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In our 2007 report we made five recommendations to the Department of Energy to improve its royalty review systems. In 2011 we found that the department had implemented four of the recommendations and made satisfactory progress implementing our recommendation to improve its annual performance measures. The department developed a measure and supplementary indicators to measure the competiveness of the conventional oil and natural gas royalty regimes in relation to other jurisdictions. We did not assess the recommendation as implemented because the department did not have performance measures to assess whether the bitumen royalty regime was meeting stated objectives.

Our audit findings

The department has implemented our recommendation. In the Ministry of Energy’s 2012–2013 business plan the department introduced a new measure that reflects the relative impact of oil sands production in Alberta to the global oil market. This measure was publicly reported in the ministry’s 2012–2013 annual report. The measure is a ratio of the total number of barrels of Alberta bitumen production in comparison to the total number of barrels of world oil consumption. Alberta bitumen production includes mined and insitu bitumen produced during the most recent calendar year. The Alberta production data is based upon information from Alberta Energy Regulator reports. World oil consumption data is from the Oil Market Report, published by the International Energy Agency.

Improving annual performance measures—implemented