NDP's Royalty Review keeps status quo
It appears no news is good news in the oil industry as the government of Alberta has adopted the recommendations of the Royalty Review Advisory Panel.
The Alberta Government has finally released the result of a review by an appointed panel and by and large, more has stayed the same than has changed.
According to a release, the Panel determined that Alberta’s royalties are comparable to similar jurisdictions, but the industry’s costs are substantially higher. As a result, the panel recommends a modernized framework that sets a drilling cost allowance for wells according to an industrywide average.
“This improved royalty framework will make Alberta’s energy industry more competitive and create more good jobs. We heard the system was complex, unpredictable and too rigid to keep pace with the rapidly changing technology of our energy sector. Albertans and industry will benefit from a modernized framework that is simple, predictable, and adaptable,” said Marg McCuaig-Boyd, Minister of Energy.
Brad Peake, who works in many facets of the oil and gas industry locally, said, “A lot of stuff is going to stay exactly how it is. There are some operational enhancements that may trigger in the future."
"It seemed like she (Premier Notley) has been educated,” chuckles Peake.
He says the results surprises either.
“I felt fairly confident that through the entire process there would be no royalty rate increase, as quite simply there isn’t room for it. The oil and gas bankruptcy rate is not because the royalties are too high, but if you did increase them bankruptcy rates will rise quicker,” he said. “Many a person offered negatives that the review would increase royalty rates. I was quietly optimistic that wouldn’t happen because when you look at the
are no money, there just isn’t room to cut the profit sharing pie any differently, there is no profit to share these days.”
Under the new framework, the effects will take effect in 2017. On wells drilled prior to 2017, the existing royalty structure will stay in place for 10 years. They will also maintain the current oil sands royalty regime.
One of the Rotary Club’s focus has always been youth, and this year the Drumheller Club has decided to support one young man so he can go bike riding.
On Monday, February 1, the club presented a new recumbent tricycle to Austin Kolm, son of Jacquie and Gerry. While the 13-year-old DVSS student has cerebral palsy he keeps busy in the winter playing sledge hockey, and in the summer he likes to go biking.
He has outgrown his current bicycle and was looking to replace it.
A recumbent trike has a hefty price tag and the family approached the Rotary Club hoping for a little support. The Rotary took up the project and agreed to fund the trike in full.
“For you to step forward and look after the bike really made a difference in our life,” said Gerry, thanking the Rotary. Austin is grateful. “I am speechless right now,” he tells The Mail. “In the off season I can bike around, it is going to be awesome. It is not just going to keep me fit, it is going to be really fun at the same time.”
Because of the weather, he hasn’t been able to try out the bike, but is looking forward to better weather to try it out.
For you to step forward and look after the bike really made a difference
in our life.”
The Royalty Review is complete and the Alberta Government has accepted the recommendations. This includes keeping the current oil sands royalty regime.
The Drumheller Rotary Club purchased a recumbent tricycle for Austin Kolm to enjoy the summer cruising. On Monday February 1, the club presented Austin with his new wheels.