Monday, October 29, 2007

The US exchange is part of the Royality scam

It is worth while to note the constant sell out of Alberta by this Government.

For nearly 20 years the price of oil has been in US dollars.

Now, all of Stelmach’s paper is quoting Canadian Dollars.
Canadian dollar expected to be back to 85 cents next year. Who picks up the other 15 percent of Stelmach's numbers? Guess!

With the view that the Canadian dollar supremacy will be short lived one can assume that a further discount in royalties will be given the oil companies in the field of currency exchange.

John Clark

Alberta Election Agenda

Keep in mind the Government in Power has the advantage in the Election because they can choose the agenda. If that same agenda is ripped way from them by the opposition they will probably loose or come close to it.

Royalty review with rubber numbers and little substance is an Agenda setter. Whether or not it will succeed is pretty much in your hands.

Don’t forget the goals of this Government it to further privatize health care; privatize the water and water distribution, privatize the penal system and, the police force. (There is no legislation in place supporting the highway sheriffs and the Health Authorities have written up services to uninsured).

Never in your life in Alberta has your vote been more important and at no point in our history can your vote make such a difference.

John Clark

Alberta Oil reaches 94.00 per bbl

Oil reaches 94.00 per bbl US

Under present reduced conditions (19%) created by Stelmach
Alberta gets 17.86 cents
Oil companies take away 76.74

This will continue until 20.10 causing Alberta to loose over 50 billions of dollars.

Under the schedule as it was defined (25%)
Alberta would get 23.50
Oil companies take away 70.50

Under Stelmach’s BS 20% increase paid in “like funds” or bitumen Alberta will be taking home between 20. and 23 dollars after the bitumen is sold short to the up-graders.

Stelmach’s deal is no deal at all. If anything it further reducing Alberta’s share in the resources.

Eastern financial papers are saying “How much does Alberta Need” rather than saying “Alberta is entitled to”

John Clark

Saturday, October 27, 2007

Alberta Royality Scam-Consequence

If my assumptions are correct and the whole Royalty show is a carefully organized scam it would follow there is room here for the R.C.M.P. and the securities people to investigate what would be insider trading for those who manipulated stocks and then picked them up cheap. Hardly speculation!

The people on the Royalty Committee were taken unfair advantage of if this is the case.

John Clark

Alberta Conservatives want you to trust them!

Vote for me again and just maybe I will do something for the citizens of this province!

The window Stelmach has given, moving into 2010 will put them past another election and, depending on what the oil companies say, the scaled increases will be put in place. He would like you to move forward with warm and fuzzy thoughts and, no substance.

This sounds a lot like the last election when they were fighting privatizing health care. 23% (We) voted them back in and yes, the health care is now privatized! The Health Care regions are set up as private corporations, hospitals are owned by the board members and Capital health has completed lists for un insuring segments health care. Buy more insurance is the mantra.

The “New” Royalty Regime” is still another exercise in creating projects with no accountability. Rather than go to the voter and say “we want you to subsidize oil up-graders” they will now take bitumen as currency and give this bitumen to the up-graders at reduced rates. I would guess rather than getting a dollar on this product we will be getting 50 or 70 cents. It is after all in line with the cost plus operation they put in on every one of their projects assuring their friends will walk away with the coin.

Another blind spot to be exploited is the taxation. 1.4 billion is only a very small percentage of the total amount of money in play in the tar sands. One could call it a miniscule amount. As such, it would be very easy to give back every cent of this money in tax breaks.

There is no mention of the oil companies paying the billions for the road upgrade into McMurray. At these rates it will take years to pay for while the rest of Alberta goes short in infrastructure. Infrastructure was deliberately short funded to open the door for 3PO schemes. Private companies build and maintain them leasing them back to the state. If it doesn't work the state is stuck with the bundle, in effect paying twice.

Remember, there is no accounting of what is an expense in the tar sands. What ever they put in for is okay and this Government steadfastly refuses to put in guidelines or do any expense audit.

Allowed to proceed on the track they have chosen there will be a huge amount of dollars bundling into the oil company coffers and, Ottawa will be reaching in to take up the slack.

