The Party Mite Be Over

[Walleyes]

If the provincial government goes ahead with the recommendations put forth on the royalty review I hope everyone is ready for what looks like a severe slow down and a major recession in this province and country.. Its to bad that the general public doesnt understand how these companies operate.. Its to bad they don't realise that these companies turn around and put the majority of their so called earnings into exploration and that is what we most benefit from,, the exploration... Shock waves are already running through town.. Budgets are already being cut for next year.. Just in case the recommandations go through..

I am afraid that the majority of the people are not ready for what could and looks like is happening.. Foreign investment is starting to pull out and go to greener pastures.. Local companies are cutting back.. There are a lot of smaller and even larger service companies that are heavily financed that barley pulled through this summer that will not make it long.. These companies employ thousands of people.. There is going to be massive lay offs.. Not sure how they will pay for their houses and put food on the table without a job.. Hope the government makes a **** load on the revenues because they are going to need it to support the people.. Don't think so ?? just look at Sask and Man they have been running that way for years,, hasn't worked out to well has it ??? What makes me laugh is we have a province sitting on billions made off of these companies and the people think its not enough.. They want more money and they expect it to come from someone else... These are not threats put out by these companies,, we have been told to cut our projects back,, its happening and its happening now...

Well whats to be said,, other than we wanted it.. We wanted the projects to stop we wanted the so called destruction to end.. I'm just not sure we are prepared for it... We may have to live off the land,, its just to bad were not aloud to anymore !!!!

To those that have the heavy mortgages its to bad.. To those that have all the financed toys its to bad,, but the fun is over.. I'm glad my house is all but payed for and the toys were bought cash because people,,, the **** may hit the fan.....

So for those of us who know or more importantly care to know,, its not to late but we better make our voices heard and soon...

We have a saying in my industry IF IT AINT BROKE DON'T FIX IT...

[Tuc]

Wall, which industry and why the 'all or nothing' thinking?

[sirmike68]

It wouldn't hurt my feelings if things slowed down a bit. I work for a big oil company and beleive me they are not hurting.

[Walleyes]

Tuc I am talking about our oil and gas industry.. And again this province and its people make billions and billions off of the industry so how can we say its nothing....

[sheephunter]

I know this may not be the popular opinion but personally I think a bit of a slow down would be good for Alberta. I do feel for the people that will be affected but Alberta's environment cannot sustain what is going on. Whether raising royalty rates will result in a net increase to Albertans is certainly debatable but this is an industry out of control right now. Profits are through the roof....wages are through the roof and so too are many of the associated costs of living (primarily housing). A bit of a slow down may be just the reality check we all need. Sadly, people will lose houses and other tangible things but there definitely is two sides to this.

As for Alberta falling into a recession...I don't buy into it. Getting back to some sort of normality is more like it. Weve been down this road before and survived.

Remember the bumper stickers..."Oh God Please let there be another oil boom...I promise not to **** it all away this time" It seems many forgot that promise and got themselves in too deep again.

[John Spartan]

TJ, I'm in agreement with you - be nice if they scaled back to 80% of what is now happening. Part of what is happening now is also with the Canadian dollar at par with the US dollar - companies have to pay in CDN dollars and market oil/gas in US dollars. Realistically, I cannot see Big Oil walking away from Alberta - Exxon and other companies have been making huge multi-billion dollar profits the past few years and would continue to make money even with increased expenses - that from a few members of my family who are involved with a number of the big companies. Besides, what alternative to oli and gas is there?

[Walleyes]

I totally agree with what you say sheep you are rite people do need a reality check in this country.. And it would be nice to get things in check.. I'm just afraid not many are ready for it.. But they made their bed they can sleep in it... Hell I wouldn't mind spending more time at home... But I have been preparing for this day not many were...

[sheephunter]

Ya walleyes, I think those of us that saw the last bust are more prepared for sure.

[BrainTan]

I definitely feel for those that rely on the O&G for employment. As much as a slow down may cause a bit of a lag, hopefully we can use this opportunity to build a more stable economy in regards to oil and gas instead of the rape and pillage we have going on now. Big companies can pull out all they want, but they will be back as oil is limited and supply must meet the demand, and there is no way they would pass up the dollars they make off our resources.

[rugatika]

Yeah here it comes. Could be a while until things get back going. The oil sands will likely continue going gangbusters, but gas drilling will stay down unless there is a huge jump in gas prices.

As to the increase in royalties. We seem to have made out alright at the present rates. What kills me is that we send billions of dollars to Ottawa and get little in return. Nobody seems to mind that the individual Albertans are sending half of our money to one form of government or another with little or no value for our dollar. Yet when the oil companies make a 5 or 10 percent return on their investment dollar everyone cries bloody murder that "big oil" is stealing from us.

If not for people that were willing to risk their investment money in oil and gas exploration Alberta would be another Saskatchewan. Talk of increasing royalties increases the risk of investing this money to unacceptable levels for some people so we can kiss that "Growth" goodbye.

[Sakoman]

Just to add a bit to the original post there is a good article in the Globe and mail in regards to this topic. Please read it it makes alot of sense and hit's the nail on the head. If the goverment takes more royalties the oil and gas companies will not fork out the big guaranteed money to the goverment when they originally buy the land. It is always a case of economics. If they want a bigger slice of the pie it has to give somewhere and the oil companies will chop it from somewhere. If you spend 2 million to buy the land, drill /complete
the well and tie in into the market and the goverment wants 40% instead of 30% for an new gas well for example that only leaves you with 60% to get back. If the Rate of return on that project was only 30% and now it is 20% that well will not get drilled until the gas price forecast goes up signifigantly for you to make up the extra cash. Or you will not fork over the big dollars for the land which goes straight into the goverments pocket assuming it is crown land and not freehold. The goverment only collects a royaly if the well is succesful so if a dry well is hit the goverment gets nothing. So what would you rather have the guaranteed high land costs going straight into the Provinces coffers or increase your royalty, decrease the easy money and bank you will get more when the company is succesful. Read the article it is better than my blabbering on.
As for Sheeps ( not to pick on Sheep ) comments on an industry out of control I would agree to that the previous 3 years but not this year. The oil and gas industry is always and will always be cyclical and has a way of correcting itself as it is currently doing, just ask anyone who works for a service company. For those in the Red Deer area take a drive down HWY2 North at supper time and look at all the equipment in BJ'S, Trican, Technicoil yards, they are full. The previous years they would have been empty. Now don't get me wrong it is not all doom and gloom here just a correction to take care of the high spending, high salaries and dead weight that has been employed to keep all that equipment busy. Trican itself was one of the first companies to make mandatory wage cut's for all employees amd Management.

Enough rambling on.:)

[Deer Hunter]

Stelmach is a wet dish rag. Not the guy you want making decisions for the whole province. Its too bad, first abolish the royalty trusts, second watch natural gas prices tumble on LNG imports and US drilling, third a royalty review. And then have everyone complaining about record profits. Where? Have you seen the oil and gas stock markets? Its trickle down like it or not. That same stock performance could happen to your house, your salary, interest rates rising.... all for what? So the government can sit on more money. I don't think so, transfer payments will take care of that. The eastern lawyers need another adscam on the backs of alberta success.

When Alberta oil companies are successful, the province is successful. If you haven't experienced success in the past five years, there is nothing Stelmach government can help you with, regardless of how much money they are sitting on.

Money is always better sitting in your bank account than the governments.

Albertans are the hardest working people in the country, that is the root of the Alberta Advantage.

[Bushrat]

I too feel the environment could use a break. I really don't feel that sorry for those folks who are not going to be able to make their payments. Why is it people can't live within their means according to their paycheques and save that money they are spending on their boats, quads, fifth wheels etc and pay off their mortgage instead. If you have to finance these things, you can't afford them and shouldn't be buying them. Why is it people over extend themselves and risk looseing everything just so they can have that trip to mexico and those frivelous toys. Sure I could have all that stuff, but instead I prefer putting money in the bank instead of making payments on things that hold no value and depreciate to nothing in no time.

[Frans]

The company I work for indirectly thrives on this boom, but personally I wouldn't mind seeing the bubble growing a bit slower...

I've missed the last slump (was in Europe), but I worry about the kids who buy big houses, fast boats, honking trucks, multiple other motorized fun tools, etc.... I probably sound like an old fart, but heck guys, put some money in an old sock!

Frans

[altaberg]

I think this is the article Sakoman was referring to:
http://www.reportonbusiness.com/servlet/story/RTGAM.20070927.walbertareport0927/BNStory/Business/home

A bit of a slowdown for ALberta wouldn't be such a bad thing IMO either.
Inflation is bad and governments and individuals at all levels can't afford infrastructure anymore.

Even companies that are not O&G are hurting because they can't compete with wages and costs.

[BrainTan]

Just some food for thought, as for royalties, the oil sands provide zero dollars in royalties (unless something has changed in the last 6 months that I have missed). As long as they keep expanding their business and keep building infrastucture they do not have to pay royalties (special clause in their contracts). Same goes for reclaimed land, they say that it is reclaimed, but not even one acre is officially (AKA legitimately and properly) reclaimed.

If royalties are in review I think it is time we started making the big business pay for the irrevokable destruction up north (which less than 1% of Albertans have actually seen and can fathom the scale of destruction)

[BigBuck$]

I work in the service sector (downhole tools) in the patch and the trend that I am seeeing over the last 6 months is a fairly drastic slow down by the big companies (Shell, Nexen, Husky, etc.), howerver the smaller companies seem to be picking up speed and taking advantage of the falling price of services and the availability of equipment. The summer was slow which was nice for a change but profit for September is at par for last year.

