ALBERTA OIL SANDS BOOM LEADS TO BIGGEST MIGRATION IN CANADA IN Caption: An oil rig stands 11 June 2007 Big Valley, Alberta, Canada. Not since the late 1800s when tens of thousands of Europeans settled Canada's wild west have so many people migrated here, but recent newcomers are still too few to abate a growing demand for oil industry workers. Western Alberta province sits atop an estimated 175 billion barrels of oil, ranking second behind Saudi Arabia in petroleum reserves. But due to high extraction costs, the deposits were long neglected except by local companies.AFP PHOTO/David BOILY == WITH AFP STORY: CANADA-OIL-IMMIGRATION BY GUILLAUME LAVALEE ==
Alberta moves to ease royalty take
The government of Alberta said today it will cut its royalty rates on conventional oil and natural gas production as it looks to boost investment in the its oil and gas reserves.
The province, under fire from the oil and gas industry since raising its take from producers at the start of last year, will lower its maximum royalty on gas production to 36% from 50% and on conventional oil to 40% from 50% at the beginning of next year.
Royalties from oil and gas production underpin Alberta's public finances.
Increasing the province's take was a key and popular plank in Premier Ed Stelmach's 2008 election campaign, which brought him the largest majority in the province's history in the middle of a commodity-price boom that enriched the industry, sparked labor shortages and boosted inflation.
However, Stelmach's popularity waned as the economy weakened and lower oil and gas prices pushed the government's budget into deficit after 14 years in surplus.
Now the government will look to support the oil and gas industry without reigniting the public anger that led to the higher royalties.
"We need to do more to explain to Albertans the ways in which our energy sector drives our economy," Ron Liepert, the province's energy minister, said in a Bloomberg report. "Albertans need to have factual and balanced information about how energy development happens in Alberta and just how critical it is to meeting our economic goals."
The western Canadian province, one of the largest petroleum suppliers to the United States, said it expects the changes to boost industry spending in the province by up to C$700 million ($686 million) by the 2012-13 fiscal year.
And though it expects the cuts to boost its revenue by C$168 million through the 2011-2012 fiscal year, it will see a C$363 million cut to its net revenue in 2012-13.
The province's oil sands, the largest crude reserves outside the Middle East, were not included in the royalty changes