Alberta's Conservative government is taking steps to jumpstart an economic recovery with a blueprint it released yesterday, which involves billions in infrastructure investment and a tax cut, among other measures.
Under the plan, the Jason Kenney government will reduce the general business tax rate from 10 percent to eight percent effective July 1 instead of January 1, 2022, when the tax cut was originally scheduled to go into effect. The government will also invest some $7.3 billion in infrastructure projects that will create jobs.
Some $1.1 billion (C$1.5 billion) will be spent on the Keystone XL pipeline, the Alberta government said, which will support the province's recovery and create 7,000 jobs. However, the completion of the pipeline is far from certain as opposition against the project in the U.S. continues to put hurdle after hurdle on its road to finalization.
At the moment, the federal government is awaiting a decision by the Supreme Court regarding a lawsuit that is blocking construction. Meanwhile, two tribes have filed a new lawsuit against the controversial pipeline, alleging it violates the national Environmental Policy Act.
The Alberta government is firmly behind the 830,000-bpd Keystone XL, however.
"Global oil and gas prices are estimated to return to a WTI benchmark of $60 per barrel within 12 to 18 months.
In that environment, Alberta's oil and gas sector is set to thrive, as long as we can build new pipelines to get our product to market. This is why we invested $1.5 billion to ensure Keystone XL broke ground this spring - creating 7,400 high-paying jobs in Canada this year alone," the government's economic recovery plan stated.
However, the energy aspect of the plan is not solely focused on oil. According to the blueprint, the Alberta government will also support investment in so-called blue hydrogen, utilizing its abundant reserves of natural gas to produce clean fuel. Carbon capture and storage is also an area of interest, as is the emerging technology of geothermal energy extraction.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- Second COVID Wave In China Could Upend Crude Recovery
- OPEC+ Is Still Producing Too Much Oil
- How The Fed Bailed Out U.S. Oil And Gas