I honestly cant see a big crash in the O & G sector when foriegn demand increase every day. How many Billions of dollars has the US spent fighting a war for Oil in the last ten years? Does anyone honestly still believe they are fighting for better living conditions for the people in a county half way around the world? I doubt it, there are thousands if not millions of people in the US that are homeless and living in poverty and no one seems to care. It's all about the cheap oil and the sooner they realize war costs money and lives the better oil will look in peaceful countries like Canada.

I can side with people that believe that the Oil industry has a negative impact on the environment and I have voiced my opinion on several occasions while on a lease where someone has spilled "fresh" water on the ground and not bothered to properly clean it up, "If its fresh than drink it" usually gets a cold stare. A couple of gallons of frac oil can completly ruin a fresh water supply and yes it causes cancer.

I think there needs to be more regulations on where drilling is done in the province as well, I really hate tracking an animal for a couple of miles through the bush only to come across an oil lease or lease road, it destroys the entire thrill of the hunt for me. Its kind of nice to at least believe that there is somewhere out there West of Rocky Mountain House that no one has set foot on yet, and better yet not destroyed its natural beauty with a rusty well head or a noisy pump jack.

[bruceba]

There is a lot of merrit in all the posts above [ slow downs, cut backs and over spending] and the one with the most merrit IMHO is the one by Deer Hunter about Stelmach. We have an alternate third guy in the race running the show.

[monstermuley]

I can't believe that everyone, (or almost everyone ) wants it to slow down, man i guess some of us are obviously working outside the patch but we must realize that ALL businesses in alberta grow off the oil and gas. Fortunatly I work out of the country so hopefully I can stay going for a bit here but personally I like to go on the outfitted hunts and the guided fishing trips and I like to run my boat up and down the river or take a new gun to the range, or whatever I feel like doing is directly related to the oilfield and there aren't many people who can honestly say that they would rather sit at home broke and not hunt and fish as apposed to working and doing the things you want to.

I couldn't amagine saying to someone that I hope the bottom falls out of your employment or job and I guess if you loose your house maybe you should have read the bumper sticker from the 80's.

[TreeGuy]

I think this is the article Sakoman was referring to:
http://www.reportonbusiness.com/servlet/story/RTGAM.20070927.walbertareport0927/BNStory/Business/home

A bit of a slowdown for ALberta wouldn't be such a bad thing IMO either.
Inflation is bad and governments and individuals at all levels can't afford infrastructure anymore.

Even companies that are not O&G are hurting because they can't compete with wages and costs.

True. From this thread I read alot of 'small picture' thinking. I'll try to do all of the facts, but may miss one or two.

1. Oil and gas are the only true international 'currency'

2. Oil and gas are the economic engine of both Alberta AND Canada! Ontario's manufacturing sector is done...put a fork in it, and at the same time send out a big thank you to the unions!:mad:

3. The oil and gas have been in the ground for millions of years. With billions in the bank, how much effort do you think the companies are going to make in terms of development when the price per barrel is $80 vs. $11?

4. The price of a barrel of oil is dependant upon global 'supply and demand'. The global oil industry (OPEC) sets international production rates in order to manage supply.....thus dictating prices (demand)

5. It has been estimated that Ft. Mac. contains nearly 3 centuries worth of oil......in a 'friendly' setting. Do you really think that industry is going to walk away from that...in a politically stable environment?? What they have the finacial ability to do is shut things down here and there to hurt the workers who haven't been as wise as Walleyes, and cause short term political turmoil.....particularly prior to an election.

6. A 20% increase in royalties (I'm predicting 8%, with an annual 15% increase tied in with the price per barrel, coupled with hush-hush tax breaks that'll balance everything, and keep everyone happy) isn't going to happen, however if you think about the companies paying 1% on the barrel will now have to pay a massive 1.2% on the barrel.

7. Oil company employees who have not managed their finances responsibly, and spent like oil is always going to be $80US/b, are NOT my problem. They shouldn't be ANYONE'S problem! I have seen first hand an industry exec. buy his live at home, 35 year old son, a $220K car if he would stop eat fattening foods 'cause he was getting chubby (you should have seen the REST of his toys!)

8. Oil will never again fall below $65/b until there is peace and functional democracy in the middle east.....er, make that $70/b

9. The 'civilized' world's intention is to preserve domestic reserves while depleating foreign ones. As quick as you can pay off the sh*t holes and take all of there oil (read: money and power) and get the hell out the better. Without oil, do you really think that we'd be dealing with what we are right now? Without oil, the middle east would just be another tribalistic Afghanistan, or Africa.

10. The oil industry in Alberta has gotten a bit of a 'soft ride'. I know what you mean to our economy, but on the flip side, I know what our resources mean to you. I think that instead of the standard restaurant dinner, the stelmach (haven't decided if I'll capitalize his name yet) government is considering ordering desert before they bend over for you.:love:

11. stelmach will huff and puff, and 'take on' the industry thus creating a 'David vs Goliath' scenario heading into his first election as premier. The deal will have been made long beforehand, but the song-and-dance will be played out for a stupid fuc*ing media who'll eat it all up. stelmach gets elected, oil companies take the 8% hike with the hidden breaks (I'm guessing the breaks will have something to do with the 'environment') and we'll still be even.

12. I'm long winded, and now I have to pee. Goodbye!:wave:

Tree

[slipbobber]

I'm sure everyone old enough remembers that quote that Sheephunter posted. That pretty wraps it up in a nutshell. Although I don't like to see people have taken materal things taken away from them its there own fault. Used to be friend with a family who depended on money from the oilpatch. Every year in the spring when road bans were in place not much work is being done. Had to go to family and beg for money to keep the power on and feed his family. OK maybe he isn't the sharpest knife in the drawer but you get the picture.

[209x50]

Google this book, get it and read it.
In 2006 the world passed the threshold of one thousand barrels of oil a second consumption to support our energy needs.
A frightening and enlightening statistic. In the book the author Peter Tertzakian covers the history of energy consumption from whale oil to today and the various break points that occur along the way. He points out that with the supplies that we have Canada should be THE super power in the world, but in fact we are being used in the same way the arab countries were. Once the arab countries took back ownership from Big Oil and formed OPEC they took control of their destiny and the price of their commodity.
Doom and gloomers like walleyes are a dime a dozen and when Danny Williams took after Big Oil to negotiate a deal that the proposed Alberta deal mirrors he was called "Chavez" and was going to wreck the NL oil industry. He didn't and NL now has a better deal with the oil companies than we do. And you may note that drilling in the ocean is a lot more expensive than around here.
Our biggest asset other than the oil is that we are stable, investment with us is safe and secure, we are not going to be a war torn mess that causes oil to stop flowing. One of the break points that is talked about in the book is how important secure energy reserves are, and companies and countries are willing to pay for that security.
I say make em pay.
In 2006 the world passed the threshold of one thousand barrels of oil a second consumption to support our energy needs.
Think about that, where the hell else are they going to go?

[sjd]

I have finally read the whole royalties report, at 100 pages, thats quite a feat.

I think it is a great piece of work, and hope Stelmach stands up for Albertans and supports it.

The fearmongering and namecalling in the industry in the media has been a disgrace. It is not "socialist" for Alberta as the owner to ensure we squeeze every penny from our resource - its supply and demand and the markets working as they should. Its a market intervention to give it away for less than its worth.

There are some good figures that show, even with this huge increase, Alberta will still be one of the more generous places for industry to do business, so no-one is going to be fleeing.

Its a sellers market, and with the second largest source of oil on the planet, in a landscape without dictators, wars, or snakes, where exactly are these companies going to go - the US, Norway - they already take more, Libya, Venezuala, Iraq?

The companies still will only pay 1% until their projects are paid off - hardly draconian.

I'm just mad about the billions we have let slip through our fingers over the past decade. There's also some good stuff in there that says the Alberta Department of Energy is so incompetent, they don't even know what's going on.

[Chung66]

I would like to pose another point of view.
I am in the Forestry Industry.
If we were to develop our resource like the oil and gas resource, we would be finnished cutting wood in this Province in 10 years. The mentality of the Oil and Gas companies and the government is to develop all the resource in as little time as possible. Wouldn't longer term development make more sense?
I have seen decisions made daily where the environment and other stakeholder take a back seat. It have been states from government and industry officials not to delay or question development because "they pay the bills in this province". Where will they be when the resource is gone?
I have seen the "pay what ever it takes to get it done" mentality for 10 years. They spend money like water and still make huge profits.

I have little sympathy for them.
I feel sorry for all of the bad financial decisions made by people during the boom.
Don't blame the government for those decisions. Heavy oil needs to contribute in the royalties game. They just re-invest so they don't pay royalties. I wish other resource industries could avoid paying government dues, as long as they had "visible" debt.


Just my take on the situation.

[genek270]

The petroleum industry has always been about 3 factors; risk, reward and cost. Obviously the rewards for the conventional industry are small = lower reserves per discovery, costs are escalating and risk is increasing. Ergo, the conventional industry is dead! Only the little guys will be looking for small puddles of oil and gas. Big oil will go where the reserves are big and can justify the cost and there's no finding risk in the oilsands. I'm sure many of you who read the financial pages see where growth of small companies is through mergers and acquisitions. There have been no major finds in Alberta for 25 years. And for those who want to squeeze the goose remember that 50% of Alberta's economy rests on the petroleum industry.