Predictable the Alberta Conservatives will scream foul citing another NEP where in truth it will be a disaster of their own making, failing to take a reasonable cut from the resource.

I still think this has been one large dog and pony show brining us with much fan fair to a point where we get nothing.

I am so looking forward to the Parkland Institute analysis of the numbers.

John Clark

Wednesday, October 24, 2007

Alberta Premier speaks. Con Man robs Alberta.

Global 8 said it all last night. Sterling example of “Negative Journalism”

As the lead in to their 11 PM news we were told that Premier Stelmach spoke to the people of Alberta promptly followed by “A Con Man fleeces Alberta” or, similar. “More news at 11”

John Clark

Tuesday, October 23, 2007

Alberta Royality homework done by Parkland Institute!

Review panel actually plans sharp drop in royaltiesTo get its fair share, Alberta must heed Lougheed's advice:
'Think like an owner'By Gordon Laxer for The Edmonton JournalPublished October 22, 2007

Albertans have been led astray by the heated rhetoric around the recommendations of the royalty review panel's Our Fair Share. Rather than increasing royalties by 20 per cent as headlines tell the public, the panel's recommendations would, if fully implemented, reduce them by 20 per cent by 2016.

That's right. According to the review panel, its proposals would have Alberta collect $2 billion less per year nine years from now, even though oilsands production is projected to more than double.

Alberta would collect only $7.6 billion in 2016, compared to $9.5 billion in royalties in 2006. And that doesn't seem to take inflation into account, meaning that in real dollars the province's royalty revenues would fall more.

Where does the promised extra $2 billion from the review panel come from, then? Without the panel's recommendations, royalties would drop even further -- to $5.6 billion. The status quo would mean a drop of $4 billion or 42 per cent, whereas the panel's plan means a drop of 20 per cent.

The net drop in the review panel's royalty revenues can be partially explained by the forecast royalty cuts on conventional oil and gas. Natural gas revenues are projected to fall by over 50 per cent, or over $3 billion per year, even though production is projected to drop by only 14.5 per cent. A royalty shortfall is also projected in oilsands production, which is expected to rise by 111 per cent, while royalties rise by only 81 per cent.

These are hardly the increases that will drive the oil corporations out of Alberta. The forecast drop in Alberta's royalty take comes at a time when practically every other oil jurisdiction in the world is substantially jacking up its rates.

Why? Because they can. The world oil price quadrupled in the past five years, leaving so much more room for economic rent.

Rents or royalties are not taxes. They are the unearned profits due to owners, in our case, Albertans, not to the service contractors, the oil corporations. The latter have temporarily leased land from us, the owners. As Peter Lougheed wisely advised, "think like an owner."
As a homeowner, you hire a contractor to redecorate your kitchen. You pay the contractor enough, including the going profit rate, to entice him to do the work, but no more.

The value of your house goes up, partly because of the improved kitchen. But you, the owner, get all of the increased value of the house. The contractor gets none of it.

A royalty, or economic rent, is that increased value, the difference between the price and the costs; the costs already include a normal profit rate.

It's the same way with oil and gas. Oil corporations are the service contractors. We Albertans are the owners. Think like an owner.

We should not accept that Alberta must compete only by offering big oil lower royalties than elsewhere. The panel report admits that if its recommendations are accepted, Albertans will still get less than American states.

Why? It's totally unnecessary. Alberta does not need to be in the bottom half of oil and gas jurisdictions in royalty takes. Eighty per cent of the world's oil is in government hands and off limits to private investors. According to Jeff Rubin, chief economist for CIBC, the oilsands represent over half of all oil reserves in the world that are open to private investment. Alberta is in a very strong bargaining position.

Alberta has lots of advantages: political stability, First World infrastructure, proximity to oil markets. We do not need low royalties to compete. That would offer an unfair share to Albertans.

Promoters of big oil present two faces, one to the public and another to oil corporations. The scary face tells the public, "Don't raise royalties or you will kill the golden goose." The happy face tells a different story to select audiences.

Last October, Murray Smith, Alberta's representative to the U.S., told a prestigious oil executive audience in the States, "the royalty structure for oilsands is we 'give it away' at a one-per-cent royalty structure."

