Drilling increases across Alberta under new royalty system

By Margaret McCuaig-Boyd, MLA for Dunvegan-Central Peace-Notley. First published in the Cold Lake Sun, Aug. 30, 2016.

As a rural MLA who lives in a small northern community I have been surrounded by the energy industry my whole life. I have friends, family and neighbours who have worked and benefited from this important sector.

I know these are not easy times for the energy sector and communities and families are hurting in many ways. We cannot control the global price for our resources but can control our own actions and policies.

It is with this in mind that we introduced new changes to our royalty system that would help our oil industry prosper.

Dozens of new oil and gas wells are now being drilled across Alberta, creating jobs in rural communities and regional centres, after our government made a decision to open up our new royalty system early.

The modernized royalty framework is a long-term solution that promotes a stable investment environment for continued growth in the sector.

Since we started reviewing our royalty system I have said we would listen to industry and there would be no surprises. We pledged to create a royalty system would work for all of us; to create the fair returns Albertans want while allowing companies to remain competitive and to create jobs.

I believe we have accomplished that goal and this summer wells in Alberta have started drilling under our new modernized royalty framework. The first ones began drilling in mid-August in Grande Prairie County and others are moving towards operation in several other parts of the province.

Our new framework is not scheduled to take effect until next year, but when industry told us they were willing to increase their investments in Alberta this year if they could access the new system - we responded.

These new wells represent investment in our province beyond what was originally planned for 2016.

I was pleased to tour an Encana rig on August 17 and meet crew members from across Alberta working there. Each operating drilling rig can create 135 direct and in-direct jobs according to figures from the Canadian Oilwell Drilling Contractors Association.

I was joined on the tour by a representative from the Canadian Association of Petroleum Producers (CAPP) who said our new royalty framework will help industry stay competitive.

“The modernized royalty framework is a long-term solution that promotes a stable investment environment for continued growth in the sector. It is both flexible to short term market conditions for long term planning. When Alberta‘s oil and natural gas industry is healthy and can compete - that’s good for Alberta‘s economy, that’s good for government revenues and that’s good for Alberta families,” said Brad Herald, VP Western Canada Operations with CAPP.

Our government will continue to advocate for sustainable and environmentally responsible energy development in our province.

We are demonstrating to the business community and the world beyond our borders that Alberta is open for energy investment and we are a responsible and competitive energy supplier.

With this kind of positive initial response to our early opt-in for the new framework, I’m confident we will continue to see activity in 2017, helping bring jobs and opportunities to communities across Alberta, big and small.