History of Royalty Changes in Alberta

Alberta has made significant changes to royalty rates on four occasions in the previous 60 years:

• 1941 - Alberta shifted the royalty rates on oil from a flat rate of 10 per cent to a choice of a 12.5 per cent flat rate or a five to 15-per-cent royalty based on production levels.
• 1972 - Royalty rates were raised at a time when the world price of oil averaged $3 per barrel.
• 1974 - Royalties were raised again in response to higher world oil prices, which averaged $12 per barrel.
• 1997 - the Oil Sands Generic Royalty Regime set rates and established the federal accelerated capital cost allowance for oil sands projects to encourage development. The world price of oil averaged $22 per barrel, dropping to $10 per barrel in 1999.
• 2007 - The Government of Alberta tasked an independent, expert Royalty Review Panel to examine the province's energy royalties and tax regime. The panel was asked to focus on all aspects of the royalty system, including oil sands, conventional oil and gas, and coalbed methane. Their report was released on September 18th, 2007. Royalty review panel background information is available, it includes information sheets to provide Albertans with an understanding of the review process and it includes many of the technical reports that were used by the panel.
• 2007 - October 25, Royalty Framework announced.  - Technical Information for webcast - News Release -
  Premier Stelmach delivers historic Royalty Regime for Alberta
  A team led by Alberta Energy consulted with industry participants, CAPP and SEPAC on implementation details for Alberta’s royalty framework.
• 2008 - Royalty News
  • The Mines and Minerals (Royalty Framework) Amendment Act, 2008 was given Royal Assent by the Lieutenant Governor on December 2, 2008 and becomes law on January 1, 2009. Additional information on the passing of the act can be viewed in Hansard, the official, verbatim record of parliamentary debates and proceedings. 
  • Wells commenced after November 19, 2008 eligible for transitional royalty rates (News Release) (November 24, 2008)
  • Alberta to offer transitional royalty rates to promote new drilling(News Release) (November 19, 2008)
  • Transition Wells Charts (Natural Gas and Oil) (updated November 20, 3:00 pm)
  • Formulas for calculating conventional oil and transition well royalties(updated December 3) 
  • Formulas for calculating natural gas and transition well royalties(updated November 27) 
  • Frequently Asked Questions - Transition Wells (updates November 24, 2008)
  • Legislation to implement Royalty Framework introduced (News Release) (November 6, 2008)
  • Information on the Royalty Framework for the October 30/31 and December 8, 2008 Training sessions, Gas Royalty Calculation Unit (October 20, 2008)
    • Natural Gas Deep Drilling Program NGDDP (45 slides) (November 12, 2008)
    • Royalty Formula presentation (115 slides) (November 12, 2008)
    • Changes to Gas Cost Allowance (44 slides) (December 5, 2008)
    • Shallow Rights Reversion (September 4, 2008)
    • Bitumen Royalty-In-Kind Expression of Interest (August 15, 2008)
    • Bitumen Valuation Methodology (BVM) This document developed by the department of Energy describes the method. It is a draft for discussion of implementation issues with stakeholders, and is subject to approval and implementation through regulation by the Government of Alberta as part of the Royalty Framework package.
    • New deep resource programs promote high-cost oil and gas development
      Announcement follows analysis of Royalty Framework unintended consequences
      News Release (April 10, 2008)
    • Building Confidence: Improving Accountability and Transparency in Alberta's Royalty System, report by Peter Valentine, FCA
      News release (April 7, 2008)
• 2009 - January 1, Royalty Framework takes effect.
  • March Incentive Program
    • Talk about the Incentive program(fact sheet)
    • News releases
      • Province extends energy incentive programs; moves forward on competitiveness review(June 25, 2009)
      • Province announces three-point incentive program for energy sector(March 2009)
    • Frequently Asked Questions
      • Drilling Royalty Credit (July 3, 2009)
      • New Well Reduction
      • Transition Wells   
  • July Bitumen Royalty in Kind (BRIK) RFP process begins
  • September reports released
    • Energy Economics - Understanding Royalties
    • Alberta's Royalty System - Jurisdictional Comparison(Price Waterhouse Coopers)
    • Alberta Energy information from 1994 to 2008 

A complete history of Energy in Alberta is also available.