Alberta energy sector waits for policies from NDP

The word "fear" has been spoken repeatedly in recent days in the corporate towers of downtown Calgary as the oil and gas sector tries to figure out what a new NDP government will bring to Alberta.

The concern is largely because of the unknown.

"We don't have any facts, we just have the platform," Steve Laut, president of Canadian Natural Resources, told analysts Thursday."We will respond appropriately when we understand what the platform and policies will be."

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Besides saying everything will be A-OK, here are five policy areas thatthe energy industry is anxious to hear about from premier-designate RachelNotley.

1. Royalties

Clearly, this is the big concern for energy companies.

Notleymade no bones about this subject during the election campaign. If elected, she said she wouldhold a review of the province's royalty structure to ensureAlbertansare getting a fair return for their non-renewable resources. It's uncertain if sheactually wants to make immediatechanges. If so, how much would she be looking to increase royalties?

On Thursday, Crescent Point EnergyCEO ScottSaxbergtold analysts on a conference call that his company could easily shift its investments to either Saskatchewan or Utah, if theNew Democrats hike royalties in Alberta.

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The sector has recent memories of the pain felt duringthe last hike to royalties.The government of former premier EdStelmachincreased rates in 2007. The move proved to be temporary as royalties wererolledback after major criticism from the oil and natural gas industries and a significant loss of investment in Alberta.

2. Pipelines

During the campaign,Notleyaddressed certain proposed pipeline projects, saying she would take a hands-off approach withthe Northern Gateway pipeline, which would take oil from Alberta to tankers on the B.C. coast.

Similarly, she would let the Keystone XL pipeline debate play itself out in the United States. The project would take oil from Alberta to refineries and ports on the Gulf Coast.

Notley seemed much more enthusiastic about thepotential for Energy East, which would take product to refineries in Eastern Canada.

Market access isa top priority for the oil industry.

3. Fracking

The process of using sand, water and chemicals to break up underground rock is commonplace throughout Alberta and North America. In fact, over 90 per centof the wells drilled and completedare hydraulically fractured,according toMark Salkeld,CEO of the Petroleum Services Association of Canada.

"It is absolutely necessary," said Salkeld."It's not new, our members are world experts in fracking."

Fracking concerns are well documented, includingthe threat to groundwater andthe potential for earthquakes.

Any addedenvironmentalprotections will increase the cost of fracking.

4. Taxes

Notleyhas calledfor the largest, most profitable corporations to pay their fair share. She has said the wealthiest Albertans should pay more as well.

Specifically, she campaigned on raising the corporate tax rate to 12 per cent from 10 per cent.Between the higher tax rates and better collection, the NDP estimates itcan raise more than $800 million in 2015-16.

Industry will also keep a close eye on other taxes and fees, such as theWell Drilling Equipment Tax.

5. Environment

The NDP pledged in its electionplatform to "phase out coal-fired electricity generation to reduce smog and greenhouse gas emissions." The party also campaigned on a promise to "strengthen environmental standards, inspection, monitoring and enforcement to protect Alberta's water,land and air."

ThePembinaInstitute, an environmental think-tank, is hopingNotley will increase the priceon carbon, currently at $15 a tonne, in order to motivate industry toreduce emissions.The group would also like to see the Alberta government speed up the process tophase out existing conventional coal plants. Pembina wants Notley to strengthen environmental regulations, amove it says could help industry.

"Some of the concern with regards to pipelines coming from theoilsandshave been with Alberta andwhetherAlberta is doing its fair share in regards to climate change," saidEd Whittingham, executive director of Pembina.

The oilsands were rarely discussed during the election campaign. Over the years,Notleyhas suggested the government needed to take more responsibility for the environmental performance of the oilsands and hastalked about theneed fora strong environmental protection regime.