CALGARY — The steep price discount facing Alberta crude is jeopardizing the Redford government’s projection of collecting $10 billion in bitumen revenue by 2014-15, as fewer oilsands projects are expected to graduate into paying higher royalties in the short term, says Energy Minister Ken Hughes.

In last spring’s budget, the Tory government predicted it would collect a gusher from the province’s 108 oilsands projects, with bitumen royalties hitting $5.7 billion this year and climbing by an average of 32 per cent in each of the following two years — driven by rising production and expectations of higher commodity prices.

Rising prices would mean more oilsands projects would move from paying an initial lower levy to the government — known as a pre-payout royalty rate — to a higher tier of payments, as producers recoup their total development costs for such large-scale projects.

Today, however, Alberta bitumen faces a huge discount compared to the price for benchmark West Texas Intermediate crude, with the differential near $37 a barrel on Friday.

In an interview, Hughes said the number of oilsands operations now expected to reach payout quickly — bumping them into the higher royalty tier — is smaller.

“In my estimate, we’d probably see maybe half as many projects reach payout in the next four years, compared to what we might’ve thought would happen even a year ago,” he said.

“The impact of the price pressure on bitumen means payout will not come as quickly for as many projects. So that also has an impact on the revenues of the province of Alberta over time.

“They will still reach payout, but they won’t reach payout as quickly.”

As for the government’s target last spring of garnering almost $10 billion in bitumen royalties in 2014-15 — propelling the province into an overall $5.2-billion surplus — Hughes urged caution.

“I cannot foresee anything like that happening, and our job as the government of Alberta is to be prudent, cautious and conservative in our assumptions about revenues to the provincial coffers, so we can continue to have choices that we do today about how we manage our way through these issues.”

According to provincial statistics, 49 oilsands projects in northern Alberta are currently in the pre-payout phase as of Dec. 31, 2012, paying royalty rates that top out at nine per cent of gross revenues.

Another 59 are in the higher category, paying royalties of up to 40 per cent of net revenues, depending on oil prices.

When the budget was released last February, the Energy Department expected 13 oilsands projects would graduate to the higher post-payout levels by 2014-15. (An updated number won’t be released until the new budget is released in March.)

Greg Stringham, vice-president of the Canadian Association of Petroleum Producers, notes some U.S. refineries are converting to handle heavier grades of crude, which should increase markets for Alberta bitumen.

As well, another pricing issue — the gap between North American and global oil prices — is expected to narrow.