Alberta increases royalties charged to energy companies

As I expected Stelmach has increased royalties but quite a bit less than his own panel recommended. For some reason he also gives the companies a year's grace by starting the new regime in 2009. As expected there is nothing about Alberta having its own provincially owned company and gain even more advantages as the Saudis, Kuwaitis and many others do. Even so, he has probably done enough to call an election and win handily. He won't like the Federal Liberals be yapping about Albertans not wanting an election now!


Alberta increases royalties charged to energy companies
Last Updated: Thursday, October 25, 2007 | 4:01 PM MT
CBC News
Energy companies will be charged 20 per cent more for the right to develop Alberta's oil and gas resources, Premier Ed Stelmach revealed in a long-awaited announcement Thursday.

Introducing what he called "a framework for a new century," Stelmach said oil and gas companies will be paying $1.4 billion more a year in royalties starting in 2009.

Alberta Premier Ed Stelmach announced Thursday that starting in 2009, oil and gas companies will pay $1.4 billion more a year in royalties.
(CBC) That figure is 25 per cent less than the $2 billion recommended by a government-appointed panel that reviewed the royalty formula, which had not changed since 1992.

Stelmach rejected about half of the panel's recommendations, including a new tax on oilsands production.

However, royalties will increase for conventional oil, natural gas and oilsands projects, with Stelmach promising a simpler framework that reflects fluctuations in market prices.

"We recognize energy is a volatile industry. There is risk and there is reward. So when oil prices go up, the royalty goes up," Stelmach said in a news conference in Calgary.



The panel's report, released five weeks ago, concluded Albertans were not receiving their fair share of the province's non-renewable resources and called for an increase of $2 billion in royalties.

The report rocked the energy industry, which launched an aggressive campaign against any royalty changes. Oil and gas companies warned an increase will force them to slash jobs and billions in investment in booming Alberta.

Stelmach also said existing oilsands projects will not be grandfathered. The province will negotiate a transition to the new rates with companies, including Syncrude and Suncor, who have agreements that expire in 2016.

"We need a bigger pie. We can't just carve up the existing one," Stelmach told reporters. "We are confident we made the right decision for today and for Albertans' future."

Political observers believe the royalty decision is a defining issue for the premier, who has had the top job for just 10 months and is rumoured to be gearing up for a fall election.