job killer."

"We have stepped back from the abyss," he said.

The Alberta Federation of Labour was also pleased with the delay, saying "it will give the Redford government an opportunity to pursue value-added opportunities here at home, rather than shipping unprocessed bitumen south for upgrading."

The review of new routes could be completed "as early as the first quarter of 2013," State Department said — several months after next November's presidential election. The State Department decision effectively means Obama can dodge a political bullet since he won't have to decide whether to approve the project until after U.S. voters go to the polls.

When Redford was asked whether the U.S. election had anything to do with the delay, she said: "Everybody watching knows we live in a complicated world."

The pipeline would traverse six U.S. states to Gulf Coast refineries. Its current proposed route crosses the Sand Hills area of Nebraska, the location of the Ogallala aquifer, a crucial source of drinking water to millions on the Great Plains.

"Taken together with the national concern about the pipeline's route, the department has determined it is necessary to examine in-depth alternative routes that would avoid the Sand Hills in Nebraska in order to move forward with a national interest determination for the presidential permit," the State Department said.

Obama praised the State Department's decision, saying it's necessary because a final decision "could affect the health and safety of the American people as well as the environment."

"The final decision should be guided by an open, transparent process that is informed by the best available science and the voices of the American people," Obama said in a statement.

The reaction from the Prime Minister's Office was of a decidedly different tone.

"We are disappointed," said Andrew MacDougall, a spokesman for Prime Minister Stephen Harper. Keystone XL, he said, promises to create thousands of jobs and billions of dollars in economic growth on both sides of the border.

"We remain hopeful the project will be decided on its merits and eventually approved. In the meantime, our government will continue to promote Canada and the oilsands as a stable, secure, and responsible source of energy for the world."

The decision represents a stunning victory for the North American environmental movement. For months, Keystone XL has been the target of angry protests on both sides of the Canada-U.S. border and a major source of consternation for Obama.

"A year ago this pipeline was assumed to be a done deal, but thanks to the amazing strength and determination of ordinary people concerned about water, climate change and the health of communities, we have a decision that brings us a little closer to the world we need," said Greenpeace anti-oilsands campaigner Mike Hudema.

A lobbyist for TransCanada expressed dismay about the decision, saying it stemmed from "a couple of senior advisers" in the White House.

"It's breathtaking; the White House's political operation gave in to the protesters, going completely outside the national interest and the three-year permit process that's been a painstaking one," the lobbyist, who asked not to be identified, told The Canadian Press.

"The ballsier thing would have been to either approve it or deny it, but to kick the can again is actually more difficult for the president politically. There's 20,000 jobs on the table and they did this to save one — Barack Obama's."

Indeed, the White House was reportedly becoming increasingly concerned that the Canadian pipeline would cost Obama much-needed votes in the election. Environmentalists within his liberal base had vowed to stay home if he gave Keystone XL the green light.

Global BC, Thurs Nov 10 2011

EDMONTON - With an unemployment rate of 4.9 percent, Alberta currently fares better than any other Canadian province. But despite being fairly insulated from the economic turmoil plaguing the rest of the world, our oil-rich province's economy is not without problems.

Unlike south of the border, though, Alberta's biggest labour worry is that there are actually 114,000 more jobs than people to fill them.

So in an effort to help find solutions to that predicament, the Alberta Coalition for Action on Labour shortage, comprised of 19 groups and businesses, has been formed. Its key message is that it should be easier for people to come and work in our prairie province.

"If you look at the issue of labour shortages, the problem is getting worse, not better," said Tim Shipton of the Alberta Enterprise Group.

"Right now...the governments seem to be talking at each other and not engaging in a conversation about the issues and finding productive, positive ways forward," added Richard Truscott with the Canadian Federation of Independent Business.

To reverse that trend, the coalition believes the government should help by easing immigration restrictions.

On the provincial front, they say to write to the Minister of Human Services, Dave Hancock, who tells us he's already in agreement.

"While we need to make sure that every Albertan has an opportunity to get the skills they need to participate in the economy, even with that we're going to need others."

It's a realization that some local businesses can support.

At Edmonton's All-Weather Windows, Paul Taylor said they're really starting to notice the talent pool shrinking as the number of job applications aren't keeping pace with order forms.

"It's just harder to get the right people into the organization," he said.

And while they remember this pattern from the last boom, this time, experts say there's a big difference: this boom isn't expected to be about western Canada's oil industry, but rather, it is due largely to an aging population and too many retirees.

Not everyone agrees with the new coalition's views, though. The Alberta Federation of Labour believes the problem facing Alberta is what it considers to be the government's failure to set a reasonable pace to oilsands development.

"If these employers really want to be able to man these projects, then they should talk to the government about approving 5 or 10 projects at once instead of 65 multi-billion dollar projects going on all at the same time," said the AFL's Gil McGowan.

He considers the coalition's solution of loosening immigration restrictions to be a short-term solution which will have long-term consequences of lowered wages.

