January 29, 2016

Notley's royalty review was a pointless exercise that created a costly "shockwave of instability"

Holly NicholasRebel Commentator
 

In a joint address, Premier Rachel Notley and Dave Mowat, President of Alberta Treasury Branches, outlined four key recommendations regarding changes in the royalty review process in Alberta. 

The key recommendations addressed the need for Albertans to be informed, to give them a better understanding of the royalty process and encourage public engagement. 

Optimizing returns to Albertans, attracting investments and promoting job creation, supporting downstream value-added industries and encouraging environmental responsibility were said to be the guiding principles of the review.

Further recommendations included keeping existing royalties in effect on all previous wells for ten years, with a flat 5% royalty rate applied to new wells drilled in 2017 and beyond until revenues equal the drilling and completion cost allowances. 

Once equal revenues are realized, royalty rates will increase and a permanent formula will be developed to easily calculate drilling and completion cost allowances based on vertical depth and horizontal length.  

The new structure will also harmonize royalties on oil, liquids and natural gas using a "revenue minus costs" approach. 

Under the recommendations, the current royalty structure will remain the same for oilsands, but cost allowances will be subject to increased transparency. 

The development of a new strategy has also been recommended for natural gas, for commercialization of partial uprgrading and alternative technologies.

Although there are no big changes, the review has created uncertainty within the oil and gas industry at a time when oil prices are low and capital is evacuating the province. 

Previous reviews were completed in 2007 and 2008, but changes were reversed in early 2010 due to the impact of the world recession on the oil and gas industry in Alberta. 

When asked whether the review would attract investments in the oil and gas industry, Mowat insisted that the stability of the framework would increase interest in drilling from clear and predictable structuring.  The panelist also mentioned that oil prices were not a focus of the review and the recommendations were based only on the future. 

Since no real major changes were addressed in the review, it’s unclear as to why it was undertaken at all.  Was it all worth the shockwave of instability sent across the province?


 

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Comments
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commented 2016-02-09 00:07:06 -0500
I came to TheRebel to find out what the conservatives are thinking. I’m saddened by the mindlessness of most of the comments below and horrified by the language and tone. Really now, “dumb bitch”, “gargoyle”, “feminazi”, “false flag”, “fuck off”, topped with this gem, “GET THAT BITCH GONE BECAUSE SHE DUSE NOT KNOW WHAT SHE IS DOING”. Is this the voice of Canada’s right? Michael Bonner wrote a piece for TheRebel making some good points about what he called the “vulgarity of the left”, but I can’t see that the readership of this site is any better than his most egregious examples. Can’t we all please just talk like grown-up citizens of a democracy?
commented 2016-02-08 00:39:58 -0500
GET THAT BITCH GONE BECAUSE SHE DUSE NOT KNOW WHAT SHE IS DOING
commented 2016-02-03 17:16:47 -0500
TPP/agenda 21/environcommies/ the little commie sold us out again, just carrying out the Redford agenda as planned!
commented 2016-02-02 18:51:34 -0500
with out co2 every plant on this planet dies
commented 2016-02-02 15:12:47 -0500
We are going to be the next 3rd world nation on the planet if we don’t stop the influx of foreigners coming to Canada & changing our way of life & our belief ’s. Just try go to there country and change anything. They would throw you in a hole and stone you death.
commented 2016-02-01 11:15:19 -0500
Insane trudoop and nutley will now push for grotesque, useless windmills, trample on farmer’s and ranchers land rights and put us into huge deficit, we will be paying for this monstrous garbage that doesn’t work as in ontario and Europe. Then try to undo these windmills and their carbon footprint is huge. But it’s ok as foreign oil comes into this country with no environmental standards at all. When will all Albertans wake up to this insane double stsndard and start pushing back?
commented 2016-02-01 11:15:19 -0500
Insane trudoop and nutley will now push for grotesque, useless windmills, trample on farmer’s and ranchers land rights and put us into huge deficit, we will be paying for this monstrous garbage that doesn’t work as in ontario and Europe. Then try to undo these windmills and their carbon footprint is huge. But it’s ok as foreign oil comes into this country with no environmental standards at all. When will all Albertans wake up to this insane double stsndard and start pushing back?
commented 2016-01-31 11:42:37 -0500
From a conning totally corrupt Commie PC party to a inept alibet full on kindergarten commie party either way they got the main step of carbon taxes and serfdom for private non Union workforce they wanted. Idiots.
commented 2016-01-31 11:28:55 -0500
Quite a conundrum for Notley. Being a good environmental activist premier against everything related to the oil industry, and yet needing all the money she can get from the oil patch to run her socialist agenda. Must have taken lesson on walking a thin line from Nick Wallenda. Just hope she doesn’t ruin the already weak economy of the province with her balancing act.
commented 2016-01-30 02:28:57 -0500
Peter the carbon green agenda is how they will attack alberta and saskatchewan. They will need to nationalize it to control our carbon output to save the world. B.c. and newfoundland will comply willingly
commented 2016-01-29 20:06:38 -0500
It’s government pretending to do work.
commented 2016-01-29 18:12:37 -0500
I can predict this much: now that it has been determined, by an independent panel, that Albertans get more for their royalties than other jurisdictions, the question will be asked, “What was the complaint about royalties all about, anyway?”

