With abundant natural resources, Canada is an energy-intensive country. It ranks fifth globally for energy production, trailing only China, the United States, Russia and Saudi Arabia. With the exception of Alberta, most of the electricity sector is controlled by Crown corporations — government-owned public utilities.
The goal of Alberta’s free market is to encourage investment and competition in the sector. For the past 20 years, deregulation has been a way to spur economic prosperity and jobs in the province. But what was once a boom is now a lull, thanks to a glut of oil on the market. Then came another shift — the New Democratic Party’s (NDP) majority win in Alberta and Liberal Justin Trudeau’s election as Prime Minister. All of these changes could have a big impact on the Alberta energy sector.
Planned Regulatory Changes
Trudeau campaigned on tougher environmental rules and a fierce fight against climate change. The NDP already has plans percolating for regulatory changes in the energy sector. This political shift will likely mean a greater emphasis on the reduction of greenhouse gas emissions, as well as potential delays in regulatory hearings for proposed oil-sands pipelines. With oil-sands resources as a significant contributor, Canada’s proven oil reserves rank third globally, behind Venezuela and Saudi Arabia.
The energy industry is worried about the impact these changes might have on costs in a time of low oil prices. It’s an especially challenging situation in Alberta, where the Canadian Association of Petroleum Producers estimates 42 percent of the provincial economy is related to the energy sector.
Action Plans for the New Environment
What do these changes mean for utilities in Alberta? Now more than ever, utilities are under intense pressure to deliver electricity cheaper and more consistently. With new regulations in sight, utilities must respond with agility and efficiency, even under the most challenging conditions. Seeking out partners with commitment, experience, innovation and a strong work ethic will be essential.
Utilities may also find the need to commit to public advocacy. Many feel that taxing a system at a time when revenues are at a stranglehold could strike a death knell for the industry. Unemployment in the province continues to edge higher. People in the energy sector are lobbying for prudent regulations rather than sweeping change.
A Commitment to Alberta
Consultants in Canada have long flocked to where the market is hot. And while this can be an effective strategy, it can also be shortsighted. Instead, we’ve built a strategy using long-term relationships to produce world-changing impacts — just as the founders of Burns & McDonnell did more than a century ago.
Our team of consultants is similarly straightforward in our commitment to long-term relationships. We’re happily busy while the market is hot, but we’re equally committed to sticking around in a down market. When a consultant fully understands the ebbs and flows of the marketplace like we do, we’re better suited to serve a client’s best interests.
I’ll be at the Independent Power Producers Society of Alberta (IPPSA) Annual Conference in Banff from March 6-8 and would be interested in hearing your perspective about changes ahead for the energy sector in Alberta. Or, if you can’t make it there, I’d love to hear your thoughts in the comments.