Alberta's energy minister says an internal review of the province's royalty tax regime has concluded taxpayers are getting "a fair share" from oilsands and conventional oil.
Greg Melchin says the province got $15 billion in royalties last year. He says any change in financial agreements would send a destructive signal to industry.
That means there will be no royalty changes for energy companies despite dizzying profits and an extended run of near-record high prices for oil.
But one day after Melchin's pronouncement, several of those running for Premier Ralph Klein's job say they don't believe the assessment of the royalty regime was ever completed.
"My understanding was that the review was postponed," said former cabinet minister Dave Hancock, who called for an open, public examination of the issue.
MLA Ted Morton said the royalty review was shelved after Klein's leadership review in the spring made it apparent there would be a new person at the Conservative helm within months.
The leadership hopefuls say as resource prices soar, growing numbers of Albertans want proof that taxpayers are getting a good return on the province's energy riches.
Jim Dinning says a review of the whole system is overdue, while Lyle Oberg says the results should be made public even if the review itself takes place behind closed doors to protect business interests.
Alberta has long encouraged development by having oil companies pay only one per cent of royalties on production from new plants until their production costs are fully recovered.
After that, the province gets 25 per cent of net revenues.
At the other end of the country, Newfoundland Premier Danny Williams is taking the opposite tack on royalty taxes.
In his latest effort to muscle more money from Exxon-Mobil Canada (NYSE: XOM), Williams has accused the oil company of soft-pedalling Hibernia's operating revenues, production and field life. ExxonMobil is the largest owner in Hibernia with a 33-per-cent share.
Williams enlisted an independent auditing firm to analyse all available financial information on the project. Navigant Consulting Inc. found Hibernia's production and revenue better than ExxonMobil claims.
Based on the audit, the premier says it's time the company shares the wealth with the province.
Newfoundland receives less than five per cent in royalties from Hibernia, Williams added.
A spokeswoman with ExxonMobil Canada declined to comment on Navigant Consulting's findings.
Petro-Canada has bowed out of a bidding war over junior Canada Southern Petroleum (TSX:CSW), one day after rival Canadian Oil Sands Trust sweetened its bid for a third time.
"We had a range of values for these assets. Going any further would exceed that threshold and not represent value to us," Kathy Sendall, Petro-Canada's senior vice-president, said in a release.
The decision will likely end a two-month struggle for control of the company that has very little in the way of production but a lot of acreage in Canada's Arctic islands.
Canadian Oil Sands (TSX:COS.UN) currently has the highest offer for the company, after pledging $13.10 US per share, or about $224 million Cdn last week.
The bid was 10 cents per share higher than - and in direct response to - an offer tabled by Petro-Canada (TSX:PCA), when it raised its bid for Canada Southern to $13 US per share.
Canada Southern's key assets are potential natural gas reserves of nearly one trillion cubic feet in the Arctic.
Premier Ralph Klein says it should be full steam ahead in developing the province's oilsands, despite calls for a halt due to growth pressures on the surrounding communities.
Klein made his comments during a visit by U.S. Energy Secretary Samuel Bodman to Syncrude Canada's Mildred Lake plant north of Fort McMurray last week.
Earlier this year, Bodman declared that increasing production from northern Alberta's oilsands was a "very important component" of future U.S. energy supply.
Klein said development needs to be promoted even though there are infrastructure and growth pressures on the city of Fort McMurray.
"There are challenges, no doubt about it, and perhaps to some degree they're right, but I've always been of the attitude that everyone is entitled to go broke."
Klein was in France recently and talked to executives with Total SA, the French oil giant, which is planning to develop an oilsands operation in the regional municipality of Wood Buffalo.
"They're concerned about labour, they're concerned about infrastructure generally, the high cost of materials and the escalating costs of project development, and they're still intent on going ahead," the premier said.
"I guess when oil is in excess of $70 per barrel it makes economic sense.
"In relation to the infrastructure challenges we'll find solutions to those particular problems in the community and at some point be growing and developing as responsibly as we should be."
Canada is the largest exporter of both natural gas and oil to the U.S. and expects to be the world's fifth-largest oil producer within 10 years.
Less than three per cent of the estimated 174 billion barrels of oilsands reserves have been depleted despite 40 years of activity.
The U.S. has been paying a great deal more attention to Canadian energy supply recently, especially in the oilsands where production is expected to triple in the next decade, because it wants to reduce its overall dependence on offshore energy imports.
Meanwhile, industry needs to play a bigger role in addressing concerns that infrastructure in northern Alberta lags far behind the hot pace of oilsands development, an energy company executive says.
Charlie Fischer, president and CEO of Nexen Inc. (TSX:NXY), said municipal leaders in northern Alberta who have recently voiced alarm over infrastructure deficiencies are only doing what they have to do.
Concerns over unbridled oilsands development have come to the fore in recent weeks as industry leader Suncor Energy (TSX:SU) faces a public regulatory hearing over its next big expansion - the $7-billion Voyageur mine extension and upgrader.
Fischer said the energy industry is all too aware of the dire need for new infrastructure in the Wood Buffalo region of northwestern Alberta.
Terry Bachynski, Suncor's vice-president of regulatory approvals, told the hearing that it should be left to the market to decide when material and labour costs have become too inflated to proceed.
He warned that if Alberta's energy regulator bows to community pressure and delays the Voyageur project - even for one year to allow local officials to catch up with development and adjust their plans - the company would be forced to revisit the entire proposal.
In other Suncor news, the company has started production at its new $120-million St. Clair ethanol plant, which will turn corn into a gasoline additive that reduces carbon monoxide emissions.
Suncor, which has been blending ethanol into its Sunoco-branded gasoline sold since 1996, said the plant is expected to produce 200 million litres of ethanol per year - making the Sarnia-area plant the largest ethanol producer in Canada.
A subsidiary of Talisman Energy Inc. (TSX:TLM) has received approval from the U.K. Department of Trade and Industry to develop a deep-water windfarm demonstrator project.
The project - adjacent to Talisman's Beatrice oilfield, 25 kilometres off Scotland's east coast - is a joint venture between Talisman Energy (UK) Ltd. and Scottish and Southern Energy.
It will use two of the largest turbines installed anywhere in the world to test the technical and economic feasibility of deepwater wind farms in depths of about 45 metres, Talisman said in a statement.
Oilfield services giant Schlumberger (NYSE:SLB) could soon take up residence in central Alberta.
The international company is proposing to build its biggest facility in the world in the small community of Blackfalds.
The administrative centre would oversee its operations in Alberta and Saskatchewan.
The company has indicated it wants to start site work this year, with construction beginning in 2007.