Pedro Van Meurs Says Royalty Plan "Smoke & Mirrors"

Instead, the province opted to tinker with the existing system. Levies will be raised to between 1 percent and 9 percent of revenue, from 1 percent, while project costs are recouped, and from 25 percent of profit after payout to between 25 percent and 40 percent, rising with prices. But van Meurs said the changes are at best a minor increase and the province's has lost a once-in-a-generation chance to get what he considers a fair share of the burgeoning sector's revenues. "It's pretty disastrous," van Meurs told Reuters. "Instead of having a simple tax, what we are now going to see is very complicated system that is more smoke and mirrors than reality." Van Meurs was a consultant for the review panel that recommended higher rates and a per-barrel tax on oil sands production. The proposals were attacked by oil sands producers and some threatened to cancel plans for new projects to tap the resource, claiming the planned tax would sap their profits. Under the new system, which takes effect at the start of 2009, the province's share of revenue from oil sands projects rises to between 56 percent and 66 percent, depending on oil prices, from about 47 percent currently. The review panel had recommended the government's take rise to 64 percent of revenue. It's a level van Meurs said would have placed the province's royalty scheme slightly below the average of other jurisdictions. However with the changes touted last week by Stelmach, Alberta will become among the top third of the most generous regions. "It's absolutely a minor increase," he said. "The most idiotic thing is that Alberta already had 25 percent." .... http://www.thestar.com/article/271594

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