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| Oil Royalties
Posted: 11/2/2007 4:41:28 PM | | I find it hard to believe that a company that makes billions upon billions of dollars off a barrel of oil, while paying a penny on the dollar per barrel, will go broke if heaven forbid they pay TWO pennies. | |
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| Oil Royalties
Posted: 11/2/2007 5:27:11 PM | Whoa, do your math, Royalties are increasing by 20%, that will bring the royalties to 21%, not much but if that was our tax rate I am certain you would not be too happy with that. The oil companies also have investors that want the stock prices to increase or a payment of dividends, they are also paying the cost of exploration for new oil fields, drilling of wells and distribution charges. Once you have removed 20% of their profits, there is very little left for further expansion of new fields; plus the cost of labor in northern Alberta is already through the roof, housing is insane (my taxes this year were over 3x what they would have been for a similar house in Calgary), and oil companies are flying workers all over the country for the time off periods.
Oil companies are already looking at other provinces or in the States to build refineries; upgraders are needed but projects are put on hold or canceled due to labor/cost issues. Qualified personnel are hard to find in this province and to secure them as employees they demand top dollar, upwards of $75/hour. These companies make billions and billions of dollars because they sell billions of barrels annually, they treat their employees very well and are very generous to some of the smaller communities in this province.
You should not look at what these royalties will put into the governments coffers (like they really need that much more), but what the oil companies have done and continue to do to our communities and livelihood. I do agree that the oil companies can afford to pay these royalties, but a much more reasonable amount say 5-6%.
Put yourself in their shoes a 20% tax overnight is insane, hell we all live high on the hog now, why not just raise the GST by 15%, the money would all end up in the same pile anyways; if that happened I am certain that you would quit your ****in and vent at the source of the real problem, greedy government.
JMHO
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| Oil Royalties
Posted: 11/2/2007 6:15:58 PM | Ahhhh ok. I thought the 20% was an increase from the one cent, to bring it to 1.2 cents. Still. The bitumen is there. What do they pay in other jurisdictions? Alaska? Europe? I also don't see what the big rush is to ship all the bitumen out of the country. I think they should build refineries in alberta, sask, and wherever. Even if it takes a couple decades, what is the rush???
A penny on the dollar was fine when oil was $16.00 a barrel, but at $95.00 it's rediculous, Big oil has had it pretty good for quite a while. We have lost out on billions upon billions of dollars. Residents in Alaska get a cheque for $1000 a year, from oil royalties. They are laughing all the way to the bank. Again I'm sure if they leave, someone else will come in their place. | |
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| Oil Royalties
Posted: 11/2/2007 6:50:39 PM | OK, I am not completely up on this topic, so please do kindly correct me if I am wrong.
they are also paying the cost of exploration for new oil fields, drilling of wells
This part of the deal hasn't changed. Oil companies are still only going to be paying one % until development or initial investment costs are paid, and then the 'full' royalty rated kicks in.
Oil companies are already looking at other provinces or in the States to build refineries
This makes me crazy. The oil comes from 'our' land (and no I don't want a debate on whose land it really is, just saying the oil and gas come from AB) and then we send it somewhere else for refineries. We already do it. They are ALREADY looking elsewhere to build refineries, so what has the royalty increase changed?
Put yourself in their shoes a 20% tax overnight is insane
I agree that 20% is a pretty big jump. I think it should have been an incremental change.
Although, like Mr Lougheed says, when both sides are po'd, it must be a good decision.
The thing I am most surprised at? This is the first thread about it! | |
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| Oil Royalties
Posted: 11/2/2007 7:40:08 PM | I leave near the tucker oil fields and one of the larger companies in this area has quoted that up to 16,000 jobs will be directly or indirectly effected by these royalties, and this is in a city of 15,000 people. They were also saying that 2/3 of the present work force could be unemployed in 3 yrs if they royalties were to go through (not sure what effect this phasing in will have)
Houses in this city were once listed and sold same day, now market has stagnated and is starting to devalue.
This makes me crazy. The oil comes from 'our' land (and no I don't want a debate on whose land it really is, just saying the oil and gas come from AB) and then we send it somewhere else for refineries. We already do it. They are ALREADY looking elsewhere to build refineries, so what has the royalty increase changed?
Alberta is now less attractive for these multi billion dollar projects, business is business, we all want the best return for our money, but after all initial investments are paid then royalties kick in, how can we compete with a 20% tax on our profits. Note that refineries are a huge employer, and pay very well; nothing like keeping high paying jobs elsewhere. | |
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| Oil Royalties
Posted: 11/2/2007 7:48:18 PM | But how many refineries are here in Alberta now? How many were being planned for Alberta before the report?
