Questions – Round 1

WHAT YOU’VE BEEN SAYING SO FAR

Since launching our “ Let ’ s Talk Royalties ” Conversation Hub, we ’ ve received thousands of visits to the website and received hundreds of responses from visitors.

We ’ ve been inviting everyone to tell us what they think, or want to understand, about the Alberta royalty framework today; and to tell us what they would like the royalty review to do. As we expected, Albertans have been open and straightforward in their comments. We ’ d like to give you a look at what people have been telling us so far.

Every piece of input we receive is important, so these aren ’ t listed based on how often we ’ re seeing them or where they ’ re coming from. This is a broad picture of the themes that we ’ re consistently seeing in people ’ s responses. Along with the themes are examples of what ’ s being said by people ‘ in their own words ’ .

Here’s what you’ve been saying you think, or want to understand, about the Alberta royalty framework today:

Investment Certainty

• In the current economic climate, and amid low resource prices, Alberta can ’ t afford to lose further investment. So Alberta should provide certainty for businesses and make sure it remains economically attractive.
  

  At this point in time, the Alberta government would be cutting off the hand that feeds it by increasing oil/gas revenues.

Framework Favours Industry

• The current royalty framework isn ’ t generating the best deal for Albertans, but for energy companies instead. The framework shouldn ’ t subsidize energy companies at the expense of Albertans and Alberta ’ s environment. At the end of the day, Albertans must have something to show for selling their resources, and not be left with an environmental mess.
  

  I think that the current framework is geared toward development and exploration. I think that the time for this is past.

Current Framework Works

• The current royalty framework has been working well. In addition to generating royalty revenue for the government, it has encouraged investment that has created lots of jobs and income for Alberta families. This is a balance that needs to be kept.
  

  A working oil patch will give money back to the province, an idle one will not.

Timing

• While a review of the royalty framework might not be a bad idea, the wisdom of doing it now is up for debate. Some people say it ’ s a good time. Others say it ’ s a terrible time. Some people are wondering why a review is needed at all, and are looking for an answer.
  

  I wish the Notley government every success and what I don ’ t understand is why it would proceed with a royalty review in the teeth of a dramatic collapse in energy prices.

Facts vs. Rhetoric

• It ’ s important to separate the facts from the rhetoric. Does Alberta collect more royalties when resource prices are higher? How are the calculations made? What else does the Alberta government collect from energy companies besides royalties? How much does it cost to produce oil here compared to other places? How does Alberta ’ s royalty framework compare to those of other jurisdictions? People want credible information about these and other questions, so they can assess things for themselves.
  

  I have no idea how the royalty system in Alberta works … It ’ s a shame and I ’ d like to know!

Benefit For All

• Royalties collected by the government can benefit all Albertans, while investment activity only benefits some Albertans. Not every one works in the energy industry or in a business that primarily relies on the energy industry. Yet everyone in Alberta is impacted by energy activity, including its impacts on the environment and, through inflation, on things like groceries and housing. This needs to be considered.
  

  Less energy cheerleading is needed. We need to be serious about protecting the public interest.

Value-Added Production

• If possible, the royalty framework should do more to encourage more value-added production in Alberta.
  

  Integrated companies with downstream facilities (refineries, upgraders, petrochemical facilities, etc.) should get favorable royalty treatment compared to companies who are just exporting raw products.

Simplify

• The royalty framework seems complicated. Make the framework simpler and easier for ordinary Albertans to understand, so that people can more easily determine what ’ s happening.
  

  Make the royalty process uncomplicated with clear reporting and accountability accessible to the public.

Learn From Others

• Learn from the examples of places such as Norway and Alaska, which have accumulated large funds from their resource royalties.
  

  Norway seems to have a sensible and beneficial plan that protects and benefits industry, the environment and the public.

Here’s what you’ve been saying you’d like this review to do:

Leave It Alone!

• Leave the royalty framework alone.
  

  The government should leave everything as is; it was working just fine … ..

Encourage Investment

• Encourage further investment in Alberta ’ s energy sector.
  

  I’d like the review to make Alberta the best place in North America to do business in oil and gas.

Set Higher Rates

• Set royalty rates higher so that Albertans get a better return for their resources.
  

  I fully expect that the current government should raise royalties to a level that would ensure the citizens/constituents who all collectively own these resources benefit at a much higher level proportionate to what it is now.

Find Balance

• Strike a balance between generating revenues for Alberta, encouraging investment activity, and environmentally responsible development.
  

  I think we need to set royalties with some degree of consideration of other goals we want to achieve such as diversifying our economy, providing jobs for Canadians/Albertans or reducing greenhouse gas emissions.

Clarity

• Be honest and clear with Albertans about the facts.
  

  I believe government has been doing an excellent job of communicating with the producers, but I feel that less emphasis has been put into delivering facts about the oil and gas industry to the public …

Long-term Stability

• Be guided by the facts, look at all the facts, do a thorough job so that there is stability for some time.
  

  Do it once and get it right. We waste too much money on repeat efforts.

Get It Done!

• Do the work quickly, so that people know what the new rules will be.
  

  It needs to be done…but please get it done sooner as opposed to later so that our industry can shut up about it and get back to work.

If you’ve provided a response but don ’ t see your exact thought above, don ’ t worry — we ’ ve got it, and we ’ ve read it. The above list is by no means exhaustive. It ’ s simply meant to provide a picture of some consistent themes we ’ ve seen so far.

Also, we want to say a big “ Thank you ” to those of you who ’ ve contributed your thoughts so far. People have generously shared their personal stories, and have provided lots of interesting anecdotes and ideas.

This is a great start to this conversation. We want you to keep your ideas coming.

Now that you’ve read this summary, think about and visit our next question:

DID WE GET IT? IS ANYTHING MAJOR MISSING?

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