Grassroots Oilworkers Rally, Oct. 17, 2007

[First Lady]

Posting on Derricks behalf to spread the word.

October 4, 2007
ATT: All Supporters

RE: Grassroots Oilworkers Rally

Hello all,

We have booked the grounds at the Alberta Legislature for Wednesday, October17th, 2007 at11:00 am. The address is10800-97th Avenue Edmonton, AB.

We will have MLA Paul Hinman as a guest speaker. If there are any others interested in speaking please let me know so that I may have some type of schedule in place.

I will have a link on my website with all of the reports, petition, as well as releases from Oil Companies. This rally will be designed to inform the public on the crippling effect passing the Royalty Review will have as well as protest the passing of it.

Please be advised it will be kept professional and is not intended to have a wolf pack mentality. We only have one shot at this so let’s be on our best behavior and let our concerns be heard. If anyone is lining up buses etc. I will also post it on my website. This link will be up and running by the end of the day.

The premier is booked to make a public address on the 22nd. Bring your hardhats and let’s show them what Alberta is about. The rally will take place in front of the main entrance steps.

Regards,
Derrick Jacobson
President-Quattro Energy Services Inc.

e-mail- derrick.j@shaw.ca
www.quattroenergy.ca

[First Lady]

Alberta Alliance Media release on Rally.

Thursday, October 04, 2007

A call to action for Alberta’s future

First, I appreciate greatly the massive economic boost that the oil, gas
and related industries provide to all people in this province. The
recommendations of the Royalty Review Panel have concerned me
greatly and I believe that the majority of Albertans will be hurt should the
recommendations be implemented. I am writing to share a few of my
thoughts on the issue and to invite you to take part in an organized
campaign to inform Albertans and fight for the economic future of the
province.

A word about fairness. “Fair” is an easy word to use and, as seen by the
media’s reaction to the Royalty Review Report, a very effective one. It
instantly conjures the positive. For instance, in minor hockey, who doesn’t
think it right that every kid get a fair and equal chance to play.

However, if the Flames or the Oilers are in the Stanley Cup Finals, how
concerned are we as fans that every player on the team gets equal ice
time? Not at all. The fans, the coach and all the players want the best
players on the ice, as much as possible. They want the team to win.

We want Alberta to win. The oil and gas industry is our best player,
benching it through higher royalties might be seen as fair but in the end
the whole team will suffer. And as much as we love hockey, this is a
bigger game. This is the prosperity of our province and livelihood of our
families.

Let’s talk to people, not in terms of dollars, but in terms of jobs lost. The
misconception is that we can always tax industry more. Even in this
economy, people will listen if we can explain how many families will be
without pay checks should the government implement the recommendations.
The larger companies will downsize and many of the small businesses may
be forced to close their doors.

It is critical that people see and feel their connection to the oil and gas industry.
Every Albertan is connected, through family, through friends, through customers,
through tax revenue. We have to help them realize
that. Industry experts have forecast consequences but the people are
not listening or believing. We must get the word out: this is not about big
industry, it is about Alberta’s economy, yours and mine.

I hope you have read the Alberta Alliance’s Response to the Report of the
Royalty Review Panel. If you haven’t, please visit www.albertaalliance.ca.
We need to inform the people of Alberta about the consequences of
raising the royalty rates. They need to understand the impact that
changing the rules will have on raising capital for exploration and infrastructure.

Bill Hunter’s Report was a very well written political document and we
need to combat that with an energizing campaign. I am looking forward
to participating during your rally at the Legislature on October 17. We are
also happy to assist with a website, an ad campaign or any other
initiative. Derek Jacobson needs your support, presence and donations in
order to capture media interest and change misconceptions.

Please call or email me anytime to discuss ideas or plan strategy. 403-393-
2003, 780-644-7195 or paul.hinman@assembly.ab.ca

Paul Hinman,
MLA and Leader of the Alberta Alliance

Alberta’s Alliance Opposition
401 Legislature Annex, 9718 – 107 Street, Edmonton, AB T5K 1E4

Alberta Alliance Party
#3, 1303 - 44 Ave NE
Calgary, AB T2E 6L5

Toll free: 1-888-262-1888
Phone: (403) 769-0992
Fax: 1-866-620-4791

[Slava]

Wow. Political opportunism didn't take long to get involved.

