Study
| EST. READ TIME 1 MIN.Policy uncertainty main reason for reduced investor confidence in Alberta’s oil and gas sector
While an analysis of the share prices of firms show that savvy investors have already “priced in” many of the concerns about oil transport and access to outside markets, the Fraser Institute’s annual Global Petroleum Survey shows that investor confidence in Alberta is taking a serious hit.
The survey’s Policy Perception Index measures the extent of policy-related investment barriers within each jurisdiction. The higher the score, the more negative the sentiment on the part of respondents, indicating that they regard the jurisdiction in question as relatively unattractive for investment. Alberta’s score deteriorated from a value of 26.6 in 2014 to 34.2 in 2015, and its global rank as a desirable location for investment fell to 38th (out of 126) in 2015, down from 16th (out of 156) in 2014.
Areas such as political stability, fiscal terms, uncertainty concerning protected areas, and taxation experienced large negative shifts, indicating that more investors are viewing these areas as barriers to investment in Alberta.
During Alberta’s last royalty review, when investors also downgraded Alberta’s ratings in the Global Petroleum Survey, exploration and development spending in Alberta declined, while neighboring Saskatchewan and British Columbia saw increases in investment.
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Ross McKitrick
Professor of Economics, University of Guelph -
Kenneth P. Green
Senior Fellow, Fraser Institute
Kenneth P. Green is a Fraser Institute senior fellow and author of over 800 essays and articles on public policy,published by think tanks, major newspapers, and technical and trade journals in North America. Mr. Green holds a doctoral degree in environmental science and engineering from UCLA, a master’s degree in molecular genetics from San Diego State University, and a bachelors degree in general biology from UCLA.Mr. Green’s policy analysis has centered on evaluating the pros and cons of government management of environmental, health, and safety risk. More often than not, his research has shown that governments are poor managers of risk, promulgating policies that often do more harm than good both socially and individually, are wasteful of limited regulatory resources, often benefit special interests (in government and industry) at the expense of the general public, and are almost universally violative of individual rights and personal autonomy. Mr. Green has also focused on government’s misuse of probabilistic risk models in the defining and regulating of EHS risks, ranging from air pollution to chemical exposure, to climate change, and most recently, to biological threats such as COVID-19.Mr. Green's longer publications include two supplementary text books on environmental science issues, numerous studies of environment, health, and safety policies and regulations across North America, as well as a broad range of derivative articles and opinion columns. Mr. Green has appeared frequently in major media and has testified before legislative bodies in both the United States and Canada.… Read more Read Less…
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