A national task force in Canada recommends governments should provide $2.8 billion (Canadian) in tax and royalty incentives during 8 years to triple production from Alberta oilsands.
A report by the National Task Force on Oilsands Strategies said the production increase would call for as much as $25 billion in spending and provide 44,000 jobs during the next 25 years. Governments would garner an added $97 billion in revenues from development after 2002.
Eric Newell, president of oilsands operator Syncrude Canada Ltd. and a task force member, said Alberta's oilsands represent the largest single private sector investment opportunity in western Canada. He said the era of large-scale projects such as Syncrude is all but dead. Canadian companies are no longer planning megaprojects but are considering smaller projects using new technologies.
The task force called for reductions in provincial royalties and lower provincial and federal taxes to promote oilsands development. It said subsidies, grants, loans, and other artificial inducements to development should be avoided.
Proposed royalty and tax cuts would mean revenue losses of $2.14 billion for the Alberta government and $702 million for Ottawa during the 8 year period.
Newell said further oilsands development is unlikely unless the tax and royalty cuts are made.
The report said Canadian and foreign investment in oilsands could triple production to 1.2 million b/d by 2020. The oilsands would then supply about 50% of Canada's oil needs compared with 21 % at present.
ENVIRONMENTAL VIEW
An Alberta environmental spokesman said more jobs would be created by encouraging energy efficiency and renewable energy projects than by oilsands development.
Robert Hornung of the Pembina Institute for Appropriate Development said oilsands development is not the best strategy for job creation and would increase greenhouse gas emissions.
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