Alberta Royalty Review = The death of the Alberta oilpatch

[digital-audiophile]

Originally Posted by StirCrazy

That is nothing but fear mongering by EnCana trying to sway public vote. you think any other Provence is going to let them in with out tougher royalties? BC cost way more just in business tax alone and the regulations here would be worse than the Alberta royalties. I am from Alberta and did my stint in the oil patch. EnCana has to release this type of press report to keep shareholder from bailing. how about including a link to the royalties page also so you can see why they are so worried.

Steve

Here is a link to the main royalty review webpage http://www.albertaroyaltyreview.ca/index.html

I'm a second generation oilman myself, my dad was a Shell company man for 35 years. I've seen the ups and downs through my life as a child and now as an adult in the patch myself.

I agree that the boom in Calgary hurts a good number of people, I make a fair salary but I still find myself waiting for my next pay cheque most months. That however has to do more with our society than Alberta itself.

I agree that a review is required, but as mentioned by my fellow EnCanan, we have no PST and the lowest provincial income tax in the Country. We see benfits that the other provinces do not. There -is- work here, it may be epensive to live, but look at the martimes, there is a reason there are people flooding from the east coast to Alberta every dayh.. it may be more expensive but at least you can get a job other than bagging groceries at Sobey's.

Should every Albertan get their fair share? sure, How about native Albertans get a bigger share than the guy who just moved here last week? My great great grandfather came to Alberta and worked the coal mines before he started ranching, which continued on to my grandfather and father.. I am the first generation of my family that hasn't worked the ranch. Am I more deserving of extra revenue?

Anyhow, read the info make your own decision, all I am confident in however is that there are hundreds of thousands of people in Alberta working directly in the oilpatch that will fight the current review tooth and nail until it is fair and equitable for both big oil and the people of Alberta.

[StirCrazy]

what a lot of you people need to understand is the "Oil Patch" is out of control in Alberta. my home town that 18 years ago you could get a house for 60K, now the same house is listing for 400+K is that right... no.. Alberta is so artificially inflated right now it isn't even funny, and because of that I cannot afford to move back when I retire with out working. Grab a clue... when minimum wage jobs are paying 20.00/hr something is wrong and the economy can only support it for so long.

Alberta needs new developments like a hole in the head, what they need to do is suck back and invest in making existing sites more profitable instead of doing the bulk drilling. Now I have 3 cousins that between them own two drilling companies and I an still in touch with them so I am not exactly talking out my ***. they don't know which side to be on but they do agree Alberta is out of control and something needs to be done.

[Matt]

Higher royalties will slow down investment and new drilling? And that's bad news how?

There is no imperitive to extract all the hydrocarbons as fast as possible. We're selling our house, brickload by brickload, and all the while cackling about the money we're getting. Are we getting enough to build a new house (economy) when the bricks are gone?

[trilinearmipmap]

What is going to happen to Alberta several decades from now when all the easy and cheap oil and gas has been extracted? There will be thousands and thousands of people out of work, and without the education or training to find work outside the oil industry.

It makes sense to slow down the rate of extraction of the oil and gas from Alberta. First it will mean more efficient and environmentally sound resource extraction. Second it will leave more resources for the future, 40 60 or 80 years from now, when we will appreciate having some oil and gas left, and people in Alberta will still need jobs. Extracting all of the oil and gas as fast as possible might make short-term economic sense for the oil companies but it doesn't make sense for taxpayers, workers, or the environment.

A friend is moving to Fort MacMurray where I am told a dumpy 3-bedroom home costs $600,000.00 and blue-collar workers earn six figure salaries. Any guesses on how much a house in Fort MacMurray will be worth in 20 or 30 years when the jobs are gone. How many people will have sunk their life savings into a house that is now worth less than a hundred grand?

The oil and gas belong to all the people in Alberta and all the people in Canada. They let the oil and gas companies extract it from the ground. It is not the companies' right to do this, it is a privilege we allow them. Of course the government of Alberta should maximize its profits from the resources that belong to the people. By maintaining high royalty rates the government can preserve oil and gas for the future as well as preserving long-term employment for the future rather than a boom-and-bust economy.

I have no connection to the oil industry but I have invested in many of these companies in the past. I can tell you that as corporations, they are simply machines for making money with no other consideration whatsoever for people jobs environment or anything. Any noise these companies make about caring about the economy, caring about jobs, paying attention to the environment etc. is just a smokescreen. They care about money, money, money and nothing else. We should recognize the sociopathic nature of corporations and create strict regulations to use corporations for the public benefit. If corporations do not benefit the public, they should not be allowed to exist at all.

[rigger11]

ok well the way i see it is it is a bad thing to have Encana pull out of Ab. does anyone else remember last september/october when Encana cut some where around 5-6 billion out of their exploration budget?

the rig count in september 26 of 06 in alberta was 215 active rigs
then again on september 19 the count was 317 active rigs
one week later 112 rigs shut down.

this year the count is 230 rigs active as of septeber 25
september 18 235 active rigs

we are bairly above the active mark or last year. and antone that works in the patch knows how long and slow this years breakup was. if Encana pulls more money out of the budget then other oil companies will more then likely do the same and then the rig counts will fall even more.

