Investors point to uncertainties associated with Canada’s environmental regulations as a deterrent
According to a recent survey, none of Canada’s states are among the top 10 most attractive jurisdictions in North America for oil and gas investment, but Texas and Oklahoma dominate.
The Canada-US Energy Sector Competitiveness Survey 2021, conducted on senior oil sector executives, finds that US states are far more attractive to oil and gas investors than Canadian provinces and territories. Did.
“The message from investors is clear. Canada’s pesky and uncertain regulatory environment continues to undermine the attractiveness of investment in the country’s oil and gas industry,” said the director of the Fraser Institute’s Center for Natural Resources Research. Yes, research co-author Elmira Aliakbari said in a press release.
An annual survey conducted from May to August found 22 jurisdictions in North America (with five Canadian states) based on how government policies affect sentiment towards oil and gas investment. It ranks territories and 17 states in the United States).
Texas and Oklahoma were 1st and 2nd, respectively, and Alberta was 12th. 11th place Saskatchewan is Canada’s highest ranked state.
Regulatory factors continue to impede Canada’s energy competitiveness, according to survey respondents.
Barriers are concerns about high tax rates, uncertainty over environmental regulations, costly regulatory obligations, “interpretation and control of regulations governing the upstream oil industry”, and “political stability and security of personnel and equipment”. According to a survey.
Alberta’s share is 65%, more than three times higher than Texas and Oklahoma, compared to Texas and Oklahoma, where 13% and 20% of each respondent showed environmental regulatory uncertainty as a deterrent to investment. did.
A further comparison between Alberta and Texas shows that 71% of respondents are regulated as another major deterrent to investment in the state’s oil and gas sector, compared to only 10% in the US state. We have identified duplications and inconsistencies.
On average, the authors found that 76% of respondents were deterred by Canadian environmental regulations compared to 49% in the United States. In addition, 72% of Canadian respondents believed that regulatory duplication and inconsistency hindered investment, compared to 45% in the United States.
The cost of regulatory compliance was also a major turning point, with 56 people per person.Percentage of respondents identifying regulatory costs Compliance as a deterrent to investing in Alberta Compared to just 9 percent in Texas.
Overall, 70% of Canadian province respondents showed the cost of regulatory compliance as a deterrent, compared to 43% in 17 US provinces.
Rankings for other states and territories include Newfoundland and Labrador (16th), British Columbia (18th), and Northwest Territory (20th).
“Overall, an analysis of the 2021 findings shows that the negative sentiment of senior executives in the industry on the key factors driving oil investment decisions is more in Canadian provinces than in competing US jurisdictions. It shows that it remains high, “the study said.
Gyro Unis, a policy analyst and co-author of the study at the Fraser Institute, said the findings show trends that the Canadian government cannot overlook.
“Policy is important, and policy makers need to be careful if investors clearly indicate that they are investing in US states rather than Canadian jurisdictions,” he said.