McGowan said a better alternative would be for projects to be stretched out over longer periods of time "so that our existing Canadian construction labour force can do the work and then we can have 23 to 30 years of good employment for our trades people as oppposed to 5 years of intense development by temporary foreign workers followed by a bust, because I believe that's where we're headed."

While the groups may disagree on how to achieve change, both agree on that finding political solutions is especially important now, before the problem becomes even more widespread.

Global TV Edmonton, Fri Mar 2 2012

VANCOUVER — Chinese energy companies, at one time eager to see the Northern Gateway pipeline completed quickly so they could access the Alberta oilsands, are now taking a longer and more patient view, according to a China expert.

The big three — PetroChina, Sinopec and China National Offshore Oil Company (CNOOC) — have shown interest in Northern Gateway, but also frustration with the slow pace of project approval, said Wenran Jiang, a professor with the University of Alberta's China Institute.

First introduced in 2003, the project is in the midst of a regulatory review slated to end in 2013.

"In the beginning, the (Chinese companies) asked a lot of questions of Gateway. When is it going to be built? How fast will it be (built)? However, over the years, how (China) defines energy security has relaxed a little bit," said Jiang.

While the Chinese state-controlled companies initially wanted access to the oil, now the companies are content to invest in the Alberta oilsands, as they do in other areas of the globe, in an effort to increase global supply, said Jiang.

"Then they will buy oil wherever it is convenient and is most economical in terms of shipping and price," he said.

Chinese oil companies have invested about $10 billion recently in the oilsands, but it's just one part of China's global oil investment strategy, noted Jiang.

Chinese state companies also have invested tens of billions of dollars in South America, Africa, Russia, Australia and the Middle East.

Jiang said the question is less about Chinese desire or demand for access to Alberta oil, but whether Canada wants to diversify its market for oil, which is almost solely dependent on the U.S.

The Northern Gateway project represents that prize.

For Canadian companies, it means new markets for the largest reserve of oil in the world outside of Saudi Arabia.

It also means a predicted higher price for Canadian oil. Market diversification would bring an estimated $28-billion increase in net incremental revenue to the Canadian industry in the first 10 years, said a report filed by Enbridge with the National Energy Board.

However, some in Alberta are questioning the wisdom of pumping oil, and jobs, out of the country.

The Alberta Federation of Labour wants oilsands bitumen to be refined in Alberta.

"It would be irresponsible for us to build more pipelines that send high-quality jobs out of the country to places like the United States and China," said Gil McGowan, the federation's president.

The federation — representing 29 unions and 145,000 workers — also opposes TransCanada's Keystone XL project to the United States.

McGowan estimates upgrading and refining the Northern Gateway oil in Alberta would create 50,000 direct and spinoff jobs.

The oil companies that have signed up as interveners in Enbridge's $5.5-billion Northern Gateway is a who's-who of the North American industry.

ExxonMobil, Imperial Oil, BP, ConocoPhillips, Natural Resources Canada and Husky Energy are among the two dozen oil companies that have the right to address the regulatory hearings that begin Tuesday in Kitimat, B.C.

In documents filed with the National Energy Board on Wednesday, several corporate backers of the pipeline were revealed for the first time. They are Cenovus Energy Inc., MEG Energy Corp., Nexen Inc., Suncor Energy Marketing Inc., and Total E&P Canada.

Imperial Oil spokesman Pius Rolheiser said the company supports the Northern Gateway project, but also Keystone XL to the U.S. "Access to export markets in North America and beyond remains a critical factor for the projected growth in non-conventional resources like the oilsands," said Rolheiser.

The Canadian Association of Petroleum Producers (CAPP), also an intervener in the pipeline regulatory review, emphasizes that Canada needs access to markets other than the U.S.

"There is significant growth in Asia — China, Japan, Korea and even interest from India. We are really positioned in Canada as being one of the closest suppliers to them, even compared to the Middle East and Australia where China is currently sourcing energy supply," said Greg Stringham, CAPP's vice-president, markets and oilsands.

The Paris-based International Energy Agency forecasts China and India will account for 45 per cent of the increase in global primary energy demand to 2030, with both countries more than doubling their energy use over that period.

Three Asian companies have signed on as interveners: SinoCanada Petroleum Corp. (a subsidiary of China's Sinopec), Korea's Daewoo International Corp. and Japan Canada Oil Sands Ltd.

SinoCanada officials could not be reached for comment, but Sinopec has confirmed it is one of the supporters that provided a portion of the $100 million to develop the Northern Gateway project.

Ottawa Citizen, Wed Jan 4 2012 Byline: Gordon Hoekstra

The Harper government has quietly buried a controversial promise to ban bitumen exports to countries that are environmental laggards, as Alberta and the energy industry formalize plans to ship oilsands product to lucrative Asian markets.

One person familiar with Prime Minister Stephen Harper's surprise announcement during the 2008 federal election campaign said the pledge was simply electioneering at the time and was to be "buried and never seen again."