[Okotokian]

Oh PULEEEZE... I work in the industry. It's not going to collapse because of a royalty change. The oilsands one percent (based on $20 per barrel... just hit $84) was put in back when the industry there was unprofitable and needed it to spur development. Now? come on..... Why should Albertans GIVE AWAY a resource they own? The industry is making hay, Alberta should get a reasonable share. So maybe the oil company CEO will only be able to buy ONE home in the caribbean instead of that and one in the south of France.

[Piker]

I also agree with sheephunter. I worked my whole life in the oil patch and saw all the booms and busts. What I see in this area is that the generation working in the patch now has to have instant gratification meaning new homes new trucks,cars boats and all the toys. They think this will go on forever but it wont and they will get hurt. None of them would listen to the old guy:me: when you talk to them. When they go down not only do they get hurt but it has a domino affect. A nice slow down to a more realistic economy would help a lot. Well thats the old guys two bits worth thks for listening

[mskrecek]

I work in the forest industry as well, see alot of the country side in the WCT area and the oil/gas companies don't consider the size of footprint they leave on the environment, the sketchy practices utilized and the garbage (metal buildings, culverts, pipes, casing, geotextile) they leave behind not to mention the small percentage of idiots that are attracted to the industry. And I see alot of idiots. It all leaves a bad taste in my mouth. Don't get me wrong, forest operations leave a sizeable footprint as well with cut-blocks and such but they are responsible for managing their FMA and have a vested interest in sustaining their management area. The oil companies come, they take and they leave. Whatever extra expenses they incurr that cuts into their profits is always passed on to the consumer. In the end the little guy inevitably pays.

[Walleyes]

Some good posts coming in and some good points of view... I would like to add that some of you are right and that we are dependent on oil and the supply will keep it going at a reasonable rate but,,, what you don't realise is that other than Fort Mac we are not a big player in oil... I'm sorry but the whole province can not run off of one town... Loyd does all right but in the bigger sceam of things its a drop in the bucket... I know some of you drive around and you think you see a lot of pump jacks but truth be known there aint a whole lot coming out of them... Profits are marginal at best...

And oh yah thx for the personnel jab there 209 I thought maybe we could hold a decent debate on here and keep it clean but I guess not... I think of myself worth more than a dime thank you very much.. And after 25 years in the buis I beleive my opinion is worth something,, but hey you would know I guess. And just in case you all think I'm blowing hot air this was released by the boss today... This guy doesn't blow hot air he means what he speaks....

We plan to cut $1 billion from our 2008 Alberta investments if royalty panel report adopted in full

While it is not my practice to participate strongly in public policy debate, I am entering into the debate on the royalty review issue. I believe it is of great importance that you understand the impacts of the Alberta Royalty Review Panel recommendations on our business – and they are enormous in Alberta. We put out a news release on this issue earlier this morning because my Executive Team and I believe the importance of this matter cannot be overstated. We have a responsibility and an obligation to not only inform you, but to inform our Alberta communities and our other key Alberta stakeholders about what this means for EnCana and our role in Alberta’s economy.
EnCana will continue to thrive. As North America’s largest natural gas producer, we have built an extensive and diverse portfolio of investment opportunities with the flexibility to strategically deploy capital. Most importantly, we have developed the expertise and technology required to unlock maximum value from our resource base.
However, if the proposed recommendations are adopted in full, many of Alberta’s new and emerging resource plays will simply not be economically viable. We will have no choice but to slow down our Alberta-based activity and move investments to other areas in Canada and the U.S. that are more economically attractive. And most significantly, we will have to cut our 2008 capital investment in Alberta by about $1 billion, or 30 to 40 percent of the $2.5 billion to $3 billion we had planned for Alberta-based activity. Most of the reductions would be to our natural gas activity in areas where the proposed royalty scheme makes those activities uneconomic or uncompetitive in our portfolio.
Such a reduction in expenditures would mean fewer wells drilled, completed, pipelined, operated and serviced. It would also mean fewer hotel bookings, vehicle purchases, landowner lease payments, restaurant meals and lower property taxes in the areas where we operate, from the smallest towns to the biggest cities. More importantly and over the long term, well-paying, permanent jobs will not materialize across Alberta.
We don’t want this to happen. We care about the people of Alberta and we hope we won’t have to make these choices. We want to be clear that we are open to changes to Alberta’s royalties, but that we want to ensure they reflect the economic realities of volatile commodity prices, higher cost and the risks of long-term capital investments. We believe a royalty system can be developed that achieves Alberta’s objectives without so severely damaging the province’s future.
We are seeking a solution that balances more royalty revenue with maintaining a competitive investment climate. We believe we can achieve that, but only if we solve the economic challenges together, in a spirit of co-operation and collaboration....


So take 40% off of this next year which is already decreased by 20% from 06 and you have a total of 60% less activity than 2 years ago... Hey its not me saying it its the man running the biggest company in our country.. You think his opinion is worth more than a dime ????

[sheephunter]

There's a lot of flexing going on by the oil companies right now and it's ****ing me off. I want them to get a fair shake yes but their "it's my ball and I'm going somewhere else with it" attitude is childish at best. Good, leave then and we'll get new oil companies in that will be happy with the share they receive. They keep saying they'll pull out and go elsewhere. Where is elsewhere? Not many places with lower royalties than Alberta. Anyhow, let's all sit down and make a deal that works for the oil companies and Albertans and stop the pouting big oil companies....I'm sick of it.

[Walleyes]

You know sheep that's the hole thing people in A.B. think we are the only place that has the resources truth is are reserves are declining fast and this is the whole point the reserves that are left are not cheap and easy to get at...
Truth is Mexico and South America are just sitting there waiting with vast amounts of reserves.. The only thing keeping these companies from going there hard is the working environment they have at home.. Did you know that the Mackenzie Delta which covers ground from the Beaufort, most of the Yukon and the western portion of N.W.T. and northern B.C. has an estimated 2 -3 times the reserves that the western Canadian sedimentary basin has.. Which is Alberta, Sask and southern Man. So this thinking that we are the only game in the country is false... They can and will leave.. I would just rather it be slowly and gradually so people can adjust rather than sudden change,, that would not be good for any one..

I know that we see in the media all these companies showing large profits but truth be known most of it is reinvested back into the province through exploration and new ventures...

[sheephunter]

I hate to disagree with you walleyes but you've been reading way too much oil company propeganda. If all this oil was so readily available why haven't they moved already? It's because Alberta is giving their oil away. I'm not saying we need to up royalties so much to drive the oil companies away but it's high time they quit getting a free ride. I always laugh at the statements about reinvesting in Alberta. All they are reinvesting in is infrastructure to make themselves more profits. When the ground is dry and the oil companies gone....that investment won't be anything more than an eyesore on the landscape.

The oil isn't going anywhere and if they want to pull out now, let them. They'll be back. Maybe not in our lifetime but quite possibly we should leave something for future generations?????

Just out of curiosity walleyes...do you work for Encana?

[Bushrat]

I'd like to see us slow down and diversify our economy so we are not so dependant on oil. I would also like to see us live within our means so that when the oil does come to an end we are not all sitting here complaining we screwed the pooch and spent all the oil money and now have nothing. Alberta's been putting all its eggs into one basket for way too long.

[slopeshunter]

All they are reinvesting in is infrastructure to make themselves more profits. When the ground is dry and the oil companies gone....that investment won't be anything more than an eyesore on the landscape.

Off topic, but reading your sentence just made me think of the Dr. Seuss story "The Lorax".;)

[209x50]

No walleyes I don't think the head of encana's opinion is worth a dime. Just what in hell did you expect them to say? "Yeah that is great - sure you don't want more?" Of course they are going to bluster and threaten all they can but the truth is if there is so little left in Alberta we should have kicked them out long ago. They'll kick and scream but they will take it and smile because we are the cheapest ho on the block.
Another thing that ticks me off is why we allow these pirates to ship all these raw resources south for refining. All those lost jobs! We support a huge number of US employees with our largess.
Enough.
Funny Encana is advertising non stop for months for employees but I guess that will end, sigh, another dream job gone.

[gunslinger]

yea after 15 years on these rigs i also have been through the hardtimes and do ahve a little sock of money right now, because i aint ****ing this one away.
but it is deffitnly slowing down and the rigs in this project are shutting down too...i heavily depend on the drilling as my living and in no way hope it shuts down, luckily i have overseas experience and can go anywhere to work i want.
secondly in our industry now they have begun a apprecnticeship program that now tickets tradesman for our job. i was grandfathered into it because of my experience but for the up and comers they challenge exams and get there tickets if passed as rig technicians,,it is gonna slow down again like it does every 5 years but it always seems to creep back up to the pace were at now.
actually was jsut talking to my consultant here tonight and he was telling em it is a good thing were working in bc cause alberta is in jeopardy of really slowing down......but thats patch rumors too.:rolleyes:

[Sakoman]

Good points made on both sides here.

Okotokian - is your comment about oil CEO's and all their homes a little short sighted? You may have forgot All the hitech companies, drug companies, car companies and a few other that are all filthy rich

Piker - You comments are correct in young people wanting everything now. But once again you can not say this is exclusive to oil companies. A kid went into the hunting store not long ago looking for over $20/hour with 1 month experince at the gas station and 3 months worth of walking dogs and informed the guy behind the counter he was a bargain.

mskrecek - good points also but if Tree's were worth more and the demand was there, trust me they would be coming down faster. Your company is into making money. Also There are some real idiots out there in every type of business. I have drilled wells all over AB and the Environmental hoops that you have to jump through to get a well drilled are more than mind boggling to the point the most important person on the site is the Environmental monitor.

