The booming North American oil industry got a rude wake-up call yesterday when the Alberta premier announced drastic royalty hikes that could cost $1.4 billion a year starting in 2009—a move the Wall Street Journal says could drastically slow crude development. The move irks both corporations who say the increase is too high and environmentalists who counter that it's not high enough.
The oil industry has threatened to retaliate by cutting billions in capital spending and jobs, reports the Globe and Mail. But countries such as Kazakhstan, Ecuador, and Nigeria are also trying to grab bigger royalties. Canada holds the world's second-largest petroleum reserves and currently produces 1.3% of the world's petroleum—a figure expected to more than double by 2015.