The torrent of billions in oil sands megaproject spending has, until now, produced a relative trickle in energy royalty revenues for the government of Alberta. But in a sign of how quickly Fort McMurray is transforming the province's economy, oil sands revenues are expected to overtake income from any other energy sources in the current fiscal year, which ends in June, for the first time.

The growth in revenues from the unconventional oil contrasts with plunging proceeds from Alberta's traditional primary breadwinner – natural gas. Slumping prices and lower production will reduce the province's take from natural gas by a stunning 70 per cent this year, compared with the 2008-09 budget year.

Oil sands royalties will outstrip conventional crude royalties by a modest $35-million this year, the government forecast in the budget tabled yesterday. By 2010-2011, the province expects oil sands royalties to roar to $3.2-billion, a 75-per-cent hike that will see bitumen production provide 45 per cent of the province's total oil and gas royalties. By 2012-2013, the oil sands will form 53 per cent of Alberta's royalty stream, which will represent a quarter of total provincial revenues.

Alberta is clearly viewing the oilsands as it's new cashcow, and new job creation in the coming years may very well be higher than ever before.

Source: Globe and Mail