'Big Oil' can't threat

[Thunderball]

sounds like Saskatchewan is dusting off the ol' "Open for Business" sign in anticipation of a Stelmach blunder.

[Incinerator]

let the exodus begin!

[Azure]

Originally Posted by Thunderball

sounds like Saskatchewan is dusting off the ol' "Open for Business" sign in anticipation of a Stelmach blunder.

lets hope that doesn't happen.

[Cowboy89]

Originally Posted by Thunderball

sounds like Saskatchewan is dusting off the ol' "Open for Business" sign in anticipation of a Stelmach blunder.

I dunno taking Alberta's leftovers without meaningful change at the healm in Sask doesn't represent sound policy. As an election platform the NDP are are planning to socialize medicine under one universal Saskatchewan insurance program. Long-term yet another drain on the budget which when times turn sour in terms of revenue they'll start upping taxes. Who do you think they'll hit first: the public with income taxes or corporate taxes/increased royaties. No province run by the NDP is 'Open for business'

[Hakan]

There are considerable economic rents that the Government of Alberta is not capturing. As Albertans that is something that you should all be concerned about. That's your land and it's being under-utilized.

Also, the Government of Alberta miscalculated royalties for the past 7 years with millions of dollars being kept away from government. The incompetence of the Klein regime is stunning.

[Thunderball]

Originally Posted by Cowboy89

I dunno taking Alberta's leftovers without meaningful change at the healm in Sask doesn't represent sound policy. As an election platform the NDP are are planning to socialize medicine under one universal Saskatchewan insurance program. Long-term yet another drain on the budget which when times turn sour in terms of revenue they'll start upping taxes. Who do you think they'll hit first: the public with income taxes or corporate taxes/increased royaties. No province run by the NDP is 'Open for business'

I have very large doubts the NDP are going to win this upcoming election. I think they're done.

[ddj]

Originally Posted by Hakan

There are considerable economic rents that the Government of Alberta is not capturing. As Albertans that is something that you should all be concerned about. That's your land and it's being under-utilized.

Also, the Government of Alberta miscalculated royalties for the past 7 years with millions of dollars being kept away from government. The incompetence of the Klein regime is stunning.

I think we have caught them. Our province reaps the billions of dollars in surpluses that are p***ed away. When and if they can ever learn to manage money in the government, I can see where it may benefit us.
At this time I would rather keep the economy rolling recieving the income and expanding business where lots of the money is put back into our province, not into a fund..

[ddj]

Originally Posted by Thunderball

I have very large doubts the NDP are going to win this upcoming election. I think they're done.

I would agree...but the oppostion has said they do not reccommend adjusting the royalties also...

[Hakan]

Government has a duty to capture all the rents on crown land so long as they provide a reasonable rate of return to firms. Individual cases aside, the returns enjoyed by firms in the Alberta oilpatch have been significantly more than reasonable. Typical economic theory places about a 8 to 12 per cent return as reasonable for resource extracting corporations.

As opposed to you, no matter how potentially wasteful government may be, I would much rather have that money being controlled by elected officials instead of unaccountable shareholders.

I don't even understand how this is a debate.

[Azure]

When was the last time elected officials did the right thing with so much money?

You talked about the incompetence of the Klein government, yet you think Stelmach will be better?

[Hakan]

Pretty asinine argument there. You think Exxon will provide more for you with their windfall gains than the Government of Alberta?

[ddj]

Originally Posted by Hakan

Government has a duty to capture all the rents on crown land so long as they provide a reasonable rate of return to firms. Individual cases aside, the returns enjoyed by firms in the Alberta oilpatch have been significantly more than reasonable. Typical economic theory places about a 8 to 12 per cent return as reasonable for resource extracting corporations.

As opposed to you, no matter how potentially wasteful government may be, I would much rather have that money being controlled by elected officials instead of unaccountable shareholders.

I don't even understand how this is a debate.

There is nothing to debate. In AB we all have enjoyed the advantage in one way or another. Government has capture their share and Oil companies have returned it by investing here. As for a 12% return the money would be safer in a GIC. This is a low rate of return. I am not talking about Oil companies controlling the money government already has but leave them to continue investing here. Obviously it is good for them here, but aren't we enjoying the benefits of it???

