The new royalty structure if passed will do the same to Alberta that the NEP did in 1980. Depressed economy soaring interest rates, job losses. This is not a wise move. I don't just say that becuase I am paid by big oil but as a Calgarian and an Albertan I can see the disater looming. Last October we were crushed by the income trust taxation, this october we have the potential to be crushed on the royalty review.
For example, EnCana put out a press release this morning stating that they will cut their 2008 activity by $1 Billion (roughly 30-40% decrease) if the royalty structure is changed. How does this increase revenue to the province of Alberta and it's citizens.
I quote : "The proposed changes will have immediate and long-term impacts on working Albertans. The magnitude of the expected capital reductions is the tip of the iceberg. In the short term, these changes would mean extensive job losses across the industry. There will be fewer wells drilled, completed, pipelined, operated and serviced. There will be fewer hotel bookings, vehicle purchases, landowner lease payments, restaurant meals and lower property taxes in the areas where EnCana operates, and that is just about every corner of Alberta, from the smallest towns to the biggest cities. More importantly and over the long term, well-paying, permanent jobs will not materialize across Alberta."
The full press release can be found here -
http://www.encana.com/investors/news...950052710.html
Anyone who thinks this is a good thing for Alberta does not understand all the facts IMHO.