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30 Fairmont Park Lane S
Lethbridge, AB
T1K 7H7
Phone: (403) 328-1804
Sunday, October 28, 2007
The Editor
The Lethbridge Herald
P.O. Box 670
Lethbridge, AB, T1J 3Z7 

Alberta Royalty Review Outcome 

Dear Editor, 

Premier Stelmach has taken a major step forward in helping Albertans understand how royalties work. 

As a participant in the Alberta Royalty Review I was impressed with its transparency and openness. The Panel made public some 300 presentations, as well as details leading to the recommendations made. 

Initially industry too was stepping up to the plate and providing public responses to the Panel’s recommendations. However, it seems deliberations slipped underground again to some degree, feeding suspicions government and industry once made deals in the back rooms of the Calgary Petroleum Club. The new back room is the office of Deputy Premier Ron Stevens who has apparently received private petitions from corporate interests.  

Legitimate concerns are apparent in industry reviews of the Panel recommendations. In all fairness, our past royalty policy, government, industry and investors have built a thriving industry from the one time curiosity of the oil sands. We don’t want to destroy that, and it seems the government’s new royalty policy has met the challenge to maintain the delicate balance between royalty revenue and industry incentive. 

There are more challenges to come.  The Panel recommended no grandfathering and the New Royalty Framework accepted that. Long term contracts with Suncor and Syncrude to 2016 remain to be resolved in 90 days. The Panel recommended the establishment of an ombudsman like body to ensure that the information basis for royalty decisions is open and accountable to all. Former Auditor General Peter Valentine is to address “accountability” by March 31 next year. The Panel Chairman suggested a tax on all resources to help ensure that a healthy environment is preserved as we progress through coming decades. Environmental protection cost is at least recognized as a business expense. Premier Stelmach legitimately claims this is the most open and transparent public review undertaken in Alberta for years. There is room for improvement. For example, input from industry through the Deputy Premier could be made publicly available to remove the developing perception industry was given privileged audience. 

Premier Stelmach initiated a model of good governance with the Royalty Review Panel. His New Royalty Framework faces up to the challenge of fairly resolving Panel recommendations with resource company concerns. Successful completion of the remaining tasks in an open and transparent way will help cement his reputation as the “Steady Eddie” Conservative Party members elected last fall.


Yours truly, 


Duane Pendergast


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