Oilsands companies are divided over the issue of curtailment. CALGARY – Alberta government could avoid losing out on as much as $2.9 billion in royalty revenues if it were to force local oil companies to throttle back crude production in the province, a highly divisive policy option currently being considered. A Wednesday report from Scotiabank Economics shows the “extraordinary challenge” facing Alberta. The province’s treasury is set to lose between $1.5 billion and $4.1 billion in royalty revenues if record-setting discounts for Canadian oil persist. But Alberta could cut those potential losses through a dramatic intervention in the oil market, using its powers to mandate a four per cent production cut by all oil companies operating within its borders. The move, while controversial, could save the province between $300 million and $2.9 billion in lost royalties, the Scotiabank report noted. Such a move would also help oil companies avoid between $3 billion and up to $27 billion of a potential $39 billion in forgone revenues. “The bar for the government to intervene directly into the energy sector should be a high one and the policy option should only be considered in an effort to prevent extreme value destruction,” the […]
