The post Royalties, oil and gas production, and the cycle of energy investment appeared first on Let's Talk Royalties – Alberta's Royalty Review Panel.

As at our other community sessions, Panel Chair Dave Mowat gave a presentation on the Panel’s objectives, approach and overall process. This was followed by a “Q&A” session, in which he freely took questions from participants.

People who attended the session had the opportunity to browse information, and provide their thoughts on a number of questions that the Panel has been asking through its website.

Approximately 125 people participated in the Edmonton session. They brought a lot of insight and some tough questions.

The Edmonton session certainly reminded our Panel that our work involves a careful balancing act.

Some participants at the session were nervous about the state of Alberta’s economy and the possibility of a prolonged period of low resource prices. We had some folks in attendance who had driven several hours from out of town, just to remind us how the energy sector is vital for the sustainability of their rural communities. They urged us to proceed with caution, because adjusting royalties — however well intentioned — could have unintended consequences for Albertans and their communities.

Other participants at the session wanted to understand how the royalty framework operates right now. Many had concerns that the framework hasn’t been generating the best possible deal for Albertans. Some people also spoke about the importance of improving environmental performance in the energy sector, and wondered how the royalty framework might be used to encourage that. As they told us, when oil and gas production concludes there are facilities, equipment and sites to clean up. And it’s important that Alberta taxpayers are not stuck with the reclamation bill.

These diverse comments were an excellent demonstration of why the Panel is looking at ways to optimize Alberta’s royalty framework to meet several inter-related objectives, including:

• optimizing the return to Albertans, so that as owners we’re getting a good deal
• attracting investment, so that the energy sector can continue to provide benefits to Albertans, including small and rural communities,
• and supporting responsible development, recognizing that environmental performance is a must in today’s world.

A lot of our work and analysis is going to be about how to best strike this careful balance.

We want to thank everyone who came to the Edmonton session and made their views known.

We also want to thank participants for their patience with the video camera and apparatus at this session. The Panel has received a number of requests for Dave’s presentation, so we wanted to capture it on video and make it available on the website. The final product is on the website now — feel free to have a look.

The post REPORT ON THE EDMONTON COMMUNITY ENGAGEMENT SESSION appeared first on Let's Talk Royalties – Alberta's Royalty Review Panel.

The community session offered an additional opportunity for Albertans to lean about the Panel’s process, and to contribute their views in person. People who attended were able to read the same core information that’s on our website (such as our “Did You Know” series), and were able to answer the same questions that we’ve had as part of the dialogue here on the site.

As part of the evening’s formal program, Panel Chair Dave Mowat made a presentation and held a Q&A session.

As we expected, people weren’t shy about sharing their views with us.

Calgary has certainly felt the vibrations that have come from the sharp fall in oil prices. Quite understandably, for many people who came to our Calgary session, employment was top of mind. They emphasized that what happens with the royalty framework stands to impact real people and real jobs in Alberta’s energy sector.

Participants in Calgary also reminded our Panel that when considering royalties, it’s important for us to look at the entire cost of doing business in Alberta — from taxes and regulatory fees, to the compliance costs that come with climate change and other environmental policies.

We heard you loud and clear. And our Panel is mindful of all these things. In fact, it’s part of the reason our work is going beyond a “traditional” review.

In addition to the standard comparison of Alberta’s royalty rates with other places, our Panel is overlaying a “capital markets” analysis, to assess how well energy companies in Alberta can compete. That involves looking at companies’ rates of return, so we’ll definitely be considering the full costs of doing business in Alberta.

Our work also includes an “economic overlay”, which recognizes that royalties are just one part of a larger picture. Last year, the Government of Alberta collected approximately $9 billion in royalty revenue. The industry generated those royalties through about $60-65 billion in economic activity — including jobs and income for families in Calgary and across Alberta. We’re going to be carefully considering how adjustments to the royalty framework can lever that broader economic activity and potentially expand the size of Alberta’s overall economy.

A big thanks to everyone who came and shared their views with us. We heard a lot of personal stories and experiences, and we know how much this issue touches the lives and families of our fellow Albertans. We’re determined to do a good job on your behalf.

The post REPORT ON THE CALGARY COMMUNITY ENGAGEMENT SESSION appeared first on Let's Talk Royalties – Alberta's Royalty Review Panel.

Recently, we had two community engagement sessions in both Calgary and Edmonton. As with our sessions in Grande Prairie and Fort McMurray, Albertans came with something to say. Attendees were impassioned, inquisitive, and ready to share perspectives. I felt as though everyone came because they understand how important our royalty framework is to Albertans.

Both sessions yielded plenty of coverage in local and provincial media – I imagine that you’ve seen some of it. We’ve collected as much coverage as we could link to so you can get an idea of some of the comments and conversation at each session:

CALGARY – October 5^th

• 660 News
• Calgary Herald
• CBC News

EDMONTON – October 6^th

• CBC Edmonton AM – Preview Interview of Edmonton Community Engagement Session
• Edmonton Journal
• Edmonton Sun
• Global Edmonton

For those of you who weren’t able to attend a session, we’ve uploaded my presentation to the group that collected in Edmonton on October 6^th, which you can watch here.

