Alberta’s share from oil sands projects under the new royalty regime (hatched blue) compared to other countries. Click to enlarge. Source: Alberta Royalty Review Panel

Saying that “Future generations of Albertans will receive a fair share from the development of their resources,” Alberta Premier Ed Stelmach last week unveiled the Canadian province’s new royalty regime for the energy sector. Under the New Royalty Framework, oil and gas royalties are expected to increase by C$1.4 billion in 2010, a 20% increase over currently projected revenues for that year.

Actual revenues will depend on future prices and production levels in the province. Therefore, the Alberta government’s annual budget development process will not change. The new royalty regime includes the following components:

• Conventional oil. The government will simplify royalties for conventional oil, eliminating specialty royalty programs and tiers. Royalties will be set by a sliding rate formula containing separate elements that account for oil price and well production. Royalty rates will range up to 50%, with rate caps at $120 per barrel.

• Oil sands. The government will increase its royalty share from oil sands development by introducing price-sensitive formulas both pre- and post-payout, rather than implementing an industry-wide tax on oil sands production.

  The base royalty will start at 1%, and increase for every dollar the world oil price, as reflected by West Texas Intermediate (WTI), is priced above $55 per barrel, to a maximum of 9% when oil is priced at $120 or higher. The net royalty will start at 25% and increase for every dollar oil is priced above $55 per barrel to 40% when oil is priced at $120 or higher.

  There is no grandfathering for existing oil sands projects. The government will work with Syncrude and Suncor over the next 90 days to reach an agreement on a transition plan to the new royalty framework. In the event an agreement cannot be reached, the government will take other measures to ensure a level playing field for all industry stakeholders.

  The government will adopt a permanent generic “bitumen valuation methodology” by June 30, 2008, after consulting with stakeholders and independent advisors.

  The province will exercise its existing right to receive “royalty-in-kind” on oil sands projects (i.e. raw bitumen delivered to the Crown-operated Alberta Petroleum Marketing Commission in lieu of cash royalties). Because this bitumen can be sold or used for upgrading or refining, royalty-in-kind can be sold by the province to support value-added, upgrading projects in Alberta.

The province will ensure that eligible expenditures and definitions of oil sands projects (also known as “ring fence” definition) that determine when a project has reached payout are tightly and clearly defined. Environmental “costs of doing business” will continue to be recognized as eligible expenditures.

• Natural gas. Gas royalties will be set by a sliding rate formula sensitive to price and production volume. New royalty rates will range from 5-50% with rate caps at C$17.50/MMBtu.

  The government will eliminate all tiers, but will retain natural gas programs for the Otherwise Flared Solution Gas Royalty Waiver Program, which improves air quality through solution gas conservation. New incentives consistent with the current Deep Gas Drilling Program will be implemented to support development of costly deep reserves. Royalties for natural gas liquids will be set at 40% for pentanes and 30% for butanes and propane.

• Substantial legislative, regulatory and systems updates will be introduced before changes become fully effective in January 2009.

Canadian press characterized the energy industry as “reeling” after the announcement.

Alberta Premier Ed Stelmach found himself brushing off comparisons to a South American socialist revolutionary Friday as he defended his aggressive plan to increase Alberta’s energy royalties by 20 per cent. Stelmach told listeners to radio talk show that he shouldn’t be compared to Venezuelan President Hugo Chavez, who recently raised royalty and tax rates on all foreign oil companies as part of a nationalization plan.

“I can tell you that this isn’t Venezuela. This is Alberta,” the premier said. “Alberta is without a doubt the best place to invest in North America. We have the lowest personal income taxes, low corporate taxes.”

—CBC News

The Canadian Association of Petroleum Producers (CAPP) had earlier reviewed the report of the Alberta Royalty Review Panel which formed the basis for the new royalty regime, and concluded that the Panel did not achieve the government’s objectives in finding the balance between a reasonable royalty and tax system and a healthy, sustainable oil and gas industry.

CAPP said that it found faults with the report in a number of areas, including flawed data; incorrect costs; activity assumptions; and international comparison and government take.

Resources

• Our Fair Share: Report of the Alberta Royalty Review Panel

• CAPP’s Technical Review of the Alberta Royalty Panel Report

(A hat-tip to Allen!)

Originally Syndicated via RSS from Green Car Congress

New figures released by Transport for London (TfL) show school travel plans are having an impact on reducing the number of car journeys to and from school, with almost two million fewer car journeys made during the last year.

School travel plans encourage schools to seek practical solutions to reduce the number of cars dropping children off at school. Currently, 35% of school pupils in London travel to school by car, according to TfL. Schools with a travel plan in London have reduced the number of car journeys by an average 7% per school, or 1,200 fewer journeys per school per year.

TfL helps schools with support, advice and practical help, for example funding for cycle parking, road safety improvements, and setting up car sharing schemes.

Help is also available to set up a “walking bus” scheme in which school children, accompanied by teachers or parents, walk to school together along a designated route collecting fellow pupils as they go.

