New royalty rate responds to soaring helium interest
Setting a helium royalty rate provides investor certainty to develop an untapped resource that could help diversify the economy and bring jobs to Albertans.
With global demand for helium on the rise, industry interest in exploring Alberta’s helium potential is growing. Establishing this new rate – of 4.25 per cent – and structure helps set the stage for investment, while ensuring a fair price for Albertans.
Several companies expressed interest in investing in Alberta’s helium potential, but the lack of a royalty rate has been a disincentive.
“Removing this barrier unlocks the potential to develop helium deposits in southeastern Alberta and sets us up to take advantage of the close proximity to the United States, the world’s largest helium consumer. Economic diversification is an essential part of the province’s recovery efforts and sets a course towards future prosperity.” Sonya Savage, Minister of Energy
Global demand for helium is growing, in part because of its use in medical imaging, electronics and space exploration.
This effective royalty rate is set for an initial period of five years. At that time, the rate will be reviewed to ensure it remains competitive and allows for any necessary adjustments.
The new royalty rate and structure for helium comes into effect retroactive to April 1.
The helium royalty rate is being established through amendments to two regulations: Natural Gas Royalty Regulation, 2009; and Natural Gas Royalty Regulation, 2017.
Canada has the fifth largest helium reserves in the world.
Saskatchewan is currently the only commercial helium producer in Canada.