Alberta Politics Thread v2

[Dion]

Originally Posted by GullFoss

It’s going to be an interesting election because while so many of us have a distaste for the ndp, notley has shown herself to be a classy lady with real leadership skills and good judgement. Meanwhile, Kennedy is a petty man who just can’t help himself. I’ll probably vote ucp, but will take a long shower afterwards because it’s gonna make me feel real dirty doing so.

I encourage you to watch question period in the AB legislature. She is far from the classy lady you like to think she is. She does an excellent job of lobbing petty partisan insults when questions are being of her and her party. She's on the same level as Hoffman in her attacks.

[GullFoss]

Originally Posted by CaptainCrunch

He doesn't favor it, he still doesn't favor it. Read the column that you posted.



He goes on to talk about going to industry leaders to discuss.

Then in his opt ed piece on the 28th

https://calgarysun.com/opinion/colum...e-differential



So he tried to get the industry to follow a market solution of cutting production willingly but not everyone was on board.

So then



In summery, he wanted production cuts, but he hoped that the market participants would do it for the good of the industry, when he didn't get consensus he called for a 10% cut.

I’m not sure this was his position in early to mid November. But by late nov, all 3 parties called for the mandatory cut.

[calf]

Could private industry legally cut production amongst themselves in order to raise prices?

[GGG]

Originally Posted by Regorium

Can't say I like the solution at all.

Nobody came to their aid when oil was $100 and they couldn't fully capitalize on the upside. Having the government bail companies out for poor strategic decisions (like not investing to vertically integrate) just does not sit well with me.

This is coming from someone that's lost probably $50,000 from investing in Albertan producers in the last 5 years.

When oil was $100 refineries still made money as no one had a cheaper source of oil. The issue here is that Pipeline rates are regulated. In an unregulated market it’s the pipelines companies not integrated companies would be making killing.

So if we accept that pipelines need regulation to ensure their viability then a knock on affect is what we see now.

I don’t like it much either but I think the current situation is a result of a lack of market forces working properly so regulation needs to be the solution or let pipeline tolls float.

[calgarygeologist]

I haven't really followed things closely recently because I've essentially realized that I won't be returning to the O&G industry in Alberta again. I've given up hope and I don't see any situation in the next ten years where the industry will recover and boom again.

That being said, can anyone actually shed any light on this rail car issue that Notley has been proposing? I don't know much about it but it seems like a stupid idea to me. Is the Government actually planning on buying rail cars? Will they lease them to CP? How many investment dollars is this expected to cost and are there better alternatives for that money? Maybe most importantly, isn't rail traffic pretty much at a maximum now? Won't the logistics of getting those tankers cars to actually move across the country be extremely difficult to work out?

[Frequitude]

Production cuts should have been prorated based on net heavy sales so as not to punish the integrateds who picked the right path. This is the right being forced by government to bail out the wrong and that is not a good signal for attracting capital investment in the future.

[CaptainCrunch]

Originally Posted by calgarygeologist

I haven't really followed things closely recently because I've essentially realized that I won't be returning to the O&G industry in Alberta again. I've given up hope and I don't see any situation in the next ten years where the industry will recover and boom again.

That being said, can anyone actually shed any light on this rail car issue that Notley has been proposing? I don't know much about it but it seems like a stupid idea to me. Is the Government actually planning on buying rail cars? Will they lease them to CP? How many investment dollars is this expected to cost and are there better alternatives for that money? Maybe most importantly, isn't rail traffic pretty much at a maximum now? Won't the logistics of getting those tankers cars to actually move across the country be extremely difficult to work out?

I had heard a figure of $375 million for the initial costs and then about 3 billion bucks over three years.


But I could be wrong.

[DiracSpike]

Originally Posted by Frequitude

Production cuts should have been prorated based on net heavy sales so as not to punish the integrateds who picked the right path. This is the right being forced by government to bail out the wrong and that is not a good signal for attracting capital investment in the future.