Sheep - I know it sounds like sour Grapes from Encana but when you are a public company and you have to keep your millions of investors happy you have to do the best job you can in making your company profitable. And if spending your money elsewhere is the place to do then that is what you have to do.

Prime example is the thread on buying out of the US. Would any of you like to tell Jamie he had to spend his money at Wholesale to buy his stuff at higher costs. I am pretty sure he would tell all of you where to go, I know I would.

No I do not work at Encana I work for a tiny little private oil company so trust me when I sat that if the projected revenues drop not just for the oilsands but natural gas and conventional oil I will be looking for another job.

Talking about our powerful dollar, can anyone guess what is pushing it this high?? It is not the manufacturing jobs in Ontario or the fishing off the east and west coasts, it is oil plain and simple. All these new homes being built everywhere in AB where does 90% of that money come from. New car sales ect. can you see the ripple effect here.

Now also a slow down does not hurt either I totally agree with that but the patch is doing that to itself right now, it does not need anymore help.

Keep the posts coming:)
Keep up the posts.

[sheephunter]

The thing that really ****es me off about Encana is that they were already going to have to cut way back because of all their gas involvement in southern Alberta but now they are trying to blame it on the oil royalties which btw have not been decided upon yet. That kind of posturing just ****es me off and I suspect it might do the same to a whole lot of Albertans.

[Bushrat]

Talking about our powerful dollar, can anyone guess what is pushing it this high??

It dosen't have a whole lot to do with what is going on in Canada and less to do with oil. It's partly because of the sub prime mortgage crisis in the US and the steadily devaluing US. dollar combined with international traders investing heavily in other markets outside of the US. The Euro is climbing in parallel with the Canadian dollar along with many other currencies. The american dollar is tanking, everyone else's currency is staying the same, our dollar is only going up in relation to the US dollar.

[Frans]

I'd like to see us slow down and diversify our economy so we are not so dependant on oil. I would also like to see us live within our means so that when the oil does come to an end we are not all sitting here complaining we screwed the pooch and spent all the oil money and now have nothing. Alberta's been putting all its eggs into one basket for way too long.


Words of wisdom! Let's use the current riches to build an economy that isn't so dependent on one resource.

Frans

[stubblejumper]

The one thing that everyone is neglecting to mention is just how many voters would be affected by a slowdown caused by increasing the royalty rates.If the government takes action that results in reducing the standard of living for a great amount of voters,the voters could toss out the current government,or at least many conservative MLAs come the next election.Don't think that the government won't consider this before acting.After all,the MLAs do want to get re-elected so that they can continue to enjoy their current status.

[getasheep]

Yup, anymore hot air from the oil companies and I'm gonna yak. They have been making assinine profits for years (Encana made $6,500,000,000 in 2006 alone). While at the same time paying executives tens or hundreds of millions of dollars (I'm not picking on O&G on this one, I think execs in all industry that make that much are way overpaid).

So if Encana takes their toys and quits playing, I am confident someone else would love to have thier stake.

At the end of the day the Oil companies will claim its the end of the world, knowing its not, but hoping to lessen the amount of royalties and increase their share of the profits, its what they are paid to do. The Oil isn't going anywhere and with the infrastructure already in place as well as the security of the resource, we are still among the best plays out there.


I'm not all anti-bigOil here. The government needs to cleans its frickin act as the report highlighted as well. They track damn near nothing and have no idea what they should be collecting and from whom. Alberta Energy should release quarterly reports which detail the oil/gas pumped and the revenue taken in.

If royalty revenues increase I think a dedicated portion should go into developing other industries. Why can't Alberta be the leader in nano-tech or renewable energy. With the smart and hard working men and women of the province diversification should come easily.

[TreeGuy]

Walleyes. If I or maybe any one of us was in your position, I know that I would be of the same opinion of yourself. It's only natural, you have a life and a lifetime of vested interest in the business. It's all good, bud!:wave:

With that being said here is a bit of a scenario for you. Say you owned a sucessful retail business. At the same time you have your house on the market. Hypothetically, would you sell your house to your number one customer for 40% less than what you could get on the open market?

My point is that Albertans own a finiate, non-renewable resource. When it is gone, it's GONE! I for one am by no means advocating raping the oil companies. I am advocating that the oil companies have to pay royalties that are representitive of global market value....at least. This is from memory, but I remember reading that if ALL of the recomendations in the report were implemented, Alberta would STILL be below the global average! Come on, don't believe all of the bluster!

Encana isn't going anywhere. In fact, they have a damn big hole in the ground in downtown Calgary, where they have started construction on the largest office tower in western Canada at a cost of over a billion dollars. Oil companies survived at $11/b. They may be slowing things down now to purposly make a point about how hard up they are, and hurt the workers, but COME ON! Oil is over $80/b right now. Who's going to blink first, especially when the companies are having such a hard time recruiting employees in the first place! They have the resources to take a break for 6 months, or even a year, but in the end, money talks. I'm sure they can get much lower royalty rates in Iraq, but, um....... Just my 2 cents!

Tree

[Walleyes]

What a lot of people don't seem to realise is that oil and gas are two different commodities.. Oil can be at what it wants that has nothing to do with natural gas... And Encana is not exactly big into oil,, their game is natural gas...

The thing is, is that the provincial government will never go through with all the recommendations anyway so I don't think we should get at each others throats just yet..

Another point is that the people that directly work in the oil and gas industry will probably be hit the least.. Shoot very few of us in the exploration end of it work from home anyways.. Don't matter to us if we drive 8hrs from the Yukon or Southern Sask or anyplace else, that's our life.. Its all the other support industries that are going to be hit the worst and all the people that work for them... The ones that have to run home every night Like the housing industry, Hotel and restaurants, merchandising and so on.. Guys don't forget these companies all own land and in most cases they own more land outside of Canada and Alberta then they do in it. It don't matter to them either if they have to phone to Mexico or to Calgary its just a phone call.. You all really have to get it out of you're heads that we are the only game in town... If these recommendations go through make no mistake about it these other countries and provinces will capitalize on our misfortune... They are all business people and they will not kick a gift horse in the mouth like we with our full bellies would...

[sheephunter]

And Encana is not exactly big into oil,, their game is natural gas...


That's why I find it so funny that they are forefront in the media blaming the proposed oil revenue increases for all their problems. Seems like they are looking for a scapegoat.

[270WIN]

I know this may not be the popular opinion but personally I think a bit of a slow down would be good for Alberta. I do feel for the people that will be affected but Alberta's environment cannot sustain what is going on. Whether raising royalty rates will result in a net increase to Albertans is certainly debatable but this is an industry out of control right now. Profits are through the roof....wages are through the roof and so too are many of the associated costs of living (primarily housing). A bit of a slow down may be just the reality check we all need. Sadly, people will lose houses and other tangible things but there definitely is two sides to this.

As for Alberta falling into a recession...I don't buy into it. Getting back to some sort of normality is more like it. Weve been down this road before and survived.

Remember the bumper stickers..."Oh God Please let there be another oil boom...I promise not to **** it all away this time" It seems many forgot that promise and got themselves in too deep again.

Sheephunter I've read this and all your other posts, to this point, on this thread and you echo my thoughts exactly. Just wish I'd said these things myself. Oh, and by the way, I'm not against free enterprise and prosperity. I spent my entire career as a business man here in Alberta.

[TreeGuy]

Walleyes, if all of these other areas are so lucrative, why aren't they operating there instead of here? The fact of the matter is that O&G have had a 'sweetheart' deal in Alberta for decades now. It is time for our government to be responsible to the people it represents, rather than the well financed insiders. We are only talking in regards to getting fair market value for what we OWN!

Tree

[magoonpointboy]

Come on! You heartless ogres! How are these oil executives going to keep up their million dollar acreages and keep their sports cars (summer) and Hummers (Winter) polished, if we raise royalties??? How will they keep their wives (and girlfriends) in diamonds and pearls? Can't you see how they are hurting already? Enough is enough! Stop the pain!

[Deer Hunter]

People are jealous of other peoples money and are hoping for the government to make everyone rich with no individual effort. I for one don't trust the government to do anything right and any dime left in a taxpayers pocket is better than a dollar left for Stelmach.

Let Encana get rich. Give Encana employees a bonus. Let them buy new cars houses, and yes sheep, even books. No I don't work there but I'm not a jealous person.

Let the Government get rich? I hope not. More bickering, more transfer payments to the unemployed east, more waste.

People are so forgetful of what got us here. An attractive tax structure, risk seeking capital and hard working albertans. All to be forgotten so that Stelmach can sit on more dough. Do you really think another coulple of billion $ would build more hospitals? Money isn't the problem. Government bureacracy is.

There is enough natural resources in this province for many generations, don't think that oil companies will be here today, gone tommorow. They've been here since the 40's. They'll be here when my kids are pushing up the pansies.

BTW sheep, Encana's southern alberta gas properties are freehold mineral rights which are not subject to conventional crown royalties. Sorry, you, I and the rest of Alberta don't own them, Encana does. All thanks to the previous government run company CP Rail. Government posturing about royalties ****es me off worse. Encana is trying to protect $50 billion dollars of our grandma's money. Believe me, Stelmach doesn't give a **** about grandma.

[sheephunter]

BTW sheep, Encana's southern alberta gas properties are freehold mineral rights which are not subject to conventional crown royalties. Sorry, you, I and the rest of Alberta don't own them, Encana does.

Don't think I said anything to the contrary....seems like you misread a lot of what I said. Their gas profits are dismal right now and a slow down was coming...all I said is they are now trying to blame it on the proposed oil royalty reductions when as you and I both pointed out, it has nothing to do with it.

