Review of the BRIK (Bitumen Royalty-in-Kind) program : Review of the Bitumen Royalty-in-Kind program

On October 31, 2012, the Standing Committee on Alberta’s Economic Future passed the following motion to undertake a study of the BRIK (Bitumen Royalty-in-kind) program: MOVED by Ms Olesen that in the interest of encouraging economic development in the province, the Standing Committee on Alberta’s Economic Future undertake a study of the BRIK, Bitumen Royalty-in-kind program, and that the scope of [...] The parties to the Agreement will account for the difference in value of the base Crown supply and the value of the CNRL supply through a monthly equalization amount, which shall be determined by taking the value of the Crown stream of bitumen for a particular month and subtracting 75 per cent of the aggregate equalized stream value (which is the sum of the Crown stream and the CNRL stream) for th [...] However, according to sections 12.1, 12.4, and 12.5 of the Agreement if the Government supplies more than the base supply required in the Agreement, called the “excess capacity,” the Processor is entitled to a share of the proceeds from the sale of the excess capacity of bitumen once it is refined. [...] If the monthly amount is positive, 75 per cent of the amount is for the account of the Processor, and if the amount is negative, 75 per cent of the absolute value of the amount is for the account of APMC. [...] According to the Alberta Federation of Labour (AFL) in its presentation to the Committee, this decline is not due to closures of upgrading facilities within Alberta but, rather, is due to the fact that with the exception of the Sturgeon Refinery no new upgrading capacity is being added to the province as the pace of bitumen extraction accelerates.