Official (Alberta) Oil Discussion Thread

[GGG]

Where is Notley adding uncertainty today. I think people are over parsing notleys phrasing here.

If Brian Jean said today's economy is not the time for a cash grab the inference would be it's never a good time for a cash grab.

Because Notley said it it's assumed that Tomorrow will be a good time for a cash grab.

[rubecube]

Originally Posted by Resolute 14

That didn't answer my question.

I guess from an idealist perspective it probably isn't, but with how widely criticized idealism is around here I didn't think we'd be looking at things that way.

[Slava]

Originally Posted by GGG

Where is Notley adding uncertainty today. I think people are over parsing notleys phrasing here.

If Brian Jean said today's economy is not the time for a cash grab the inference would be it's never a good time for a cash grab.

Because Notley said it it's assumed that Tomorrow will be a good time for a cash grab.

Well she brought that on herself when she campaigned on Albertans not getting their fair-share. Its obvious from that campaign that they were going to increase the take. So when you come ahead 8 months and say "its not the time" it sounds to a lot of people like that day is still coming.

[GGG]

Originally Posted by Slava

Well she brought that on herself when she campaigned on Albertans not getting their fair-share. Its obvious from that campaign that they were going to increase the take. So when you come ahead 8 months and say "its not the time" it sounds to a lot of people like that day is still coming.

She hired a qualified group of people to do the review. She implemented it without interference. If she hired a similar group of qualified people in the future the results will be the same. If she wanted her cash grab she could have put it in here for high oil prices.

It's people's ideology that is hearing what they want to here.

[Fozzie_DeBear]

I think that the effort to encourage innovation in new wells will be interesting to keep an eye on. If those rules change the behaviour of industry to increase adoption of new technology that would be excellent.

Overall, I can't imagine a public review of royalty rates going much better under a PC or Wildrose regime.

[Slava]

Originally Posted by GGG

She hired a qualified group of people to do the review. She implemented it without interference. If she hired a similar group of qualified people in the future the results will be the same. If she wanted her cash grab she could have put it in here for high oil prices.

It's people's ideology that is hearing what they want to here.

And full credit to her for that. She didn't interfere despite her obvious thought that we should increase the rates. She campaigned on that, and didn't she bring forth a private members bill on that topic when she was in opposition? That's why her wording is being questioned...her track record on the topic.

[Amethyst]

Originally Posted by monkeyman

Couldn't they have done this review without inciting Albertans first with they're whole fair share rhetoric? That and then the posturing. So frustrating. To any of those who thought Albertans weren't getting they're fair share, does this sway that opinion? Just curious.

Well, I didn't necessarily think Albertans were NOT getting their fair share, but I certainly had no confidence that we were, based on something put in place by the PCs. From all appearances, it certainly seemed to me that the PCs were in bed with oil companies and I would not have been surprised that the royalty framework was in the companies' favour.

I have more confidence that the current framework is reasonable now than I did before.

[bizaro86]

Originally Posted by GGG

She hired a qualified group of people to do the review. She implemented it without interference. If she hired a similar group of qualified people in the future the results will be the same. If she wanted her cash grab she could have put it in here for high oil prices.

It's people's ideology that is hearing what they want to here.

I'm thrilled the oil sands royalties are staying the same. But without knowing the new rates for oil/gas/ngls, it's tough to say they won't be putting in a cash grab at higher commodity prices.

[CampbellsTransgressions]

Here's a question.

If we're currently collecting most of our royalties at the gross revenue rate, will the projects that exist now and that were started over the last few years hit payout at current oil prices?

Can we expect to see our royalties go up, even though production levels might stay the same?

[bizaro86]

Originally Posted by CampbellsTransgressions

Here's a question.

If we're currently collecting most of our royalties at the gross revenue rate, will the projects that exist now and that were started over the last few years hit payout at current oil prices?

Can we expect to see our royalties go up, even though production levels might stay the same?

At current commodity prices and with the cost of capital in the formula, I would expect most oil sands projects to never reach payout.

Obviously if prices go back up some will, but if prices go back up we'll see new projects...

[OMG!WTF!]

This is just weird....

The system also allows companies to include its recently increased carbon taxes among the costs it deducts from its operations before they pay royalties to the province.

http://business.financialpost.com/ne..._lsa=0fa1-42e1

I'd be flipping my freaking lid if I were a crazy ass NDP voter. Actually, I'm flipping my lid anyway. I want to write off taxes before I pay taxes too.

[Jacks]

Originally Posted by Amethyst

Well, I didn't necessarily think Albertans were NOT getting their fair share, but I certainly had no confidence that we were, based on something put in place by the PCs. From all appearances, it certainly seemed to me that the PCs were in bed with oil companies and I would not have been surprised that the royalty framework was in the companies' favour.

