Alberta Royalty Review
The Alberta Royalty Review was an independent panel established by the government of Alberta to review the level of resource royalties collected by the provincial government from petroleum and natural gas companies. It released its final report on September 17, 2007.
Background
In areas surveyed and homesteaded early in Alberta's history all sub-soil resource rights belong to the land owner, but in the areas surveyed later or in the massive crown land areas of the northern half of the province where the current productive oil fields are located, the Crown, represented by the provincial government, owns all sub-soil resources.
Unlike many other oil producing jurisdictions such as Saudi Arabia or Norway, Alberta does not have a government oil company that owns and exploits all petroleum resources. Instead privately-owned oil companies of various sizes, from inside and outside Canada are encouraged to drill for oil and gas or mine oilsands on Crown land, and in exchange pay a royalty. Royalty rates have fluctuated widely over Alberta's history, but they were most recently lowered during the early 1990s to encourage investment despite the low price of oil at that time. Internal government reviews since then have maintained that the royalty rate was appropriate. However, growing public preassure led Premier Ed Stelmach to call for an external review in 2007.
Findings
The Chairman of the review, Bill Hunter, said "Albertans do not receive their fair share from energy development and they have not, in fact, been receiving their fair share for some time."
The panel's report not only recommended increated royal rates for all three major resources (conventional oil, natural gas, and oilsands but also insisted that the government had failed to collect royalties already owed.
The recommended rate increase amounted to a 20% increase or an extra $2 billion per year.
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