[First Lady]

Originally Posted by Slava

Wow. Political opportunism didn't take long to get involved.

Call it that if you like, but perhaps you do not have the facts.

#1) They approached us after reading our response to the review. It has been documented in the media that we are the only party speaking up. The Liberals and NDP want to see it pushed through. It only makes sense they ask our Leader to speak at their function.

http://www.albertaalliance.ca/


#2) I was speaking out against this when no one was listening and before it became an issue.

http://forum.calgarypuck.com/showthread.php?p=907496#post907496

[Slava]

I haven't had a chance to look yet, but is there a response there to the Auditor Generals report as well?

[First Lady]

Originally Posted by Slava

I haven't had a chance to look yet, but is there a response there to the Auditor Generals report as well?

Yes: http://www.allianceopposition.ca/?q=node/34

[Slava]

Originally Posted by First Lady

Yes: http://www.allianceopposition.ca/?q=node/34

What about the $1-2 Billion dollars per year that the Auditor General says the government could've collected in royalties though? I didn't see mention of that in that response?

[llama64]

Can anyone quantify how much of the current Oil & Gas revenue is leaving the province to foreign investers? If a party is supposedly speaking out for the people of Alberta, wouldn't they want to get as much of that money to stay inside the province?

Basically, if the royalty hike is going to increase the amount of money that stays local, I support it. If it's going to decrease the amount of money, then it's a stupid idea.

[Slava]

I have received a lot of emails over the past 6-8 months that say that the oil and gas is 90% foreign owned. There is no industry in the United States that is anywhere near this, and in fact not in most of the industrialised world!

Surely we are smart enough to recognize the issue with this!

[wegotBeers]

Talking about foreign ownership is not really relavent to this issue. The majority of energy companies in the western hemisphere are publically traded companies which, means they are not locally owned they are globaly owned. If you want more local ownership then go out and buy more energy stock but in a capitalistic economy we do not have state owned energy companies. The real issue hear is the hard fact that if you make gas production more expensive by increasing royalties; companies will stop investing. Over the last few years the Canadian Deep Basin has already become the most expensive basin to operate in the world and companies are already rolling back there capital investment. If the royalties go up they will invest less, it is really pretty simple.

[killer_carlson]

It also depends upon what the Province does with the extra money.

If they put it into the seperation....er I mean Heritage Fund, then forget it. Don't pass it.

If they spend most of it on initiatives to diversify the economy and improve our infrastructure, then that's a different story.

[Thunderball]

Originally Posted by Slava

I have received a lot of emails over the past 6-8 months that say that the oil and gas is 90% foreign owned. There is no industry in the United States that is anywhere near this, and in fact not in most of the industrialised world!

Surely we are smart enough to recognize the issue with this!

As mentioned, its not really related, but I'm going to discuss it anyway.

The reason for the huge amount of foreign ownership in the patch is due to three major factors (as far as I know):

1. The dark side of currency depreciation. While great for manufacturing, the depreciated dollar of the 1990s made Canadian business discounted targets. Back when the dollar was 65c US, a corporation worth $1B CDN could essentially be bought for $650m US. Furthermore, since the oilpatch works in USD, and employees were paid in discount CDN$, it made good business sense to buy/build Canadian divisions.

2. Taxation. While most major oil companies (Exxon, Conoco, Shell, etc.) have Canadian divisions, they choose to maintain global headquarters in a different country for tax purposes.

3. Global Scope. Canada is a small fry globally. Calgary is an emerging global oilpatch city, but it still lags behind the usual suspects. Big companies from these established centres like what is going on here and buy into it.

There's really only one way to completely curtail this, and that's nationalization. Do that, and you essentially assure economic chaos and the end of foreign investment. The other, lowering taxes, is not a viable (or popular) option.

[Slava]

Well there is another reason why we have a core industry that is 90% foreign owned and controlled: that being the lack of a governmental policy to limit foreign ownership.