Roland Priddle, former head of the National Energy Board, based in Calgary, pitched Alberta to Texas oil executives as a place to invest last year by asking "where else can you purchase in-place oil (well, bitumen) for one cent a barrel?"

Big oil portrays the review panel as radical. The language of Bill Hunter, the panel's chair, sounds like he took a tough position: "As Albertans, we own 100 per cent of the resource, and we should expect nothing less than 100 per cent of the rent. It's up to industry to convince us that we should take a decrease." Exactly right.

But unfortunately, the review panel failed to take up those noble ideas in its very timid report.
It was in the spirit of Hunter's remarks, and the shortcomings of the panel's report, that Parkland Institute issued its report Selling Albertans Short, by Diana Gibson.

The review panel's recommendations are far too timid. The oil corporations don't like the review panel's report because royalties would fall by another $2 billion, if the status quo prevailed. Are there any limits to how much unearned profits big oil corporations are prepared to fight for, even if they are not the owners?

Parkland Institute was the first voice to say that Alberta's royalty rate was way too low. Our 1999 report, Giving Away the Alberta Advantage, was the first to compare Alberta's take with Norway's and with U.S. states such as Alaska.

Parkland recommended a yearly review of royalty rates and comparisons with other countries. We applaud the review panel for taking up this cause. Albertans deserve full disclosure.
Parkland's 1999 report showed that Alberta was receiving half the royalty rate in the 1990s that it did under Peter Lougheed's regime.
Premier Lougheed was courageous enough to double royalty rates in 1972, when prices were low, not to lower them by 20 per cent as the panel is recommending.

The oil corporations were outraged and carried out a scare campaign, much like we see today. In fact, many of the leaders of today's scare campaigns are the same ones who threatened to leave in 1972 if royalties were increased. But the Lougheed Conservatives toughed it out, and farsightedly used higher royalties to set up the Heritage Fund.

Don't sell Albertans short. Where is today's Peter Lougheed when we need him or her?
Gordon Laxer is the director and co-founder of Parkland Institute and a professor of political economy at the University of Alberta.
********************************************************************PARKLAND INSTITUTE - website Edmonton Office: 11045 Saskatchewan Drive, T6G 2E1Phone: (780) 492-8558 Fax:(780) 492-8738 email: Calgary Office: 2919 - 8 Avenue NW, T2N 1C8 Phone: (403) 270-9669 Fax (403) 283-6480 email: Parkland's 11th Annual Fall ConferenceFrom Crisis to Hope: Building Just and Sustainable Communities November 16-18, 2007University of Alberta Campus, in EdmontonDetails will be posted on our website when available.

Sunday, October 21, 2007

Alberta gauges for Slippery Eddies speach

It is time to put out some gauges for Slippery Eddies coming address to Albertans.

Alberta royalties for tar sands were set up as 25% of profits on completed oil projects.
Slipper Eddie has reduced these to just 19% over the past year.

In order to get back to the incredibly low rate of 25%, Slippery Eddie would say in his coming speech “We will increase our royalties by 30%” Such a deal!

If on the other hand, the recommended increase of 20% was applied to the take on the 25% it would increase Alberta Royalty to 30% for the final figure.

If, however the 20% was added to the present 25% that would give Alberta Treasury 45% for the royalty collected on the tar sands.

It is my bet that Slippery Eddie will not give you a final figure and will lowball the application of the numbers. IF HE HAS NO FINAL FIGURE YOU KNOW HE IS LYING THROUGH HIS TEETH!

This is a provincial resource. When it is gone, there is no more! It is not renewable!

Here is a Government map on tar sands projects. What is notable is the amount of area dependent on so very little water. What is not shown is the huge amount of free natural gas burned up in the process.

“My decision will be in the interests of Albertans as it always is”

When has this Government ever had the interests of Albertans at heart?

Why is it that this Government asks for closed bids then, never publishes who bid or who the bids were awarded to? I call it theft!

Otherwise why do they have to seal court documents to cover their tracks?

