The Fraser Institute released the results of its latest survey of petroleum executives and says Alberta’s taxation, onerous regulatory schemes and unpredictable environmental rules are deterring investment in the oil and gas sector.

The 8th annual Global Petroleum Survey was released on Tuesday and this year Alberta dropped to 43rd place on the Policy Perception Index, which measures how much policy hampers oil and gas investment.

“Every year we survey executives in the oil and gas, upstream oil and gas sector, and ask them to assess the jurisdictions that they’re in with regard to whether that jurisdiction is attractive for investment or has policies that would actually deter investment,“ said Dr. Kenneth P. Green, Senior Director, Natural Resource Studies, Fraser Institute. “In the large reserve holders, yes, Alberta ranks fourth, which is not shabby, it’s actually pretty good but Alberta’s ranking within Canada and within the pack with regard to its policies has been dropping fairly precipitously. It was in the top 15 as early as just a couple of years ago, dropped to 25th place last year, now 43rd this year out of 96 jurisdictions, where executives are saying taxation, regulation, government stability, these are all things that are increasingly deterring them from being interested in investing in Alberta.”

Green says Alberta’s policies are confusing and likely costly and that is creating uncertainty in the energy industry.

“This is the perception of oil company executives. What they’re telling us though is that unfavourable taxation, onerous regulatory schemes that are duplicative and time consuming and costly and environmental regulations that are somewhat irregular or unpredictable are major factors that would deter them from, land claims is another one in terms of British Colombia and other places,  native land, aboriginal land claims, is another factor but those factors, it’s not really a lack of resource, we know where those resources are and we know how to get it, we have the technology to get it, it’s the regulatory milieu in which we produce that is deterring,” he said.

The survey was completed before the approval of two pipeline expansions last week and Green says Alberta’s future ranking will depend on access to markets and environmental regulations.

“This was before the announcement about the two pipeline approvals but this was also before the announcement of the acceptance of the federal carbon price schedule of $50 a ton by 2022, so we don’t know how those two things are going to play out, Alberta could rise if the pipelines move ahead and investors see access to Asia for Alberta’s oil and gas products, it could improve. It could also decline depending on whether or not we continue to march ahead with disadvantages compared to our biggest competitors and our biggest customer, in fact, our only customer,” he said.

The Fraser Institute says U.S. President elect Donald Trump is supportive of Keystone XL, which could improve Alberta’s score in the future, but that now is not the time for non-competitive actions.

“This is not the time for Canada to be sabotaging itself and Alberta to be sabotaging itself with regard to its biggest competitor, which just elected a president, let’s not forget, that said he’s going to unleash energy development in the United States, he’s going to reduce regulations on energy development, he’s going to open federal lands to energy development and offshore areas to energy development in the United States and the United States lifted its export ban so it’s now a competitor of ours, it’s no longer just our customer, it’s a competitor in global markets and so this is not really the time, I don’t think this is the time to be handing Canadian runners a lead backpack.”

Saskatchewan continues to improve, ranking fourth, and earned high scores from petroleum sector executives for fiscal terms, the cost of regulatory compliance and clear environmental regulations.

Canadian rankings from the Global Petroleum Survey:

Province

 

2016 Rank

 

2015 Rank

Saskatchewan

 

1

 

1

Manitoba

 

2

 

2

Newfoundland and Labrador

 

3

 

3

British Columbia

 

4

 

7

Alberta

 

5

 

4

Nova Scotia

 

6

 

9

Northwest Territories

 

7

 

8

Yukon

 

8

 

5

New Brunswick

 

9

 

10

Quebec

 

10

 

  11*

*NOTE: Ontario was included in the 2015 ranking, but did not generate sufficient survey responses in 2016.

For more information on the survey, click HERE.