EDMONTON, AB (November 10, 2011): The delay in approving the Keystone XL pipeline is costing the Alberta treasury nearly $2 billion a year and could cost upwards of $5 billion a year in the future, highlighting the importance for Premier Alison Redford to do everything she can to help get it approved, the Wildrose said today.

Since early 2011, Alberta oil has sold at a discount below the world price. This gap has ranged from $10 to more than $25 a barrel. Experts say additional pipeline capacity, such as Keystone XL, is essential to narrowing and eliminating that gap.

Eliminating the gap between what Alberta oil is priced at and the world price will mean billions in extra annual royalty revenue and many more billions in economic activity.

According to the Canadian Association of Petroleum Producers (see chart below), Alberta’s total hydrocarbon production in 2010 was around 394,000 cubic meters a day, or just under 2.5 million barrels of oil and other valuable petroleum liquid products.

Assuming a $10/barrel difference between West Texas Intermediate (the price point for Alberta product) and Brent crude (the world price) and a 20% average royalty take, the Alberta treasury loses out on $1.8 billion of annual royalty revenue without Keystone in place to eliminate the spread. That figure jumps to more than $4.5 billion when the spread goes up to $25.

The spread was $15.60 at 11 a.m. today.

With an additional $4.5 billion in annual revenue, and without increasing oil production or raising taxes, Alberta could:

•             Eliminate the deficit ($1.3 billion)

•             Hire 600 nurses ($120 million)

•             Add 200 detox and mental health beds ($80 million)

•             Build 1,500 long-term care beds ($450 million)

•             Build 35 new schools ($550 million) and hire 1,500 teachers to staff them ($150 million)

•             Buy 10 MRI machines and do a surgical blitz to get 90,000 Albertans off waiting lists ($150 million)

•             Twin one half of Highway 63 to Fort McMurray ($700 million)

•             Put $1 billion back into the Heritage Fund

“This is what Keystone really means to Alberta,” Wildrose Leader Danielle Smith said. “This is why it’s so important to our future and this is why Ms. Redford needs to get behind it all the way. It is critical, not only to our economic growth, but the overall future of our province.”

The Wildrose Caucus stands for free enterprise, less government, increased personal freedom and democracy.

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BACKGROUNDER

* Canadian Association of Petroleum Producers statistical handbook

** Based on conversion rate of one cubic meter = 6.29 barrels of oil

For further information or to arrange an interview, media are invited to contact:

Evan Menzies

Communications Assistant, Wildrose Caucus

Ph: 780-904-4913