More than 1,600 schools (53%) in the Capital now have a school travel plan. All schools will have a travel plan by 2009. When all of London`s schools have a travel plan it is estimated a further 4.5 million car journeys a year will be saved, reducing CO₂ emissions, congestion and improving Londoners’ health.

The investment that we are making in providing families with alternatives to driving children to school is now paying off, cutting out the unnecessary school run journeys that can contribute to safety, pollution, congestion, and health problems.

—Ken Livingstone, Mayor of London

The results of the School Travel Plans were published by TfL in the first annual School Travel Plan Programme Report. The Mayor of London has set the target of all schools in the Capital to have a school travel by 2009. The national target is 2010.

Originally Syndicated via RSS from Green Car Congress

Current draft bicycle routes corridor plan. Click to enlarge.

The American Association of State Highway Transportation Officials (AASHTO) has been working with Adventure Cycling Association and several other organizations to develop a corridor-level plan for a national US bicycle routes system.

Attendees at the recent meeting of the AASHTO Standing Committee on Highways (SCOH) in Milwaukee, Wisconsin received an update on the status of the bicycle routes system project, currently in the phase of drafting the new corridor plan after having first inventoried state and national bike routes and trails across the US.

The goal of the plan is to develop recommended corridors (± 50 mile radius) where a route in a logical national system should exist.

The primary criteria for the corridor are:

• Meet the planning, design, and operational criteria in the AASHTO Guide for Development of Bicycle Facilities. 

• Access destinations and regions with high tourism potential, including routes that incorporate important scenic, historic, cultural, and recreational values.

• Link major metropolitan areas in a reasonably direct manner to connect key attractions and transportation nodes.

• Make natural connections between adjoining states, Canada, and Mexico when possible.

• Have more or less even distribution, though route density will need to consider both population density and available, suitable roads.

• Include major existing and planned bike routes, including both on-road facilities and off-road shared use paths suitable for road bikes.

Upon completion of the draft plan—which also includes the development of a logical system of designations for US bicycle routes—the plan will be reviewed by the Joint Technical Committee on Non-motorized Transportation, Subcommittee on Design, and Subcommittee on Traffic Engineering.

The final revised draft will then be reviewed by SCOH for endorsement as “an official corridor plan”.

Resources:

• United States Bicycle Route System: Draft Corridor Plan

Originally Syndicated via RSS from Green Car Congress

Filed under: MPG, Legislation and Policy

Hillary Clinton's energy plan is expected today or tomorrow according to Grist. Hillary is widely seen as the Democratic front runner, so this energy plan will be considered by the media more than any other. What's Hillary's fuel economy standard? What does Hillary have to say about ethanol? We will keep you informed as the story develops.

So far, we know the plan will be introduced with the speech "Powering America's Future: New Energy, New Jobs" this morning at Clipper Turbine Works, Inc. in Cedar Rapids where she will take questions from the press, according to CNN. Tuesday, November 6, Hillary will give a policy address at the Renewable Energy Group in Newton, Iowa, according to a press release.

Related:

• Video: Quiet, Obama's new TV ad has "Detroit" fuel efficiency joke
• Edwards' Plan: 40 MPG Cafe, all cars flex fuel and more
• Richardson: you won't lose your SUV

[Source: Grist, CNN, Press Release]

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BOLD MOVES: THE FUTURE OF FORD Step behind the curtain at Ford Motor. Experience the documentary first-hand.

Originally Syndicated via RSS from AutoblogGreen

Electrovaya has entered into a non-binding Memorandum of Understanding (MOU) with Electrotherm India to establish an Advanced Lithium SuperPolymer battery plant in India, with a capacity of up to 10 Megawatt hours per month.

The partners will establish a new joint venture company, with shared ownership between Electrotherm and Electrovaya, to manufacture battery packs for electric two-wheelers, three-wheelers and four-wheelers produced in India.

Electrotherm and Electrovaya will have the right to appoint the Managing Director and Chairman for the new Company on an alternate basis. The financial conditions of the arrangement include an initial payment by the new Company for Electrovaya’s technology and equity participation by Electrovaya, as well as a royalty fee based on production from the new battery plant.

Electrovaya will have the exclusive right to export batteries from this plant to overseas customers.

Electrotherm, the maker of the electric two-wheeler Yobyke, recently developed prototypes of electric three- and four-wheelers and hybrid-electric low-floor buses. (Earlier post.)

Originally Syndicated via RSS from Green Car Congress

Daily Yomiuri. Japan’s Economy, Trade and Industry Ministry plans to introduce a new preferential tax system in fiscal 2008 aimed at promoting a wider use of biofuel in vehicles.

Under the plan, biofuel mixed with gasoline will be exempt from the gasoline tax—currently ¥53.8 per liter (US$0.46)—in proportion to the amount of biofuel included. If blended with diesel oil, biofuel will be free from the diesel oil delivery tax, currently ¥32.1 yen (US$0.27) per liter. Currently there is no tax break for biofuel blends.

The new tax plan will be incorporated in a joint request to the government’s Tax Commission by the ministry together with the Agriculture, Forestry and Fisheries, and Environment ministries.

