Alberta Caves On Royalties (Again)

“The government of Alberta is prepared to continue to work through January on economic issues related to … four categories of wells that could potentially be addressed,” Energy Minister Mel Knight wrote in a Jan. 9 letter to Gordon Kerr, chairman of the Canadian Association of Petroleum Producers, the industry's main lobby group. The three other categories are all high-cost, deep, high-productivity wells: conventional oil, sour oil (which contains significant amounts of hydrogen sulfide) and natural gas drilling that involves multiple lateral spurs in the subsurface. Mr. Knight said in his letter that an “unintended consequence” would include a clear set of wells or projects “inadvertently made uneconomic.” The letter went on to state such a consequence “must have a quantifiable negative impact on Albertans generally; resolving the issue would increase revenues to all Albertans.” He added that “consequences must be so immediate that they need to be dealt with in the short term.” Mr. Kerr said industry is “encouraged” by the government's move to consider some changes. ... http://www.theglobeandmail.com/servlet/story/RTGAM.20080120.wrroyalties0120/BNStory/energy/

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