Alberta's energy minister Ron Liepert also wonders whether the campaign promise is even a government policy any longer, noting the issue has never been discussed with him during his two years in the portfolio.

However, a spokeswoman for federal Natural Resources Minister Joe Oliver said Wednesday the government policy - designed to halt the flow of raw bitumen and jobs overseas - remains in place but is being regularly examined.

"Our 2008 platform commitment remains in effect. We continue to review on an ongoing basis," said Julie Di Mambro, press secretary to Oliver.

As criticism mounts in the United States over oilsands development - and the potential for additional shipment stateside via the Keystone XL pipeline - Canadian politicians and energy companies have increasingly been eyeing emerging markets such as China, India and Korea.

Space has already been fully booked on Enbridge Inc.'s proposed $5.5-billion Northern Gateway pipeline, potentially linking Alberta's oilsands to energyhungry Asia-Pacific countries.

The line would carry raw bitumen or upgraded synthetic crude 1,170 kilometres from northern Alberta to the port of Kitimat, B.C. The project remains under review by the National Energy Board and could be operational by 2016.

Di Mambro noted the federal government has referred the Northern Gateway project to a joint review panel that's consulting with Canadians.

"We await the recommendations of this panel and remain committed to ensuring that any project is environmentally sustainable," she said.

However, plans for the pipeline to ship oilsands product to the West Coast, and then by supertanker to Asia, seemingly conflict with the prime minister's three-year-old promise.

In September 2008, Harper announced during a Calgary campaign stop his government would halt the flow of oilsands products and jobs to countries with greenhouse gas emission standards weaker than Canada's.

"This is the right thing to do for our environment and our economy," Harper said at the time.

The Conservative policy - which was, at the time, to apply to bitumen exports to China - was to take effect in January 2010 and apply to new export deals and not impact existing contracts. But barely a word has been heard of it since, as billions of dollars of Asian investment flood into Canada's petroleum sector and the federal Tories continue to mend what were once threadbare relations with China. At the same time, companies on both sides of the Pacific have com-bined to pledge billions to build the Northern Gateway pipeline and premiers trumpet the need to feed Asia's insatiable energy appetite.

"That may not even be a policy of the federal government any longer," said Liepert, who notes the federal Conservatives have been very supportive of opening up Asia-Pacific markets.

"It's something that, in the two years I've been in the ministry, hasn't been mentioned to me."

Politicians in Canada point to the oilsands protests in the U.S. as more reason to build Enbridge's Northern Gateway project, increase pipeline capacity to the coast and look for new customers.

Officials with Enbridge said they've heard nothing from the Harper government about the promise and don't expect it will impede shipping oilsands product to new markets.

"It's certainly not an issue that has been raised with us," said company spokesman Paul Stanway. "It's not on our radar at the moment."

Gil McGowan, president of the Alberta Federation of Labour, which has been fighting for the federal and provincial governments to keep oilsands value-added jobs in Canada, said he never expected the federal Tories to hold to their pledge.

"When the promise was made, we thought it had more to do with politics than real policy," McGowan said. "It was a reaction to the climate of the day . . . I'm not surprised to see very little is being done to see that policy becomes reality."

Calgary Herald, Thurs Sept 8 2011 Vancouver Sun, Wed Sept 7 2011 Byline: Jason Fekete

With academics and everyone but the Tories themselves realizing that the government is too dependent on energy royalties, it was obvious Saturday's economic summit was little more than a feel-good exercise. Even the government itself said the meeting was a conversation about the direction Alberta needs to take moving forward and wasn't likely to shape next month's budget.

But of all that was said at the meeting, the best wisdom was expressed by the president of the Alberta Federation of Labour.

"Albertans are willing to make tough sacrifices when necessary. We're prepared to take it on the chin when we've been convinced it's the right thing to do," said Gil McGowan. "But allowing yourself to get punched in the face when it's not necessary is not brave and it's not noble. It's stupid."

McGowan's remarks appear to be in response to comments made by Tom Flanagan, who pointed out that the across-the-board cuts of Ralph Klein in the early 1990s balanced the province's books and set the stage for Alberta's economic boom.

Conservatives should heed what McGowan has to say, but instead, agree we shouldn't take tax increases on the chin while the budget has all but doubled in the past decade and a University of Calgary report found that 95 per cent of the increases in revenues during the same period were swallowed up by the public sector.

McGowan is right: we'll make sacrifices when necessary. But the fact the government can't do its job is no reflection on ordinary Albertans, who provide the highest tax contributions per capita in the country.The Calgary Herald, Sunday, Feb. 10, 2013

Alberta has nothing to fear from a federal government led by Jack Layton, says provincial New Democratic Party Leader Brian Mason.

Despite the federal Conservatives' insistence that NDP environmental policies would ruin Alberta's energy industry, Mason said Friday the party's national leader "understands the importance of the oilsands."

Layton has vowed to eliminate federal subsidies to the energy sector and use the cash for renewable energy projects.