Thanks again to everyone that came out to these two sessions and to everyone who’s been sharing their perspectives in our questions.

Thanks,

Dave Mowat

The post Media Round-up – community engagement sessions appeared first on Let's Talk Royalties – Alberta's Royalty Review Panel.

These three groups — one focused on natural gas, another on oil sands, and the third on crude oil and liquids — have been formed to help the Panel understand and work through the technical issues in the current royalty framework. (You can click on the links to learn more about the groups.)

Our First Meeting

Our first set of all-day meetings with the Expert Groups was productive. During each morning, we brought each group up to speed with the Panel’s overall process, and provided some context about what Alberta is confronting in the changing global energy landscape. We then spent the rest of each day discussing how the royalty framework might need to adapt for the future.

Each group exchanged ideas and provided the Panel feedback on some key areas that have been determined for study and analysis. Members of each group were asked to consider several specific questions for ‘homework’ between now and the next time they meet. The Panel’s support team also has ‘homework’, compiling additional data and research that has been requested by the Expert Groups.

An Important Takeaway

Something we’ve taken away from these initial discussions, as well as our conversations around the province, is that there’s an important distinction between energy companies and investors. People tend to think of these as one and the same, perhaps because we often hear talk about ‘the industry’. But in fact, these two groups can and do have very different mindsets.

Energy companies need to raise money from investors to finance their projects — especially when those projects can involve hundreds of millions, or billions of dollars. Even if an energy company thinks that an opportunity in Alberta is really good, they often can’t proceed without the backing of investors.

It can be frustrating to Albertans when we hear companies say things like “we’ll just stop investing in Alberta”, because it sounds akin to the playground version of ‘taking their toys and going home’. But in fact, energy companies can be frustrated themselves if they can’t make the case to investors to invest in their companies to fund their Alberta projects.

Who are those investors? Well, think Bay Street and Wall Street — think pension funds, foundations, private equity funds, investment firms and so on. (In fact, if we Albertans have pension plans or mutual funds, it’s the managers of those funds investing on behalf of us!) In today’s interconnected and complex world, investors have more choices than ever before. And it’s not just the choice between investing in an energy project in Texas, or one in Alberta. It’s also the choice between an investment in energy, or in a completely different industry altogether.

Working as Partners to Attract Investment

Competition for investment dollars is ever present. With all the opportunities and challenges Alberta possesses, getting investment to fund development will be a key ingredient for success. The natural ‘partnership’ to form is Albertans (represented by the Province) and the energy companies operating here. We need to team up to convince investors that we have a sound framework for the success of Albertans, energy companies and investors.

We’re going to be looking closely not just at how energy development has changed, but also how investors think these days. Because how they think and what they look for can be very different from energy companies. This is something to be mindful about as we move forward.

The post Kicking off our Expert Groups appeared first on Let's Talk Royalties – Alberta's Royalty Review Panel.

Take a look and then feel free to let the panel know what you think or answer our conversation questions.

Thanks,

Dave

The post Community Engagement Sessions Presentation appeared first on Let's Talk Royalties – Alberta's Royalty Review Panel.

It’s pretty clear that Albertans have lots of opinions about what to do with the royalties we collect. And it’s an important conversation. There’s some big decisions to be made, in what our panel would call “step two”.

But before step two, there’s a critical “step one” — and that’s collecting the royalties in the first place. And for us to have royalties to collect, our province needs to have the right royalty framework — one that enables us to develop our resources strategically and responsibly, and collect the value from their production and sale.

This is where our panel’s mandate is focused: that very important “step one”.

Sincerely,

Dave Mowat

The post A note on our mandate appeared first on Let's Talk Royalties – Alberta's Royalty Review Panel.

You can imagine, then, that I was quite happy to do an interview with the Gateway, the University of Alberta’s student newspaper since 1910 (making it one of the oldest standing publications in Alberta).

A publication like the Gateway helps us reach into specific communities in Alberta and hear what they have to say on the royalty review – something that I believe strengthens the quality of our review considerably. As the review goes on, we’ll keep pursuing opportunities like these.

We’ll have more to discuss next week with reflections from and some coverage of the Calgary and Edmonton, but in the meantime, head over to the question this week and be part of the conversation.

Thanks for reading, and thanks for talking with us.

Dave Mowat

The post Media Round Up Week Five appeared first on Let's Talk Royalties – Alberta's Royalty Review Panel.

Between our two sets of sessions, I had the opportunity to sit down with the Calgary Herald editorial board for an in-depth interview. They’ve written two stories based on that interview that I’d encourage you to read:

• Herald reporter James Wood provided a short overview of the interview, including a video on some selected topics.
• One story focused on my initial response to an overview of the C.D. Howe Institute report.

