Under the 2009 formula applied to Natural Gas and By-products represented a decrease from the previous fixed rates.
Unlike many other oil-producing jurisdictions such as Saudi Arabia or Norway, Alberta does not have a National Oil Company that owns and exploits all petroleum resources.
[11] In 1971, soon after winning a majority government for the Progressive Conservatives in 1971, then-premier Peter Lougheed moved to increase Alberta's share of royalties creating hostilities with the oil industry.
At that time the price of oil was rising globally as the influence of the newly formed Organization of Petroleum Exporting Countries increased.
As Premier in 2007 he tasked then-Minister of Finance Lyle Oberg to lead the Alberta Royalty Review process.
[17]: 10 In that year Alberta's total resource revenue "fell below $7 billion...when the world economy was in the grip of recession.
[17]: 10 In order to accelerate development of the oil sands, the federal and provincial governments more closely aligned taxation of the oil sands with other surface mining resulting in "charging one per cent of a project's gross revenues until the project's investment costs are paid in full at which point rates increased to 25 per cent of net revenue.
Effective January 1, 2009 the royalty percentage of net revenue is also indexed to the Canadian dollar price of WTI.
For royalty purposes, net revenue equals project revenue less allowed costs.When the price of oil per barrel is less than or equal to $55/bbl indexed against West Texas Intermediate (WTI) (Oil and Gas Fiscal Regimes 2011:30) (Indexed to the Canadian dollar price of WTI)[20]: 30 to a maximum of 9%).
Western Canadian Select (WCS), a grade or blend of Alberta bitumens, diluents (a product such as naphtha or condensate which is added to increase the ability of the oil to flow through a pipeline) and conventional heavy oils, developed by Alberta producers and stored and valued at Hardisty, AB was determined to be the best reference crude price in the development of a BVM.
From October 2009 to 2013/14 bitumen and crude oil royalties "averaged $6.2 billion and contributed just under 16 per cent to government revenues on an annual basis.
"[22]: 2 The Alberta government predicted in its 2014/15 fiscal-year budget that there would be "an annual average of $8.0 billion in bitumen and crude oil royalties over the next three fiscal years (2014/15 to 2016/17) and an increase in the annual share of bitumen and crude oil royalties to over 17 per cent of government revenues.
"[16]: 4 The panel's report not only recommended increased royal rates for all three major resources (conventional oil, natural gas, and oilsands) but also insisted that the government had failed to collect royalties already owed.
Some supporters of the oil industry responded to the 2007 Review with concerns that Calgary would become the "Caracas on the Bow" in the province of "Albertastan.
They failed to make any gains against the Conservatives during the Alberta provincial general election of 2008, however, despite a record low turnout caused primarily by traditional Tory supporters staying home.
"[23]: 2 In September 2007, TD Bank Financial Group Chief economist, Don Drummond and Derek Burelton claimed Alberta's economy would continue to thrive.
From 1993 to 2003, Calgary-Edmonton Corridor "registered explosive real economic growth and population increases, surpassing rates chalked up in the majority of North American urban centres."
By 2003 oil and gas royalty revenues were surging[29]: 28 and the Corridor was "the only urban region in Canada to rival U.S. metropolitan areas in terms of both productivity and standard of living.
Those on the right criticized the government for raising royalties and damaging profits in Alberta's most important industry, which they likened the "killing The Goose That Laid the Golden Eggs".
Junior oil companies were instrumental in funding the upstart Wildrose Party which emerged in the Alberta provincial general election of 2012 as the major challenger to the governing Tories, and became the Official Opposition.