16 Replies to “Royalty Documentary Project”

  1. Gee , I wonder where all that money BIG OIL was going to spend in Alberta is going ?
    Pay attention Saskatchewan . Opportunity knocks . Who needs the feds to kill the milk cow , when we have Stelmach ?

  2. I sent a note to my MLA Gary Mar (who is out until Dec. 12) and one to Ed Stelmach asking just how many job losses must occur before the new “fair share” Royalty structure is changed.
    No response so far though it looks like Ed is going to claim ‘other factors’ are driving down exploration budgets.
    For me, if the value of our dollar and the cost of natural gas, among other things, are hurting oil and gas investment in our province then adding another negative (20% increase in royalties owed) will make things much worse.
    The PC party seems to be all “Progressive” and very little “Conservative”.
    I will look for a different Conservative party to vote for next election.

  3. Ed was sure right about everyone getting their “fair share”. That is through their EI cheques, soon followed by their welfare cheques.

  4. The royalty “debate” is just the visible tip of the media/academic left to turn Alberta into a full collectivist client state.
    The numbers on patch profitability I saw were so profoundly unreal I checked on their authors…none of who had anything to do with Patch operations accounting.
    Personally if Eddy keeps taking his marching orders from leftist scribblers in the EdJournal, I hope the patch slaps his pee-pee with a shut down when profitability is negatively impacted by royalty demands.

  5. Vitriol and rhetoric aside, do any of you have actual numbers of ‘jobs lost’ that can be directly attributed to this? Out of each barrel of oil, how many more bucks is this going to direct into provincial coffers? Out of each barrel of oil, how much currently goes into corporate profits?
    Some of you guys are losing credibility with this hyper-emotional response that is pretty well devoid of ANY factual information. Personally, I don’t see anything wrong with it. As an Albertan, the resources are mine constitutionally, (sort of, in a provincial collective kind of way, I don’t mean that I personally own them), and as a capitalist I would like to get the most possible value from their sale. As a person who lost his inheritance to PET’s NEP when my father went bankrupt, believe me, I don’t want to kill the goose that lays the oily eggs, I just don’t think this is going to kill our economy.
    Feel free to convince me otherwise, but use facts and logic not anger and vitriol, those make you look like Gliberals.

  6. 110% of the jobs lost in this province are a direct result of excessive labour costs. $25 an hour to hold a gooney spoon, WTH is that about? The wind down started last January when there wasn’t even a whiff of “royalty review” excuses. I think you guys must think there’s no such thing as peaks & valley’s in the market. We were in for a correction AGES ago.

  7. Jon,
    believe it or not, this has to do with natural gas more so than oil. Alberta’s future will be about oil but right now the downturn, and there is one, is because conventional drilling will be flat this winter when it comes to natural gas exploration.
    There was already a correction occurring within the industry due to market forces. The royalty will make things worse but the AB Torys will say it’s because of commodity prices, which it is partially. The problem I have with it, the royalty thingy, is that there will be unnecessary bloodletting within the patch. This will be the 2nd consecutive winter where the number of wells drilled in western Canada declines. Some estimates I’ve read says there may only be 13,000 wells drilled in 2008 compared to around 22,000 in 2005 and 2006. 14,000 wells were expected to be drilled in 2007. Utilization rates are hovering around 35% today for drilling rigs. Where are those individuals going to get work to pay for their standard of living?
    As a service provider in the patch, I find it very frustrating when for the past 2 years especially, we have been trying to lure workers out here to satisfy demand. The province has spent millions recruiting as has many companies as well. Now we get these people out here and the gov. comes along and slaps a tax on the industry which then makes a slowdown even worse. Now people are setting.
    But here’s the rub Jon. People will lose their jobs, their homes and regrettably some families will be broken up. Some of this is unnecessary especially since in another year or so natural gas commodity prices will return to stronger prices and the industry will get ramped up again and we will once again be looking for workers only this time they will be a little gun shy about moving out west as they will have seen all the pics on TV and in the media of people going bankrupt and losing their homes. And we know the MSM will show those pics over and over and over…
    Those facts that you are asking for, those numbers you request are irrelevant. By the time those facts are collected and presented it will be too late. You and everyone else will already be well aware of the situation.
    Jon, did you know that the AB treasury had another surplus of which 1.4$billion was from higher provincial tax revenue because so many of us are earning in the upper tax bracket? Did you know AB contributed an extra 17$ Billion to the Feds more than they got back in federal Health and Social transfers?
    Maybe you should rephrase your question to read “Out of each barrel of oil how much currently gets transfered to the province of Quebec?”
    Cheers