Maybe you are/were putting too much stock in what you were being told by anti PC sources like the NDP?

[OMG!WTF!]

It must be so embarrassing to have this as part of your official platform....

The PCs have squandered Alberta’s resource wealth. How? By refusing to implement realistic oil royalties that the people who own the resources – all of us – deserve. As a result, the people of Alberta as a whole are deprived of much of the benefit of our own resources.

Foot in mouth times a million.

[CampbellsTransgressions]

Oh well. Politicians are politicians. Populists are populists. What is important is that they are open minded and realize the error in their policies and try to improve. Trudeau is experiencing the same thing with the refugees and CF-18's.

It's equally as embarrassing to have saved zero dollars after 10 years of $80 oil.

It's equally as embarrassing to constantly act like a petulant child on twitter, like our wonderful WRP leader is content with doing.

The NDP most likely won't be in power past 2019. Hopefully in the meantime we get a little bit better of an opposition than what we currently have.

[chemgear]

Originally Posted by peter12

Did she actually say that bit about the big money grab? Was it a Freudian slip or something?

Indeed. Had a look around later this evening. Here is the quote from her speech from both the Herald and the Sun.

http://calgaryherald.com/business/en...-review-report

http://www.calgarysun.com/2016/01/28/matter-of-survival

“But it is not the time to reach out and make a big money grab, because that is just not going to help Albertans.”

[chemgear]

http://business.financialpost.com/ne..._lsa=fb0b-a9c6

The Alberta government’s $3 million royalty review, which had the energy industry tied in knots for months, turned out to be an expensive lesson.
In the end, Rachel Notley’s NDP government left the oilsands’ royalty model largely untouched on Friday.

“There was this deep suspicion that somehow the industry was just ripping off the province,” said Dr. Robert Skinner, an executive fellow at the University of Calgary. He was referring to the NDP’s successful campaign pledge last year that Albertans should get fair compensation for their resources. But the review process showed that the province is a high-cost jurisdiction and there is not much more to trim off the profits.

“The other good thing is, surely, it’s a lesson to other governments who make promises in elections campaigns.”

However, Michael Scholz, president of Canadian Oil Wells Drilling Association, said the report did not address Alberta’s competitiveness gap with Saskatchewan and British Columbia.

“It’s ironic that the Alberta Government wants to encourage cost leadership by the industry when it has effectively increased industry’s costs through increased corporate taxes, carbon levies and minimum wage. The Alberta Government should show its own cost leadership in order to support lower costs in the basin,” Scholz said.

[CampbellsTransgressions]

I only read a few pages in, but that was the impression I got. They said we need to lower costs to be more competitive with BC and SK, but that we're competitive with other countries. Convenient. We don't need to lower royalty rates to compete with our neighbouring provinces?

Whatever, many of the jobs created by BC and SK end up in Alberta.

[Regorium]

Originally Posted by Amethyst

Well, I didn't necessarily think Albertans were NOT getting their fair share, but I certainly had no confidence that we were, based on something put in place by the PCs. From all appearances, it certainly seemed to me that the PCs were in bed with oil companies and I would not have been surprised that the royalty framework was in the companies' favour.

I have more confidence that the current framework is reasonable now than I did before.

Where did your previous perception of royalties come from?

[transplant99]

No question that the NDP have made the correct decision here and for that, ALL Albertans should be thankful. Rachel Notley and crew are finally showing they do live in reality at moments.

However, it is also now fair game to wonder what all their bluster during the campaign was really all about. When you look at the actual platform they ran on, and all the statements that were in black and white on their website, it's very apparent that one of two things has to be factual and true:


A) they flat out lied about the royalty system being unfair to Albertans and disingenuously parroted it over and over all the while knowing nothing would change but it was a great way to discredit their opponents.

or

B) They truly had no clue what the hell they were talking about even though leadership had full access to how things worked and could easily have informed themselves. Then they chose not to as it would take away the possibility of being "right" through all their rhetoric.

Niether one of those things should go unchallenged by the media nor their constituents because it means they have cost thousands Albertans their livlihoods by being liars or incompetent and that is unacceptable.

[GGG]

Originally Posted by OMG!WTF!

This is just weird....



http://business.financialpost.com/ne..._lsa=0fa1-42e1

I'd be flipping my freaking lid if I were a crazy ass NDP voter. Actually, I'm flipping my lid anyway. I want to write off taxes before I pay taxes too.

This is absolutely correct and why a carbon tax doenst matter in a properly designed royalty scheme.

The royalty should be set and cost - reasonable investment return based on risk = governments take. If you increase the cost by adding a carbon tax you still need the same ROI to justify projects so the governments take goes down or investment in the industry goes down.