Skip to main content

The Globe and Mail

Alberta to cut royalty rates in effort to squeeze out more oil, gas production

An oil pump jack pumps oil in a field near Calgary, Alberta, July 21, 2014.

© Todd Korol / Reuters

The Alberta government is introducing two new royalty programs to encourage the energy sector to spend more on developments in their early stages and squeeze more oil and gas from underutilized existing operations.

Under the programs, companies would pay reduced royalty rates on those projects for a longer period.

CEO Tim McMillan of the Canadian Association of Petroleum Producers says the new royalty system recognizes the higher risks and greater costs of drilling associated with emerging developments and wringing out as much oil and gas from ongoing operations.

Story continues below advertisement

The changes were recommended by the provincial royalty review advisory panel in January.

They are to take effect as of Jan. 1, at the same time as Alberta's overall new royalty framework.

Report an error
As of December 20, 2017, we have temporarily removed commenting from our articles as we switch to a new provider. We are behind schedule, but we are still working hard to bring you a new commenting system as soon as possible. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to