May 25, 2015 / 10:20 PM / 2 years ago

Alberta energy minister inexperience a concern for industry

CALGARY, Alberta (Reuters) - Canada’s oil and gas industry is concerned about the inexperience of Alberta’s new energy minister, but is ready to give her the benefit of the doubt for now as she takes on the closely watched role, analysts and executives said on Monday.

Marg McCauig-Boyd, a one-time teacher with a master’s degree in administration and leadership from San Diego State University, was on Sunday appointed as energy minister by new Premier Rachel Notley.

Notley’s left-wing New Democratic Party toppled a 44-year-old conservative government in a May 5 vote, but only a few of its lawmakers have ever held public office.

“She really has absolutely no experience,” said Sonny Mottahed, chief executive of Black Spruce Merchant Capital. “You would think you’d need someone with a background (in energy), just because it’s such an intricate and detailed monstrosity of a business.”

McCauig-Boyd did not immediately respond to a request for comment.

Alberta is the largest supplier of U.S. oil imports and the industry contributes about a fifth of the province’s revenue. Alberta’s oil sands are one of the world’s largest crude reserves, but also generate greenhouse gas emissions that draw international criticism.

Chief among the new minister’s priorities are a review of the amount of royalties paid to the province by producers. The NDP must also come up with a replacement to the current C$15 per tonne levy on major greenhouse gas emitters like oil sands producers, expiring in June.

“It’s going to be a steep learning curve,” said Michael Dunn, an analyst at FirstEnergy Capital. “It’s hard to imagine (the new government) being able to do enough due diligence to do something quickly.”

Changes to the province’s climate change regime are also a concern, with the oil sands’ environmental impacts seen as a key reason that pipeline projects like Keystone XL remain blocked.

“It’s a big, complicated file and climate change is at the top of the list,” said Chris Severson-Baker, managing director of the Pembina Institute, an environmental think tank.

Though the minister’s inexperience is a concern to many, the Canadian Association of Petroleum Producers has formed a working group to offer her advice on policy.

“We can work with the minister,” said Jeff Gaulin, a spokesman for the Canadian Association of Petroleum Producers. “We’re confident she understands what it’s like to live in an oil and gas economy and can bring that perspective.”

Editing by Jeffrey Hodgson and Richard Chang

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