Notley now has no reason to count on voter support returning come the next election. They were duped by a false flag.

Notley’s fate is sealed; she will not be seeking reelection, let alone finishing her term as premier.
commented 2016-01-29 17:53:30 -0500
@ Scott – Yes, I am wondering how those two will justify making the royalties from the oil resources in Alberta while allowing all the other provinces to maintain provincial jurisdiction over natural resources, but that is what is coming with those two.
commented 2016-01-29 17:14:00 -0500
I keep seeing this Norway argument and nep angle pushed on the cbc comments. I swear the end game is coming jt and Rachel are going to nationalize the oil industry to save us all. be afraid Albertans be afraid
commented 2016-01-29 16:56:14 -0500
Seriously, why did she wait so long, cause so much loss of confidence and scare so much business away? What a leader!
commented 2016-01-29 16:13:47 -0500
Tax oil at $5 per bbl, 10$, 20$… sure.. I’m ok with this IF and only IF all imported oil is taxed at double the same rate…. IF and only IF the foreign oil producers can prove that they adhere to the same standards and scrutiny that we do, AND if the foreign source is also a democracy, then maybe they could have the same per bbl rate.
commented 2016-01-29 16:08:07 -0500
Marty said, “Notley is one sick puppy.”

Not “puppy”. Puppies are cute. Gargoyle.
commented 2016-01-29 16:07:17 -0500
The dumb Bitch caused so much grief, lost jobs, homes. lives, and investment to Alberta and Canada then submits to a certain degree knowing if she went full ndp we’d bring Hell itself to her door. Don’t bother waiting until the end of your term for you and your ilk to be booted out. Just Fuck Off now!
commented 2016-01-29 15:57:35 -0500
I don’t even want to know how much this exercise in futility just cost us.
commented 2016-01-29 15:41:53 -0500
Notley was ready to financially rape the oil industry, but the industry has gotten so bad and so fast that Notley either back pedaled or went broke even faster than she already is.

No question, Alberta is in huge financial trouble and it took less than a year for this femin-nazi to deliver ruin.

And this is only the beginning – oil should bottom out around $15 per barrel – which effectively shuts off the entire province of Alberta from producing any oil whatsoever.
commented 2016-01-29 15:41:29 -0500
If you want to optimize investment keep out of province workers out of province in the very least charge a ten percent flat tax on there pay
commented 2016-01-29 15:35:53 -0500
Notley is one sick puppy.
commented 2016-01-29 15:27:32 -0500
every decision and action taken by this notley band of communist wannabe’s is calculated to inflict maximum damage and uncertainty in which ever industry they target.
THEY ARE NOT TRYING TO GOVERN, THEY ARE TRYING TO TO AS MUCH DAMAGE AS PHYSICALLY POSSIBLE TO RUIN ALBERTA FOR GENERATIONS.
commented 2016-01-29 15:24:00 -0500
Complete insanity – Announce that the royalties are being “reviewed” publicly, then take your sweet time figuring out that there should be no changes. In the meantime, Oil & Gas companies reduced investment.

This was all a VERY expensive political show…