[Cowboy89]

Originally Posted by Hakan

There are considerable economic rents that the Government of Alberta is not capturing. As Albertans that is something that you should all be concerned about. That's your land and it's being under-utilized.

Also, the Government of Alberta miscalculated royalties for the past 7 years with millions of dollars being kept away from government. The incompetence of the Klein regime is stunning.

That thinking is flawed in the sense that it's two dimensional. There are many more dimensions that go into government take on oil and gas than simple difference in the government's cost of capital vs the oil companies cost of capital. In order for that to work to the government's advantage gas prices would have to continually go up. For example today oil cos are drilling gas wells in land that was purchased using an $8-9 gas price deck a couple of years ago. Prices on average are depressed from there and thus the land isn't pruducing as much gas as it would have in a higher price environment. Well no problem for the government because they were paid a good chunk for the land back then. Fast forward to a higher royalty environment where the government is paid off more on the back end and not the front end and they would be way behind in an econonmic sense should prices go down anywhere. I just sat through a presentation where a reputable firm was calling for $6 Hub gas short and long-term. Land that was economic to drill at $8 is might not be economical at $6. So if the expectation back when the land was purchased was $8 gas and now it's $6, the oil co's won't drill and the government makes little on land (that's worth less due to higher royalties) and less on royalties because much less gets drilled on the margin. The devil in the details of the economic rent arguement is that the oil co's have the option to drill or not to drill in low price environments. The economic rent arguement means the government takes a speculative bullish position on natural gas. Considering that the province does well in times of higher gas prices and poorer in times of low gas prices this is not good public policy.

[Azure]

Originally Posted by Hakan

Pretty asinine argument there. You think Exxon will provide more for you with their windfall gains than the Government of Alberta?

Exxon puts the money back into Alberta, provides jobs, etc, etc....the government....well the government is already loaded with money....and I doubt 'more' money would suddenly make things better for us.

[First Lady]

Originally Posted by ddj

As far as the politics goes I can't see any of our Alberta candidates having the common sense to run a business let alone the whole province.

I will try not to take that personally....

[Thunderball]

Well, it sounded like Farmer Stelmach was buttering us up for some bad news with a lot of rhetoric and empty catch phrases.

I'm expecting most of what the report asked for, with a little restraint on CBM and Oilsands production.

[Slava]

Hakan has this bang on. If the money is either going to be in the hands of the provincial government or a huge multi-national corporation, I think that the answer is pretty obvious where is should be. Its not their territory plain and simple.

Second while Albertans have benefitted from the growth and overall economic climate we've also paid a price to get that. Who builds all of the infrastructure for these companies to operate a business in the first place? That money has come from the provincial coffers, and taking our fair share is not something that should be viewed as anything other than the right way.

[Thunderball]

The "fair share" in a place that claims to be business friendly and economically free is enough money to boast a surplus to save for a rainy day, while ensuring job creation and that most projects are not bogged down by them.

This is what they have today and might not have anymore come tomorrow.

Dicking around with the formula will invariably end up with less money in the pot, as it will push feasible projects into the marginal range, and marginal projects into the can. This means a loss of hundreds, if not thousands of jobs... and less income from the producers, as they'll either sit on their money or reinvest it in a more friendly and cost effective environment. This won't hurt the big oil companies... it'll hurt small and medium size locally owned producers, and devastate the drilling and service sector that are unable to either move or diversify into other provinces.

Its essentially a bell curve that they are pretty close to optimum on... pushing too far means less money. That $2 Billion they claim they didn't get is in fantasy world, it was derived by 2005 numbers... a situation that no longer exists.

[First Lady]

Originally Posted by Thunderball

Well, it sounded like Farmer Stelmach was buttering us up for some bad news with a lot of rhetoric and empty catch phrases.

.... and he used our money to do it.... even though he promised not to.

In February of this year, the Premier said he would not hold the annual televised address. “Premier Ed Stelmach won’t make a televised address this year, breaking the long and costly tradition of his predecessor.” (Edmonton Journal February 16, 2007. Jason Markusoff.)

http://allianceopposition.ca/index/i...id=38&Itemid=1

[Slava]

Well the $2 billion per year was based on the economy of the day, but it was the same government! Why should we put our faith in these guys to fix their own mistake now? Worse yet, why should we trust them to do the right thing now when they obviously failed to for the past 7 years?