Source: Dachis (2017)
Pipelines face delays, or are not being built at all. Provinces introduce higher corporate income taxes. Taken together, these costs are reducing the competitiveness of the Western Canadian energy sector.
In this edition of Graphic Intelligence, we compare the cost of government policies on an average northwestern Alberta conventional crude well with the same hypothetical well in Texas.
Led by pipeline delays, government policy-induced costs for an Alberta well amount to around $6–7 per barrel – a substantial share of the approximately $50 per barrel that an oil producer would receive on the global market. For every barrel of oil produced in Texas, the government policies account for only $3.3, which is nearly 50% cheaper.
To learn more about policy-induced costs on natural gas and conventional oil producers in Western Canada, check out "Death by a Thousand Cuts? Western Canada’s Oil and Natural Gas Policy Competitiveness Scorecard" by Benjamin Dachis.
Ben Dachis is Associate Director, Research, at the C.D. Howe Institute.