Alberta will achieve record revenues estimated at about $24 billion this year, entering a new era of surplus money.

The summer of 2020 represented a threat to the oil-dependent province and was threatening permanent financial woes. But in the summer of 2022, the province has $24 billion as a positive financial indicator.

Prominent energy expert Peter Tertzakian expects this is the amount the province will collect from natural resource revenues in 2022, marking a significant leap.

Rising oil prices have pushed Alberta's budget toward a modest surplus this spring, but that was based on a price of $70 per barrel, not nearly $120 this week. The province's budget, which was balanced this spring with a $511 million surplus in the 2021-22 fiscal year, could exceed $10 billion this year, or possibly surpass $12 billion, according to Tertzakian.

The next phase with huge cash surpluses will bring many options, led by Alberta's current premier. It will be a central topic of conversation after Premier Kenney's term and the general election next year.

Tertzakian explains that this tsunami of funds flowing into the province's coffers is not solely due to the skyrocketing oil prices. Of course, when oil prices rise, producers earn greater revenues and collect more taxes. But what really drives Alberta into a new era is the arrival of oil sands projects at the maturity point, where their revenues have offset all the massive start-up costs.

At that stage, known as the "payout" phase, oil sands companies pay much higher rates per barrel. If oil reaches CAD 55 per barrel, the pre-payout rate is one percent of total sales, while it jumps to 25 percent of net sales after payout—or up to 40 percent when prices rise to current levels.

Tertzakian said in an interview, "It's just a complete qualitative shift. We're getting the biggest amount of revenues."

But to give you an idea of how dramatic the turnaround is, the $24 billion revenue is more than five years of Alberta's revenues between 2016-2017 and 2020-2021. It broke the previous record of $14.35 billion, set in 2005-2006, when natural gas was Alberta government's biggest money maker and Ralph Klein was nearing the end of his premiership.

Klein used this surplus to allocate $400 from Ralph Bucks to every Albertan. But within months, Conservative Party members pushed Klein to early retirement, sparking a bigger debate on how the premier should manage Alberta's economic and financial booms more smartly.

The premier can use these surprise profits to give tax cuts and can invest this money in services and infrastructure, perhaps opening the door for the New Democratic Party or even the Conservatives to pledge big spending without the threat of returning to deficits.

The government can also recall saving methods adopted by Peter Lougheed and the Heritage Savings Trust Fund, long neglected, considering that most Albertans now realize the transient nature of these booms. Before Kenney announced his resignation plans, he had dropped hints about this in some speeches.

In the same context, oil companies paying these taxes can request some money back to support carbon capture projects or other technology expenses to reduce emissions and help them reach net zero carbon. The argument they could make is that Albertans' ability to enjoy this future prosperity will depend on how minimal the energy sector's carbon footprint is, so ultimately, they will invest by diverting some surplus to environmentally friendly subsidies.

There is also the fact that this oil price and financial boom this time did not bring with it a full recovery in jobs or a wage growth boom, but rather could keep pace with inflation and perhaps weaken morale across large areas of Alberta.

Editing: Dima Abu Khair