Alberta premier warns of $6 bln shortfall in oil revenue

Thu Jan 24, 2013 9:48pm EST
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* Redford says 2013-14 revenues to be short by C$6 bln

* Deep discounts on heavy crude hit province's coffers

* Notes Alberta still wants new roads, hospital

By Jeffrey Jones

CALGARY, Alberta, Jan 24 (Reuters) - Alberta's premier warned on Thursday that the Western Canadian province faced a C$6 billion ($6 billion) shortfall in revenue due to deeply discounted prices for its crude oil but offered no specifics on how to prevent falling deeper into the red.

Alberta's financial forecasts have been thrown into disarray by fast-growing output from its vast oil sands and limited pipeline capacity to move it to markets in the United States and elsewhere. That has pulled the price of a barrel down to less than half that of international benchmark Brent oil.

The situation has prompted Premier Alison Redford and her government to warn of a tough budget on March 7, and raised questions about her ability to meet a promise of erasing its budget deficit in the upcoming fiscal year.

In an eight-minute televised address, Redford explained the reasons for the sharply reduced take from Alberta's biggest industry and pledged not to raise taxes to make up the difference, but did not say where she will cut spending.

In fact, she made note of strong desire in the province of 3.8 million people for new roads, schools and healthcare facilities.   Continued...