Official (Alberta) Oil Discussion Thread

[CorsiHockeyLeague]

Yeah, exactly. It's a very strange outcome - the NDP clearly did the right thing by not monkeying with the regime overmuch, but the implications are twofold: first, that this created a whole bunch of uncertainty for no good reason, and second, that there's STILL uncertainty that they'll just re-do this if WTI gets back in, I dunno, the mid 50's?

[CaptainCrunch]

The smartest thing she could have done would have been.

We reviewed it, we're getting a fair share.

the next review will be after the next election.

[rubecube]

Originally Posted by CaptainCrunch

the next review will be after the next election.

Why? Then we would have had posters bitching on here that companies can't make proper 5 year plans with that kind of uncertainty.

[Jacks]

They said on the radio that rates were frozen for 10 years, is that not the case?

Edit: nm, apparently that's for existing production.

[rubecube]

Is it not completely out of the realm of reason that maybe Albertans weren't getting their fair share when oil was $100/barrel, but now the circumstances are different? I agree that it was stupid campaign promise with where oil was trending at the time the campaign started, but it makes more sense to take 8 months and come up with something that's been based on reasoned discussion than to put something out quickly just to appease the masses.

[monkeyman]

Originally Posted by rubecube

Why? Then we would have had posters bitching on here that companies can't make proper 5 year plans with that kind of uncertainty.

I dont think the government should cater thier message to the posters of this board. But thats just me.

[rubecube]

I should add that if you're a PC or WRP you also have to consider the heat Notley would've gotten from the NDP voters if she had just put out a "stay the course" review after a couple of months. They would have roasted her for being too quick. You guys technically got the best of both worlds. Royalty rates stay the same and the NDP have to shut their yaps about it for the foreseeable future.

[puckedoff]

^ Agreed. And lets all follow their example and shut our yaps.

[GGG]

Originally Posted by rubecube

Is it not completely out of the realm of reason that maybe Albertans weren't getting their fair share when oil was $100/barrel, but now the circumstances are different? I agree that it was stupid campaign promise with where oil was trending at the time the campaign started, but it makes more sense to take 8 months and come up with something that's been based on reasoned discussion than to put something out quickly just to appease the masses.

If that is the case this review should have addressed it as the rates are variable based on price. Unless significant changes to production costs occur then the rates should remain constant in the near term.

[rubecube]

Originally Posted by GGG

If that is the case this review should have addressed it as the rates are variable based on price.

Yeah, that could be true, but I'd wager politics played a big role in it as well. The NDP were going to get absolutely murdered if they tried to push that through.

[Frequitude]

Originally Posted by rubecube

Is it not completely out of the realm of reason that maybe Albertans weren't getting their fair share when oil was $100/barrel, but now the circumstances are different? I agree that it was stupid campaign promise with where oil was trending at the time the campaign started, but it makes more sense to take 8 months and come up with something that's been based on reasoned discussion than to put something out quickly just to appease the masses.

Nothing was stopping the panel from bumping the $100 WTI tiered royalty rate in this review.

[rubecube]

Originally Posted by Frequitude

Nothing was stopping the panel from bumping the $100 WTI tiered royalty rate in this review.

Sure, but I don't think they wanted to spend their dwindling political capital on that.

[SebC]

Death to Megathreads!

[Swift]

Originally Posted by CaptainCrunch

I don't disagree with your sentiment, but would like to change the wording.

Saudi Arabia threw the patch into the fire, the NDP threw more wood on, and then started roasting marshmellons.

Marshmellons? Well, at least the NDP is taking steps to diversify our economy.

[SebC]

Originally Posted by EldrickOnIce

http://www.cbc.ca/news/politics/just...-did-1.3419930

No Justin, we don't need the Prime Minister to play referee, we need leadership.
Be a leader. Take a stand. If I disagree with the stance, so be it, but failing to take any stance and playing referee instead is not the leadership we need right now.

The Federal Government - i.e. the social license panel - playing referee is exactly what we need. If the project is compliant with all applicable standards, it should be given the go-ahead from the referee, and not subject to whims of NIMBYs and extortionists.

[Frequitude]

Originally Posted by rubecube

Sure, but I don't think they wanted to spend their dwindling political capital on that.

Agreed. Surely you can see how sad that is though. Letting politics get in the way of such an important policy to this provinces economy. Their political capital is going to take a much greater hit for leaving the industry in royalty limbo moving forwards from today than they would from any token bump in royalty rates for a barrel worth $70 more than today. Just dumb. Our leadership is dumb. It so sad. I take no joy in the failure of the NDP. That's no to say I'm not going to comment on it to death, but nothing would have made me happier or more confident in them than to come out of today believing we had a solidified set of rules for the oil & gas industry to play by. Even if that meant higher rates.

[puckhog]

To those questioning the outrage from those of us who are generally "against" the NDP (in quotes because I honestly hope they do a good job, even if I don't agree with their positions), my feeling out of today is that they've come to a good conclusion, and I'm not "outraged" at all. This gives actually me some hope for this government and their willingness to listen and adapt.

However, I also feel they deserve to take some flack - not pitchfork-carrying, effigy burning outrage, but some honest criticism. They mishandled it from the start. There were a lot of people and data that supported the notion that Alberta's royalties are actually pretty fair, given our position in the global energy market. The NDP chose to ignore all of this (despite several of them being in the government with full access to the data), and declare that the current royalty structure was unfair and that they would rectify this injustice. Immediately upon coming into power they started this very public process that promised substantial changes. They did not need to do this. They easily could have quietly looked at the data, got up to speed and assessed the path forward without introducing additional uncertainty into an already fraught economic situation, but they wanted to make a very public show that they were going to fight for Albertans' fair share.

And for those that are saying the royalty review was of minimal impact and that price and export capacity are the biggest issues, you're probably right for much of the energy sector. However, there are a fair number of producers focused on lighter oil plays that could have been doing something at the $40 prices we had last year. Yes, the industry still would have been down overall, and there would have been layoffs, but for some areas things could have been slightly better.

Again, overall I think this was a good conclusion to the process, and it makes me hopeful for this government's approach to future issues. I just hope they (and other parties) take note that sometimes it's better to take a beat and assess things before making bold declarations and charging off in a wrong-headed direction.

[Resolute 14]

Originally Posted by rubecube

I should add that if you're a PC or WRP you also have to consider the heat Notley would've gotten from the NDP voters if she had just put out a "stay the course" review after a couple of months. They would have roasted her for being too quick. You guys technically got the best of both worlds. Royalty rates stay the same and the NDP have to shut their yaps about it for the foreseeable future.

How is it any way acceptable for Notley to extend the uncertainty and the risks (if not losses) that entailed for the sole purpose of appeasing her voting base? Rachel Notley is supposed to represent all Albertans now, not just a faction of her own party's voting base.

[rubecube]

Originally Posted by Resolute 14

How is it any way acceptable for Notley to extend the uncertainty and the risks (if not losses) that entailed for the sole purpose of appeasing her voting base? Rachel Notley is supposed to represent all Albertans now, not just a faction of her own party's voting base.

When have politics ever worked that way?

[Resolute 14]

That didn't answer my question.