by Morinville News Staff
The NDP say rig counts across the province have risen substantially over the past year as economic activity and jobs return in the energy sector. The government is attributing the increased activity to the modernized royalty framework.
The province adopted the Royalty Review Advisory Panel’s recommendations in January 2016, with the modernized royalty framework for oil and gas taking effect at the start of this year.
Citing industry figures, the NDP say there were 247 active rigs in Alberta in mid-January, a 50 per cent increase from the to 165 operating in Alberta at the same point in 2016. More than 40 companies applied for a total of 158 new approved wells as part of the early adoption. The NDP estimate 135 direct and indirect jobs from each rig.
“We reviewed our royalty system when prices were low, so we’d be able to hit the ground running when prices went back up,” Margaret McCuaig-Boyd, Minister of Energy. “We’re now seeing better prices, new pipeline approvals, and a royalty system that’s more competitive than before. The result is companies are putting rigs back to work, and that means getting Albertans back to work.”
The province’s oil and gas producers had the opportunity to opt-in to the modernized royalty framework before Jan. 1, 2017, allowing industry to keep and create jobs by making new or keep existing investments in Alberta.
“When we started this process we committed to listening to Albertans and industry,” Dave Mowat, President, and CEO of ATB Financial; past Chair of Alberta’s Royalty Review Advisory Panel. “Seeing our recommendations brought to life means Albertans can know their views are reflected in the Modernized Royalty Framework. This is a system that is built to last, and I’m pleased to see the positive reaction to it, one year after delivering our report.”
The government is accepting applications for what they see as two new strategic royalty programs opened his year as part of the new framework. The province says the Enhanced Hydrocarbon Recovery Program and Emerging Resources Program will help projects get more oil and gas from existing pools before they are abandoned.