The party wants a moratorium on new oilsands projects until environmental issues are better managed, and a national cap and trade system for large industrial greenhouse gas emitters.

"There needs to be a systematic plan for the further development of the oilsands, which maximizes jobs and improves our environmental performance," Mason said, noting the Tories have also talked about implementing a cap and trade system with the U.S.

However, Mason acknowledged he has talked to Layton about the party's approach to the oilsands, including giving up the word "tarsands" -which he said has become a pejorative term used by opponents of the industry.

"There's an increasing sensitivity to some of those feelings here in Alberta," Mason said.

But Calgary Southeast Conservative incumbent Jason Kenney said Layton would "shutter the oilsands," and insisted unionized workers should vote against the NDP because the party is a threat to jobs in the oilpatch and associated industries.

"The NDP policy on the economy and energy would be a disaster for Canada, but it would be a particular disaster for Alberta."

The provincial NDP leader was speaking Friday at the Alberta Federation of Labour convention in Calgary. The mood was jubilant as speakers noted poll results show the NDP leading the Liberals, and close to the Tories.

Lethbridge electrician Richard Merrick said Alberta is still an uphill battle for the NDP, but he hasn't ever felt such momentum. "It's awesome," he said.

In a speech, Mason called on union members to actively support local NDP candidates. He argued Alberta needs to send at least some New Democrat MPs to Ottawa to represent the province's views, should the party form or be a part of the next government.

Calgary Herald, Sat Apr 30 2011 Byline: Kelly Crydermann

Alberta union leader Gil McGowan met with federal politicians in Ottawa Thursday to protest a proposed extension of the Keystone XL pipeline, which he says will pump jobs into the United States rather than build opportunities to refine raw bitumen in Fort McMurray or Fort Saskatchewan.

"Frankly we were looking for allies, and we found them," McGowan said after the meeting, which was attended by opposition MPs.

The Alberta Federation of Labour president called the pipeline expansion a "job killer," suggesting its completion will ruin the chances of thousands of jobs being created in Alberta. Pulling from a cross-section of reports that show the pipeline could provide 99,000 jobs to the U.S. economy by 2020 and as many as 270,000 jobs by 2030. McGowan said the Keystone XL project will create few new jobs in Canada.

"It's clear to us that the majority of Albertans and the majority of Canadians would like to see us move up the value ladder with our oilsands resources, rather than sell our resources south of the border in their raw form," he said.

Upon completion, the $12-billion pipeline expansion is expected to push about 900,000 barrels of bitumen from Alberta to Texas each day.

But Shawn Howard, a spokesman for TransCanada - the company building the pipeline extension - pointed out Thursday no one is in the market to build a new refinery in Alberta, so Canadian jobs aren't being lost.

"We don't go and build a pipeline like Field of Dreams, where we build it and hope we can fill it. We do this in response to demand that the market has identified," Howard said.

No refining jobs would have been created in Alberta as a result of the project, Howard said. "Good luck trying to get a refinery built. It's very difficult; it's extremely expensive."

McGowan said it is up to provincial and federal governments to tighten export regulations to require more upgrading be done in Alberta. "Just because it's cheaper for companies (to export) doesn't mean that we as the owners of the resource should allow that to happen."

Vancouver Sun, Fri Sept 23 2011 Byline: Trish Audette (Edmonton Journal)

EDMONTON - The Alberta Federation of Labour says energy companies exploited a loophole in the province's drilling stimulus programs, forcing the province to spend about $2.9 billion, more than double the projected cost.

Government officials, however, say the incentive programs worked to stimulate the economy during the economic downturn and created jobs during the recession.

Federation spokesman Gil McGowan said Wednesday that documents obtained under access to information laws show it is clear the energy companies were squeezing as much out of the program as possible, at Albertans' expense.

"The governments' own staff knew that certain energy companies were gaming the system," McGowan said. "They presented that evidence to senior decision-makers within the government bureaucracy who have the ear of cabinet ministers.

"They could have taken action. They didn't."

McGowan said the federation is not against incentive programs that put people to work but that "there has to be some performance measures, there has to be some oversight.

"These foregone royalties represent the lion's share of the deficit, which the government has used to justify massive cuts to social services and public infrastructure," McGowan said.

"The government is telling Albertans the cupboard is bare for public services, but it's bare in large measure because of this irresponsible and out-of-control corporate giveaway."

Alberta's Drilling Incentive Program was announced in March 2009 to stimulate the economy during the recession.

It included three programs: the Drilling Royalty Credit, the New Well Incentive and the $30-million Orphan Well Fund.

The government originally said the incentives would cost about $1.6 billion in foregone royalty revenue over two years.

Budget documents show that in 2009, costs ballooned to $1.2 billion from the estimated $842 million. In 2010, costs surged to $1.8 billion from the original $732 million estimate.

The final price tag for the Drilling Incentive Programs was about $2.9 billion, roughly $1.3 billion over the budget.

