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Originally Posted by metal_geek
I was all for the royalty increase, not to "GET MORE", but to slow the pace, and leave a little in the ground to create employment later. Granted I didn't know the world economy was gonna collapse, I did think thier numbers were complete junk and that the "investment" was gonna move elsewhere for now. It'll be back, slowly but surely and then the move will look like genious long after anyone who was involved with it is done..
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It's completely unnecissary in an environment where commodity prices rise and fall. Just as in 1980, it's not prudent to create a system where the underlying assumption is that prices would continuously reach new heights without falling. Higher taxes on production limit the highs and ultimately create lower lows. We're about to see a lower low than would have otherwise happened without the royalty review.
No, in decade's time we won't be celebrating this move's brilliance because the amount of opportunity cost lost in the mean time. The province will lose more money as a result of this than it will gain all the while our oil and gas companies do not contribute as much to our local economy. The combined value of this lost opportunity will not be less than the present value of producing the commodity in ten years time. Assuming such is speculation on oil and gas prices and not smart to center the whole province's energy policy on said speculation.
Another thing to consider: Since Oilsands projects even running at full steam at the pace of 2006 are 40 year projects, who here is going to stand up and tell me that after 2048 world prices for Bitumen (the lowest quality of oil) is going to be so high that it will generate a higher rate of return present valued to today than had things gone ahead without the review? Heck even if society makes only moderate progress on the renewables front in the next 40 years Bitumen will be completely worthless by then.