[stubblejumper]

Believe me, Stelmach doesn't give a **** about grandma.

Exactly,like any other politician,his number one goal is to get re-elected.

[sheephunter]

Encana is trying to protect $50 billion dollars of our grandma's money. Believe me, Stelmach doesn't give a **** about grandma.


And who are they protecting it for??? BTW....I don't hold any more faith in the current governmemnt than you but that doesn't mean Encana is the lesser of two evils.

[Deer Hunter]

Don't think I said anything to the contrary....seems like you misread a lot of what I said. Their gas profits are dismal right now and a slow down was coming...all I said is they are now trying to blame it on the proposed oil revenue reductions when as you and I both pointed out, it has nothing to do with it.


The proposed royalty affects oil, gas and bitumen. Not just Encana, its that they just happen to be one of the largest (or the largest?) Canadian corporations and, if I were a shareholder, would want them to give me an indication of what the downside would be if the royalty changes came into effect. Wine... that's jealous people, not Encana. Good business... that's Encana.

[Sakoman]

IMO the Alberta Goverment has put themselves in a no win situation by even reviewing the royalties. I think every Albertan is going to have their own view on this and none of us have the right answer because none of us have all the facts.

If they change all the royalties which as said above is not decided yet but if they do. Being that there is already a slow down in the industry and this makes it worse and thousands of Albertans, the same people who are to benefit from this change lose their jobs because of it. So be it right, every industry slows down. That IMO will just start a ripple effect.

1. Thousands lose jobs ( strong potential ).
2. Some lose their homes. Some default on their car / boat / rv payments. That will hurt a few more thousand people who work at banks and associated businesses / dealerships ect.
3. Fewer home starts slow the housing industry which now has a ripple effect to eveyone in that industry.
4. When money dries up people tend to spend less. Now people slow going out for supper and buying non essential items now you are affecting even more people this will have an effect on the entire Alberta economy not just the oil and gas industry.

Now the majority of Alberta has felt some sort of pain from this change and are ****ed at the Goverment who did all this to help them out in the first place. So everyone that say's bo hoo for the oil companies, wether you like it or not somehow, someway your livelihood will probably be affected in some way shape or form by a prolonged slow down. That is the Alberta way.:wave:

[stubblejumper]

IMO the Alberta Goverment has put themselves in a no win situation by even reviewing the royalties. I think every Albertan is going to have their own view on this and none of us have the right answer because none of us have all the facts.

If they change all the royalties which as said above is not decided yet but if they do. Being that there is already a slow down in the industry and this makes it worse and thousands of Albertans, the same people who are to benefit from this change lose their jobs because of it. So be it right, every industry slows down. That IMO will just start a ripple effect.

1. Thousands lose jobs ( strong potential ).
2. Some lose their homes. Some default on their car / boat / rv payments. That will hurt a few more thousand people who work at banks and associated businesses / dealerships ect.
3. Fewer home starts slow the housing industry which now has a ripple effect to eveyone in that industry.
4. When money dries up people tend to spend less. Now people slow going out for supper and buying non essential items now you are affecting even more people this will have an effect on the entire Alberta economy not just the oil and gas industry.

Now the majority of Alberta has felt some sort of pain from this change and are ****ed at the Goverment who did all this to help them out in the first place. So everyone that say's bo hoo for the oil companies, wether you like it or not somehow, someway your livelihood will probably be affected in some way shape or form by a prolonged slow down. That is the Alberta way.
Reply With Quote

Well said.

[Duk Dog]

Like so many things it is a no win situation. Not that long ago people are belly aching at the pace things are going at and the foreign workers being brought in, and the shortage of all trades and engineers in general. Now we have a situation that is threatening to slow the pace of things down. Seems to me it maybe brings things more in line with a more manageable industry sector.

Maybe just maybe the government would take this extra money and put it towards more schools, recreational facilities, roads etc etc that aren't keeping up to the growth in new houses.

For anyone that is not originally from Alberta (and there are lots of us) what is currently going on in this province is insane. Look at the housing prices in recent years - great if you were already in the market - next to impossible to get into it if you weren't. With the shortage in workers in every industry in the province look at the hike in wages - figure any of the youth of today have a real picture of life when they are working at Tim Hortons for what - $12 or so these days. How about businesses that are either closing their doors permanently due to staff shortages or working on reduced hours. How has your service been at any restaurants you have been to lately?

I haven't touched base on the state of the environment here in the province. Once these projects push forward it is next to impossible to correct the damage done. From what I've seen the environment ranks pretty low on the priority scale here in Alberta. I don't know about you but I don't want roads, well sites and trails through every square inch of our great province. Anyone that is familiar with the Whaleback and Porcupine Hills area knows what the impact on that area would be if some of the proposed projects move forward. The common theme for all of us on this board is our love of the outdoors - hunting, fishing, camping etc.. It surprises me we aren't more concerned with the environment. If industry runs wild everywhere your favourite little fishing hole or elk hidey hole will likely be impacted sooner or later.

Like many of us in the province don't get me wrong I have benefitted by what is happening, and I hope I have been smart about things for when the market does slow and correct itself. Luckily in my line of work we do work in the O&G market but we are also diversified in many other market segments. Don't get me wrong I am not against the O&G stuff here, but there must be a better balance.

[sheephunter]

The proposed royalty affects oil, gas and bitumen. Not just Encana, its that they just happen to be one of the largest (or the largest?) Canadian corporations and, if I were a shareholder, would want them to give me an indication of what the downside would be if the royalty changes came into effect. Wine... that's jealous people, not Encana. Good business... that's Encana.

I agree that they should be informing and protecting their shareholders but their outright threats were uncalled for and likely to backfire on them. I'm all for a fair deal for everyone...oil companies included but it seems to me that some civil negotiation and not all this media bravado is the way to achieve it. I'm by no means anti oil....it's just time for a fairer deal for all. That may not be the reccomendations brought forward. All this doom and gloom is total BS though.

[Deer Hunter]

Threats?
Encana informs shareholders it will redeploy 1 billion dollars elsewhere if the proposed royalties come to pass. Not a threat. A reaction.

Stelmach's review panel threatens to increase royalties. A real threat.

Call a spade a spade. You're ****ed at big oil, why? I'm not sure. Did you use an oil lease road when you were antelope hunting? Were you charged to use it? Probably not. Well Encana paid for it. Paid a leaseholder. Maybe he bought a truck with it. Maybe the Ford dealer bought a book. Maybe it was Alberta Outdoorsman. Maybe the contributors were able to buy a new rifle?

I'm not trying to pick a fight with you sheep but people need to realize the depth of oil activity and how it affects all of us.

Good debate anyways. Good night.

[sheephunter]

Not sure why you think I'm ****ed at big oil because I'm not. I totally realize their importance and impact in this province. Just because I want a fair deal for all certainly doesn't make me biased one way or the other. I'm not sure why you think I'm ****ed and please stop saying it because I'm not. And ya, Encana was making threats in the media!

[altiplano]

reposted from a news site...

Last week we received yet another indicator of the degree to which Albertans’ interests are being wilfully disregarded by our government. And it came from a rather unlikely source—the Conservative premier of an Atlantic province.

Albertans have been told by the oil industry and by their government for years that if anything was done to improve the deal we are getting on royalties or taxes, the oil companies would simply pack up and leave, leaving Alberta an economically depressed wasteland.

Newfoundland and Labrador Premier Danny Williams, however, believed otherwise, and events last week proved that he was right.

The government of Newfoundland and Labrador has been working for the last few years to move forward on the development of the Hebron oil field—an off-shore field estimated to contain some 700 million barrels of oil.
Negotiations between the Williams government and a group of companies (which includes Chevron, Exxon-Mobil, Petro Canada and Norsk Hydro) for the development of the field broke down in April 2006 when the oil companies refused to accept Premier Williams’s demands.

In particular it was Williams’s insistence on an equity stake for his government in the project, a higher royalty rate when prices were high and his refusal to hand out tax credits and an exemption on fuel costs that the companies pointed to as they walked from the table.

When Chevron, the lead negotiator for the consortium, announced later that year that the consortium would be dissolved and there would be no further negotiations on Hebron, Williams did something that may seem completely foreign to those of us in Alberta, and which at the time was loudly ridiculed by the likes of the Canadian Association of Petroleum Producers—he let them go.

Actually, he did more than let them go. Williams told the oil companies that the oil was not going anywhere, and that the people of Newfoundland and Labrador were more than willing to wait for its development. “They won’t wait us out,” said Williams at the time. His government refused to sign a bad deal just for the sake of developing the resource quickly. The resource would only be developed in a way that would maximize the benefits received by the people of the province.

Williams was banking on the fact that, ultimately, these companies would rather deal with him than with the Venezuelas and Irans of the world, places where the terms would be much worse and the governments less friendly.

This June, Williams was proven right—the consortium was reformed and the companies came back to the bargaining table. And just last week, Williams got what he wanted. The consortium signed a letter of understanding in which they agreed to Williams’s key demands: a 30 per cent baseline royalty, an extra 6.5 per cent in royalties when the price of oil is over $50, and a 4.9 per cent equity stake in the project for the government of Newfoundland and Labrador.

The lessons Alberta can learn from the Hebron example are many. It is clear, for example, that oil companies are not extracting our oil as a favour to us. They recognize that there is value in our resources, and they are willing to pay for that value if need be.

It is also clear that threats to pack up and leave and abandon the development of resources are often just that—threats. When faced with the prospect of getting a little less profit than they wanted versus the possibility of getting no profit at all, the companies will choose to take what they can get every time. Just ask Danny Williams.
What is required to take maximum advantage of these lessons, however, is a government willing to call the oil industry’s bluff and walk away from the table if need be. That takes some courage.

