Ed Stelmach resigning as Premier

[WilsonFourTwo]

Originally Posted by burn_this_city

The royalty regime was fine before the changes he brought in. All the changes did was drive away investment in the oil patch. Its cute when people who don't work in the industry say it didnt go far enough. Of course not, because you arent getting something for nothing.

You're confusing "I was doing fine before the changes were brought in" with "The future of Alberta was doing fine before the changes were brought in".

And I could argue that it's cute when people work in the industry without giving a thought to the long term survival of Alberta (and I'm talking money and economy, not tree hugging hippie junk).

[burn_this_city]

Originally Posted by WilsonFourTwo

You're confusing "I was doing fine before the changes were brought in" with "The future of Alberta was doing fine before the changes were brought in".

And I could argue that it's cute when people work in the industry without giving a thought to the long term survival of Alberta (and I'm talking money and economy, not tree hugging hippie junk).

You do realize there is over a trillion barrels of oil up there? How long should this resource last for? 100 years? 500 years? After the age of oil, when the world has transitioned away from petroleum? There is more oil up there than the world has used to date. We can't just ramp up production overnight, the infrastructure required takes years to build, with only incrimental increases of production. You drive away that investment with short sighted cash grabs and that resource might sit in the ground indefinitely. Like Frequitude said, a larger peice of a smaller pie is worse than smaller peice of a much larger pie.

[WilsonFourTwo]

[QUOTE=burn_this_city;2915839]How is the pie the same size? When projects are cancelled due to economics? QUOTE]

There is a (more or less) fixed amount of oil in Alberta. The pie is always going to be that size.

Projects are cancelled for now. Those projects will be viable in the future, and we'll obtain an improved rate. I'm a fan of a sustained economy, not a free for all.

[burn_this_city]

I think you're confused as to what the pie is.

[bizaro86]

Originally Posted by burn_baby_burn

Are all farmers stupid?

They don't all have to be stupid for Stelmach to be stupid. And his record would kind of suggest it.

[Frequitude]

Originally Posted by WilsonFourTwo

I've always seen that as a bogus argument used to support lower royalty rates. The pie is, was and will always be the same size.

The REAL differences that comes from an increased royalty rate......the rate in which the resources get exploited, and the dollars brought in for the resource.

And no, I don't advocate killing the oil patch......but I also don't see the need to give up all the resources as quickly as possible.

Time value of money. $1 now is worth more than $1 tomorrow.

[WilsonFourTwo]

Originally Posted by Frequitude

Time value of money. $1 now is worth more than $1 tomorrow.

For sure, but we're talking about getting $1.25 tomorrow.

[Resolute 14]

Originally Posted by WilsonFourTwo

You're confusing "I was doing fine before the changes were brought in" with "The future of Alberta was doing fine before the changes were brought in".

And I could argue that it's cute when people work in the industry without giving a thought to the long term survival of Alberta (and I'm talking money and economy, not tree hugging hippie junk).

Speaking of money and economy...

http://www.afl.org/index.php/Press-R...ialq-rate.html

[WilsonFourTwo]

Originally Posted by burn_this_city

I think you're confused as to what the pie is.

I'm talking about economic activity generated by the desire to extract/exploit natural resources. And since there's a finite amount of oil (and gas, etc) in the ground, there's a finite amount of resource related economic activity.

[WilsonFourTwo]

Originally Posted by Resolute 14

Speaking of money and economy...

http://www.afl.org/index.php/Press-R...ialq-rate.html

Ugh, obviously not great to see.

I'm not at all trying to dismiss the news, but isn't this the time of year where we traditionally see an increase in unemployment (reported and real)?

What's behind the unwillingness to swap PT hours into FT jobs in Alberta? Seems to me that things stabilized a long time ago, and have (generally) been slowly but surely improving. It just seems like there's more fear amongst the business community than necessarily warranted?

[Frequitude]

Originally Posted by WilsonFourTwo

For sure, but we're talking about getting $1.25 tomorrow.

No we're not! I'd love to see you actually try to arrive at that number.

As a base, you're suggesting that a 25% further increase in royalties would have zero impact on project timing, which is obviously false. So to arrive at your absurd $1.25 number, you have to increase by more than that 25% to offset the delayed cash flow effect. Are you actually suggesting more than a 25% increase on the current rates (~5% revenue pre-payout, ~30% gross margin post-payout)?

[WilsonFourTwo]

Originally Posted by Frequitude

No we're not! I'd love to see you actually try to arrive at that number.

As a base, you're suggesting that a 25% further increase in royalties would have zero impact on project timing, which is obviously false. So to arrive at your absurd $1.25 number, you have to increase by more than that 25% to offset the delayed cash flow effect. Are you actually suggesting more than a 25% increase on the current rates (~5% revenue pre-payout, ~30% gross margin post-payout)?