The quote was that the companies are ALREADY looking at building the refineries elsewhere.
As far as layoffs, that should take care of a whole bunch of the temporary workers that were brought in shouldn't it?
I realize that I am not an expert, just a sorta informed citizen, but even the markets didn't have the giant crash that everyone said would happen. Shades of chicken little?
I'm with King Pete. It must be a good decision to pees both sides of the debate off!! | |
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| Oil Royalties
Posted: 11/2/2007 10:59:05 PM | ummmm, people... this province is NOT, i repeat not an OIL province....
75% of the production is this province revolves around natural gas.... that is where companies make there, money, and alberta really gets there royalties from.... so with natural gas prices hovering around $6.00/GJ (gigajoule), is there really that much money to be made ??? two years ago, natural gas prices were hovering around $15.00/GJ, and that is when alberta's economy really took off... so in less then two years, natural gas prices 60%, but yet they wanted to raise royalties by 20% ?? that doesn't make any sense...
stelmach has dug his own grave now, and provinces like saskatchewan and british columbia will flourish on alberta's big mistake.... they have offered lowered royalties and tax breaks to companies just for them to move there production out of alberta and into there provinces....
and lets not forget, the biggest piece of the athabasca oilsands is not in alberta, it's in saskatchewan... saskatchewan is just a sitting goldmine right now, and come 2008, you are gonna see alot of these companies move out of alberta, and into there province and other provinces as well (b.c., manitoba, new brunswick, nova scotia) | |
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| Oil Royalties
Posted: 11/2/2007 11:05:58 PM | | I bet Sask won't be letting them get away with a penny on the dollar. | |
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| Oil Royalties
Posted: 11/3/2007 6:42:33 AM | | Working directly in the Oil and Gas industry I have heard both sides of the story. What should really peeve the people off is the Huge Multinational companies, i.e. Husky (51% Chinese owned) Suncor, Syncrude, et al. who are making record profits off your natural resources, and taking them OUT of the country. The higher royalties should focus mainly on them. Besides all of that, Petro-Canada and Encana are BLUFFING, people! Where the heck are they going to take their investments? Unstable mid-east countries? NO. To the States where the dollar is sub-par? NO. This would result in HUGE losses to investors, and that is their bottom line. So, relax everyone, the Oil and Gas industry isn't going to come to a screeching halt any time soon. | |
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| Oil Royalties
Posted: 11/3/2007 10:41:23 AM | Good speak Juffie
OP needs to get his facts a little straighter, I like most others are only pertially educated on this. However, current royalty structure gives AB around 12 Billion, new structure will add 1.2 billion - that is not an increas like he is talking.
Petro can has already said they are going to go ahead with a planned 15 billion upgrade project in teh oilsands, so I am not certain there is much to worry about.
as for the slow down being felt by most not in Bonneyville and Fort Mac - it is the depressed natural Gas prices - majority of drilling rigs work in gas, so without a cold snpa in the US where current reserves are high, gas prices will remain depressed.
current Decmeber futures in OIl are being traded at over 97 dollar per barrel, witht he world demand for gasoline, we are not going to see the oilsands go anywhere.
yup houising prices here might be dropping a bit, however, for us being a diverse economy of oil and lumber the high dollar is not helping lumber trade so there you go. amI worried, not really, so if I sold now I would only increase my house investment by 1/2 in 2 years instead of doubling, darn, still a great investment by any definition.
so, Yes, roughnecks and the like are feeling the pinch but not from the royalty review, gas activity was slowed before June, royalty was announced in October, hhmm, don't see the connection.
want busier times?
Pray for a cold snowy winter along the eastern sea board, gas prices will shoot up and drilling will increase again.
persoanally I like only having to work 8 hours a day as opposed to the 12 I was working when were swamped. and that was just to keep up in the office.
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| Oil Royalties
Posted: 11/3/2007 10:42:29 AM | oops, I said OP needs to get facts straight, my apologies, I meant ridgeline
no offense meant to either. | |
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| Oil Royalties
Posted: 11/4/2007 1:18:38 AM | Montana woos disgruntled Alberta oil companies
Last Updated: Tuesday, October 30, 2007 | 1:02 PM MT
The governor of Montana is marketing his state as an alternative for energy companies unhappy with the recent royalty increase in bordering Alberta. "Our tax rate and regulatory environment is better in Montana than Alberta," Gov. Brian Schweitzer told the Calgary Chamber of Commerce Tuesday morning.
