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In six lease and licence auctions between Jan. Eight and April 8, 2020, the province raised simply shy of $26 million in revenues, the least quantity raised at an public sale within the province since information was first collected in 1977. If the numbers have been adjusted to replicate the total yr, it could fall wanting the earlier document low of $119 million set final yr.
Since 1977, the province has generated a median of $775 million per yr in land gross sales to grease and pure gasoline corporations and set a document in 2011 of $3.5 billion, auctioning off lease and mineral rights.
To stop promoting land rights at a heavy low cost right into a depressed market, the province is planning to implement the next minimal bid to make sure land isn’t bought too cheaply.
Curiosity in oil and gasoline leases and licences rise and fall with oil costs, so minimal bids are a “prudent transfer” within the present pandemic to make sure that Albertans get worth from the land they’re promoting to grease and gasoline producers, mentioned Dan McFadyen, an government fellow on the College of Calgary Faculty of Public Coverage and former deputy minister of vitality in Alberta.
“They don’t wish to find yourself with minimal bids the place you’re simply giving these lands away,” McFadyen mentioned.
Nevertheless, he mentioned there was extra worth to the province to promoting the land than simply the bid quantity as a result of oil corporations decide to spending cash exploring and creating these lands or they lose their leases.
The present minimal bid for a hectare of oil and gasoline rights in Alberta is $2.50 per hectare, a worth that was set in 1977.