Kevin O'Leary's Letter to Premier Notley - Carbon Tax Discussion

[iggy_oi]

Originally Posted by CorsiHockeyLeague

Prices have gone up more than 4 cents per litre, though, is the point. Is the excess a result of opportunism by the industry or the real cost of a carbon tax that's obviously going to exceed the levy at the pump? Probably a combination of both.

This is what people should be focusing on, carbon tax is here, we can't change that. But I hope people who attacked the government for implementing it will equally scrutinize companies who raise their prices as a result of it, their should be increases, how big of an increase is the issue right now. And whether or not all increases are legitimately tied to the carbon tax.

Unfortunately the provincial government is pathologically incapable of honesty about the real cost of this whole regime so the amount of blame you decide to place on various actors will probably align with your pre-existing biases... exhibits of which may be viewed in preceding posts.

I would agree that the government could done more to explain the costs to the public, but I don't believe their handling of it gives companies a free pass to gouge, they are just as capable of showing exactly what the breakdowns of their costs will be and making that public, does anyone think they will be making their books public?

[GGG]

From an Alberta oil company standpoint in pre-payback phase the carbon tax affect is essentially zero as they just stay in the preferred prepayback royalty phase until the capital is paid for.

So their will be a lot of creative accounting. There was a reason all the majors were standing behind Notley on this one and haven't been complaining about a loss of competitiveness. It as far less impact on the bottom line of an oil sands company than one would originally think.

The long term cap is actually the greater concern.

Also I don't think any state had a lower combined federal and state corporate tax than Alberta. It was only Saskatchewan that was ahead now. Could be wrong on this one though.

[Snuffleupagus]

Originally Posted by OMG!WTF!

Gas prices mirror crude prices almost exactly.

[OMG!WTF!]

Originally Posted by iggy_oi

This is not accurate, if the price of oil goes back to $100/barrel(double what it is now) you will not be seeing $2/L prices at the pump.

It is accurate. Check out any graph over any ten year time period you like. Gas tracks oil almost exactly. Oil was at $140 for a very short time. Gas prices smooth out the big swings but by and large they track the same trends. If oil were $100 barrel for a long time gas would certainly follow.

[OMG!WTF!]

Originally Posted by Snuffleupagus

Kinda ya.....

image post

[iggy_oi]

Originally Posted by OMG!WTF!

It is accurate. Check out any graph over any ten year time period you like. Gas tracks oil almost exactly. Oil was at $140 for a very short time. Gas prices smooth out the big swings but by and large they track the same trends. If oil were $100 barrel for a long time gas would certainly follow.

It's relative, but does not mirror it directly. The price of oil doesn't go up every long weekend, but the price at the pumps always seem to.

[jayswin]

Damn, I read that open letter and thought it might spawn decent discussion here on CP. But I see it's already turned into an "explain business to iggyoi" thread and if it's like the other threads that's all it will be now.

[iggy_oi]

Originally Posted by jayswin

Damn, I read that open letter and thought it might spawn decent discussion here on CP. But I see it's already turned into an "explain business to iggyoi" thread and if it's like the other threads that's all it will be now.

So you want it to have decent discussion and in an effort to achieve that you took it upon yourself to make the first off topic post. Great contribution! Maybe if some people's New Years resolution was to get over themselves the world would be a better place. Do you have anything relevant to add to the discussion? If you don't like my posts, you know you can always ignore them right?

[Cecil Terwilliger]

Originally Posted by jayswin

Damn, I read that open letter and thought it might spawn decent discussion here on CP. But I see it's already turned into an "explain business to iggyoi" thread and if it's like the other threads that's all it will be now.

Wow dude, harsh.

[GGG]

Originally Posted by CaptainCrunch

The carbon tax at the pump 4.5 cents didn't include the Oil companies passing on their carbon costs to the consumer including transportation, and costs of keeping their own lights on.

They can't pass on the cost or we'll just buy our gas from Elsewhere So the maximum increase that can be passed on to the consumer is the difference in transportation cost between edmonton refinery gas and the closest source of US gas.

