He­lium roy­alty fears un­founded

Prairie Post (East Edition) - - Prairies - BY COLLIN GAL­LANT South­ern Al­berta News­pa­pers

Al­berta En­ergy reg­u­la­tors have con­firmed there is no roy­alty charged on he­lium pro­duc­tion, tak­ing the air out con­cerns from lo­cal city of­fi­cials that reg­u­la­tion is sti­fling the emerg­ing in­dus­try in the prov­ince.

The news comes just as U.S. of­fi­cials an­nounced auc­tion prices for sales of that coun­try’s strate­gic sup­ply have more than dou­bled to nearly US$280 per 1,000-cu­bicfeet in the past year.

All that said, the city is still not pro­duc­ing he­lium but is study­ing pos­si­ble pro­duc­tion lev­els from one of three wells drilled last year. If the well was in Al­berta and if it moved to com­mer­cial pro­duc­tion, the city would need to re­port vol­umes and sales, but for now, no roy­al­ties would be due.

“There was some am­bi­gu­ity about what a he­lium roy­alty would or wouldn’t be,” said Brad Maynes, the city’s pe­tro­leum pro­duc­tion gen­eral man­ager. “It’s a clar­i­fi­ca­tion from them that we had been seek­ing. We hope the rate will be com­pa­ra­ble to the Saskatchewan rate, which is very at­trac­tive and the rea­son, we be­lieve, that there’s more ac­tiv­ity in Saskatchewan.”

Last fall, the city en­ergy di­vi­sion an­nounced it would be­gin tar­geted drilling for the in­dus­trial el­e­ment in order to di­ver­sify in­come with test wells in both Saskatchewan, home to a small he­lium sec­tor since the early 1960s, but also Al­berta.

Mayor Ted Clugston how­ever, said he feared the gas could fall un­der roy­alty pro­vi­sions for gen­eral nat­u­ral gas, which has a roy­alty rate sev­eral times higher than Saskatchewan’s he­lium rate.

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