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http://www.canada.com/topics/news/na...f7adb0&k=31227

EDMONTON -- Oilpatch giant EnCana Corporation warned Friday it would shift $1 billion in capital investments from Alberta next year if the province implements higher royalties recommended by a review panel.


And the company, North America’s largest natural gas producer, said its reduced spending is the “tip of the iceberg” in potential job and investment losses if Premier Ed Stelmach’s government implements changes that would hike its royalty revenues on oil and gas production by $2 billion.


“If the royalty panel’s recommendations are adopted in full, many of Alberta’s new and emerging resource plays will simply not be economically viable,” the Calgary-based company said in a news release.


EnCana is the first energy producer to announce it would cut spending in Alberta in the wake of the panel report, which was released on Sept. 18. Stelmach has said he would announce the government’s response next month.
Frank Atkins, an economics professor at the University of Calgary, said Friday that EnCana’s announcement is “necessary posturing” designed to pressure Stelmach to water down the panel’s recommendations.


Alberta’s economy will continue to be driven by oilsands projects, since the panel told government to keep royalties low on such projects until companies recover their investments, he told Bloomberg News.


“Any time your taxes change for the worst, you’re going to scream. It’s their job to get their argument out there,
” Atkins said. “I can’t see a great deal of capital flight coming out of this.”
Companies including EnCana, Royal Dutch Shell and Exxon Mobil Corp. have few options in finding stable countries where they can boost output and profit from record crude prices, Atkins said.