Where was the interest in our well being when they legislated we should pay for all the power lines used to supply the oil sands and all the power lines which sole purpose is to export electricity to the USA?

Where was the interest when the Federal and Provincial Governments put millions into up grading camp grounds then sold them to their short list of friends for hundreds or thousands of dollars?

Where was the interest of Albertans when the state owned power lines were ripped away for us returning 1 cent on a dollar of value or less?

This crew has something on their minds but it is not to the benefit of this province!
John Clark

Monday, October 15, 2007

Higher royalties will not hurt profit picture.

Financial report outlines the very high profitability of the oil sands, not to be deterred by higher royalties.

Saturday, October 13, 2007

Conservatives are covering their tracks!

Today a headline reads “Czar of Alberta Electrical Deregulation resigns” along with “conflict of interest cited” and “Minister can not make any other comments”

Also in another paper is an add for still another Conservative agency. This one is being called the AUC or Alberta Utility Commission which is to do away with the Alberta Energy Board.

A corner stone of the privatization plan of the above Czar was top break up Alberta’s generation capacity into blocks to be sold individually. These were known as “Power Purchase Agreements or, PPAs.

The power very much ended up with the two cities, Calgary and Edmonton. Enmax and Epcor. But, there as a number of less profitable generation facilities that were not picked up in the “public” auction. These I was advised were picked up by “The Power Corp” which you are more familiar with as being the group Mazankowsky belongs to.

This group is not known for bad decisions or welfare payouts to Government. One has to ask how much did the taxpayers pay them to pick up these worse than useless options?

Much troubling to me is the flipping or quick buys and sells of PPA for the sole purpose of pocketing a bunch of money. (Multi millions thought to have been absconded)

This was advertised as being “public” but like the park hand offs the opening of any such tenders was done behind closed doors and no word was given as to who all bid and what were the prices bid.

Once the initial sale was made by the Government it was out of their hands and the paper could be sold for what ever; gouging the electrical system. Money that should have been in the public tax fund was swiftly channeled into “friends” pockets.

There has been no public accounting of who bid and who got what.

What we do know is the majority of the electricity ended up with the cities which I think is what was planned from the onset.

So, if it was planned to end up like this, why were intermediate bids was needed for purposes other than lining some ones pockets?

Now it is a time for restructure, burn the evidence and, pull the resignation of the author of this scam.

Only the Attorney General can ask the RCMP to investigate.

One has to wonder what Conservatives in Alberta are proud of!

John Clark

Thursday, October 11, 2007

The Energy Market Alberta is trying for

The US Federal Government is borrowing about $2 billions each day; North America, according to the ERO of the US Department of Energy, needs 141 gigawatts of new generation by 2016. That generation alone will cost between $310 billions and $395 billions. When you consider the need for corresponding transmission and corresponding distribution the totals are likely to range from $931 billions to $1.18 trillions.

There is critical shortage of materials to construct new generation, transmission, and distribution systems. Consequently the estimates of cost, given above, must be regarded as optimistic

This short fall of electricity is roughly 1000 times greater than the total present production of Alberta. My question is, why do the rate payers of this province have to pay for it on our utility bills? This industry can be self supporting.

John Clark

Alberta - Stelmach to give away the royality-again.

There is a huge amount of BS hitting the streets and news regarding Royalties.

Simple truths:

40.00 % per BBL US is lower than the lowest price in the word.

20.00 % per BBL US is a huge give away to the oil industry. Some call it compromise.

Huge expenses cited by the oil companies are in reality paid for, dollar for dollar by the Alberta Taxpayer and, they are not audited. For this reason the oil industry has no regard on what they spend or where.

Most of the “new tar sands programs” are going to export their product out of province for upgrading. No profits for the taxpayer here. Why proceed?

If you want to get rid of this Government you have to vote!

John Clark

Wednesday, October 10, 2007

Alberta--Power Bills confuse consumers

There is some really fine investigative journalism coming out of Alberta these days!

Power Bills confuse consumers reads the Sun headlines. This and the associated articles by Graham Hicks are to the point and very well balanced. Worth the read!

John Clark

Tuesday, October 09, 2007

Alberta Power utility rip off- DetailsThursday.

