Alberta Premier Ed Stelmach speaks to reporters Wednesday as Energy Minister Mel Knight looks on. (CBC)

The Alberta government announced Wednesday it will offer resource companies starting new projects on or after Jan. 1 a reduced royalty rate in the short term to encourage new drilling in the province.

"The world has changed in recent months, and we must respond," Premier Ed Stelmach said. "We must be competitive, so we're making this change to encourage new activity in the oil patch, which really means new investment and new jobs."

Stelmach announced $1.8 billion in royalty savings over five years for new oil and natural gas wells that are within 1,000 and 3,500 metres in depth and started between 2009 and 2013.

Companies that take up this one-time offer will have to start paying the same royalty rates as other companies beginning Jan. 1, 2014.

This announcement is a late amendment to the province's new royalty framework, which comes into effect six weeks from now.

That new rate structure was first announced in October 2007.

But Stelmach insisted Wednesday that projects underway right now will not qualify for the transitional rates.

"Let me be very clear. For all existing oil and gas production in Alberta, the new royalty framework will be implemented on New Year's Day, as promised. That will happen," Stelmach said.

'This whole royalty process has been a bloody mess from the beginning.'—Kevin Taft, Alberta Liberal leader

Stelmach said the government needed to take action because world credit markets have dried up, making it hard for companies to access high-risk capital.

He said he isn't expecting to make any more changes to the new royalty structure before its starts, unless the federal government announces something that will "significantly affect Alberta's future."

"Well, this whole royalty process has been a bloody mess from the beginning," Alberta Liberal Leader Kevin Taft said.

"One of the things I take from this is that these guys are expecting the downturn to be sharper and deeper and longer than they're letting on. I think this is a signal that they're getting information that tells us Alberta's economy is in worse shape than they've been letting the public know."

The Alberta government could look at other options to keep people working, Taft said, like cancelling the temporary foreign workers program.

He said the province could have also waited until the spring to see how the new royalty structure would really affect the industry, before tinkering with the rates like it did Wednesday.

With files from the Canadian Press