Alberta aims to revive natural gas industry
by Maximillian on 25/06/09 at 12:01 pm
The government of Alberta, sideswiped by the recession and depressed natural gas prices, is stepping up its efforts to resuscitate drilling and compete against massive supplies of shale gas from British Columbia and the United States.
Premier Ed Stelmach’s government is expected on Thursday to extend royalty breaks on natural gas production. Observers also believe the government could make one permanent change that would see a low rate of 5 per cent on the production from gas wells in their first year, a move considered key by the industry.
A spokesman for the provincial Energy Minister said the government would not announce new incentives but rather extend a program related to existing breaks, allowing drillers to plan.
The changes would mark the fourth adjustment of royalty rules since a decision to raise rates was made in late 2007. But for the first time the province is also expected to acknowledge the stiff competition for investment capital from recent massive shale gas discoveries in British Columbia, Texas and Louisiana. Shale gas is natural gas trapped in barely-porous rock.
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