Research coming in faster than I anticipated. Unreasonable profits in Alberta as compared to other jurisditions an eye opener.

Will be ready to post in time for the election.

Friday, October 05, 2007

Alberta's consequence for in-action.

One person said "I want to see a strong Alberta; strong as in facing up to Ottawa when they try to take over our stuff"

I said “There is a great deal of cash moving to the oil companies that should be in tax coffers.
If Alberta does not step up to the plate and collect the Royalties that belong to us, Ottawa will most certainly step in and take up the slack."

This will leave Alberta in a most familiar place of bad mouthing other jurisdictions because they failed to look after their own interests properly.

The NEP is dead; Never to rise again. Move on.

Stelmach driving get away car

Stelmach driving the get-away car!

Canada AM produced this catching one liner. I share.

The talk program centered on a speaking engagement Ed Stelmach made in Grande Prairie Alberta. He is telling rural Alberta to accept a lot less than 20% while side stepping and avoiding any reference to the billions a year lost to Albertans in royalties as pointed out by the Auditor General.

This guy was very much involved in the decisions not to increase the oil royalties as were the rest of the Conservative caucus. Fritting away multi billions of revenue cannot be forgiven!

At a recent meeting I heard one conservative say “perhaps we should stop privatizing everything” (to capture a vote). My comment to him was “that would make you a small L Liberal.

John Clark
cyerclark @

Power rip off explained (somewhat)

Conversations with help lines can really be a very major help!

“The Electrical Company” pay between 4 and 6 cents per kwh for the electricity they sell you. “As a rule of thumb they double this price when talking to you on the phone because, that would be our overhead” they say.

Their buying price today is under 05 cents kwh.

That brings the conversation price of electricity up to between .08 and .12 cents per kwh.

“The Electrical Company” feel they are giving every one a break when they charge us at 10 or 11 cents per kwh.

The point here is the base rate charged on electricity to the consumer is entirely arbitrary and supported by the EUB! When is 100% profit not enough? That is when the EUB allows increases in power costs based on “lost profits” Dam, I want one of those!

The power line companies running their various power lines base the price of the transmission on the “conversation” price of electricity.

As your power price increases so does your transmission costs. Money must weigh heavily on the lines.

Running a cost plus operation is hard. They have to figure out how they can add a billion dollars profit, or more in services charges. (Thanks to Edmonton Sun- Too bad they don't archive)

John Clark

Alberta oil a major rip off - Big oil Accountant

Alberta royalties on the tar sands are the lowest in the world at 1% until costs are recovered. They are far less than the inflation rate in this province. Total increase over the past 5 years has been 36.3% or average over 7% per year higher than the rate for all Canada.

This is the paltry sum that Albertans are getting for the big black holes in the northern forest and tailings ponds that are growing around the exploitation that can be seen from space. That is what the province got for this resource for 40 years of production.

A post graduate aboriginal told me that those ponds overflow in a heavy rain and are already polluting the rivers. They are concerned about the long term effects on the environment. Sycrude is dishonest when they claim to have restored 30% of the damage.

Canadian Oil Sands Trust Unit, the largest owner of Syncrude, paid an effective income tax rate of under 5% for each of the last seven years according to the Financial Post Survey of firms.

The international president of Exxon Mobil, the operator through its 70% owned Imperial Oil, was the first to threaten Alberta over an increase in royalties. It is the world’s largest listed oil firm reporting profits over 18% of revenue after tax last year. Imperial it self had net income about 1% higher.

Exxon Mobil, Imperial Oil and Suncor are “private Canadians” as suggested in a recent article by Diane Frances in the National Post. They are public traded corporations. As the former head of Shell said as a member of the provincial commission, they can afford to pay more. Exxon Mobil agreed to give Newfoundland and Labrador a 5% interest in its offshore oil. That field took even more years to reach production than does a tar sands operation now.

Why are the Canadian governments giving this resource away so cheap?

Authored by former big oil accountant
I checked Imperial Oil earnings.That Exxon Mobil subsidiary alone earned $3 billionin Canada alone in the 12 months ended June 30.Like Former CEO of Shell said, they can afford it.

