Fuel or Fire: Alberta Tar Sands
“FUEL AND FIRE” DEVELOPMENT
VERSUS
ECONOMIC AND ENVIRONMENTAL BALANCE
What the Alberta Oil Sands can Learn from the Norway Governance Model
Anu Carena Harder
May 6, 2009
Athabasca University
MAIS 701
Submitted to: Dr. Angela Specht
TABLE OF CONTENTS
ABSTRACT…………………………………………………………………………p 3
SECTION 1: BACKGROUND
Introduction……………………………………..………………………………….p 4
Oil Market Overview…………………………….…………………………………p 6
SECTION 2: ALBERTA’S “FIRE AND FUEL” DEVELOPMENT
Firing up Development: The Privatization of the Alberta Oil Sands…………..p 9
Adding Fuel to the Fire: Ratification of the North American Free Trade Agreement……….……………………………………………………………….p 11
SECTION 3: ISSUES IN GOVERNANCE OF OIL WEALTH Dutch Disease Economic Model …………… .................................................p 15 Antidote to Dutch Disease—The Creation of the Sovereign Wealth Fund…p 17 SECTION 4: GOVERNANCE PARADIGMS Alberta Heritage Savings Trust Fund……….…….………………………...p 19 Norway Government Pension Fund………………………………………...p 20 Comparative Analysis of Governance: “Fuel and Fire” vs. Economic and Environmental Balance……………………………………………………...p 22 SECTION 5: CONCLUSION Conclusions……………………………………………………………..…….p 28 Afterword……………………………………………………………………..p 29
Abstract
The Alberta Oil Sands Reserve is one of the world’s largest hydrocarbon deposits ever discovered, second only to Saudi Arabia. Due to the impact on the environment, the mining of this unconventional oil resource has been mired in controversy. With the onset of the 2008 global fiscal crisis and plummeting world oil prices, many economists and environmentalists alike began predicting a moratorium of further Oil Sands development. This paper explores firstly, the economic and political underpinnings that secure Oil Sands’ continued development and secondly, a comparative case study of oil wealth management with another oil economy, Norway. The Conservative Alberta government has historically favoured
VERSUS
ECONOMIC AND ENVIRONMENTAL BALANCE
What the Alberta Oil Sands can Learn from the Norway Governance Model
Anu Carena Harder
May 6, 2009
Athabasca University
MAIS 701
Submitted to: Dr. Angela Specht
TABLE OF CONTENTS
ABSTRACT…………………………………………………………………………p 3
SECTION 1: BACKGROUND
Introduction……………………………………..………………………………….p 4
Oil Market Overview…………………………….…………………………………p 6
SECTION 2: ALBERTA’S “FIRE AND FUEL” DEVELOPMENT
Firing up Development: The Privatization of the Alberta Oil Sands…………..p 9
Adding Fuel to the Fire: Ratification of the North American Free Trade Agreement……….……………………………………………………………….p 11
SECTION 3: ISSUES IN GOVERNANCE OF OIL WEALTH Dutch Disease Economic Model …………… .................................................p 15 Antidote to Dutch Disease—The Creation of the Sovereign Wealth Fund…p 17 SECTION 4: GOVERNANCE PARADIGMS Alberta Heritage Savings Trust Fund……….…….………………………...p 19 Norway Government Pension Fund………………………………………...p 20 Comparative Analysis of Governance: “Fuel and Fire” vs. Economic and Environmental Balance……………………………………………………...p 22 SECTION 5: CONCLUSION Conclusions……………………………………………………………..…….p 28 Afterword……………………………………………………………………..p 29
Abstract
The Alberta Oil Sands Reserve is one of the world’s largest hydrocarbon deposits ever discovered, second only to Saudi Arabia. Due to the impact on the environment, the mining of this unconventional oil resource has been mired in controversy. With the onset of the 2008 global fiscal crisis and plummeting world oil prices, many economists and environmentalists alike began predicting a moratorium of further Oil Sands development. This paper explores firstly, the economic and political underpinnings that secure Oil Sands’ continued development and secondly, a comparative case study of oil wealth management with another oil economy, Norway. The Conservative Alberta government has historically favoured