Alberta's energy sector is bracing for change today, as the Progressive Conservatives' more than 40-year reign comes to an end. In their place -- the NDP.
Rachel Notley's NDP government is expected to have a different approach to managing corporate Alberta, in general and the oilpatch, in particular. Energy royalties are on the table, corporate income taxes will increase, and bitumen pipelines will lose at least some direct government support.
Notley said during the campaign that she would initiate a review of Alberta's energy royalties, a regime that has a reputation for charging energy companies low royalties, relative to other energy jurisdictions.
It is also a system that is extremely complex, with every oil and gas well in the province paying a tailored royalty based on energy prices, the depth, type and age of the well and how much it produces.
Notley's stance on royalties threw the energy sector into high alert, in part because of the poorly managed royalty review of 2007, which led to further royalty changes in 2010.
Altacorp Capital, a Calgary investment bank that is partly owned by the provincial government, expressed a similar view in a report earlier this week, before the election.
The report pointed out that energy investors, especially those based outside of Canada, have lots of options when it comes to investing.
Notley said that she will appoint a Resource Owner's Rights Commission that would propose recommendations for a new provincial royalty structure and that the commission would report within six months.
