Report shows Alberta scheme needs revamping
The provincial government is missing out on hundreds of millions of dollars in oil revenues because of Alberta’s current 1 per cent royalty rate, says a new report compiled by a private consultant.
The report, done by an energy economic consultant hired by the province’s energy department, says the current royalty rate is too low — something that concerns Alberta’s NDP leader.
“These royalty rates need to change need to change as soon as possible and they need to change at a fair level,” said Brian Mason.
“If Albertans are going to pay $1 per litre at the pump, we’d better make darned sure that we get our fair share in royalties.
The report, written by Pedro van Meurs, says upgrading bitumen in Alberta is integral to the resource value of the province and the government’s royalty take is low by international standards.
When compared to other countries, the report suggests Alberta is bringing in between 15 per cent and 30 per cent less overall revenue from oil and gas companies here each year, percentages that could translate to as much as $2 billion since royalty rates were initially set in 1996.
The report will be taken under consideration and will be studied, says Alberta Energy spokesman Jason Chance.
“This report shows that we’re not getting our fair share of royalties from the tar sands, it also documents how the Conservative government’s incompetence in handling the tarsands has put future economic health of this province in jeopardy,” said Mason.
“The government is giving our resources away to the energy multinationals. Our province’s future depends on getting our fair share of non-renewable resource revenue before it’s gone.”
Liberal critics have also voiced concerns over the province’s royalty regime, saying the province needs to have a 60 per cent share in profits instead of the current 47 per cent.
The province also wrapped up an independent review of the royalty regime.