[jayswin]

Originally Posted by iggy_oi

So you want it to have decent discussion and in an effort to achieve that you took it upon yourself to make the first off topic post. Great contribution! Maybe if some people's New Years resolution was to get over themselves the world would be a better place. Do you have anything relevant to add to the discussion? If you don't like my posts, you know you can always ignore them right?

It's not ignorable when the discussion stays on you, but yeah that was pretty harsh on my part, I apologize. I should have said that Alberta political discussions mostly get stuck on one misunderstanding (regardless of who's right and who's wrong) with you and it will quite literally go on for pages and pages.

[John Doe]

At what point is the carbon taxed? Is it when it is taken from the ground, at the pumps, or at some other stage of the process?

[iggy_oi]

Originally Posted by John Doe

At what point is the carbon taxed? Is it when it is taken from the ground, at the pumps, or at some other stage of the process?

I believe it is at whatever point it is initially sold or used in Alberta. But someone else might have a more detailed answer.

[Violator]

Kevin O'leary and Notley belong together they are both out to lunch.

[Wormius]

Maybe somebody could just post that gas price de-obfuscation table?

[transplant99]

Originally Posted by Cecil Terwilliger

Wow dude, harsh.

No it isn't.

[Dion]

Originally Posted by flamesfan6

Gas prices rose late in the week everywhere.. Some refinery line from the industry saying they weren't making money. Victoria went from 1.17 to 1.26

I heard it had something to do with a refinery going down for repairs in Chicago.

[Coach]

Originally Posted by OMG!WTF!

Kinda ya.....

image post

That's US prices.



It's not often that the lines cross and recently they have crossed pretty sharply and dramatically.

http://globalnews.ca/news/2178192/he...-oil-plummets/

Gas prices have marched higher across Canada this summer even as oil prices have hit multi-year lows, causing a jarring disconnect between crude and gasoline, two commodities that typically move up and down in price in general unison. At least historically.

The average price for a litre of gas this week was just shy of $1.19, according to Natural Resources Canada. That’s roughly what the average price was last October. Back then, a barrel of oil was selling for around $85 (U.S.). On Friday, West Texas Intermediate slipped below $40/barrel for the first time since 2009 .

“We’re paying [gas] prices similar to when oil was $100,” said Bruce Cran, president of the Consumers’ Association of Canada.

Imperial Oil, Shell and Suncor are the biggest integrated players in Canada. Each operates, either directly or through franchisees, hundreds of stations under the Esso (Imperial), Shell and Petro-Canada (Suncor) banners.

They have kept the bar high at their stations, which has set the tone for others, McKnight said.

“They’re the ones that really establish the market price for gasoline on a daily basis, and the rest just merely follow,” he said.

This is all perfectly above board, according to experts. It’s not price maintenance, something that’s prohibited by competition laws. It’s the market.

“It’s a competitive, free market and [gas] prices are determined by market forces,” Earl Sweet, senior economist at Bank of Montreal, said.

Can't say I agree with Earl Sweet's take on the free market here. There's very little about the oil market that represents a free market. OPEC sets the price. That's exactly why this whole s***mix has happened. I don't see how anyone can pretend it's a free market.



http://www.tradingeconomics.com/canada/gasoline-prices


http://www.fedprimerate.com/nymex-cr...tory-chart.htm

A longer-term chart shows a pretty tight trend, until the crude price reached it's high before the 2008 crash. In 2007, at the oil over $140 USD, average gas price was ~$0.85. Then the price crashed and eventually stabilized for a while ~$100-$120, meanwhile Canadians gas price kept rising peaking around $1.30\L.

Only recently has the gas price dropped back into the $0.80's (where it was during peak crude price), and that's with the oil crash. Meaning short term graphs (like the one above) show a close trend, but the fact is the gap between those lines has expanded quite a bit from it's usual trend.

[LanceUppercut]

Originally Posted by transplant99

No it isn't.

The original comment and this one are both completely justified.

[John Doe]

Originally Posted by iggy_oi

I believe it is at whatever point it is initially sold or used in Alberta. But someone else might have a more detailed answer.

If this is correct, then it shouldn't have much of an impact on exports to the US.