Originally Syndicated via RSS from Green Car Congress

Filed under: Etc., MPG, European Union

A Spanish Leasing/Renting company called LeasePlan (which actually manages company car fleets) has launched a program called GreenPlan which is an "efficient management program" based on vehicle CO₂ emissions. The plan aims to balance green and "real driving" for its 8,000 customer companies and 97,000 drivers.

The aim of the program is to reduce CO₂ by reducing fuel consumption, which is claimed to be 20 percent of the costs of fleet maintenance. GreenPlan expects to reduce by at least ten percent the fleet's global operation costs with this measure, which constantly monitors the cars' CO₂ emission figures with a tool named "Ecocalculator." These figures will be sent to customers so companies will be able to assess their environmental impact.

GreenPlan cars will also have an Energy Efficiency color label that will show how polluting a vehicle is. The color will be determined by comparison with the average pollution figures of all cars sold in the country on a yearly basis.

[Source: LeasePlan]

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BOLD MOVES: THE FUTURE OF FORD Step behind the curtain at Ford Motor. Experience the documentary first-hand.

Originally Syndicated via RSS from AutoblogGreen

Filed under: Toyota, Legislation and Policy

Toyota told Reuters they will join Thailand's plan to be the eco-friendly car production capital of the world. Trying to repair the economic damage to the Thai car industry from the 2006 coup, the Thai government is offering green car makers 50 percent cut in the excise tax, no income tax for 8 years and machinery imports duty free.

"Toyota should submit the application by November 30. … We are studying carefully which model will meet customer demand," says Ninnart Chaithirapinyo, vice chairman of Toyota Motor Thailand. There are rumors Ford may sign up as well. So, in a few years, if you turn over your green car and see "Made in Thailand" don't be surprised.

[Source: Reuters]

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BOLD MOVES: THE FUTURE OF FORD Step behind the curtain at Ford Motor. Experience the documentary first-hand.

Originally Syndicated via RSS from AutoblogGreen

Originally Syndicated via RSS from Green Car Congress

The new AT150 automatic transmission will first be targeted at domestic China manufacturers, but eventually will be exported. Click to enlarge.

Transmission developer Antonov plc says that it is making “considerable progress” in China, with its cooperation with Loncin on developing a small six-speed automatic transmission proceeding according to plan and with financial and other commitments being met on time.

In parallel with the technical development work, marketing of the new product is underway. The first product is aimed at 1.3- to 1.6-liter front wheel drive passenger cars, initially targeting the Chinese domestic car makers.

More and more Chinese customers prefer cars with automatic transmissions. At the moment, all automatic transmissions used within our industry are imported. We believe that our engine manufacturing experience in partnership with the unique resources provided by Antonov provide significant opportunities to address a major market for Chinese produced automatic transmissions.

—Tu Jianhua, Loncin’s Chairman

The partnership with Loncin, originally announced in September 2007, was to be Anontov’s second in China. In January 2007, Antonov had signed a Production License Agreement with Zhejiang Geely Automobile Gearbox Co, the transmission manufacturing subsidiary of Geely Automotive. This followed an announcement on 27 November 2006 that Geely and Antonov had signed Heads of Agreement for the license, which is for the production of the Company’s TX6 six-speed automatic transmission. (Earlier post.)

However, in November 2007, Antonov’s board announced that the company would not go ahead with its cooperation with Geely. Antonov claimed that Geely had not fulfilled its financial and other obligations agreed upon in the contract. The initial production licence lapsed in September 2007.

Loncin is a Chinese manufacturer of motorcycles, small engines and a range of automotive components. It currently manufactures 1.5 million motor cycles per annum and more than 3 million engines both for domestic use and export. It supplies components to domestic and major Western automotive brands.

In order to be fully prepared for the joint venture between Antonov and Loncin, an Antonov WOFE (wholly owned foreign enterprise) is being established in China and an additional funding facility of €10 million (US$14.7 million) has been secured to finance Antonov’s contribution to the JV. This is an extension to the €15 million (US$22 million) facility announced on the 9 August 2007 with Quivest, its largest shareholder.

Negotiation continues on the details of the joint venture, but under the heads of terms agreed with Loncin, it will be funded by both parties in proportion to the JV shareholding.  It is intended that this be close to a 50:50 split but with Loncin having the majority holding. Total initial capitalization is expected to be between €20 million (US$29.3 million)  and €30m (US$ 44 million) which will be used to invest in setting up an automatic transmission manufacturing plant in Chong Qing, PRC.

The JV will receive a licence for the Antonov patents and Antonov will receive a royalty on each unit sold in addition to any dividend due in respect of its shareholding in the JV. Initial sales will be targeted at Chinese domestic car makers but the intention is to export in the longer term. The initial production capacity is planned at 200,000 units per annum.

It is expected that the joint venture will be formed once Antonov has completed its prototype vehicles and Loncin has completed the detailed production planning and costing. These are due to be complete in May 2008.

Antonov views the joint venture as a key element in its commercial strategy to maintain direct involvement in the application of its technology. This enables the company to have closer control over its intellectual property rights in order to reduce risk and generate better returns compared with a pure licensing business model, as originally set out with Geely.

Originally Syndicated via RSS from Green Car Congress