http://www.calgaryherald.com/business/price+plummet+sets+alarm+bells/10353918/story.html
November 5, 2014

the budget was based on oil averaging $95.22 US a barrel. Every $1-a-barrel drop in prices over the course of the year would cost the Alberta treasury $215 million.

But Oberle noted the Canadian dollar has also dropped, which partially offsets the royalty loss.

Todd Crawford, senior economist with the Conference Board of Canada, said most energy companies take a long-term view of their plans and aren’t likely to make a snap decision based on the current price.

What should be more concerning for Alberta is the glut of crude produced in the U.S. — Alberta’s dominant foreign customer for oil — that is helping drive prices down, he said.

Gaining access to markets such as Asia becomes all the more crucial, but major pipeline projects remain stalled, said Crawford.

Kavcic said the government should be looking at adjustments in its budgeting as it faces a royalty shortfall that could reach $2.5 billion, offset partially by the sinking loonie.

But he said Alberta is in decent condition because of its $5-billion contingency fund.

In a low-price environment, the Tory government’s plan to borrow billions of dollars to pay for infrastructure projects will lead to an unsustainable amount of debt, while the province could post annual deficits as high as $7 billion, said the Wildrose finance critic.

“This could erase a lot of prosperity going forward,” Anderson said. “We have to seriously put a plan in place to recalibrate the budget to balance at $75, $80 a barrel.”