CALGARY – Alberta Energy says it has already approved applications for 129 new wells under its new royalty regime for oil and gas producers.
The NDP government’s framework officially kicks in Jan. 1, but it announced in July that companies would be allowed to make early applications under the regime for new wells.
Energy Minister Marg McCuaig-Boyd says each new wells supports about 135 direct and indirect jobs and represents about $4.5 million in spending, adding more applications are coming in.
On Monday, the University of Calgary School of Public Policy released a report that concluded the new royalty system will bring the marginal effective tax and royalty rate for conventional oil projects in Alberta down from 35 per cent to 26.7 per cent.
The study said Alberta producers will pay a lower rate than rivals in British Columbia, at 28.7 per cent, and Saskatchewan, at 32.6 per cent. It didn’t take into account other regulatory and carbon policies that may affect competitiveness.
The new royalty framework harmonizes the way oil, gas and liquids wells drilled in the province are treated, while accounting for higher costs associated with drilling enhanced recovery wells and exploring emerging resources.