If we lived in a functional country I'd agree with you, government setting production quotas Caps is a guaranteed investment killer. But since we live in Canada where special interest groups and spineless PMs rule the day I think this will help investor sentiment because there was no where further it could go down. Even before tmx was delayed every money manager on BNN was saying to avoid Canada and out investment index was dropping like a rock. Hopefully this is the first step out of a dark chapter in the province. Short term cuts, medium term rail, long term pipelines to the coast.

[GGG]

Originally Posted by Frequitude

Production cuts should have been prorated based on net heavy sales so as not to punish the integrateds who picked the right path. This is the right being forced by government to bail out the wrong and that is not a good signal for attracting capital investment in the future.

Maybe for locally refined product but anything shipped out is subsidized by low pipeline tolls. In a free market the cost of each transportation option would be roughly equal but pipelines are regulated and tolls set to generate a reasonable rate of return. So everyone pays a premium when pipeline is empty and gets discounted rates when they are full so it’s reasonable that everyone should also take the hit when the pipeline gets overfilled.

https://www.neb-one.gc.ca/bts/whwr/r...ltrff-eng.html

[Frequitude]

Smart take GGG. I like it

[Husky]

Originally Posted by monkeyman

This is the right decision. Oil and gas does not belong to the companies producing it, the government only grants them the right to produce it. as such, it's in the Alberta governments and the Alberta peoples best interest not to sell something that belongs to all of us at a loss.

That is not entirely true. Not all leases are Crown. There are free hold mineral leases.

[Redliner]

Originally Posted by calgarygeologist

That being said, can anyone actually shed any light on this rail car issue that Notley has been proposing? I don't know much about it but it seems like a stupid idea to me. Is the Government actually planning on buying rail cars? Will they lease them to CP? How many investment dollars is this expected to cost and are there better alternatives for that money? Maybe most importantly, isn't rail traffic pretty much at a maximum now? Won't the logistics of getting those tankers cars to actually move across the country be extremely difficult to work out?

It's a terrible idea. While I certainly understand the desire to do something to help move Alberta oil, this "solution" has the potential to create more problems than it solves.

1. Who will be operating and maintaining the new cars and locomotives? I'm assuming they will be leased to CP/CN similar to how the government grain fleet used to be run, but I haven't seen any details of how they're expecting to do that or which railways will be getting what.
2. The Alberta government does not own any rail infrastructure. They might be able to buy the equipment but where will it "live"? Neither CP or CN are swimming in excess capacity right now, and adding more equipment to their respective networks without any provision for more sidings or yards will only create more congestion and potentially delay shipment of other commodities.
3. Even if the physical plants can be leveraged to find additional capacity, it takes more than just railcars to run a train. Where will the additional engineers and conductors come from? The railways will be forced to hire more employees (which isn't necessarily a bad thing) but training them takes time.
4. What happens to all this stuff if a pipeline finally does get built? Now you suddenly have a glut of very expensive rail equipment that you no longer need, with nowhere to put it. You may be forced to sell it for pennies on the dollar.

There is a reason CP and CN haven't been lining up to invest heavily in crude by rail. It is a very unpredictable market with an extremely high cost of entry and a limited lifespan.

[robbie111]

The best thing the feds can do to help Alberta would be to stop the 20 billion in net federal transfers they take out of Alberta every year. It sure makes the pipeline purchase look like pocket change.

https://calgaryherald.com/opinion/co...g-quebec-happy

[monkeyman]

Originally Posted by Husky

That is not entirely true. Not all leases are Crown. There are free hold mineral leases.

true. If I'm not mistaken, a great majority of those are in Southern Alberta, primarily gas and mostly owned or farmed out by EnCana? I don't believe there are any heavy oil freehold leases, which is really what this production cap is targeting. I haven't really looked though in a really long time.

[CaptainCrunch]

I'm interested in the execution of the Rail Cars myself Redliner because you pointed out a huge question of infrastructure.


