Friday, June 15, 2007

Royalties Energy-Recap

There has been volumes published by oil companies trying to defend the highest profit oil royalty regime in the world! In defending what is seemingly impossible to defend there is only a few key points they hit on.

Natural Gas output has peaked as of 2001. It’s all downhill now. We are running out and the taps are still turned on full for export. Alberta Natural Gas was also given to the oil and gas companies at the lowest rates in the world. Now that it is running out, these same companies will move on to greener fields and, we in Alberta are left holding a very stinky bag of no natural gas and ruined water supplies.

Multi billions of dollars miss managed by this Government! They sill plan on accelerating the coal bed methane capture using more of our dwindling water supplies and returning the lowest royalties in the world.

Conventional oil complains are saying they are not getting the profits they once did because it is more difficult to drill in part and the cost of labor has increased. They feel they should be compensated for this by the taxpayers who are in the same boat.

The Association for Canadian Oil Producers have finally come out and their only addition to the arguments is the oil companies pay big bucks for the oil leases and this somehow entities them to the extreme high share of oil revenue while the Alberta Crown gets next to nothing; 20 to 25 percent.

The leases like every thing else the Conservative Government has done are sold off lower than leases elsewhere in the world leaving this organizations arguments empty.

Tar sands organizations are saying their costs have gone up; they need still more profit if anything. Look here at the hundreds of billions of dollars profit declared by these same companies every quarter!

By over building and exploiting the resources they actually get for nothing they have put huge pressures on the supply structure as well as the labor market. In fact they pay some of the highest wages in the world to people working in the tar sands industry. Unfortunately they are paying this out of taxpayer money. The taxpayer does not get any part of their skinny royalty until the plant costs are totally paid for.

The same organizations are saying they add so much to the economy of this province they should not have to take a lower cut of the oil revenue. Considering most of what they have added is bought with our money its hard to think they are actually serious in this ploy.

Stelmach’s Conservatives continue to say this “success” is because they created a climate conducive to business investment. What a snow job!

I say to the oil companies “Come to the table with a proposal of 40% royalty held over time” and then, you may just survive.

John Clark
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