As we keep talking to Albertans, I’m pleasantly surprised at the thoughtfulness and thoroughness of the questions we are getting from all corners. Every day the conversation becomes a little more robust. Keep giving us your thoughts, we’re listening.

Thanks,

Dave Mowat

The post Week Four Media Round-Up appeared first on Let's Talk Royalties – Alberta's Royalty Review Panel.

In our travels this week, something that really struck us is how deeply people care about the future of their communities and how much they see the energy industry as a part of that future. We heard a lot of stories about job losses to be sure, but we also heard a lot of stories about investments that energy companies have been making to give back to communities.

Another clear message we took from our visits was that people are hungry for data. We got a lot of questions about how Alberta stacks up to other places in terms of royalty rates, costs, fees and taxes. It’s great that so many Albertans are interested and engaged and eager to dig into the facts and figures.

In the coming weeks, we’re going to be convening three expert groups (one for crude oil and liquids, another for natural gas, and a third for oil sands). Those groups are going to be gathering and analyzing lots of data and information to help our Panel understand the challenges and opportunities Alberta is facing.

Of course, we’re committed to sharing that data with you. As it comes in, we’ll be posting it to this site. So you don’t miss anything, make sure you to sign up to our email subscription list.

Thanks to everyone in Grande Prairie and Fort McMurray who gave us a warm welcome and some great thoughts and perspectives to take away.

Thank you,

Dave Mowat & Leona Hanson

The post Our travels in Grande Prairie and Fort McMurray appeared first on Let's Talk Royalties – Alberta's Royalty Review Panel.

We have more open houses coming up in the next few weeks, please stay tuned for more details.

Our major appearances this week largely came from coverage of our meetings with different groups and our community engagement sessions in both areas:

• Fellow panel member Leona Hanson joined me for an interview with the Grande Prairie Daily Herald-Tribune;
• Grande Prairie radio station Q99 also highlighted some of my comments from the community session;
• com attended our lunchtime event with the Chamber of Commerce and reported on some of my speaking notes; and
• I got the chance to speak to the folks at Fort McMurray Today at our community engagement session about the panel and what it’s been charged with doing.

I hope this coverage will give you some insight into how we’re seeking out the opinions of Albertans and engaging in conversation with them. If you’d like to be part of this conversation – and we would very much like you to be – head over to our page and take part! Or, better yet, come and speak to us directly at our next community engagement sessions.

See you out on the road,

Dave Mowat

The post Week Three Media Round Up appeared first on Let's Talk Royalties – Alberta's Royalty Review Panel.

It’s been another inspiring week talking to Albertans about royalties. I want to thank the hundreds of people I’ve had a chance to talk to this week, as well as everyone who continued to participate in the online conversation. Our conversation is growing larger every day.

Talking to as many Albertans as we can is such an important part of this process, so I want to give a special thanks to all the media outlets that hosted us this week to help us connect with people from across the province. Here’s where we’ve appeared this week:

• On Wednesday, I was the guest of QR77 Calgary’s Roger Kingkade and Rob Breakenridge (choose September 9th at 11:00AM, we start about 5 minutes in).
• I had a chance to speak to over 500 people as part of the CAPP Speaker Series on September 9th.
• Panel member Annette Trimbee was a guest on CBC’s alberta@noon on September 10th.
• I had an opportunity to do an interview with Alberta Oil magazine.

We’ve included the links above for you to post in your own social media feeds and get your own debate going. Otherwise, take a look at what we’re saying in the media, read the “Did you know?” pages and let us know what you think directly or by answering the questions. Better yet, we hope you’ll encourage your family, friends and colleagues to join as well. The more Albertans we hear from the better!

Thanks,

Dave Mowat
Chair, Alberta Royalty Review Panel

The post Week Two Media Round Up appeared first on Let's Talk Royalties – Alberta's Royalty Review Panel.

It’s been just over a week since we launched the Royalty Review and we’re looking forward to the road ahead. I want to thank everyone who’s been part of the conversation so far. As part of our efforts, we’re trying to reach you in every way we can: through the website, through public meetings, through social media, and, when we can, directly with you. We’ll also be getting in front of media as much as we can throughout the process.

As often as we can, we’ll share our media appearances in this space so you can watch them, question them and discuss them on our Facebook or by telling us what you think on letstalkroyatlies.ca.

I had a chance to go in studio 630 CHED to talk to J’lyn Nye and Andrew Grose on 630 CHED:

• I was also able to stop by and speak with Kent Morrison at Global Edmonton.
• Donna McElligott was kind enough to host me on CBC’s alberta@noon (right off the top).
• You can find me on BNN with Amber Kanwar.
• And you can find me on Calgary Today on News Talk 770 (follow the link, select August 28th at 5pm – my appearance starts about 16 minutes in): http://www.newstalk770.com/audio-on-demand-2/

Have a good listen/look and let me know what you think.

I hope we’ll hear from you soon,

Dave

The post Week One Media Round Up appeared first on Let's Talk Royalties – Alberta's Royalty Review Panel.