Alberta’s failed oil and gas bailout a warning to feds: report
By CM Staff
Industry Energy Resource Sector Alberta oilpatchSays $1.1 billion invested in small and midsize oil and gas companies – one went bankrupt, more likely to follow as share prices tank.
CALGARY – A new report from left-leaning advocacy group Progress Alberta, Alberta’s Failed Oil and Gas Bailout, shows that every publicly traded oil and gas company that the Alberta Investment Management Corporation (AIMCo) has invested in — more than $1.1 billion dollars over the past three and half years — under an invest local directive brought forward in 2015 has seen its share price tumble.
One of those companies, Trident Exploration, filed for bankruptcy in 2019 despite receiving $60 million from AIMCo. Funding from AIMCo comes from pensions and the Heritage Fund.
According to the report, junior producers Journey Energy, Pieridae Energy and Razor Energy all received favourable debt negotiations late last year, while Calfrac Well Services, an oilfield services company based in Calgary, gave $50,000 to a pro-Jason Kenney PAC after receiving more than $228 million in investment from AIMCo. The company also relocated a large portion of its operations to the United States.
“AIMCo has been engaging in this bailout of Alberta’s oil and gas industry for several years, losing tens of millions in the process,” said Duncan Kinney of Progress Alberta, who authored the report. “This should serve as a clear warning to the federal government as it works out the details of its own financial bailout of oil and gas companies.”
Late last week, Prime Minister Justin Trudeau said the federal government would work through Export Development Canada and the Business Development Bank of Canada to expand access to credit for small and medium-sized oil and gas companies. So far, no dollar amount has been provided.
Related: Federal oilpatch bailout focus on cleanup of abandoned wells, reduced emissions
The report also found that the companies AIMCo has invested in have more than $3.1 billion in environmental liabilities based on research by the Alberta Liabilities Disclosure Project.
“The answer is not to keep trying to prop up Alberta’s oil and gas industry with huge sums of money, but to fund a transition so these companies can adapt and function in a low carbon economy,” said Kinney in a statement.
