Gateway Gazette

Royalty Framework May Spur Billions in Value Added Investment

 

Alberta’s Industrial Heartland – Albertans could see nearly $25 billion of new investment flow into the province’s energy sector as a result of the Royalty Review. Changing the current Royalty Framework to recognize and incent value adding within Alberta will help optimize returns to Albertans and generate additional investment in energy processing.

Alberta’s Industrial Heartland Association (AIHA) submitted an official position to Alberta’s Royalty Review Panel today. The opportunities and benefits of value adding form the key recommendation.

“Alberta’s government has made it a priority to focus on diversifying the economy, expanding value added investment in Alberta’s energy sector, and enhancing our environmental stewardship,” explained Ed Gibbons, Chair of Alberta’s Industrial Heartland Association. “Our key recommendation fits well within these goals, as it calls for recognizing and including the benefits of adding value as an underlying principle in the new royalty system.”

It is AIHA’s view that the current royalty system does not support the potential benefits that are created by value added processing. Therefore, the system as it is now cannot ensure Albertans are receiving optimal returns as owners of the resource.

The significant net benefits of additional value added energy processing include: increases to economic activity, job creation, new forms of government revenue, improved environmental performance, and creating markets at home for our energy products.

Additionally, Alberta’s current economic situation has shown that we are vulnerable to the boom and bust cycles of the market. By increasing investment in the midstream and downstream sectors, we help diversify Alberta’s economy and diminish reliance on any one sector within the energy industry.

“We’ve engaged with corporate stakeholders from around the world and reviewed studies on the potential for value added development in Alberta,” commented Neil Shelly, Executive Director of Alberta’s Industrial Heartland Association. “It is our belief that the province can achieve nearly $25 billion in new investment if changes to the Royalty Framework support value adding and are accompanied by appropriate policies and programs.”

For more information and to view the recommendations submitted to the Royalty Review Panel, visit www.industrialheartland.com. Submit your own thoughts to the panel at www.letstalkroyalties.ca.

Alberta’s Industrial Heartland Association is dedicated to coordinating, advocating, and promoting sustainable industrial development in the region. The Association is a cooperative effort of Lamont County, Strathcona County, Sturgeon County, and the Cities of Edmonton and Fort Saskatchewan.

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