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Originally Posted by heep223
What a weird comment. I hope I am just misinterpreting.
Royalties come off the top of revenues, and just like any other cost, have a significant impact on project economics and investment decision-making.
Petronas just the other day cited Trudeau's knee jerk GHG emission policy changes as a reason that they're probably going to walk away from the LNG project that they've already sunk $10B into. Ten billion.
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My understanding is that royalties get included in costs and no royalty is paid until all cost is recovered therefore instead of paying a royalty you just pay the carbon tax.
In a general sense royalty is the surplus amount of money available after investment return so to have the same project exist the royalty needs to be reduced by an amount equal to the tax or investment isn't profitable.
My understanding was the revised royalty system accounted for this.