Of that spending, the Drilling Royalty Credit accounted for $1.7 billion, more than triple the original estimated of $466 million. The New Well Incentive program cost for $1.2 billion, just over the initial estimated of $1 billion.

The documents released by the federation suggest bureaucrats knew the Drilling Royalty Credit program was going over-budget because energy companies were swapping credits on a "grey market" to increase the incentives they received.

Energy Minister Ted Morton said he was aware of the credit swapping.

"I was aware of the fact that the program was costing more than we anticipated. We looked at it, and we were getting good pick up and it was creating more jobs," Morton said.

"At the time we thought that if it gets the rigs back working again, then it's achieving its effect."

In 2009, fewer than one in five drilling rigs were working in Alberta. By 2010, that figure had climbed to one in three, due in part to the stimulus programs, Morton said.

Similarly, the number of rigs working had dropped to 141 in 2009 as a result of the recession. In 2010, 237 rigs were up and working.

Gary Leach, executive director of Small Explorers and Producers Association of Canada, said governments around the world launched stimulus packages at the time.

"I don't believe that companies were gaming the system," he said. "This wasn't a loophole. The program was designed to make sure the companies spent the money because the government wanted to make sure the companies were investing. ... These credits were designed to be transferred."

Leach said most of the money was spent in rural Alberta where "it gets turned into jobs, it gets turned into property taxes for rural areas, and it turns into royalty streams for the government.

"Two years later, I think it was a success. Nobody is looking for another one."

Edmonton Journal, Wed Mar 7 2012 Byline: Karen Kleiss

The Alberta Federation of Labour, which represents 145,000 workers, is adding its voice to the growing list of opponents of a proposed pipeline project that would ship raw bitumen from Alberta's oilsands to Texas refineries.

If the extension of the Trans-Canada Keystone X-L pipeline is approved, it would stretch 3 feet wide and run 2,600 kilometres from Hardisty all the way to Texas - the length of about 26,000 football fields.

The project is expected to cost 7 billion dollars, but is also anticipated to have an economic impact in the billions, as it would potentially almost double oil production in Alberta to a million barrels a day.

"It's hard for me to imagine that the eventual decision would be not to build that. The economic case is so overwhelming," said Prime Minister Stephen Harper in New York on Wednesday.

The U.S. State Department is in the midst of deciding whether the project is in their national interests, and will be holding public consultation meetings across the pipeline route over the next three weeks.

But environmental groups have already been making their voices heard, staging two weeks of protests outside the White House in opposition of the pipeline this past month.

Now economic groups are also fighting to stop the construction of the project, arguing the pipeline would allow the US to take Alberta's crude oil and reap the rewards for refining it. Gil McGowan, the president of the Alberta Federation of Labour, believes it would be more responsible for the province to develop its refining capabilities, instead of just shipping raw bitumen to be refined south of the border.

"As an Albertan, I'm profoundly worried," said McGowan in Ottawa on Thursday. "Once the construction is complete, all we are going to be left with is a pipeline sucking up our resources south of the border, and no jobs for future generations."

He argues approving Keystone XL would create hundreds of thousands of jobs in the U.S., but would only add about a dozen permanent jobs in Alberta.

Harper's government is refuting that claim though.

"The fact is the oilsands are responsible for over 140,000 jobs across Canada," said Natural Resources Minister Joe Oliver in the House of Commons, in response to questions from Laurin Liu, the NDP MP for Riviere-des-Mille-Iles, Que. "The job number is expected to grow to almost half a million jobs...Employment in Canada is much too important to be used to make political gains."

A final meeting on the pipeline project will be held in Washington on October 7th, with a final decision from the U.S. State Department expected by the end of the year.

Global Edmonton, Thurs Sept 22 2011

link to video

A joint study from the Alberta Federation of Labour and the Parkland Institute of Alberta have released a study arguing the province could lose billions in royalty revenue if the proposed Northern Gateway pipeline is built.

The report's authors defend their claim by examining projected royalty payments between 2011 and 2045, using data collected from the Canadian Energy Research Institute. The report's authors compared those numbers to the royalty system that existed under former premier Peter Lougheed, who held office between 1971 and 1985.

Under Lougheed, 35% of Alberta's oil revenue was captured by royalties during the 1980s. The study argues if that system was still in place, the Alberta Heritage Fund could be as large as $1 trillion by 2045, not including any income earned through investments.

Under the current royalty model, secretary-treasurer of the Alberta Federation of Labour Nancy Furlong says Alberta will collect an average of 18% from oilsands revenue between 2012 and 2045.

"That's an extra billion missing," she said. "Under the old system, that means total royalty would be worth $2.2 trillion during that period, based on CERI's numbers."

Furlong acknowledges that lower royalty payouts mean the province would still be missing out on royalties that existed in the 1980s, even if Gateway is not approved. However, she argues the province's economy will still suffer if Enbridge's proposed pipeline is built.