More importantly, it takes conviction on the part of the government in the belief in long-term public interest overriding the short-term interest of oil companies. No government in Alberta has been willing or able to show that degree of conviction since Premier Peter Lougheed last raised royalty rates more than 30 years ago. Isn’t it time we demanded better of our leaders? If Canada’s poorest province can risk standing up to the oil industry in favour of the public interest, certainly the richest province can too.

[altiplano]

article reposted from another site archive...

Last week we received yet another indicator of the degree to which Albertans’ interests are being wilfully disregarded by our government. And it came from a rather unlikely source—the Conservative premier of an Atlantic province.

Albertans have been told by the oil industry and by their government for years that if anything was done to improve the deal we are getting on royalties or taxes, the oil companies would simply pack up and leave, leaving Alberta an economically depressed wasteland.

Newfoundland and Labrador Premier Danny Williams, however, believed otherwise, and events last week proved that he was right.

The government of Newfoundland and Labrador has been working for the last few years to move forward on the development of the Hebron oil field—an off-shore field estimated to contain some 700 million barrels of oil.
Negotiations between the Williams government and a group of companies (which includes Chevron, Exxon-Mobil, Petro Canada and Norsk Hydro) for the development of the field broke down in April 2006 when the oil companies refused to accept Premier Williams’s demands.

In particular it was Williams’s insistence on an equity stake for his government in the project, a higher royalty rate when prices were high and his refusal to hand out tax credits and an exemption on fuel costs that the companies pointed to as they walked from the table.

When Chevron, the lead negotiator for the consortium, announced later that year that the consortium would be dissolved and there would be no further negotiations on Hebron, Williams did something that may seem completely foreign to those of us in Alberta, and which at the time was loudly ridiculed by the likes of the Canadian Association of Petroleum Producers—he let them go.

Actually, he did more than let them go. Williams told the oil companies that the oil was not going anywhere, and that the people of Newfoundland and Labrador were more than willing to wait for its development. “They won’t wait us out,” said Williams at the time. His government refused to sign a bad deal just for the sake of developing the resource quickly. The resource would only be developed in a way that would maximize the benefits received by the people of the province.

Williams was banking on the fact that, ultimately, these companies would rather deal with him than with the Venezuelas and Irans of the world, places where the terms would be much worse and the governments less friendly.

This June, Williams was proven right—the consortium was reformed and the companies came back to the bargaining table. And just last week, Williams got what he wanted. The consortium signed a letter of understanding in which they agreed to Williams’s key demands: a 30 per cent baseline royalty, an extra 6.5 per cent in royalties when the price of oil is over $50, and a 4.9 per cent equity stake in the project for the government of Newfoundland and Labrador.

The lessons Alberta can learn from the Hebron example are many. It is clear, for example, that oil companies are not extracting our oil as a favour to us. They recognize that there is value in our resources, and they are willing to pay for that value if need be.

It is also clear that threats to pack up and leave and abandon the development of resources are often just that—threats. When faced with the prospect of getting a little less profit than they wanted versus the possibility of getting no profit at all, the companies will choose to take what they can get every time. Just ask Danny Williams.
What is required to take maximum advantage of these lessons, however, is a government willing to call the oil industry’s bluff and walk away from the table if need be. That takes some courage.

More importantly, it takes conviction on the part of the government in the belief in long-term public interest overriding the short-term interest of oil companies. No government in Alberta has been willing or able to show that degree of conviction since Premier Peter Lougheed last raised royalty rates more than 30 years ago. Isn’t it time we demanded better of our leaders? If Canada’s poorest province can risk standing up to the oil industry in favour of the public interest, certainly the richest province can too.

[Bushrat]

There is definately something askew and out of line with the royalties payed to individuals and the gov't in comparison to what is done in other countries. I have a friend in Texas, she has 4 large oil pump jacks on her property. Unlike Canada, Americans own subsurface mineral rights on their own property. She gets full ownership of the oil and can cut her own deal with the oil company. In Canada the landowner gets a surface lease payment from the oil company to reimburse them for the land taken out of production to accomidate the lease site and access road. This amounts to very little $$ generally less than $2000 a year per lease. The gov't makes its oil revenue from leasing out the subsurface rights and a small royalty on the oil/gas that is extracted. This amount adds a very low percentage to the cost of producing a barrel of oil. I don't know what the oil companies are paying the gov't per barrel but I can tell you it isn't much in comparison to other areas. My friend in Texas is getting an income from the oil company depending on how much is produced from these four pumpjacks. She averages between $140,000 to $160,000 a month directly to her bank account. If an oil company in Texas can come knocking on your door and invest, engineer, develop, and extract oil and pay you the landowner a fair market price for oil, I think they can also do the same for us in Alberta. It's no wonder they are hell bent on developing everything in Alberta, it's because we are giving it away at firesale prices. Whey are they not developing the Alaska north slope oil, why not the oil shale beds in Colorado and Utah on federal and private lands, why because they don't want it in their back yards and it will cost them more, see the US gov't and American landowners aren't stupid enough to sell oil to the oil companies for anywhere near Alberta prices. The oil companies in turn sell it for OPEC prices, the cheaper they can buy it the more money they make. Thats why they are here, were giving it away.

[Sakoman]

First off Roayalty rates change depending on what you are drilling for but a typical gas well has a royalty rate of 30%. That does not include the money paid up front to gain access to the lease, that will vary depending on what the oil or gas company thinks is down below. Secondly not all land in Alberta is crown land alot of it is freehold and those mineral rights go to the land owner that owns the land. The yearly lease rental is based on land values in the area and they get reviwed evey 3-5 years at the request of the landowner or oil company. So yes the yearly rental on a lease is not much but the money paid up front to gain access to the land can cost you well over 100K that is not peanuts.

As for Danny Williams I like his spunk but you left out the fact that he is being sued by both Exxon and Murphy for what he is trying to do. Everyone in this country deserves their fair share for eveything not just oil and gas,

In terms everyone on this board can agree on if we all slend $250 on hunting licenses and all of a sudden the Gov't came back and said now we want $300 everyone on this board would be up in arms. No different than the oil and gas companies that are the target today.

[altaberg]

apparently Alberta's own auditor general is chastising the government for not even collecting from the oil companies what's owed:

http://www.theglobeandmail.com/servlet/story/RTGAM.20071001.walberta1001/BNStory/Business

[steveo10]

I dont have even time to read this bible long thread, so i just read the first and last few post.

When i was working on the southwest tip of the WoodBuffalo park a few yrs back the consultant for the oil company said they would have this well paid for in 2 - 3months! At the time a oil well of that kind (approx 500M) cost $750,000 or less to complete. After that its $$$ in the pocket for the oil company.

For those of you who say they would like a slowdown in the patch and dont care how many payment we have, have you heard of the trickledown effect? If we cant buy our payments, we cannot buy fuel at the that gas station you work at/own, cant buy that nice shiny quad/truck at the dealership you work at and etc. That involves layoffs in jobs that you think are not even oilpatch related.

[sheephunter]

I dont have even time to read this bible long thread, so i just read the first and last few post.

When i was working on the southwest tip of the WoodBuffalo park a few yrs back the consultant for the oil company said they would have this well paid for in 2 - 3months! At the time a oil well of that kind (approx 500M) cost $750,000 or less to complete. After that its $$$ in the pocket for the oil company.

For those of you who say they would like a slowdown in the patch and dont care how many payment we have, have you heard of the trickledown effect? If we cant buy our payments, we cannot buy fuel at the that gas station you work at/own, cant buy that nice shiny quad/truck at the dealership you work at and etc. That involves layoffs in jobs that you think are not even oilpatch related.


We'll all pay the price if there is a slow down in the patch there is no question about that but I for one am willing to pay the price. I'll still be able to afford gas and if I can't buy a new truck every year, I'll keep the one I have. I'm not sure why everyone thinks a slow down means economic chaos.....it's just means everybody may have to cut back a bit......

I think we all knew this boom wasn't going to last forever and some of just planned better for the days when it slowed down. It's happened before...not sure why it's such a big shock to some.

I don't want to see anyone lose their house or their job but hey....if they can't afford and new truck and ski boat every year...I don't really see that as a hardship.

[Sakoman]

We'll all pay the price if there is a slow down in the patch there is no question about that but I for one am willing to pay the price.

Sheep - Just how of your money comes from working in Oil and Gas?

I don't want to see anyone lose their house or their job but hey....if they can't afford and new truck and ski boat every year...I don't really see that as a hardship.

Very Insightfull. Maybe you would like to come check out my driveway for a boat, trailer and truck ( over a year old ) and I work in the Oil and Gas industry. Yes there is alot of money to be made but to insinuate that because one works in an industry he is loaded is a pretty careless statement. I guess I had better get upstairs and tell my wife and 5 month old daughter they never has to worry about a thing because daddy works for an Oil and gas company.

I am sure I would get a great response from you if I was careless enough to make a statement assuming you get everything for free because of who you are.

[sheephunter]

Not sure why you are attributing statements to me that I never made. I never once said everyone in the oil business was loaded but you have to admit that there are a whole people in the industry way over extending themselves buying toys. That's the ones I was speaking about.

