The two announced the results of a study called the Competitiveness Review done by the University of Calgary which described what was ailing the sinking Alberta oil and gas patch. The report took into account the global market, oil activity in nearby provinces and what was happening to business due to the new royalty scheme.

There has been a lot of speculation in regards to the government allowing the oil industry to have a carte blanché with the province, but Liepert wanted to dispel that.

"We are not going to sacrifice environment or do business at any cost," explained Liepert. "(The adjusted framework) just needs to do the job."

Premier Ed Stelmach agreed something needed to be done because there were a lot of Albertans out of work.

"Alberta must change too or risk losing our competitive edge," added Stelmach and pointed to improving energy-related technologies in the province.

When asked if he regretted something wasn't done earlier last year about the so-called heavy regulations and red tape oil industry has to go through, Liepert responded: "I regret we didn't do something in 1995. I can't do anything about yesterday. I can only worry about tomorrow."

Below is the recommendations from that report:

Fiscal

The key recommendations for royalty adjustments will become effective on a permanent basis for the January 2011 production month.

* The current incentive program rate of five per cent on new natural gas and conventional oil wells will become a permanent feature of the royalty system, with the current time and volume limits.

* The maximum royalty rate for conventional oil will be reduced at higher price levels from 50 per cent to 40 per cent to provide better risk-reward balance to investors.

* Recognizing the fundamental changes to the North American supply/demand balance and increased competition from other jurisdictions, the maximum royalty rate for conventional and unconventional natural gas will be reduced at higher price levels from 50 to 36 per cent.

* All royalty curves will be finalized and announced by May 31, 2010.

* The transitional royalty framework for oil and gas introduced in November 2008 will continue until its original announced expiration on December 31, 2013. Effective January 1, 2011, no new wells will be allowed to select the transitional royalty rates. Wells that have already selected the transitional royalty rates will have the option to stay with those rates or switch to the new rates effective January 1, 2011.

Innovation

Innovation will drive our future competitiveness. The government will therefore:

* explore additional ways to recognize and account for the higher costs of new and advanced technologies needed to develop mature fields; and

* ensure the development of technologies for enhanced oil and gas recovery remain a priority in the government’s research strategies with industry and academic partners.

Regulatory

The government also accepted recommendations to create a more efficient and effective regulatory system that is based on outcomes.

* Regulatory bodies will work to better coordinate compliance inspections by October 2010.

* The Energy Resources Conservation Board (ERCB) will develop new processes around well spacing and confidentiality of data.

* Parliamentary Assistant to the Minister of Energy, Drayton Valley-Calmar MLA Diana McQueen, will chair a cross-ministry task force to report within 90 days on:

o implementation of near-term regulatory enhancements;

o changes to support deployment of innovative, new technologies; and

o the process for comprehensive review of the regulatory system, with specific milestones and measurable objectives.

Final details of the fiscal changes were not provided. The Alberta Government indicates that royalty details will follow at the end of May.

Reaction from the energy industry was positive.

"The rapid growth in competing unconventional gas resources across North America, coupled with the challenges for conventional oil and gas production in the province, have made it very difficult for Alberta producers," said David Collyer, CAPP's President told CNW Group. "Investors need to know Alberta is back in the game.

"A competitive oil and gas industry creates jobs in communities across Alberta and across sectors - from rigs and offices to machine shops and the corner store. A strong oil and gas industry means a vibrant economy, which contributes in many ways to our quality of life."

e are encouraged that all aspects of competitiveness are being addressed. In particular, the government's commitment to address regulatory competitiveness in a timely manner is very positive," said Collyer. "A better regulatory framework will provide greater certainty for industry while continuing to deliver responsible environmental performance."

CAPP Chairman Andrew Wiswell, also President and CEO of NAL Oil and Gas Trust told to CNW Group. "Investors seek stability and predictability in deciding where to allocate their capital. Today's announcement is a very important step in re-establishing investor confidence in Alberta."

(With files from CNW Group and Ryan Dahlman)