"Gateway will ship thousands of upgrading and refining jobs to the Chinese, taking jobs away from Canadians. It will only leave 104 permanent jobs for Canadians, most of them in B.C. Other jobs surrounding construction of the pipeline will be mostly part-time or temporary labour," she said. "We're not opposed to a pipeline, but any discussion surrounding one has to include getting our fair share."

SunMedia.ca, Thurs Aug 9 2012Byline: Vincent McDermott

Alberta's lobbyist registrar has cleared the Canadian Association of Petroleum Producers of any wrongdoing after allegations the group tried to influence government public relations strategy. "CAPP is not in breach of the act," Lobbyists Act Registrar Bradley Odsen wrote in an eight-page report tabled Monday in the legislature.

"The totality of the evidence clearly shows that CAPP is in full compliance with the requirements of the Lobbyists Act."

The allegations against CAPP were levelled in August by the Alberta Federation of Labour. In a letter to the registrar, the federation alleged that a leaked note showed the petroleum producers had sought to influence government messaging about fracking and shale gas development. It added that three government departments and Alberta's Energy Resources Conservation Board reviewed the organization's request. It also claimed three lobbyists representing CAPP were not listed in the lobbyist registry under CAPP's filing, though all three were registered lobbyists for their employers, which included Encana, Canadian Natural Resources Limited and Shell Canada Limited.

Odsen ruled that "collaboration to enhance public communication" is not lobbying.

Calgary Herald, Tues Nov 29 2011 Byline: Karen Kleiss

Former ICBC boss says predicted rise in cost of oil serious risk to economy

EDMONTON — A new report says the Northern Gateway pipeline will boost crude oil prices $2 to $3 per barrel annually over the next 30 years, causing significant damage to consumers, businesses and the Canadian economy.

The economic assessment of the $5.5-billion project by former Insurance Corporation of British Columbia CEO Robyn Allan says the price shock will have "a negative and prolonged impact on the Canadian economy by reducing output, employment labour income and government revenues."

Allan, an economist who researched the impact of the pipeline proposal out of curiosity, says it has been touted by proponents as a nation building enterprise, but it really represents a "serious economic risk" to the Canadian economy.

"The emperor has no clothes," Allan said in an interview. "We're told it is a gross producing economic opportunity, but in fact it's an oil price shock to the economy."

Allan said when the price of oil goes up, that means Canadian consumers and businesses will pay more for anything produced by that oil.

That will result in inflation, business being down-sized and employees being laid off, she said.

Enbridge forecast a $2 to $3 annual increase in the price per barrel of crude in its pipeline application to the joint National Energy Board-Canadian Environmental Assessment Agency panel.

Enbridge spokesman Paul Stanway said the company can't comment in detail about the report because it is evidence tabled before the NEB-CEAA at its ongoing pipeline hearings, but it will get a chance to rebut the report in September.

Stanway confirmed, though, the projected price increase in the application.

"The price of oil in Canada is estimated to increase $2 to $3 per barrel as a result of market diversity and exposure to global pricing," he said. "That's correct, but that is taken into account in our estimation of an overall benefit of about $270 billion to the Canadian economy."

He said there is a significant benefit to the federal treasury and to Alberta as a result of having an outlet to world markets.

"If we don't get that outlet to the global marketplace, we're trapped with essentially being able to sell into just one market and we're going to get a heavily discounted price for that resource," Stanway said. "We're talking about Canada's most valuable export commodity. Why would we want to sell it continuously at a discount?"

Allan said Enbridge has exaggerated the benefits of the pipeline and downplayed the economic impact of price shock on Canadian refineries and businesses and consumers.

"They used the wrong model to answer the question of what will happen to the economy when Northern Gateway is successful in raising oil prices," she said.

Allan, named as by the Financial Post as one of Canada's top 200 CEOs, said she wanted to present her information to the hearing panel and question Enbridge on its model, but was denied intervener status.

The 145,000-member Alberta Federation of Labour included her report in its submission to the panel this week.

AFL president Gil McGowan called the report "a game-changer" and a wake-up call to those who have been seduced by the public relations campaigns of the oil companies.

He said Allan's report suggests the promises of economic growth and job creation "are nothing more than a mirage."

"Once Albertans and Canadian read Robyn's report and realize they are being sold a bill of goods by proponents of the pipeline, I think they will first get angry and then second, start asking some serious questions," he said. "What Robyn's report shows is that if this pipeline is built, the public interest will be undermined — not enhanced— in terms of broad economic growth and job creation."

If it is approved, the 1,177-kilometre line will carry 525,000 barrels of oilsand crude from near Bruderheim, outside Edmonton, to Kitimat, B.C.

Calgary Herald, Thurs Feb 2 2012 Byline: Darcy Henton

Ed Stelmach's program to stimulate drilling during the recession cost taxpayers $2.9 billion and failed to create promised jobs, new wells or new investment in the oilpatch, says the Alberta Federation of Labour.

