New Alberta leader says industry should upgrade more oil in province

TORONTO (Reuters) - Energy companies operating in Alberta should aim to upgrade more of the oil they produce within the province, Alberta's newly elected premier said in an television interview.

Alberta Premier Rachel Notley led the left-leaning New Democrats to a sweeping victory on Tuesday on promises that included energy industry reforms. Canadian energy stocks dropped following the win.

Notley reiterated in an interview on Global Television's "The West Block" that she wants Alberta, the biggest source of U.S. oil imports, to be a "healthy place for investment." But she said the industry should do more value-added processing in the province.

"Let’s make sure that we have more upgraded product and more upgrading here because the higher up the supply chain you get, the more a drop in oil prices helps those higher up in the supply chain," she said in a transcript of the interview.

"Let’s make sure some of that’s happening here in Alberta. And, I’m not saying all of it, but I am saying that we need to look towards being more than simply drawers of water and hewers of wood."

Notley, who had said ahead of the vote that she would not lobby on behalf of TransCanada Corp's (Toronto:TRP.TO - News) controversial Keystone XL pipeline if elected, noted the pipeline would ship unrefined crude abroad.

"My concern about Keystone as it’s currently thought out, and of course, it doesn’t need to be exactly what it is right now, is that it’s going to ship a lot of jobs south of here," she said.

Asked about the prospect of raising carbon taxes, she said government would need more time to consult on the issue.

(Reporting by Jeffrey Hodgson; Editing by Eric Walsh)