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First off, there is the assumption that O&G revenues are somehow better off in the goverment's pockets than in those of Albertan's. Any increase in royalty rates merely transfers wealth out of the pockets of the shareholders and employees of the companies finding and extracting the reserves.
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I think this is also a big simplification of the gov't role in royalties. The government owns these resources - why should they give them away? Is this the capitalist approach? Also, governments should act in the perpertual interest of citizens, i.e. not shortsightedly maximize current development. If you look at this history of oil development in the US, it is readily obvious that unfettered access to resources ends up destroying the resource. (I'm referring to overproduction/depleted recovery rates as a result of the policy regime that did not give ownership to resevoirs and gave rise to slant drilling etc)
Also, it is naive to suppose that 100% of the benefits of oil resources remain in Alberta. Foreign ownership, etc result in the value flowing out of the province to at least some extent. If the gov't allows free access to the resource, a portion of the benefit flows out of the province.
Further, how do you ration scarce resources if the gov't gives away its oil reserves? Today, willingness to pay is one determinant via the land auction and established royalty structure. I'd prefer royalties were paid the same way, i.e. auction off the royalty rate on packages of land rather than a postage stamp approach. Some resources are more valuable, and the government should reflect this in its royalty policy. This encourages true investment efficiency as companies that can produce energy more cheaply will value it more and be willing to pay a higher royalty.
Finally, there is an inherent assumption in your position that royalties flow either to the gov't or to investors/employees. This is missing the point that royalty revenues can offset other forms of taxes, both now and in the future. That is, if you suppose the gov't needs $30 billion per year to accomplish its goals indefinitely into the future, why should it not extract this amount from royalties rather than personal income tax. It currently owns the resource, and it is irresponsible both to current and future taxpayers not to maximize the value of this resource.
NOTE: While I think the gov't should maximize the amount if pulls out of royalties, I don't think it should spend this money on current program spending and/or lower taxes. As a non-renewable resource, it should be monetized and have its benefits paid indefinitely via payments from an endowment fund to either lower taxes and/or invest in the province - not for current program spending and lower current taxes. The current approach is very short-sighted and actually causes economic inefficiency as it is increasing inflation and making development more expensive.