Alberta Royalty Review
Encyclopedia
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.
and homestead
ed 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 field
s 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.
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 C$2 billion per year.
Background
In areas surveyedSurveying
See Also: Public Land Survey SystemSurveying or land surveying is the technique, profession, and science of accurately determining the terrestrial or three-dimensional position of points and the distances and angles between them...
and homestead
Homestead (buildings)
A homestead is either a single building, or collection of buildings grouped together on a large agricultural holding, such as a ranch, station or a large agricultural operation of some other designation.-See also:* Farm house* Homestead Act...
ed 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
Crown land
In Commonwealth realms, Crown land is an area belonging to the monarch , the equivalent of an entailed estate that passed with the monarchy and could not be alienated from it....
areas of the northern half of the province
Northern Alberta
Northern Alberta is a region located in the Canadian province of Alberta.Its primary industry is oil and gas, with large heavy oil reserves being exploited at the Athabasca Oil Sands and Wabasca Area in the east of the region...
where the current productive oil field
Oil field
An oil field is a region with an abundance of oil wells extracting petroleum from below ground. Because the oil reservoirs typically extend over a large area, possibly several hundred kilometres across, full exploitation entails multiple wells scattered across the area...
s are located, the Crown
The Crown
The Crown is a corporation sole that in the Commonwealth realms and any provincial or state sub-divisions thereof represents the legal embodiment of governance, whether executive, legislative, or judicial...
, 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
National Oil Company
A national oil company is an oil company fully or in the majority owned by a national government. According to the United States Energy Information Administration, NOCs accounted for 52% global oil production and controlled 88% of proven oil reserves in 2007.Due to their increasing dominance over...
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
Ed Stelmach
Edward Michael "Ed" Stelmach, MLA is a Canadian politician and served as the 13th Premier of Alberta, Canada, from 2006 to 2011. The grandson of Ukrainian immigrants, Stelmach was born and raised on a farm near Lamont and speaks fluent Ukrainian. He spent his entire pre-political adult life as a...
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 C$2 billion per year.