  8. Don’t worry bear, we know there won’t be any attrition ar early retirement packages from the Gov of the day for the oilpatch worker. No bailout or training money either.
    The next time there is a downturn in the forestry industry I will expect the Gov of the Day to step in and increase their stumpage fees based on revenues they made years in the past. Or the next time there is a BSE outbreak (god forbid) or crop failure I will expect the Gov of the Day to not provide subsidies because of the higher prices they received in years past or to increase the land tax farmers will pay.
    Maybe this will wake up some of the energy workers out west here. Maybe we should form an association or some defense league amongst ourselves. Than we could influence public policy like the champagne sipping socialists have done in the legislature.
    We could employ the same tactics as other unions and groups like the ATA who strike in Sept. when kids are returning to school or hospital staff who hold up health care delivery services or postal workers or the longshoreman at the ports or the CN rail workers..
    I wonder how much leverage 250,000 energy workers would have if we decided to strike in January? $25 for holding a spoon you say, peanuts. We can do sooo much better than that.

  10. Jon:
    Corps pay approx 50% in fed and prov. incomes taxes so half of whatever they net after the royalty – for a total of over 50% – goes to the gov’t. So the question that ABans should basking is what are the feds and the province doing with all the money…
    And here is one that may be an even bigger screw-up than the royalty heist
    – http://www.canada.com/edmontonjournal/columnists/story.html?id=b3517b5a-aa6f-424d-8064-b205ccbe8d25 –
    Mr. Ed has essentially locked all of the public sector into a guaranteed wage increase = “Alberta Average Weekly Earnings Index — that’s the same index used to calculate wage hikes for MLAs” – do you think the nurses will settle for anything less. So, regardless of how much harder it might be to attact, for example, nurses to the province if the province wishes to offer higher salaries to them they will have to do it for ALL public sector employees.
    Essentially the dunderhead has created one massive public sector bargaining unit.
    Unbelievable, breathtaking incompetance. In the space of four months Stelmach and co. have vapourized the Alberta advantage.
    Perhaps it’s time to draft Preston into taking the leadership of the socreds and pull AB back from the socialist brink.

  11. So… Is this decline in numbers completely attributable to the royalty announcement? It has nothing to do with the change in the value of our dollar? Or the fact that the U.S. economy is currently imploding? Seems kind of premature to blame everything on Steady Eddy.

  12. In the short term it is going to hurt the Alberta economy. With the energy companies pulling back and investing their dollars in Saskatchewan, Northern BC, Northwest Territories “witch is good” and south of the border in Montana?. The dollar is high and the pulp mills is loosing money, “how long they will last” unknown. This is going to benefit Alberta in the long run by getting the cost of living back in check. Alberta can invest in the hi-way from Edmonton to FT. Mac., it can also invest in 3 nuclear power plants. This would look after the expanding power source in the North, East, West and South. Calgary needs a circle road, Red Deer is going to need a circle road. This would look after the future infra-structure of Alberta, kick the green lefty in the ass. Just take a look around the world, do you think that the energy companies are going to be gone long. Maybe they can’t get all their drilling licences until they maybe have to abandon some of their old well that has been sitting for 10+ years. Merle Underwood.

  13. Yeah, it’s always good to slow the economy through gov’t actions. Look at that backward neighbour, Saskatchewan.
    The thing about raising royalties during a down-turn is it hurts the home-grown businesses more than big oil. It’s like cutting off your nose to spite your face.

  14. This is the kind of thing that starts happening when gov’t gives off anti-business signals. Take away from business in one area (royalties) and they’ll more than recover that cost in another area.
    http://www.financialpost.com/story.html?id=147202
    Excerpts;
    CALGARY – Husky Energy Inc. and BPPLC struck a deal yesterday that integrates the upstream and downstream parts of the oilsands business, following a trend that emerged last year when EnCana Corp. and U.S. refiner ConocoPhillips Ltd. hooked up in a similar fashion.
    …while applauded by investors, may also prove unsettling to many Albertans because it means billions in downstream spending will flow south of the border…
    Yesterday’s deal with BP, a stubborn holdout that until this year refused to recognize Alberta’s burgeoning oilsands basin due to its high cost and risk relative to conventional fields, will let Husky shelve a $2.3-billion plan to expand its heavy-oil upgrader in Lloydminster, where Husky had recently completed engineering work to boost capacity from 82,000 barrels a day to 150,000.

  15. BP in Calgary is letting 20% of its office staff go. PetroCanada is downsizing by attrition. Seismic activity is way down and drilling is way down. To try to extract the royalty review out of the variables is very difficult, but attempts to pretend that the royalty review is not the cause of a lot of this is simply nonsense.

  16. I think you need to consider the Husky/BP partnership and other recent and future linkages of heavy oil to U.S. upgrading as a logical response to the Warner/Lieberman bill pending in the U.S. Senate. This institution of a carbon tax to be paid by exporters to U.S. of energy or manufactured items requiring energy will supersede our NAFTA agreement and effectively tax our exports, and at same time reduce U.S. costs.

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