The Canadian Association of Petroleum Producers says two new royalty plans announced by the province Monday recognize the extra costs that enhanced recovery methods take.
Following months of work with leaders in the energy industry, the government is releasing details of the new Enhanced Hydrocarbon Recovery Program and the Emerging Resources Program.
When determining royalty rates, the province says the new programs will take into account the higher costs associated with enhanced recovery methods as well as the higher costs associated with developing emerging resources. They say the intent of these strategic programs is to make difficult investments economically viable and increase royalties for Albertans.
The programs are part of Alberta’s new Modernized Royalty Framework and were recommended by the Royalty Review Advisory Panel.
Margaret McCuaig-Boyd, Minister of Energy says, “We can get more rigs out there drilling, create jobs and help generate greater long-term returns for Albertans by promoting production in underdeveloped or yet-to-be-developed areas. I want to thank everyone who was at the table, helping to make sure these strategic programs do what we need them to do — keep our energy industry globally competitive and well-positioned for a prosperous future.”
Jonathan Stringham from the Canadian Association of Petroleum Producers says, “It’s about risk really. (The industry) takes on additional risk and additional capital and I think this is the Government of Alberta meeting risk in the middle.”
He says the new programs provide incentive for the enhanced recovery to happen in Alberta, rather than investment elsewhere. (eb)