Plucking the Golden Goose: Higher Royalty Rates on the Oil Sands Generate Significant Increases in Government Revenue

The Alberta government’s 2009 New Royalty Framework elicited resistance on the part of the energy industry, leading to subsequent reductions in the royalties imposed on natural gas and conventional oil. However, the oil sands sector, subject to different terms, quickly accepted the new arrangement w...

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Main Author:	Kenneth J. McKenzie
Format:	Article
Language:	English
Published:	University of Calgary 2011-09-01
Series:	The School of Public Policy Publications
Online Access:	http://www.policyschool.ca/wp-content/uploads/2016/03/kmckenzie-comm-sept11_0.pdf

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spelling	doaj-663ea68046c4433f9220b177030492842020-11-24T22:03:58ZengUniversity of CalgaryThe School of Public Policy Publications2560-83122560-83202011-09-013318https://doi.org/10.11575/sppp.v4i0.42364Plucking the Golden Goose: Higher Royalty Rates on the Oil Sands Generate Significant Increases in Government RevenueKenneth J. McKenzie0University of CalgaryThe Alberta government’s 2009 New Royalty Framework elicited resistance on the part of the energy industry, leading to subsequent reductions in the royalties imposed on natural gas and conventional oil. However, the oil sands sector, subject to different terms, quickly accepted the new arrangement with little complaint, recognizing it as win-win situation for industry and the government. Under the framework, Alberta recoups much more money in royalties — about $1 billion over the two year period of 2009 and 2010 — without impinging significantly on investment in the oil sands. This brief paper demonstrates that by spreading the financial risks and benefits to everyone involved, the new framework proves it’s possible to generate increased revenue without frightening off future investment. The same model could conceivably be applied to the conventional oil and natural gas sectors.http://www.policyschool.ca/wp-content/uploads/2016/03/kmckenzie-comm-sept11_0.pdf
collection	DOAJ
language	English
format	Article
sources	DOAJ
author	Kenneth J. McKenzie
spellingShingle	Kenneth J. McKenzie Plucking the Golden Goose: Higher Royalty Rates on the Oil Sands Generate Significant Increases in Government Revenue The School of Public Policy Publications
author_facet	Kenneth J. McKenzie
author_sort	Kenneth J. McKenzie
title	Plucking the Golden Goose: Higher Royalty Rates on the Oil Sands Generate Significant Increases in Government Revenue
title_short	Plucking the Golden Goose: Higher Royalty Rates on the Oil Sands Generate Significant Increases in Government Revenue
title_full	Plucking the Golden Goose: Higher Royalty Rates on the Oil Sands Generate Significant Increases in Government Revenue
title_fullStr	Plucking the Golden Goose: Higher Royalty Rates on the Oil Sands Generate Significant Increases in Government Revenue
title_full_unstemmed	Plucking the Golden Goose: Higher Royalty Rates on the Oil Sands Generate Significant Increases in Government Revenue
title_sort	plucking the golden goose: higher royalty rates on the oil sands generate significant increases in government revenue
publisher	University of Calgary
series	The School of Public Policy Publications
issn	2560-8312 2560-8320
publishDate	2011-09-01
description	The Alberta government’s 2009 New Royalty Framework elicited resistance on the part of the energy industry, leading to subsequent reductions in the royalties imposed on natural gas and conventional oil. However, the oil sands sector, subject to different terms, quickly accepted the new arrangement with little complaint, recognizing it as win-win situation for industry and the government. Under the framework, Alberta recoups much more money in royalties — about $1 billion over the two year period of 2009 and 2010 — without impinging significantly on investment in the oil sands. This brief paper demonstrates that by spreading the financial risks and benefits to everyone involved, the new framework proves it’s possible to generate increased revenue without frightening off future investment. The same model could conceivably be applied to the conventional oil and natural gas sectors.
url	http://www.policyschool.ca/wp-content/uploads/2016/03/kmckenzie-comm-sept11_0.pdf
work_keys_str_mv	AT kennethjmckenzie pluckingthegoldengoosehigherroyaltyratesontheoilsandsgeneratesignificantincreasesingovernmentrevenue
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Plucking the Golden Goose: Higher Royalty Rates on the Oil Sands Generate Significant Increases in Government Revenue

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