AFL president Gil McGowan said Friday the federation's research shows the program merely padded the profits of major oil and gas companies in Alberta while depleting the treasury of revenue that could have been used to fund health care and education.

He has passed on AFL's findings to Alberta's auditor-general and also requested the all-party legislature public accounts committee investigate the program.

"When Albertans learn about this they will see this for what it is, which is an outrageous misuse of government funds," he said.

The program contributed to 55 per cent of the provincial deficit during the two years it was in effect — a cost McGowan estimated was 10 times the annual budget of Alberta Environment.

McGowan said the program also created a "loophole" in the form of a "grey market" for royalty tax credits that enabled smaller companies that had more credits than they needed to sell them to bigger companies.

Those companies were able to defray the amount they paid in royalties owed to Albertans without having to hire workers or drill new wells, he added.

McGowan said Albertans won't know who cashed in the credits because Alberta Energy keeps that information secret.

He quotes former energy minister Mel Knight saying the program would create jobs for Albertans and generate additional royalty revenue and production over the next 10 to 30 years.

Using statistics from Statistics Canada and the Canadian Association of Oilwell Drilling Contractors, the AFL showed the number of new wells being drilled decreased steadily during 2009 and 2010 and over the same period the province lost about 8,000 jobs.

Capital investment in the oil and gas industry swooned, but industry profits increased, the AFL says.

Alberta's rate of well completions for that period mirrored Saskatchewan and B.C., which didn't have programs as generous, and seemed to climb and fall with the price of oil, despite the drilling stimulus program, the AFL reported.

University of Alberta energy economist Andrew Leach said the program was likely not as successful as the government claimed and likely not as dismal as the AFL contends because it can't be determined how many more jobs might have been lost without it.

"I think the truth is probably somewhere in the middle," Leach said. "What you really need is an account of what would have happened in Alberta in the absence of the program and to say that Saskatchewan and B.C. are exactly like Alberta with the exception of these programs isn't true."

But he said the provincial government has an obligation to be open and accountable to Albertans since they own the resource.

"I think the government should be providing information on who is drilling and what they are paying in royalties," he said. "I can't really see a downside in releasing those numbers."

Travis Davies, a spokesman for the Canadian Association of Petroleum Producers, said the programs were successful at keeping drilling rigs working during the downturn in the economy.

The hours of operation for drilling rigs jumped from 47,000 hours in 2009 to 76,000 hours in 2010, he said.

"I don't know how that equates to reduced employment in the oil and gas sector," he said. "If you increase operational hours, I don't understand how you have reduced employment."

He noted Alberta just set a record for sales of oil and gas leases.

"Obviously there is some attraction to this province in terms of investment and I think part of that was the work that was done on royalties," Davies added.

Calgary Herald, Fri Jul 15 2011 Byline: Darcy Henton

Hundreds of Fort McMurray workers are expected to rally tonight to send a message to the Conservative government and to Oilsands Companies that the boom in Alberta needs to be shared among all Albertans. The rally coincides with the visit of many Conservative MLAs to tour Fort McMurray.

"Tonight's rally is an event organized by local workers who are frustrated with recent developments in the Oilsands projects," says Alberta Federation of Labour President Gil McGowan. "It is sending a message that Alberta is built by workers, and that workers deserve a fair share of the economic prosperity."

At issue are attempts by oilsands companies to lower wages and working conditions at their mega-projects north of Fort McMurray. Three strategies are being employed: use of employer-friendly unions willing to sign sweetheart deals, use of non-union contractors, and the threat of importing temporary foreign workers.

"At a time of record profits for energy corporations, instead of sharing the growing pie, these companies are trying to trim the edges of the workers' piece," says McGowan. "This is about their greed and the rights of workers to receive a fair share."

"And the government has been actively supporting this effort to bust unions and drive down wages, through the use of rarely used provisions in the Labour Code," adds McGowan.

"In the past, all oilsands construction was built using union labour  not because the employers liked unions, but because unions were able to provide high quality workers who could get the work done," observes McGowan. "The unions are still keeping their end of the bargain, but the employers are breaking it.

"The rally is to let MLAs and the big energy companies know that workers won't take this lying down."

- 30 -

EDMONTON - Oil producers could lose $72 billion over a nine-year-period if a pipeline to carry Alberta bitumen to the West Coast isn't built, a new report for the Alberta government says as community hearings for the proposed Enbridge Northern Gateway project are about to begin this month in British Columbia.

In a 44-page report submitted before Christmas to the federal government panel reviewing the pipeline project, consultants for Alberta Energy peg potential losses for oil producers in the project at $8-billion every year between 2017 and 2025.

The forecast, drawn up by Houston-based consultant Harold York for the firm Wood Mackenzie, is largely based on the expectation that Alberta oil sells at a higher price on an international market than it does in North America.

"If we can get it offshore, there are a lot more markets available to us which are willing to pay a higher price," Alberta Energy spokesman Tim Markle said.

