Quote:
Originally Posted by octothorp
I don't see it as such a bad thing to slow the O&G investment in the province; it's not like our reserves are going anywhere, and oil prices aren't going anywhere except up for the foreseeable future (until some really incredible alternative fuel comes along). So a little less oil is drilled in Alberta, a little more is drilled elsewhere. At some point, those other reserves will dry up, and those companies will be forced to come back to Alberta and pay whatever price is being asked of them; probably more than they're paying today.
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2009 and 2010 is the foreseeable future and it sure as hell won't be even close to $150/bbl anytime soon. So no it's not like oil prices can only go up! In a $45/bbl world hiking royalties just makes tough times tougher. Ripping up old agreements compromises business climate and that was exactly what that clip alluded to. Even if prices recovered overnight capital wouldn't return as fast due to the risk of government policy changing on a whim. Had there been no royalty review the low price itself would have slowed development down enough to avoid unsustainable inflation. Just yesterday Alberta's inflation rate was quoted as 2.4 down .2 from the national average. There was never a need for public policy hacks to draft up a royalty increase in the first place. The net result is less government revenue and less business going on. Hurray! congrats idiots! EPIC FAIL no one's better off.