Experience is a dear teacher, but fools will learn at no other. -B. Franklin
G. Santayana (Photo)
Alaska: "Essentially a third world government." -Frasier Institute Global Petroleum Survey
Globe and Mail (3/12) reports, “The Alberta government is rolling back a royalty regime loathed by the province's all-important energy industry, in a bid to revive its political fortunes and lure oil and gas investment back into the province. After months of feeling the wrath of an industry chafing under a year-old royalty hike intended to give Albertans a greater share of windfall profits, Premier Ed Stelmach's government is now reversing course and almost completely abandoning the increases. It is slashing the highest royalty rates - those designed to kick in only when energy prices are high and profits are surging - on oil and gas wells. The province is also moving to cut industry red tape, promising a new report to speed regulatory processes within 90 days. The energy sector is vital to Alberta's financial well-being. Fully 30 per cent of the province's economy flows from oil and gas. The Premier resisted calling the royalty hike a mistake, instead painting the rollback as a response to events beyond his control.
Calgary Herald by Dan Healing. Calgary oil and gas producers and analysts generally welcome the province's commitment to lower initial royalties and maximum rates but they are frustrated at being asked to wait both for details on royalty curves -- the information on what gets charged for wells that fall between the minimum and maximum royalties -- and for a task force to look at making regulatory bodies more efficient. “On the surface it all bodes well — it’s certainly better than the status quo,” said Alan Knowles, an analyst for Haywood Securities.
Alaska Dispatch by Rena Delbridge. ... The issue is at the heart of the biggest matters before the Legislature this session, with several changes to the ACES oil tax on the table. But luring companies to seek out new oil has been at the center of major controversial debates throughout the decade. Battles were fought in 2006 and 2007 over how to structure a state tax system to drive companies into uncharted terrain in pursuit of fresh flow. ... Several proposals this year call for Alaska to offer a sweeter tax deal for producers. Republicans backing the breaks say tax cuts will give companies more money to invest in new developments on the Slope. Rep. Craig Johnson, R-Anchorage, sponsored one of the bills amending oil taxes. ... He said Alaska must encourage more production out of the legacy fields in order to maintain pipeline flow. "Anytime we lose sight of the fact oil is king in Alaska, we're doing a disservice," he said. "Those fields are our lifelines."
... Like many Fairbanks residents, Rep. David Guttenberg was employed on the pipeline, clearing right-of-way in advance of construction in 1974 ... "Before we change ACES, we're going to need to do a better job of evaluating what it has done," Guttenberg said. ... "The state's major responsibility now to increase flow is not to give them tax breaks or incentives, but to expand the competitive side," he said. Steve Rinehart, with BP, offered a different take. "You can't stop (decline), but you can slow it down by continuing to invest in new developments, and especially in the big, mature fields," he said. "Year by year, the big fields is where the largest part of the ‘new' production will come from." ... Flow is expected to hit about 500,000 barrels per day in 2014 to 2016, a level that will cause problems. "We will hit that," Alyeska project manager Pat McDevitt told lawmakers on Tuesday. "There is nothing out there to get us away from that." ... "This is a marvelous pipeline, the way it was designed, but all pipelines ... you have to adjust the infrastructure to make it work better," said Mike Joyner, Alyeska's senior vice president of operations. ....