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Hector Goudreau MLA: Alberta delivers on oil and gas competitiveness
Hector Goudreau MLA, Dunvegan – Central Peace
for Smoky River Express
To advance Alberta’s competitiveness in the upstream oil and gas sector, the Alberta government will modify conventional oil and natural gas royalty rates; promote more innovation and use of new technologies; and reduce unnecessary red tape while improving coordination of regulatory processes.
Currently almost one in seven Albertans are directly or indirectly employed by the energy industry.
Changes to improve Alberta’s competitiveness are expected to create 8,000 jobs in 2011-12 and then 13,000 more jobs annually across the economy. Over the next 25 years conventional oil and gas development in Alberta has the potential to add $2.5 trillion in new economic activity.
The changes being made by government are based on a Competitiveness Review that included an extensive technical analysis of Alberta’s competitive position.
This resulted in a number of recommendations for improvement in specific areas.
Fiscal - The key recommendations for royalty adjustments will become effective on a permanent basis for the January 2011 production month.
– The current incentive program rate of five per cent on new natural gas and conventional oil wells will become a permanent feature of the royalty system, with the current time and volume limits.
– The maximum royalty rate for conventional oil will be reduced at higher price levels from 50 per cent to 40 per cent to provide better risk-reward balance to investors.
– Recognizing the fundamental changes to the North American supply/demand balance and increased competition from other jurisdictions, the maximum royalty rate for conventional and unconventional natural gas will be reduced at higher price levels from 50 to 36 per cent.
– All royalty curves will be finalized and announced by May 31, 2010.
– The transitional royalty framework for oil and gas introduced in November 2008 will continue until its original announced expiration on Dec. 31, 2013. Effective Jan. 1, 2011, no new wells will be allowed to select the transitional royalty rates. Wells that have already selected the transitional royalty rates will have the option to stay with those rates or switch to the new rates effective Jan. 1, 2011.
Community groups deliver new farm safety programs
The Government of Alberta is providing $715,000 to Alberta’s agricultural societies to help promote farm safety in the province. All eligible agricultural societies will receive a payment of $2500 to facilitate farm safety training in their community.
Alberta Agriculture and Rural Development’s (ARD) farm safety program works with rural community groups, industry and other rural partners to deliver prevention programs that address farm safety awareness and workplace-safety best practices. This includes “Safety Up!,” an awareness campaign targeting new and young farmers, and the Farm Safety Club, that educates children four to 12 years-of-age about safe behaviour on farms. ARD also works with Alberta 4-H to promote agricultural safety with its members.
ARD’s farm-safety activities also include working closely with the Alberta Farm Safety Centre to support the Safety Smarts program. These in-school presentations to rural school children from kindergarten to Grade 6 provide interactive, informative activities to increase knowledge and awareness of safety issues on the farm. The Safety Smarts program has been running in southern Alberta for the past eight years and with the help of industry and government, funding has expanded province wide.
For more information on the farm safety program visit: http://agriculture.alberta.ca.
New program flexibility encourages municipalities to keep building
Municipalities now have added flexibility and increased borrowing power for municipal infrastructure projects as a result of a recent adjustment within the province’s Municipal Sustainability Initiative program.
This adjustment will give municipalities greater access to borrowing as a strategy to stay on track with current project schedules. The limits on the amount of program funding that can be used for interest costs have been raised from five per cent to seven per cent of a municipality’s estimated total program allocation. In addition, the maximum amount of eligible borrowing has been increased from one-third of the estimated total program allocation to one-half.
This option is available to all municipalities in the province.
While not every municipality uses borrowing as a strategy, those who do or who may choose to in the future, especially during these times of low construction costs, will benefit from the greater flexibility.
Since the Municipal Sustainability Initiative was announced in 2007, more than 1,500 key projects have been approved. This year, program funding to municipalities more than doubled to a total of $876 million.
Overall Municipal Sustainability Initiative funding to municipalities will not change as a result of this program adjustment.
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