The outlook does not deal with the oilsands production boost anticipated as a result of pipeline construction. It also does not deal explicitly with the effects that offshore bitumen sales would have on oil royalties collected by the Alberta government.

Currently, Alberta's main oil customer is the United States, which recently held off on approving the massive Keystone XL pipeline extension to the Gulf of Mexico.

The Dec. 21 Wood Mackenzie report flags Alberta Energy as the provincial government's lead representative going into 18 months of hearings that start next week. But critics charge the report positions the province to offer just "half of the balance sheet" to the federal panel by not raising environmental issues as well.

"In order to make an informed decision, you need to consider both the benefits and the costs of the pipeline ..." said Pembina Institute oilsands analyst Nathan Lemphers. "Is it up to environmental groups and concerned individuals, First Nations, to be raising this? Or should it be our governments or proponents doing this?"

Other departments, like Alberta Environment and Water or Sustainable Resource Development, will take a back seat during the hearings, offering Alberta Energy supporting information as necessary.

A spokeswoman for Alberta Environment said the department has no plans to provide its own report on the impacts of the pipeline to the review panel.

"We're not officially participating in the hearings, but we are supporting Energy," said Jessica Potter.

Noting that Alberta already has pipeline infrastructure in place east of the B.C.-Alberta border, Potter called the Enbridge review "a B.C. hearing, not an Alberta hearing."

The provincial government's role, she said, is "to ensure Alberta's energy future. To say, 'Yes, we have the energy required to make this pipeline worthwhile to us.' But we already have our regulatory process in place, our frameworks and stuff that legislate how pipelines are put in, how energy is developed in the process. From our perspective we have that and we're confident in our frameworks."

The Pembina Institute is an Alberta-based think-tank focused on energy solutions. It is not opposed to pipeline infrastructure in general, but has weighed in against the Northern Gateway project because of environmental questions members say have not yet been answered. Lemphers said the province should be discussing the potential costs of cleaning up pipeline or tanker spills and the potential environmental liabilities of additional oilsands development.

The Wood Mackenzie report deals with the outlook for Alberta's share in the international crude oil market, which is expected to grow significantly in the years ahead and demand "additional export capacity ... by 2017."

"When you're having a pipeline of this magnitude (being) brought forward, it's critical that the panel have balanced information in front of it in order to make an informed decision," Lemphers said. "While it's absolutely important that there be information about the economic benefits of the pipeline, that also needs to be balanced with some of the potential economic liabilities, some of the environmental risks that are associated with the project."

The report also does not explore increased refinery capacity not currently planned for in Alberta, a sticking point for labour groups who want to see more jobs in Alberta for refining bitumen.

"Here in Alberta, we should have had a debate about whether our province should take the high road or the low road when it comes to oilsands development. The high road being focused on moving up the value ladder into upgrading, refining (and) creating the thousands of jobs that would come with that. The low road being the rip-it and ship-it approach to shipping bitumen in its rawest form," said Alberta Federation of Labour president Gil McGowan. "Unfortunately, we never had that debate. The government and the oil industry decided for us."

Community hearings for the Northern Gateway project, expected to carry oilsands oil from Bruderheim, Alta. to Kitimat, B.C., begin in Kitimat on Jan. 10. More than 4,000 people have applied to give oral evidence. Edmonton hearings are scheduled to take place Jan. 24-31.

If the province chooses to appear before the hearing panel, it would not be until the fall of 2012, said Markle. The Alberta Energy spokesman said an elected member of government likely would not appear.

Officially, the provincial government is not necessarily supporting the proposed pipeline, but access to new markets.

"If there was another pipeline that came through and made an application, we'd look at it, make sure it met all the standards that Alberta sets out, and if we (found) that it was in the best interests of Albertans, then we might support that one as well," Markle said.

The federal joint review panel is an independent body mandated by the federal environment ministry and the National Energy Board. Its recommendation and environmental assessment of the project will inform Ottawa's final decision on the pipeline.

taudette@edmontonjournal.com

Key findings in the report, "A Netback Impact Analysis of West Coast Export Capacity," now available on the federal review panel's website:

•"Canadian producers not having sufficient access to premium heavy crude refining markets could lose about $8/bbl. for every Canadian heavy crude barrel, with a revenue impact averaging $8 billion (Cdn) per year for 2017 to 2025."

•"By 2025 Canadian heavy crude production volumes could reach nearly 3,000 kbd (thousand barrels per day), primarily dominated by unconventional grades."

•In the next 15 years, "Canada could be the third largest heavy crude oil producer after Saudi Arabia and Iraq."

•Today, Alberta's crude oil production is largely delivered to hubs in Edmonton and Hardisty feeding four major pipeline networks: Enbridge Mainline, Kinder Morgan Express, Kinder Morgan Trans-Mountain, and TransCanada Keystone.

Click here to read the Wood Mackenzie report and all documents provided to the joint review panel.

Edmonton Journal, Mon Jan 2 2012 Byline: Trish Audette