This does not equate to government ownership either...just to have Canadian corporations running Canadian resource companies. All this would take is something to limit further take overs by companies elsewhere until Canadians own a certain percentage...hardly creating economic chaos or fire and brimstone!

[First Lady]

Originally Posted by Slava

What about the $1-2 Billion dollars per year that the Auditor General says the government could've collected in royalties though? I didn't see mention of that in that response?

The Auditor Generals report is like a report card on how the government is performing; how well are they are "doing their job".

The reference to what "could've been" "should've been", etc. are just speculation and examples on the part of the Auditor General. He was very clear on that earlier this week on Rutherford.

That portion of the report, just re-iterated what the Alliance has been saying along, they have become lax and complacent and not properly monitoring ongoing programs.

The AG is not in position to make recommendations on policy only to report on how policy is carried out. This is the opposite of the Royalty Review panel; who were mandated to formulate policy on the Royalty structure.

Hope that clarifies it for you.

[First Lady]

Originally Posted by llama64

Can anyone quantify how much of the current Oil & Gas revenue is leaving the province to foreign investers? If a party is supposedly speaking out for the people of Alberta, wouldn't they want to get as much of that money to stay inside the province?

Our party supports business. It's filthy I know, but someone has to do it.

When investors develop businesses in Alberta, it benefits everyone.
They employ Albertans, they build and/or rent offices, homes, etc. They stay in our hotels, they eat in our restaurants, who employ Albertans, it goes on and on.

Do we want to make ourselves unattractive to investors and development?

BTW; the Royalty review will also impact farmers.....everyone seems to be overlooking that portion.

Basically, if the royalty hike is going to increase the amount of money that stays local, I support it. If it's going to decrease the amount of money, then it's a stupid idea.

The money stays local either way.
One way it stays in the hands of businesses and Albertans who worked hard to earn it;
the other way it goes to government to mismanage as they have demonstrated they do very well.
With the latter, we also run the risk of discouraging investment and growth.

[First Lady]

Originally Posted by killer_carlson

It also depends upon what the Province does with the extra money.

If they put it into the seperation....er I mean Heritage Fund, then forget it. Don't pass it.

If they spend most of it on initiatives to diversify the economy and improve our infrastructure, then that's a different story.

Actually they have had surpluses due to royalities for a number of years now.

They have never had a "plan" in place to wisely invest it.... they throw it at what every department is screaming the loudest, even though they have already received their full budget allocations for the year and without questioning them why they are over budget.... in the past it has gone to schools, hospitals and the $400 cheques the went out.

Haven't you been benefitting from the government spending of the surpluses? No, maybe that's why they want to gouge another 2 Billion from our local ecomomy.

Had they beein investing it in something like the Heritage Trust Fund; it could actually be generating enough interest revenue to run the province. That could replace the royalty scheme or better yet reduce our taxes.

[Thunderball]

Originally Posted by fotze

How will it affect farmers?

Less drilling operations, less surface leases and right-of-way agreements.... less of those = less money to the farmer.

[First Lady]

Originally Posted by fotze

How will it affect farmers?

The panel has recommended a premium of $10.00 per acre on crown land.

This is over and above agreements already in place. This will effect many farmers who cultivate the lands and ranchers who graze their livestock on crown leases.

There are a couple other sectors effected as well. Forestry is one... I would have to go back to report to recall the other.

Remember the panel has told the government it is an all or nothing review.

Stelmach has not said a thing on it as yet. So we don't know if he will look for "grey" area. Which, personally I think that is where the real solution is.

[Thunderball]

Originally Posted by fotze

But farmers don't want wells on there land.

How do I phrase this delicately? Most farmers don't want wells on their land because saying so is a good tactic to get more money. Landowners in depressed areas tend to be a lot more receptive than in more prosperous areas. If there's a bad harvest, they welcome the landmen with open arms.

[Thunderball]

Originally Posted by fotze

Oh I know, that's why the winkie. When we do a community meet and greet the number one comment on the comment cards is "When are you going to drill on my land?". The number two most common comment is "The surface lease payments you pay are way too low".

Yeah, I thought I'd explain it more in case other people didn't get what we were saying. Your example sounds very familiar from what I've heard.