Alberta Economy Outlook - 2015 Version

[Ozy_Flame]

Originally Posted by chemgear

And have public employees and their unions exposed to skipping work every Friday? That's not going to help the fat trimming or the budget.

You mean just like how many oil companies currently give every second Friday off because they work so hard?

[Flash Walken]

Originally Posted by Mr.Coffee

One thing the government may want to think about regarding oil activity if it's what drives the provincial budgets, is making it easier to obtain a surface lease within a reasonable time frame and making clearer guidelines on tenure.

The current spin the wheel of randomness going on does not help businesses plan their investments. We have one of the most burdensome regulatory systems in the world. I don't have a problem with regulations, but speed up the G D processes.

That will just increase labour costs and inflation.

One of the main problems with oil sands development is that it has been too fast, which has hamstrung the government to a large degree.

The problem isn't that they areN'T being developed fast enough, it's that they are developing too fast.

Perhaps the current price shock will give us pause – pause to consider what an Alberta with more control on the pace of development and without the inflationary impacts which come with open-access development would look like. Had we been able to maintain costs at even double those considered by the National Energy Board, we’d have seen substantially higher taxes, royalties, and profits per barrel, although of course on fewer barrels, and we’d find ourselves much better-positioned to weather the downturns in oil prices which inevitably come. Perhaps it’s time for the Alberta government to acknowledge that it’s not optimal to simply leave the market to decide the pace of oil sands development: the government is and must be a key part of the market as the representative of the owners of the resource, the regulator of extraction and the construction of new projects, and the administrator of the royalty regime. Rising oil prices since the early 2000s have hidden a lot of sins in the oil sands, and some of those sins are going to cause a lot more pain in Alberta than need be the case for as long as this most recent drop in prices last. Perhaps, this time, we’ll learn from our mistakes.

http://www.macleans.ca/economy/econo...o-bite-us-now/

It is yet ANOTHER ideologically motivated, wrong-headed error.

Oil sands don't need less regulation, if anything, they need more.

[Mr.Coffee]

I don't know much about the oilsands, I was more referring to unconventional gas and liquids. I'm just saying if you want to generate investment, there are other things you can look at if you need to.

[Flash Walken]

Originally Posted by Mr.Coffee

I don't know much about the oilsands, I was more referring to unconventional gas and liquids. I'm just saying if you want to generate investment, there are other things you can look at if you need to.

But generating investment isn't a problem, it's actually keeping up with the investment already made.

The reasoning is like this:

Say you have 10 wells. You can open up all 10 wells to exploration and charge X for royalties on the oil from those 10 wells.

Another way you can go however, is opening up 5 wells for exploration and charge Y amount (a higher value than X) and reap the same royalty/profit, but without increasing the associated cost of labour. Now, obviously this means expansion and exploration are slowed, but, the revenue is still coming in, it is still significant revenue, and there is more of that resource left to be mined at the higher revenue point.

What Peter Lougheed favoured was a steady, 'conservative' approach to this development, opening 3-5 wells and generating significant revenue off those wells, sparing the province from rapid expansion and inflation. What the province has done, is opened them all up for exploration, but are using a value even lower than "X", which has contributed to high inflation without high royalty rates to offset it.

[nik-]

Why is this country refusing to learn from the mistakes of our neighbour to the south rather than insisting on experiencing them ourselves?