Through a quirk in our printing and distribution deadlines, this edition went to press before the 2016 Saskatchewan provincial election, but was distributed after. So, as this editorial is being typed, we really don鈥檛 know who will win the election.
But when it comes to oil and gas royalties, it really shouldn鈥檛 matter.
One of the key components of the Saskatchewan Party government鈥檚 policies over the last 8.5 years has been they were not messing with anything when it comes to royalty regimes. Minster of the Economy Bill Boyd, whose previous title was Minster of Energy and Resources, spent the first mandate giving, essentially, the same speech wherever he went. They were not changing anything, full stop.
This was at a time when then-Alberta Premier Ed Stelmach mucked around with their royalty regime several times. And just recently, current Alberta Premier Rachel Notley implemented a royalty review, scaring the bejesus out of the industry. That same review then said it is best to leave well enough alone. During that time, investment in the Alberta oilpatch, already hurting from a huge drop in oil prices, dropped like a wrench down a wellbore.
Interestingly, Saskatchewan鈥檚 current royalty regime, untouched as it has been for at least ten years now, was brought in under former premier Lorne Calvert鈥檚 government.
This point came up twice in interviews with oil producers this month.
Del Mondor, owner of Aldon Oils, said that Saskatchewan was an unfriendly place to do business under the Allan Blakeney NDP regime. That changed with Grant Devine鈥檚 Progressive Conservative government. The NDP under Roy Romanow and Lorne Calvert carried on many of those policies, Mondor said. 鈥淯s in the oil business, what we鈥檙e looking for is consistency. Credit to Romanow and the other governments, they didn鈥檛 do much in the way of change.鈥�
The Saskatchewan Party administration has carried on policies set under the Calvert government. Mondor said, 鈥淚t allows guys like me to sit back and go, 鈥榃hat am I going to do? Now that the government, and several governments, have committed to not changing anything, what should I be doing or not doing?鈥�
Raging River Exploration鈥檚 CEO Neil Roszell said, 鈥淚t鈥檚 been a favourable, stable political regime for a multiple years that has allowed us to build and execute our business without government interference. They鈥檙e kind of our partners. The landowners, in general, have been a lot more favourable to oil and gas development. And the speed of execution in terms of well licensing has been quicker in Saskatchewan. I maintain that鈥檚 still the case today.鈥�
He added, 鈥淚f I was starting a brand new company again, I would certainly be more biased to starting a company in Saskatchewan, because it is more favourable environment to get rolling in, for sure.鈥�
So, no matter who gets the nice office in the marble palace, one thing is clear: good energy policy, when it comes to royalties, appears to be agnostic to political parties. Just do the right thing, leave things where they are at, and we鈥檒l be okay.