I have no idea how much of my money comes from the oil and gas business but I know there is a whole lot of trickle down that will affect me as well. Read the auditor general's report. Albertan are being ripped off in full knowledge of this government. I'm not sure why everyone feels that bringing roayalties more in line with reality...for both Albertans and oil companies will cause economic chaos...it won't. I'm talking about a fair deal for both here so we can stop being raped like we have for the past few years. The royalty review committee saw it...the auditor general saw it.....so why do Albertans need to keep turning a blind eye?

As I've stated many times, I don't want to see anyone lose a house or a job but I'm not sure how a fair royalty will cause any of that. Status quo is not always the answer and in truth.....we are selling our kids' and grand kids' future if we don't do something now.

Are you willing to do that?

[Walleyes]

I think it was mentioned before but,, how much of the extra money do you think Ottawa would let us keep... I think very little,,, they would suck it away from us and our kids to give it to the so called have not provinces anyways.....

[Sakoman]

Is this not your statement? if they can't afford and new truck and ski boat every year...I don't really see that as a hardship.

If you are only talking about a select few your should say that. If you say just Oil and Gas you include everyone. But to brand O&G as the only people over extended is bad also. The framer up the hill from me has more toys than I could inmagine and he isn't even 30 yet and a one income family, the computer guy has a BMW and a Land rover on a solitary budget also. They do not work in the O&G industry. My neighborhood is not as nice as yours so I would suspect they too are leveraged. No body likes to be branded I am sure you will agree. There are fat cats in every industry not just mine. Can I make the assumption because you live in a nice neighborhood and drive a bigger truck than me that you are leveraged also??

I have said before that I am sure there is something that can be done in regards to royalties. The article in the paper stated that they can take and additional Billion out of the O&G industry with out Stifling the industry. I dopn't knoiw about you but I read that as we won't kill it but we won't help it either.

[sheephunter]

Sorry if you felt I was branding anyone but I wasn't and I think to continue this nit picking is pointless. If you go back to Walleye's original posts you'll see that I was refering to comments he made...they weren't generalizations. And I, like you, think something can be done about royalities that will be fair to all. I think we actually agree here. All I know is that status quo is not the way to stay just because of a few threats from the likes of Bouras. I just want what's fair for all...including future generations. Maybe you should ask your daughter how she feels about that. Read the Auditor's General's report...you'll be horrified. Albertans are being ripped off...all Albertans and future Albertans. How can that be a good thing? Am I to read your reasoning right that we should tolerate this BS just so we can maintain our present standard of living at the cost of the future of Alberta? What's your solution?

Not sure how Ottawa will get anymore money Walleyes. They tried that once and it backfired.

[Sakoman]

The nit picking is pointless and if I had the solution I would be out hunting somewhere instead of working everyday, isn't that everyone on this boards dream. If I ask my daughter all I will get is drool and some jibberish that only she can make out ( 5 months ).

As for the royalties it is not as easy as saying lets increase them across the board. You have differnt rates for different types of wells. It is not as easy as saying Oilsands one rate, gas wells another and conventional oil another rate. Oil sands projects economics are based on long term payouts due to the huge amounts of capital involved. Shallow gas and CBM projects on an individual basis are not economic which is why hundreds are drilled at a time and payout can be quite lengthy due to the low rates but the produce for many years. Convential oil and gas and shorter life reserves but higher production rates and can payout quite quickly.

I have not read the report yet but if it is like the current report it does not take into account the landsale dollars that are part of the equation. Big dollars are spent on aquiring land in hopes of drilling a sucessful well. Those dollars attributed to over 2 billion dollars in the last fiscal year. That is guaranteed wether a well is sucessful or not right into Alberta's pocket.

I see your points on people and their investments, I love fishing and camping also but I can not fathom dropping 75-100K on a boat, all I was saying is it is not just people ( my view of your comment ) in the patch that are careless with their money, there an idiots everywhere.

My judgement on this matter may be heated but I may be looking for a job if this carries out and it is not because I got that extra royalty cash in my bank account. So if I am a little touchy on the matter I apologize.

[sheephunter]

As for the royalties it is not as easy as saying lets increase them across the board. You have differnt rates for different types of wells. It is not as easy as saying Oilsands one rate, gas wells another and conventional oil another rate.

I couldn't agree more and that's why I've been saying from the beginning that we need a fair deal for all. I've never said what that fair deal entails and I think all the factors you mentioned need to be considered but read the Auditor Generals report...I promise the abuse will horrify you.

I understand you are touchy about this as it's your livelyhood but I say again that the staus quo is not the answer. This isn't an all or nothing solution as Encana would have you believe.

[Sakoman]

I will read the report but anything taken over the last three years will not take into effect the bust times. The last time the royalties were changed was to spur some action in the O&G industry. They were lowered to get the economy going. They are a little like the Bank of Canada prime rate. So unless they plan on having a sliding scale that follows pricing they will either be low ( when prices are high ) and to high ( when prices are low ). So maybe today they are to low in regards to oil and gas prices but if we drop back $50 a barrel and $4.00 gas ( hard to beleive I just said those two numbers ) they will be to high. There is no happy medium that you can just say 35% is the new royalty number for a gas well at todays prices that will cut some projects at $5 or less it will be a non starter for any oil company. Hence we now have the ripple effect

As for Encana they are the big kid on the block and they push everyone around, not just the goverment so I never listen to what they have to say. IMO they are not good for the O&G industry. But they are here so we all have to learn to live with them.

[Deer Hunter]

The royalty review committee saw it...the auditor general saw it.....so why do Albertans need to keep turning a blind eye?


Sheep, do you believe everything you hear from the government? I for one don't trust them as far as I could throw them.

The media works for the government. If you believe them, we'd also be in the Iraq war.

Looking at the facts - no quantitative #'s here: Alberta is better off then any province in Canada. Why? Because of the past 50 years of oil and gas development by hard working Albertans. Not because of the government. Because of Albertans. Why mess with success?

Sheep, What do you suggest the Alberta government does with an extra billion dollars a year? Would they be smarter with the money than you or I would?

Good debate here guys, I enjoy reading this.

[sheephunter]

Read the Aiditor General report...you'll trust the government less Deer Hunter. The auditor general operates independant of the goverment. There's a lot of arguement and speculation going on here without an understanding of the facts and the system. Ya the media may twist things but not as bad as some on this board. The government has made no decision in regards to royalty changes but there lots on here already crying that the sky is falling. There is room for a fair deal for all.

Personally, I think I'd rather see the government have some more dough to spend on schools, hospitals, the environment, infra structure.

I get a kick out of this status quo arguement because things are good. Folks, they could be better and some fair change could ensure a future for this province. Oil and gas is NOT a renewable resource. I think we need to quit just thinking about ME and consider the future of this province.

[stubblejumper]

If there is a big slowdown in the oil and gas industry,many people will lose far more than not being able to buy new toys.Many,as in thousands,could lose their homes and their jobs.And not all of these people have overextended themselves buying toys.Many are people that moved to places like Fort Mcmurray to find a good job and had to take out a large mortgage just to buy a place to live.They don't have the toys and are happy to have their own home and food on the table.

[Deer Hunter]

Read the Aiditor General report...you'll trust the government less Deer Hunter.

I don't think I could trust them any less than I do already.

Who pays the auditor general?

[redcoat01]

I have read this topic with great interest and have spoken to many people employed in various sectors of the Oil Field industry . Believe it or not many employees feel a slow down was inevitable and feel it may benefit the industry as a whole . Many small companys involved in the oil industry have blossomed literally overnight due to supply and demand not through good service . This has driven exploration/servicing costs through the roof. The big Oil producers got tired of literally getting gouged, hence budgets were cut As a Alberta residence for the past 26 years I look at the economics. I purchased Gasoline in Abbotsford BC in August cheaper than in Edmonton . Alberta still has Health care premiums. Granted we still have the lowest income tax rates but not buy a lot.
Yes I see Oil Companies and the Banks making the largest profits. I guess no doubt due to the fact, most people require both. I certainly do not wish ill will on anybody ,or begrudge anybody making a living . I guess just an equal shake for all Albertans. The Oil ain't going anywhere , we know that , lets just work together and level the playing field. Yes I agree with some of the comments and am not that naive to think the slow down would not have a trickle down effect on all sectors.:confused:

[Deer Hunter]

Here is a neat email I recieved about taxes. Kinda applies to how the government works. Its long but worth the read...


Since it is tax season let's put tax cuts in terms everyone can understand.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.
If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.

The fifth would pay $1.

The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia

[Duk Dog]

Personally, I think I'd rather see the government have some more dough to spend on schools, hospitals, the environment, infra structure.

Bingo. The O&G market is what has created the population explosion in this province and the O&G companies are making record profits as a result. Wouldn't hurt one bit if more of their profit went towards the above things mentioned by Sheep.

[sheephunter]

Read the report Deer Hunter....it is very critical of the government....

Anyhow, I'm done with this! It's gone past the point of ridiculous!


I don't think I could trust them any less than I do already.

Who pays the auditor general?

[altaberg]

I'm with sheep and duk dog on this one.

The auditor general is independent of the government supposed to exert control. Also, the royalty review panel hardly consisted of socialists or was appointed by the NDP. These are mostly retired oil executives and conservative economists.

We actually need a it of a slow down of inflation and growth in Alberta. There is an infrastructure deficit and that's only made worse by the population growth.
There was some concern about Alberta having to go into debt again soon because of the cost of infrastructure upgrades, construction and maintenance.
Building a new hospital in Alberta will be, say, $500 million or so. Right now you have to factor in 2-2.5% inflation of the cost per MONTH. Not even a rich province can keep up with that.

With that I'm bowing out of this thread too.

[Okotokian]

[QUOTE=Deer Hunter;59012]

Sheep, What do you suggest the Alberta government does with an extra billion dollars a year? Would they be smarter with the money than you or I would?

