EDMONTON – The results of Alberta’s royalty review have now been put off for a few more weeks — but critics say time is of the essence.
“We said (from the beginning) that a review shouldn’t be done at all, but if it was done it needed to be over very quickly,” Wildrose Leader Brian Jean said Monday in an interview.
“That, of course, would reduce the uncertainty in the marketplace, and add stability and confidence for the business community and investors generally. This has not happened. The review itself has taken far too long, so the faster the better for sure.”
Alberta Party Leader Greg Clark said, “the real killer in all of this from the very beginning has been uncertainty.
“The longer it goes on, the longer this uncertainty remains and the longer investment dollars are parked on the sidelines.”
Alberta’s four-person royalty review panel, headed up by ATB Financial president Dave Mowat, has been taking submissions and listening to opinions since the beginning of September.
The panel is trying to determine the best way to calculate the happy medium between the appropriate amount of money for Albertans given that they own the oil and gas resource, and the fair return for producers, who pony up the cash and take the risk to produce it.
Premier Rachel Notley’s NDP, while in opposition, maintained Alberta was not getting its fair share of the resource. After it won the provincial election last May, the NDP followed up on its campaign promise to review the royalty structure.
The panel’s report was to come out by the end of 2015, but Notley said in late December it would come out in early January.
On Sunday, Notley told Global TV the date would be later than that.
“It will be released to Albertans in the next very few weeks,” Notley told the show “The West Block.”
“And I believe that it is a plan that most people in the energy sector will see is highly responsive to the current circumstances, and allows for them to make longer term investment decisions in a way that will of course support our growth back to greater prosperity in Alberta.”
Notley reiterated, as she did on the first delay, that her team wants to make sure it has the best plan in place when responding to the panel report.
“I am fairly confident that we’re going to clean up some of the artifacts of the old system and make sure that it’s a rational system that incents the right kind of thing in an ever-changing energy economy,” she said.
The province has already said no royalty changes will kick in until 2017 at the earliest.
The review comes as the price of oil continues to deflate faster than a pin-pricked party balloon and thousands of jobs are lost in Alberta’s oil and gas sector.
From a high of more than US$100 a barrel for West Texas Intermediate in 2014, the price has, for the most part, steadily plummeted and is now in the low US$30 a barrel range.
In the process it has sucked $6 billion out of the Alberta budget this year alone.
The industry is also dealing with higher fees for larger carbon emitters and is awaiting the implementation of a broad-based $3-billion a year carbon tax.
Progressive Conservative energy critic Rick Fraser said smaller industry players are particularly vulnerable when Alberta’s pricing structure is in flux.
“You can’t control what’s happening, particularly in a global market, but what you can control is how you react to it,” said Fraser.