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Alberta Online Encyclopedia
Canadian Petroleum Heritage
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Issues

Throughout its history and evolution, the Canadian petroleum industry has faced significant challenges that have helped define and shape its policies and procedures, with both positive and negative results.

One major issue that oil and gas companies have had to contend with over the years is the issue of balance between the lucrative potential of extracting and refining petroleum and its byproducts, and the potentially harmful effects such processes can carry on the surrounding environment. Air, land, and water, all essential to the survival of life on earth, can all be profoundly affected by the petroleum development process, and oil and gas companies have had to take creative measures to ensure that a proper balance is maintained between economic gain and environmental integrity.

In addition to the environmental concerns raised by oil industry activities, petroleum companies also face issues and challenges in regards to governmental rules and regulations. On one level, such regulation can set standards for the industry and benchmarks for production, but regulation can be limiting for the industry, or for the communities that profit from industry activities. The National Energy Program (NEP), a federal government initiative introduced in 1980, was designed to set price controls and taxes on oil company revenues. From a federal standpoint, this allowed for the oil revenues to be shared nationally. On the provincial level, most especially in provinces like Alberta and Saskatchewan, the NEP threatened to slow the economic gains stemming from high oil prices.

More recently, the Canadian oil industry has had to look at the implications of implementing federal policies based on the 1997 Kyoto Accord. This international agreement, which was meant to reduce greenhouse gas emissions worldwide with the hopes of slowing climate change, carries certain economic obligations that may cut into oil production profits. This has some people in the oil industry and in provincial governments questioning what long term economic downturns may come about in the petroleum industry and in provincial economies as a result of meeting the stringent goals of the Accord too quickly.

Progress and Problems

One area in the petroleum industry that presents a number of environmental and economic challenges is the business of extracting oil from Alberta’s oil sands deposits. In this excerpt from the JuneWarren publication, The Great Canadian Oil Patch: The Petroleum Era from Birth to Peak, author Earle Gray examines these challenges, and some innovative pilot projects designed to deal with them. Read more…

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