However, this is a purchase that the NDP might not have to worry about because they understand that there's a good chance that at the end of May they won't be the government anymore.


I've stated before that I have concerns about the carry through of the Alberta Government. They pulled up a wine ban on BC and quickly surrendered it without gaining anything and were made to look like fools when BC said thank you very much and then continued to obstruct the pipeline. She broke ranks with Trudeau on the climate plan, talked tough and did nothing and promptly forgot about it.



Right now the only item that we might see carry through on is the enforced production cuts.


The rail car purchase might be long on impactful rhetoric but short on the actual ability to execute this, and adding thousands of rail cars with locomotives and personal, and maintenance etc as well as suddenly hauling 100 car trains to market is going to be extremely difficult and chances are the original cost estimates of a billion dollars a year for running it might eventually turn out to be a lot more expensive.


Also with the Liberals looking at rail car legislation for the transport of Oil product, we could find ourselves in a situation where using rail cars might be constrained (This legislation is rumored at the moment and a physical bill hasn't been put forward yet)


The biggest problem here is if this rail plan goes sideways under the NDP or if the UCP wins the next election it will do massive damage to Alberta credibility with investors.

[Envitro]

Originally Posted by robbie111

The best thing the feds can do to help Alberta would be to stop the 20 billion in net federal transfers they take out of Alberta every year. It sure makes the pipeline purchase look like pocket change.

https://calgaryherald.com/opinion/co...g-quebec-happy

I don't understand why in this economic crisis Alberta hasn't had the balls to say "sorry, we're suspending all transfer payments until our economic situation improves"...

It's like we need a pledge from all candidates running for premier next year that they'll pause/stop transfer payments until the pipelines get built (that includes Canada East).

[OMG!WTF!]

Originally Posted by Envitro

I don't understand why in this economic crisis Alberta hasn't had the balls to say "sorry, we're suspending all transfer payments until our economic situation improves"...

It's like we need a pledge from all candidates running for premier next year that they'll pause/stop transfer payments until the pipelines get built (that includes Canada East).

That'd be tax evasion. You can't just not pay federal taxes. We don't collect them so we can't not send them. But I do like the cut of your jib. Makes you want to hold a tax revolt. Sink a few tea ships.

[Envitro]

Originally Posted by OMG!WTF!

That'd be tax evasion. You can't just not pay federal taxes. We don't collect them so we can't not send them. But I do like the cut of your jib. Makes you want to hold a tax revolt. Sink a few tea ships.

Hmm, I'm not a tax expert but I'm wondering if it would be considered tax evasion.

I'm not talking about keeping things like federal taxes collected in Alberta, nor EI/CPP, etc., just the Equalization payments. I don't think that's part of the tax structure, but I could be wrong.

We need to draw a line in the sand. The equalization thing has been ridiculous for decades (placating Quebec so that they stay in Canada). Now it's just plain stupid, and they're not willing to give us a break given the economic situation in Alberta.

[PsYcNeT]

I mean, I'm not an economics guy but quite simply if Alberta suddenly became a "have-not" we would then receive equalization right?

So as it is, we're still doing better than other provinces even if we're not swimming in oil money.

[CaptainCrunch]

Originally Posted by Envitro

I don't understand why in this economic crisis Alberta hasn't had the balls to say "sorry, we're suspending all transfer payments until our economic situation improves"...

It's like we need a pledge from all candidates running for premier next year that they'll pause/stop transfer payments until the pipelines get built (that includes Canada East).

I don't think that we can simply stop because and I'm weak on equalization, but the Federal Government does the tax collections so they're taking our share from the taxes they collect.


As well I think it would be extremely difficult for us to be declared a have not province because of the adjustments that have been made to the formula including resource revenue. The Federal Government was asked to adjust the formula this year and they basically laughed and hung up the phone.


I think that Kenney talked about having to have a referendum to approach the government of Canada to adjust equalization but if that happens he mentioned that the constitution has to be opened up.