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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: CommanderCricket who wrote (92543)	10/25/2007 7:43:17 PM
From: LoneClone	Read Replies (1) \| Respond to of 206148

Yours is not a minority view Alberta doesn't go all the way; plans royalty increase of $1.4B in 2009 Thu Oct 25, 6:52 PM The Canadian Press ca.news.finance.yahoo.com CALGARY - The Alberta government is moving to take a greater share from the oil-fuelled province's energy industry by bumping up royalties by about $1.4 billion a year starting in 2009. Premier Ed Stelmach's announcement Thursday was his attempt to give Albertans a larger share of resource money while continuing to support the oil and natural gas companies driving the province's booming economy. "We need a bigger pie. We just can't carve up the existing one," he said. The premier didn't go all the way with a royalty review panel that wanted him to increase royalties by $2 billion annually as early as next summer. He rejected about half the panel's 26 recommendations - most notably a new tax on oilsands production. "As future generations look back at today, I believe they will see we were fair and reasonable, not greedy or short-sighted," he said. "I'm confident we've made the right decisions for today and for Alberta's future." Under the government's plan, royalties will go up for conventional oil, natural gas and oilsands projects, and will be more sensitive to fluctuations in price. The province also plans to allow companies to pay royalties in the form of bitumen rather than cash. Stelmach said the government would then sell the raw product to Alberta upgraders and refiners to stem the flow of refining jobs to the United States where a lot of the province's bitumen is now sent-something he has been particularly concerned about. Oil and gas royalties as they are currently calculated are forecast to bring $10.5 billion to Alberta this fiscal year - about a third of the province's total revenues. Even without any change to royalties, the government is projecting a budget surplus of $2.5 billion for 2007-08. The royalty ruckus that developed after the government-appointment panel released its report five weeks ago has been seen as a test of the rookie Conservative premier's leadership. Some have suggested he could call an election later this fall if his royalty decision appears to be going over well. Stelmach took over from former premier Ralph Klein last December and ordered the royalty review - something Klein steadfastly had refused to do in his 14 years as leader of the province. The auditor general said shortly after the review panel's report that the government had known for at least three years that its royalties were out of date and needed to reflect significantly higher energy prices. The two reports caught the energy industry off-guard. The oilpatch had lobbied during public hearings over the summer for the status quo. Since the report, there have been dire warnings from producers and service companies of multibillion-dollar spending freezes, massive layoffs and a huge flight of capital. According to the review panel, Alberta takes less from oil and gas than other major producers, including California, Venezuela, the United Kingdom and Alaska. The oil industry replied that Canada's oilpatch ranks among the lowest in returns on investment. It said costs are higher, production per-well is lower and many of the other countries have equity stakes in projects. It's hard to compare royalty systems even within Canada. In Saskatchewan, royalties and taxes are forecast to top more than $1.2 billion, or about 17 per cent of total provincial revenues. Like Alberta, royalties are collected on a sliding scale based on the age of a well and the quality of oil. In Newfoundland and Labrador, royalty rates differ on the three producing offshore oil projects.