[Ruth]

Well they say the good lord hates a coward so I might as well wade into this debate.
I do work for an oil company - not Encana - but out of BC. I do remember the NEP and the absolute devistation that brought about so that yet another government could buy eastern votes.
I think that the question every Albertan should be asking is why the heck would we want to give this government yet more $$$. Let's face it, there is more $$$$ going into the government coffers than any Oil Companies. I think who really has to be questioned is the Alberta government. They have seriously mismanaged the $$$ that are going in right now and now they want more! (and one of the above poster said that big corporations are heartless). Maybe if there was more revenue going to the province they could give everyone $500 checks next year. Talk about a stupid way to spend over a billion dollars. Alberta should be ashamed of itself for the condition they have let their roads and infastructure get into. I am old enough to remember the day when driving across the border from BC to Alberta was a startling reminder of how inept the BC government was about maintaining infastructure - it is now the opposite.
People like to talk about big corporations making $ - hello - that is what being in business is all about. It is easy to sit back and be envious of someone or thing that has more than you and point fingers and say it isn't right - that is human nature. But really think about the money that does get put back in to the communities in the way of jobs, income that supports just about every other business in a lot of communities, large corporate donations that help in a big way hospitals, community organizations and charities of all kinds. I work in the community relations part of the industry and can tell you it is not small $$$ we are talking about.
Whew! rant over for now but I could go on.

[fencer]

1. Please read the exec summary of the royalty report before you comment
2. I think the Journal had commented on that the 1 billion cut from Encanna had already been planned. As the gas side in Alberta is already slowing. Personally you just have to go to Nisku to see all the gas rigs sitting in the yard
3. Corporations make donation for tax purposes...not because of goodwill
4. Alberta is booming...it isn't going to be the Corporation who pays for infrastructure.....royalty taxes will. Don't see any Corp in Fort Mac announcing that they are going to spend profit on a road.
5. Our royalty rules should be reviewed to reflect current conditions

[Pan]

Not quite as simple as govt bad, people good. Who pays for roads, who pays for teachers etc etc. Yes, yes, they waste money but its not that simple. In a perfect world the govt wouldn't spend our money without care and consideration as to where it goes. Also in a perfect world you wouldn't work for a company that is ruining the planet, and I wouldn't drive a car that needed people to ruin the planet. And yes corporations exist for the sole purpose of making money, yeah, basic business 101. But at what price? How far should they be allowed to go? Should One or a group of shareholders be able to dictate laws to govt so it benefits them? There is a reason why the minimum wage is so low, and its not the workers. Should corporations have the same rights as an individual? Should they be allowed to get away with things that the regular folks would go jail for? I dunno about you, but last time i was 2 billion in debt the govt didn't bail me out. How can a business run without making profit for 5 or six years but still gets govt bailouts? Is it simply the govt fault for giving it to them? Should CEO's make millions because they fire people? How much is too much, there is wealth, there is obscene wealth, and then frankly there is ridiculous. Just because you can doesn't mean you should. I truly wish the govt would spend wiser, but study political history around the world and you will notice it doesn't matter the platform or the party the govt will always break the promises it makes to get elected. The Tories are no better than the Liberals who are no better than the NDP, with the slight possibility of the green party being somewhat better, but focusing to exclusively on the environment to the detriment of well everything else. When does the good of all of us outweigh the greed of the bastards?

[Quinn]

I know absolutely nothing about the energy royalty program, but I'm sure the panel, which includes a former Shell VP, knows plenty.

Originally Posted by ed99

Just one comment about moving investment out of Alberta- it is simple fact, not a threat or scare mongering. The increase in royalties means that many of our AB projects that we had planned for next year are not as profitable as projects in BC or the US, so that is where the money will go.

Absolutely! And when BC, WY and CO are totally depleted, Encana and friends will be welcome back here, assuming they haven't been beaten to the punch. By that time Alberta will have deeper pockets, a better public infrastructure, and hopefully, a better standard of living for all our citizens. Our government will have been among the first in North America to focus on long-term overall prosperity instead of short-term financial gain.

For the record I haven't heard of any public complaints by any other major industry player.

Originally Posted by Ruth

Well they say the good lord hates a coward so I might as well wade into this debate.
I do work for an oil company - not Encana - but out of BC. I do remember the NEP and the absolute devistation that brought about so that yet another government could buy eastern votes.
I think that the question every Albertan should be asking is why the heck would we want to give this government yet more $$$. Let's face it, there is more $$$$ going into the government coffers than any Oil Companies. I think who really has to be questioned is the Alberta government. They have seriously mismanaged the $$$ that are going in right now and now they want more! (and one of the above poster said that big corporations are heartless). Maybe if there was more revenue going to the province they could give everyone $500 checks next year. Talk about a stupid way to spend over a billion dollars. Alberta should be ashamed of itself for the condition they have let their roads and infastructure get into. I am old enough to remember the day when driving across the border from BC to Alberta was a startling reminder of how inept the BC government was about maintaining infastructure - it is now the opposite.

So because we don't like our provincial government, we should give the money to corporations? Maybe, if everyone had an equitable portion of shares in each of those corporations! The answer here is to change the government - we've already tried the alternative, privatization, and that clearly didn't work (except in the case of liquor stores, probably because there are more than three or four players in that industry). Regarding the NEP, at least we should be able to agree that this time, the money is staying in Alberta, instead of being handed out to have-not provinces with totally incompetent governments. Additionally, the global energy picture is fundamentally different now. In the end, this entire debate comes down to greed. The oil companies, their management and their shareholders want to keep as many of the profits to themselves. Slightly more left-wing Albertans want to keep the money in Alberta. And everyone else wants us to share it out, either to other provinces, or further. For over 70 years, Alberta's natural resources have belonged to Albertans, and my opinion is that with such a great resource under our feet, our government should act in the interests of Albertans!

[Matt]

Originally Posted by Ruth

I think that the question every Albertan should be asking is why the heck would we want to give this government yet more $$$.

So, the implication is that if the GOA can't manage it well, it should be given away? Kind of a mismanagement fine, with proceeds to big oil? Given the auditor-general's report, we've already been paying that fine for years.

Once the bucks are in the treasury, I've at least got a chance at seeing them spent to my benefit, or to the public good in some way. Please, though, no more ralph-bucks (eddies-readies)?