Alberta has long been Canada’s “energy province.” With a wealth of energy resources yet to be tapped and a growing global demand for energy, Alberta continues to maintain its position as a secure and reliable energy supplier. Our province is among a top tier of jurisdictions that have the resource base, the expertise and the creative and entrepreneurial spirit to serve the globe’s increasing energy needs.

But Alberta also faces a crossroads. Globalization has connected the world as never before, bringing greater complexity to flows of capital and trade. Patterns of energy supply and demand are shifting as countries seek to improve energy efficiency, develop alternatives, and use energy produced closer to home. These and other factors are impacting the attractiveness of our province as a destination for oil and gas investment.

In response to changes in the marketplace, the Alberta government created a team that examined Alberta’s investment competitiveness, with a focus on upstream oil and natural gas development. A key element of this review was an extensive technical analysis of Alberta’s competitive position relative to other domestic and international jurisdictions.

Overall, Alberta continues to provide competitive investment opportunities in the exploration and development of upstream oil and gas. However, Alberta’s position is not as strong as it was a decade ago. Domestic, continental and global factors have contributed to a shift of investment away from the province. Currently, costs are higher in Alberta, our regulatory system is creating barriers and many of our reservoirs require more costly technology to explore and develop.

To advance Alberta’s competitiveness in the upstream oil and gas sector, the Alberta government is modifying conventional oil and natural gas royalty rates, promoting more innovation and use of new technologies, and reducing unnecessary red tape while improving coordination of regulatory processes.

These changes will benefit literally hundreds of communities and thousands of businesses and jobs - with sustained economic growth supported by increased spending, labour income, GDP etc. Every $1 in additional energy investment results in an estimated $1.44 GDP increase. Also expected is the creation of 8,000 more jobs in 2011-12 and 13,000 more jobs annually thereafter across the economy.

The amount of economic activity that is expected is huge. Over the next 25 years, the Canadian Energy Research Institute estimates that conventional oil and gas development in Alberta has the potential to add $2.5 trillion in new economic activity.

For more information on the competitiveness review and the government’s response in a report, Energizing Investment, visit www.energy.alberta.ca.