Weak Land Tenure Sales Persist

Originally posted 6 September 2016

Sales of oil sands leases since 1 April, the start of the Province`s fiscal year have been weak. As the table below illustrates,  except for the June sale, interest has been weak. Land sales remain important as a leading indicator of future energy investment.

Public Sales Results- Oilsands
Date Bonus Hectares $/HA
11-May 61,690.63 5,169.89 11.93
25-May 3,717.12 1,024.00 3.63
22-Jun 11,170,378.05 28,039.00 398.39
06-Jul 150,192.64 1,280.00 117.34
03-Aug 170,923.52 3,264.00 52.37
Totals 11,556,901.96 38,776.89 298.0358136

The charts following are taken from the Department of Energy`s webpage disclosing its Petroleum and Natural Gas Sales Statistics. The historical data provide a helpful visual of the cycles that have occurred in the  oilpatch over the past 36 years.

Alberta Land Sales_8197_image001

A big boost for development took place in the mid to late 1990s as the oilsands royalty regime was modified to deliberately open investment with modified royalty rates which allowed companies to recoup their capital and a rate of return before meaningful returns to the resource owners occurred.

Alberta Land Sales_10090_image001

These charts also show the difficulties faced during the 1980s and early 1990s, the rapid improvements in the 2000s, save the financial crisis of 2007-09, a sharp recovery followed by a steep decline. Oil and gas discoveries (Montney and Duvernay formations) and the impact of new fracking technology have also played an important role in the demand for land to explore and develop.

Alberta Land Sales_11948_image001

The charts reinforce the difficulty faced by the Crown as resource owner becoming “addicted” to the volatile flow of bonuses into the provincial Treasury.

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 Just for a laugh read the prayer below. For many in Alberta who depend on the oil sector for sustenance, this prayer speaks to the agony of reliance on the price of a commodity to translate into happiness or pain for so many who have not had the foresight or discipline to put enough away for a “rainy day.”


The transaction, referenced below, may build some goodwill with the First Nations’ in Northeastern Alberta.  Mikisew Community websitesuncor-sells-stake-in-storage-facility19-10-16-gm

This entry was posted in Budget, Energy on by .

About albertarecessionwatch

Former Director, Institute for Public Economics, University of Alberta and currently Fellow of the Institute. Former executive with Alberta Treasury Branches. Worked for the Alberta government for 12 years with Federal and Intergovernmental Affairs and Alberta Treasury. Areas of focus: financial institutions legislation and policy, government borrowing, and relations with credit rating agencies. Ph.D in Political Science (Uof A), Masters of Public Administration and BComm. (Carleton University). Author of Politics and Public Debt: The Dominion, the Banks and Alberta's Social Credit. Presently working on study of Alberta provincial agency board appointments.

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