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 Vol:11 | Issue:2 Alberta Energy |
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Oil Rich Alberta, Canada, is fast becoming a big part of North Americas energy future as oil sands production heats up.  With global demand for oil expected to increase from 80 million barrels per day to more than 120 million barrels per day over the next 25 years, its no wonder the world is taking notice of the Alberta oil sands.In forecasts of future oil production, the oil sands are expected to be the only net add to North American crude oil supply during the coming quarter-century. Oil sands are deposits of bitumen, a heavy oil that needs to be heated or diluted with lighter hydrocarbons before it will separate itself from the sand to which it is attached or flow freely. The Alberta oil sands deposits are located in three distinct areas of the northern region of the Canadian prairie province: Cold Lake, Athabasca and Peace River. Alberta as a whole has about 175 billion barrels of proven oil reserves, with around 173 billion of that total expected to come from the oil sands. INVESTMENT OPPORTUNITIES ABOUND Albertas abundance of energy resources oil, natural gas and coal, as well as oil sands and a developing biofuel industry has helped fuel strong economic growth for the province. In 2007, the Alberta economy grew by more than 6.5 percent the highest rate in Canada. And, according to economic forecasts, this type of growth is expected to continue. Many investors have already recognized the advantages of doing business in Alberta. The province leads Canada in its ability to attract investment. Statistics from 2006 show investment per capita in Alberta exceeded $22,000 more than double the national average. The province boasts the lowest overall taxes in Canada and no provincial sales tax. There is no provincial government debt, and the provincial government has delivered a balanced budget in each of the past 14 years. In addition to being fiscally-responsible, the Alberta government is also committed to business competitiveness and environmental responsibility. While investment opportunities exist in all sectors of the energy industry, the oil sands provide one of the most significant and sustainable opportunities for investment. Almost $45 billion has been invested in close to 70 oil sands projects to date, and billions of additional dollars are expected to be invested in the coming years as new projects are developed. STRONG EXPORT ECONOMY Exports are an important component of the Alberta economy. In 2006, Alberta businesses exported more than $40 billion worth of goods and services to world markets. In the energy sector, the vast majority of Albertas international exports are destined for the United States. In 2006, the province exported about 1.08 million barrels per day of crude oil to the United States, which accounted for 13 percent of U.S. crude oil imports. On the natural gas side, Alberta supplied the U.S. with 62 percent of its natural gas imports. But with Energy Information Administration estimates pegging the potential growth of global energy consumption at more than 70 percent by 2030, opportunities are presenting themselves for Alberta to position itself as a global energy player. The strongest growth in energy requirements is anticipated to come in Asia, with demand expected to triple in the region over the next 25 years. Such forecasts have sparked new interest in investment opportunities in Canada in all aspects of energy exploration, production, processing and transportation. ROYALTY CHANGES More than 80 percent of Albertas mineral deposits are government-owned. However, the province does not own an oil or gas company, preferring to encourage private industry to develop the resources in exchange for royalty payments. The Alberta government recently announced changes to the way it assesses these royalties. The New Royalty Framework is designed to encourage long-term prosperity and stability for the energy industry so Alberta can maintain its reputation as a competitive place to invest, while delivering a fair return to Albertans the owners of the resource. The Alberta government is confident that the New Royalty Framework is a good deal for ndustry over the long term, and a good deal for Albertans. WHAT LIES AHEAD If current forecasts prove correct, the energy industry is facing a number of challenges and opportunities in the future. Increasing populations, a growing demand for energy and rising environmental standards will result in an increased demand for responsible stewardship of resources, greater efficiency of use and development of innovative technologies. Albertas vast energy resources, coupled with the provinces strong commitment to encouraging business competitiveness and commitment to environmental sustainability, should ensure the province remains a key player in the global energy sector for many generations to come. This article was provided to U.S. Industry Today by the Alberta Department of Energy. For more information visit www.energy.gov.ab.ca. Alberta Energy: [ Web ] |
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