John Clark

Wednesday, October 03, 2007

Alberta Oil moving to Saskatchwan? Not!!

Lies and misdirection are the tools of power for the oil companies and the Conservative Government. We have lived through the last 15 years of wall to wall lies and misdirection so, why should we think differently now??

If the royalty guidelines of the committee are accepted the oil companies will still be paying the lowest royalties in the world. Are they going to move? Not a chance!

Crescent Point Energy has joined the ENRON choir in saber rattling and more overt threats by saying they are moving to Saskatchewan.

Both of these companies have been working in Saskatchewan over the past many years with an increasing involvement as time moves on.

Two things come into play. The first being there is a shortage of skilled labor in Saskatchewan as there is in Albert and the housing situation in Saskatchewan is only marginally better than it is in Alberta.

These companies will move forward on an increased involvement as has been their plans for years.

Saskatchewan royalties are higher than Alberta’s. This didn’t stop the companies from opening that area up. If Alberta accepts the 20% increase as the bottom line as any responsible Government would do, Saskatchewan would have to follow suite or, face an angry populace in an election.


Monday, October 01, 2007

Electricty rides free from the critical eye!

Electrical energy as administered by this Government is not the free for all it appears to be. It is a practiced and deliberate rip off. The electricity companies and the Government are plying to the massive ignorance of Albertans when it comes to the complicated issues of Electricity supply and transmission.

AESO have said recently they are opening up the Wind Power generation in this province moving the generation threshold up to 900 mw (megawatts). The lines that are in place now are a 300 kv (kilovolt) line into BC that was put in place to export power to BC but, finds that it is moving power from BC to Alberta. It is possible to move 800 mw of power over a 900 kv line but, not with the existing power already on the grid!

Questions beg to be asked, where are the new power lines being planned for the wind farms?

Fording, of the Sherritt Fording (Ontario Teachers Pension Fund) group is courting the sale of its last remaining metallurgical coal to a US company. That would leave Fording in the power generation business. (They have already divested themselves of the heating coal by turning it over to the Sherritt part of the organization)

Fording is working through a professional Environmental company on the Environmental approval package now.

How soon is the Fording Company going to be before the power generated at Brooks Alberta is going to be available for the grid? And, what of the power lines to hook it up, north and south. It will be 90% for export and the price of the electricity will be dependent on how much Sherritt charges Fording for the coal it will use.

When that generation comes on line, the new 500 kv line will be in place from Genesse to Calgary. Because of the new southern generation the new lines will be under utilized and it will be said that that is the reason Albertans have to pay for the use of lines for export of electricity.

What is really needed is a Government who will look out for the interests of the population of Alberta. Not just the oil and energy companies.

Where are the explanations from ENMAX and EPCOR on why on top of their billions in profits do they need extra percentages on rate increases. If we have leaned anything in this past couple weeks is the EUB cannot be trusted to do other than what the Government tells them to do.

Bottom line is Alberta is short of transmission lines to export electricity and is adequate for supplies of our present needs. While weighing this, consider many US power suppliers and power line companies are in trouble financially because of bad policy and inflation. Outages shorts and meyham are ever present.

John Clark

Alberta not alone in trying to get more revenue

Miguel Roda, the President of Bolivia took to the US airways this weekend. He is known for his move to increase Bolivia’s royalty rates. He defended his decision by saying he increased Bolivia's take on the gas royalties from 300 million dollars to over 2 billion dollars a year. There has to be a lot of happier people in Bolivia, not necessarily in Santa Cruz

The US oil companies are re doing their revenue outlooks in anticipation of a Democrat Majority this election. I haven’t heard of any of the Oil companies saying they are going to pull up stakes and move out of Texas.

ENCANA on the other hand is still in the position of threatening Alberta and Stelmach is going along with them. I suggest to both parties they examine their positions and consider the alternatives. I believe very sincerely this whole show is nothing but a show to appear as a hard fight to do nothing or too little.

The number put forward by the committee on Royalty rip off produced the absolute lowest possible figures that could be considered even remotely reasonable.
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