Wow. I picked a reference number at random, I'm not actually suggesting a 25% improvement, lol. Breathe. Calm. Peace.

[Frequitude]

Originally Posted by WilsonFourTwo

I'm talking about economic activity generated by the desire to extract/exploit natural resources. And since there's a finite amount of oil (and gas, etc) in the ground, there's a finite amount of resource related economic activity.

You're also neglecting to consider the trickle down effect that major investment has on the Albertan citizen. That further compounds the concept of time value of money.

The average Albertan citizen benefits by wayyyyyyy more than just the province's royalty cut.

I think you're way offline here. Investment now >>> investment later.

[Frequitude]

Originally Posted by WilsonFourTwo

Wow. I picked a reference number at random, I'm not actually suggesting a 25% improvement, lol. Breathe. Calm. Peace.

Ok, so what would you reduce it to? Get down to that 10% area, and I'd much prefer my government just take the $1 as is and go invest it somewhere else at a 10% return.

Don't confuse the need to "breath calm peace" with someone using numbers to debunk what appears to be a poorly thought out idea.

[flamesaresmokin]

i don't think this will amount to much. Idiot Albertan voters will still turn out in droves to elect the next PC lackey to take his place in a few months.

[WilsonFourTwo]

Originally Posted by Frequitude

You're also neglecting to consider the trickle down effect that major investment has on the Albertan citizen. That further compounds the concept of time value of money.

Nah, that's definitely part of what I'm talking about. It's certainly not just about the dollars for oil, or the land sales, or the corporate taxes. The economic activity also includes the car dealerships, the sandwich shops and the personal income tax.

[Frequitude]

Originally Posted by WilsonFourTwo

Nah, that's definitely part of what I'm talking about. It's certainly not just about the dollars for oil, or the land sales, or the corporate taxes. The economic activity also includes the car dealerships, the sandwich shops and the personal income tax.

Agreed. And by increasing royalties further and delaying projects we'd also be delaying when the common Albertan can realize all of those.

Originally Posted by flamesaresmokin

i don't think this will amount to much. Idiot Albertan voters will still turn out in droves to elect the next PC lackey to take his place in a few months.

Its not so much a question of whether or not the next leader is PC, its a matter of how big the opposition will be. This move will probably shrink it?

[Canada 02]

Originally Posted by First Lady

Possibly. However, I think most people will realize the problems go far beyond Stelmach. Yes, he is the leader, but the entire caucus let things go downhill even though they had the power to do the right thing for Albertans.

Originally Posted by First Lady

I wouldn't be surprised to see more defections from the PC's. Ones who don't want to go down with the ship.

so do you want those defectors who contributed to things going downhill? I guess you already have

[Frequitude]

First Lady, lets make a deal. You run for the PC leadership and we'll all vote for you. Sell yourself out.

How about you Slava, what provincial party would you associate with? You strike me as a touch to the left (relatively speaking of course).

[redforever]

By 2008, the Conservatives had raised royalties in Alberta by 25% of what a panel had recommended. However, the NDP and Liberal parties within Alberta were outraged by what they perceived as “such a small increase” imposed on the oil and gas companies.

Alberta NDP platform position, 2008. They vowed if they were elected, they would raise royalties substantially more than the Conservatives had. Read this article with Brian Mason outlining NDP party position on royalties.

http://www.cbc.ca/canada/albertavotes2008/story/2008/02/05/mason-royalties.html

Alberta Liberal platform position, 2008...same as with the NDP, they vowed to raise royalty rates significantly higher than what the Conservatives had. This is what Taft had to say

http://oilandgasinquirer.com/article...08_JS0001.html

Both the NDP and Liberal party had researched what Alaska was doing and thought Alberta should move in that same direction.

So all 3 political parties in Alberta were raising the royalty rate...even though Ralph Klein was against it. Alberta did not have any political party that would not raise royalties further....and most chose the path of least resistance, the Conservatives….because they were afraid of change and were not really sure what would happen with further increases in royalties.

And, I think part of the blame for the whole royalty fiasco has to be put directly at the feet of the oil and gas companies themselves. Perhaps if the oil and gas companies were better educators and better communicators, they could have got their message out to the general public but such was not the case. Educators and communicators they are not. They took out a full page ad in the major newspapers of Alberta, outlining their concerns about increased royalty rates…..but they did so using such technical language that it became mumbo jumbo for the readership. Now while the oil and gas companies may be short on communication skills, they are also not always the big boogey man that that masses make them out to be either.

And Ed Stelmach basically got in by default, by a new runoff structure, and also up the middle splitting the other two Conservative factions, the one faction wanting some change (Ralph has to go, he has been in too long) and the other faction wanting change at all costs. In fairness to Ed, it is almost impossible to govern trying to appease two opposing factions within your own party.

And as some will say, Stelmach is the best Premier Saskatchewan ever had.