Adversely affected by new oil production in the United States, Alberta bitumen faces a huge discount compared to the price for benchmark West Texas Intermediate crude, with the gap about $30-$40 per barrel in recent weeks.
Redford, speaking Thursday in a televised address, said the "bitumen bubble" has cost Alberta's treasury about $1 billion in the fiscal year ending March 31 and "the trend is getting worse."
Nearly one-third of Alberta's revenue comes from oil and gas royalties.
In its budget released last spring, Alberta's government had predicted bitumen royalties of $5.7 million this year for the province's 108 oil sands projects and increasing an average of 32 percent in each of the following two years.
The Conference Board of Canada, in a report released this week, said Alberta could face a deficit of $3 billion this year, even with projected economic growth of 3 percent. It recommended that the province save more of its energy royalties rather than spending it on daily operating bills.
"We have a duty to ensure that our resources, especially Alberta oil and gas, get to new markets at a much fairer price," Redford said. "We absolutely must find ways to get Alberta oil to multiple customers around the world and get a competitive price."
Speaking to the Calgary Chamber of Commerce earlier this week, Alberta Finance Minister Doug Horner said the province is facing a "perfect storm" because Canadian oil sold in the United States is selling at a huge discount and world markets appear increasingly out of reach.
The dipping price of Canadian oil, he said, would scrape about $27 billion from the country's economy this year.
"Our biggest problem is that Alberta is landlocked," Horner said. "In fact, of the world's major oil-producing jurisdictions, Alberta is the only one with no direct access to the ocean. And until we solve this problem -- and that means all of Canada must work together -- the differential will remain large."
While Alberta is Canada's largest oil-producing province, it is a relatively high-cost environment in which to build large energy projects, says energy economist Joseph Doucet, a professor at the University of Alberta.
As for the growing price differential, Doucet told the Calgary Herald, "it's a very serious problem and it's something that wasn't anticipated -- or fully anticipated -- until fairly recently."