CALGARY — The Alberta government has promised incentives to junior energy companies struggling to deal with the economic downturn, Premier Ed Stelmach said Thursday.

Energy Minister Mel Knight has been asked to look at the situation because junior energy companies are finding it difficult to access capital, which has led to idle rigs and layoffs, Mr. Stelmach said.

Mr. Knight is to consult with the industry and announce more details.

“As a government we can't control our global financial markets or the price of commodities, but there are things we can do,” Mr. Stelmach told the Calgary Chamber of Commerce on Thursday.

He also announced a three-year economic plan to help province weather the recession.

That includes keeping tabs on spending, drawing on emergency savings fund, investing in the province and promoting the province internationally.

Steve Moran, president and chief executive officer of Bellamont Exploration Ltd., said word of relief is welcome news for companies facing “capital markets that have gone to all hell.”

“[Mr. Knight] should look at royalties and take a lot less,” he said. “There should be some short-term incentives for royalty relief on just about anything that anybody puts capital.”

Alberta's introduction of a new royalty regime, designed to increase the province's take on windfall profits, has been widely blamed for scaring energy investment dollars away to British Columbia and Saskatchewan.

“[Mr. Knight] needs to stimulate activity, and to stimulate activity he's got to give incentives for investment,” Mr. Moran said. “Because nobody's going to invest without some sort of sense that near-term profitability is going to improve.

Source: Globe and Mail