[puckhog]

Originally Posted by llama64

And that's exactly what I think we will see from Stelmach. There is too much support for the royalty increase to do nothing and too much outcry against it to implement the reviews recommendations.

The royalties will be going up and that is a much needed increase (think past this year to 20 years down the road). But they won't be going up by the overly large figure that the review specifies.

Oil & Gas is a growth industry (in that the price will only go up on average). Unless all of humanity switches energy sources in the next 20 years, Alberta's economy will remain strong. Ensuring that a decent slice of that industry's profits go to public use is something most Albertan's I know agree with.

I think you're right that most Albertans would agree with ensuring a fair amount goes to public services, including the "Big Oil" executives. I've pointed out before that none of the companies have made releases expressing outright opposition to raising royalties, most of them agree that there is room to increase them (see CAPP's website). The problem is that this specific proposal will not provide the best scenario for anyone - includinng those in and out of the industry. Finding the middle ground is necessary.

I would still like to see a response to the auditor generals point where he says that the royalties could've been increased a few years ago and never were. He states that this would be without harming the industry at all, and would put us in the bottom half around the globe.

The Auditor General is certainly not suggesting this for political reasons and did this after a review of the facts.

The problem is that the AG's report is looking back in time, and assumes that if royalties had been increased, the revenues generated in those years would remain consistent, which is very counter-intuitive - it would have definitely caused some marginal projects to not be completed. Putting that aside, however, his review doesn't help the current situation, because it makes very little sense not to consider the fact that things have changed in the past few years, especially the fact that costs have sky rocketed. I hope you can see that setting future policy based on suppositions about what could have happened in previous years is completely assinine. What is required is a forward-looking recommendation that will maximize the benefit to everyone. Crying over royalties that could have theoretically been collected a few years ago does not help - that money is gone, so everyone needs to forget about it.