Alberta Royalty Review = The death of the Alberta oilpatch

[digital-audiophile]

The new royalty structure if passed will do the same to Alberta that the NEP did in 1980. Depressed economy soaring interest rates, job losses. This is not a wise move. I don't just say that becuase I am paid by big oil but as a Calgarian and an Albertan I can see the disater looming. Last October we were crushed by the income trust taxation, this october we have the potential to be crushed on the royalty review.

For example, EnCana put out a press release this morning stating that they will cut their 2008 activity by $1 Billion (roughly 30-40% decrease) if the royalty structure is changed. How does this increase revenue to the province of Alberta and it's citizens.

I quote : "The proposed changes will have immediate and long-term impacts on working Albertans. The magnitude of the expected capital reductions is the tip of the iceberg. In the short term, these changes would mean extensive job losses across the industry. There will be fewer wells drilled, completed, pipelined, operated and serviced. There will be fewer hotel bookings, vehicle purchases, landowner lease payments, restaurant meals and lower property taxes in the areas where EnCana operates, and that is just about every corner of Alberta, from the smallest towns to the biggest cities. More importantly and over the long term, well-paying, permanent jobs will not materialize across Alberta."

The full press release can be found here - http://www.encana.com/investors/news...950052710.html


Anyone who thinks this is a good thing for Alberta does not understand all the facts IMHO.

[whosinpower]

You'd think that big oil would just close up shop and go somewhere else to get their oil - cheaper.....where would that be?!? Iraq? It is a bit hard there with a civil war. Iran? Haven't started that war yet......

It is not going to dry up the Alberta Oilpatch. Big Oil has made record profits - and it is only fair that it is time to review the royalties paid - they can well afford it. Only thing that would dry up the oilpatch is lack of demand and that would be if the US suddenly figured out another source of energy.

a bit of fearmongering going on methinks.

[Pan]

greedy people like to stay greedy (not people on here, I am meaning the ones in the big chairs...unless YOU are THEY! )

[Pan]

Originally Posted by whosinpower

You'd think that big oil would just close up shop and go somewhere else to get their oil - cheaper.....where would that be?!? Iraq? It is a bit hard there with a civil war. Iran? Haven't started that war yet......

It is not going to dry up the Alberta Oilpatch. Big Oil has made record profits - and it is only fair that it is time to review the royalties paid - they can well afford it. Only thing that would dry up the oilpatch is lack of demand and that would be if the US suddenly figured out another source of energy.

a bit of fearmongering going on methinks.

Fear mongering from the oil companies? Bah...
I sneezed while flying over the middle east....oil shot up 20 bucks a barrel

[Psyire]

If it were a perfect world this would be a good thing. More money put back into communities and infrastructure. However, in reality it's going to mean less money in the pockets of people and more money wasted by our government as usual.

[digital-audiophile]

I actually do work for EnCana as a consultant


What will happen is that EnCana will invest their money into other areas, Saskatchewan, British Columbia, Wyoming, Colorado. Wouldn't we rather keep this work in our own province?

[Pan]

They invest where they see profit, they see profit here for a long time, its just a typical industry response when asked to give up more of their money. Every industry does it.

[digital-audiophile]

There is already not much profit when gas is at $7MMCF and it costs $6MMCF to produce right now, when the cost now goes up to $6.95MMCF to produce after royalty adjustments it is no longer viable to drill these wells.

This will cause the loss of jobs not only in the energy sector and will do nothing but hurt our economy.

Anyone that is old enough to remember the NEP and what it did to Alberta will be able to talk about job losses and things like people having to sell houses for $1 and walk away from their mortgages.

[Pan]

Originally Posted by digital-audiophile

The new royalty structure if passed will do the same to Alberta that the NEP did in 1980. Depressed economy soaring interest rates, job losses. This is not a wise move. I don't just say that becuase I am paid by big oil but as a Calgarian and an Albertan I can see the disater looming. Last October we were crushed by the income trust taxation, this october we have the potential to be crushed on the royalty review.

For example, EnCana put out a press release this morning stating that they will cut their 2008 activity by $1 Billion (roughly 30-40% decrease) if the royalty structure is changed. How does this increase revenue to the province of Alberta and it's citizens.

I quote : "The proposed changes will have immediate and long-term impacts on working Albertans. The magnitude of the expected capital reductions is the tip of the iceberg. In the short term, these changes would mean extensive job losses across the industry. There will be fewer wells drilled, completed, pipelined, operated and serviced. There will be fewer hotel bookings, vehicle purchases, landowner lease payments, restaurant meals and lower property taxes in the areas where EnCana operates, and that is just about every corner of Alberta, from the smallest towns to the biggest cities. More importantly and over the long term, well-paying, permanent jobs will not materialize across Alberta."

The full press release can be found here - http://www.encana.com/investors/news...950052710.html


Anyone who thinks this is a good thing for Alberta does not understand all the facts IMHO.

Encana thinks quite a lot of themselves does it not. Do you work for Encana? Maybe they should save money instead of building useless skyscrapers. An I Quote!!!

Encana's webpage
Encanas second quarter cash flow exceeds 2.65 BILLION (US) or $3.33 Per share up 55%....

They will be like shell, hire "consultants" to find nice ways of firing people, resulting in skyrocketing shareholder prices and a bonus to the ceo or board of directors, which would have paid the salaries of those laid of for 20 years.