QUOTE]

Uh, maybe they would expand the school my wife teaches at so they wouldn't have to have classes in the library and staff room. They have resource room for kids in a place the size of a broom closet. I'd pay to do it, being the free enterprise guy I am, but I'm a little short this month.

[Jamie]

OKO, what school does your wife teach at/ My wife is also a Teacher at FFCA. Duffys wife is also a teacher... HMMM whats with all the teachers who marry hunters.
Perhaps they wish to teach us to be more responsible and not go running after bears or geese at the drop of a hat.. :lol: :lol:
Jamie

[bullwinkle]

I agree 100 percent with you sheep!The price of gas and diesel has doubled at the pumps over the last 10 years and so has the cost of utilities.We can't go on letting the industry steal the resource and then rape the average consumer.
The large oil companys can threaten all they want but they still need to maintain production and we are still the cheapest,most reliable supplier.
If indeed there is an economic slowdown in alberta it has more to do with a weaker u.s. dollar and collapsing u.s economy.Anybody that thinks the canadian economy can sustain it's current pace needs to give their head a shake.

[genek270]

If all of you complainers had any economic sense you'd have bought STOCK in the oil companies 5 to 8 years ago and now you'd be hunting and fishing 24/7/52 instead of crying about big business.

[Okotokian]

If all of you complainers had any economic sense you'd have bought STOCK in the oil companies 5 to 8 years ago and now you'd be hunting and fishing 24/7/52 instead of crying about big business.

what a stupid reply. You are right. if we had all been smarter and been millionaires now we would have nothing to complain about. For your info, I DO own oil stock.. I just didn't have $800,000 to invest in it 8 years ago, so still don't have enough to retire on just yet. But thanks for the good advice ;) LOL sheesh.... lay off the bottle before you post.

[bullwinkle]

I fail to see your point genek,investing in STOCK has nothing to do with letting the oil companys dry up our natural resourses without fairly compensating the tax payer of alberta.I work in the industry and am fed up of oil companys nickel and diming contractors and royalties while raping the consumer at the pumps.There should be a system where when the price of crude and natural gas goes up then so do the royalties and vice versa.

[Okotokian]

OKO, what school does your wife teach at/ My wife is also a Teacher at FFCA. Duffys wife is also a teacher... HMMM whats with all the teachers who marry hunters.
Perhaps they wish to teach us to be more responsible and not go running after bears or geese at the drop of a hat.. :lol: :lol:
Jamie

Jamie. I wasn't a hunter when I married her... she drove me to it! LOL

[bullwinkle]

Good point!Okotokian

[Huntnut]

Read the Auditor's General's report...you'll be horrified. Albertans are being ripped off...all Albertans and future Albertans.


I did----now I feel so violated.:ashamed:

[redcoat01]

Read the Auditor's General's report...you'll be horrified. Albertans are being ripped off...all Albertans and future Albertans.


I did----now I feel so violated.:ashamed:

After reading a number of letters in the Edmonton Journal today it appears a lot of Albertans have the same sentiment. :ashamed:

[59whiskers]

This boom will not last forever, things were beginning to slow down months ago. Most oil and gas stocks are flat or lower in price with one or two of them in the Athabasca oilsands making significant gains recently. Most of the big oil companies here are foreign owned and have other big plays around the world, and they could drop us like a hot potatoe for a while if our government demands more royalties. It is unlikely we will have a huge recession because we have political stability here and to many companies are to far along in constuction to turn back now and go home. By the way Encana needs the money, they have the need to show off to everyone they are the best and they need to prove it by building that huge office tower in Calgary with your royalty money.

[TreeGuy]

59, you are correct in that they could drop us like a hot potato in a heartbeat. They have made so much profit (EnCana made about $6.8B last year.....most of any Canadian company last year) they have the financial flexibility to make a bit of pettulant political stand. This will hurt alot of people. Will they do it? Maybe, sortof. However one must remember that with oil trading internationally over $80US/barrel, how many really will try to make an extended political stand? If it was at $12US/b, then it would be, not at $80. No way in hell.

Tree

[magoonpointboy]

The best decisions are seldom the most popular. And political decisions are seldom permanent. But I have no pity for the oil companies. They have never hesitated to raise the price of gas before a long weekend for fear it will stop people from taking their camping trip and leave the car in the driveway...

[BeerSlayer1]

Short and sweet, oil is at $80 and the oil companies are crying? Puleeez!!!!!!!!!!!:huh:

[sheepslam]

all i can say is right now i am happy to be working international where we wont be affected by the oil patch in alberta,very scarey and i no alot of peaple are hurting already,i was really concidering working back at home,but how things are slowing down i will stay put,i no of a few rig hands that have been shutdown for over three months and now a couple freinds are shutting down now,right at the start of normal busy season for rigs,if the royaltie goes through,it will be a sad day,common sense,the more money oil companys have to spend,the less they spend in the long run,they have no remorse

[50BMG]

but we must realize that ALL businesses in alberta grow off the oil and gas.


:rolleye2:

"Alberta’s other major exports: industrial goods, agri-food, machinery and equipment, and forestry accounted for 11 per cent, 6 per cent, 4 per cent, and 4 per cent of total exports respectively in 2005. Exports of industrial goods and machinery and equipment are on track to post export growth of 2 per cent and 6 per cent respectively in 2006 and 3 per cent and 5 per cent in 2007. Agri-food exports are forecast to grow by substantive 11 per cent in 2006 and 6 per cent in 2007, while the forestry sector will continue to decline by 7 per cent in 2006 and 4 per cent in 2007. In the agri-food industry, the sale of live animals posted the only noteworthy gains of 2005 while the sale of processed meat and coarse grains advanced by 2 to 3 per cent. Exports of wheat and oilseeds slid 18 to 23 per cent. Although live animal exports will again drive agri-food sales in 2006, gains are expected to be more broadly based across the other agri-food sub-categories."

Trust me, I know for a fact we aren't totally dependent on oil. I have NEVER been laid off in construction...NEVER!!! Even when the patch was in the crapper I was still putting up farm buildings, small businesses and a whack of other things. Oil and gas are huge here...but they aren't the only thing here, I wish more people could see that.

That isn't even touching the precious metals we have and are exporting.


And with that folks...........


Good luck to you all, thanks for the advice many have given me...I am out of here.

[russ]

For all of you guys apparently living under a rock. The oil companies have all slashed their drilling programs this year. That means we are ALREADY headed for a slow down. Well ahead of the royalties announcements. The royalty row is nothing more than a convenient scape goat for what is already starting to take place. The patch is gonna tank, so ya better plan well - the next 3 years or so are gonna suck.

[sirmike68]

Conventional crudes are becoming a thing of the past, of course the drilling is going to slow down. Bitumen is the future thats why they are building upgraders and converting all the refineries to handled it.

[Chung66]

Maybe they should peg the royalties to the price of the comodity (gas / oil).
When the prices are in the tank, have a low royalty rate. When they are high increase it accordingly.
That way, if times are tough development is not impeded. Also it would be a way of stabilizing the income. Oil and gas right now are high priced and low priced in the market respectively. If the graduated system is in place then the high oil raoyalties would offset the low gas and there would be a stable income for the province without hurting development.

Ted Morton, are you listening????

[Battle River]

While I hate to see the effects of the hypothetical slowdown in the "patch", it is about time the labour market in alberta had a correction. I liken oil to the feedlot industry in AB, which was expanded based on buying grain at less than the cost of producing it, increased gran costs are going to make for serious corrections. Some of the oil boom is also based on artificially low royalties. Face it, the unskilled labour market is way out of reality in this province, as well as the expectations of those workers. It is fair that the govt collect the royalties WE all deserve to build programs for all of us ,not just those who chose to go direct into the unregulated/unskilled/uneducated labour force that has benefited the most from Albertas oil boom. People who cry about the high cost of living in oilboom towns should have considered this possibility earlier, and considered TRAINING/UPGRADING/COLLEGE or simply get work in the industries not as affected by inflationary and seductive oilpatch salaries.

[ex811]

One of the oil exec's here in Calgary who is complaining is the fellow who is building at $10 million 'castle' in Mount Royal (he's actually buying two homes in this expensive area of Calgary, tearing down the existing homes and building a home that in appearance looks very much like a castle). Guess he'll have to suck it up and not build the North Turret for another year or two.

I hope the Stelmach government can find a solution that still allows profit and flexibility for the industry and increases the financial share to the citizens for schools, hospitals, police etc.

[Okotokian]

People who cry about the high cost of living in oilboom towns should have considered this possibility earlier, and considered TRAINING/UPGRADING/COLLEGE or simply get work in the industries not as affected by inflationary and seductive oilpatch salaries.

I hear ya, but not sure getting a degree or working in a different industry always helps. I have no idea how teachers or government workers can afford to live in Fort Mac. They need them there, but it must be tough.

[russ]

I hear ya, but not sure getting a degree or working in a different industry always helps. I have no idea how teachers or government workers can afford to live in Fort Mac. They need them there, but it must be tough.

Exactly, I know someone that looked at a job with Advanced Education in Ft. Mac - 72,000 / yr. No chance of making ends meet. You're looking at a 2000-2500/ month mortgage. It's just insane. That would leave you with about $2300 / month for everything else. He said there was nothing to gain. Stayed where he was @ 20,000 less per year and had more income to play with.

[stubblejumper]

I have no idea how teachers or government workers can afford to live in Fort Mac.

Most now get living allowances in addition to their wages to help with the high cost of housing..