"When you drill in Montana, you don't even pay the tax for the first 12, 18 months. We have a tax holiday."Schweitzer's pitch comes less than a week after the Alberta government announced it plans to charge energy companies $1.4 billion more in royalties for the right to develop the province's oil, gas and oilsands."So if some of you considered that with this new additional tax, you may move some of your dollars someplace else, come on to Montana," the governor said. "You'll be welcome." In his speech, Schweitzer also suggested to the audience of energy executives that new refineries could be built south of the border. | |
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| Oil Royalties
Posted: 11/4/2007 2:24:01 AM | | so, if big oil comes to manitoba, do i have to wear cowboy hats and boots? and listen to country? and vote conservative? | |
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| Oil Royalties
Posted: 11/4/2007 6:31:46 AM |
so, if big oil comes to manitoba, do i have to wear cowboy hats and boots? and listen to country? and vote conservative?
Yes. No. And yes.
And you have to sell your house and move to Saskatchewan. | |
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| Oil Royalties
Posted: 11/4/2007 6:49:34 AM | Strike me dead for saying it out loud, but if things "slow down" enough that someone in Fort Mac doesnt have to pay $2600 a month to rent a 2 bedroom apartment, thats not really a terrible thing is it? I mean, we have lived in an insanely overheated economy in some O and G towns and a little slow down would only bring things down to overheated, which is still 12 notches above 'hot'.
And its still a supply and demand economy isnt it? - eg. You couldnt charge $180 a night for a dumpy old brick hotel in Fox Creek that hasn't been renovated in 30 years *unless* its the patch thats paying for it, and its the only stop for miles on the way to oil country, which it is... in high times, everyone is going to take what they can get, but if things slow, prices drop to somewhere closer to 'normal'. | |
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| Oil Royalties
Posted: 11/4/2007 9:10:06 AM | ^^^^^
Wouldn't that be NICE? I mean really, there has to be a limit. I am looking forward to a slow drilling season so that the price of everything can come back down to earth. | |
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| Oil Royalties
Posted: 11/5/2007 8:26:38 AM | I agree, sort of
yup Fort Mac is kinda ridiculous for pricing, and all reports from the SAGD project at bonneyville is they are gearing up for their busiest winter yet.
however,with a slow drilling season (?) will the price of gas/deisel come down?
don't count on it
for the most part I doubt that pricing for most things are going to drop drastically, it is here to stay. the housing market needs a correction plain and simple.
But how about hoping that the Canadian government and retailers get their shit together and lower some prices?
here's an example, did you know, you can cross the border and buy a Bombardier recreational vehicle cheaper than in Canada?
how is that possible? they are Made in Canada!
and I am still hearing of people being able to buy vehicles in the US and have them delivered to their door, cheaper than they can buy them down the street.
OK off topic a bit but kinda ties in overall. | |
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| Oil Royalties
Posted: 11/5/2007 8:32:38 AM | following the ot...
It is my understanding that the heavily subsidized Bombardier has instructed their American retailers NOT to sell to Canadians.
Back on topic.
If gas drilling slows down, that will decrease supply which should cause the price to go up. Yes?
I did take some economics at uni, but that was a very long time ago! | |
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| Oil Royalties
Posted: 11/5/2007 9:46:07 AM |
here's an example, did you know, you can cross the border and buy a Bombardier recreational vehicle cheaper than in Canada? how is that possible? they are Made in Canada!
Ok, its off topic but this one really burns me up. Not only are they made in Canada but Bombardier has been subsidized by the Canadian tax payer (that would be me and you) for years to keep them afloat. Now they wont even sell a product, that *I* helped pay for, back to me, as a fellow Canadian, for the same price as they'll sell it to an American??? Whats with that?
ok. my rant is done. back to topic? | |
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| Oil Royalties
Posted: 11/5/2007 11:30:20 AM | | This thread is so full of BS information it's not even funny. | |
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| Oil Royalties
Posted: 11/5/2007 11:58:35 AM | | ^^^not going to provide what you would consider accurate information?! | |
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| Oil Royalties
Posted: 11/5/2007 12:30:40 PM | Heck, buying a car in edmonton was cheaper than getting one in calgary.
Go figure.
So yep, I got Edmonton plate holders and stickers on my CALGARY car.
Having grown up in a border town I saw the price differences,
Even now living in calgary I get stuff bought in detroit and shipped to calgary and even with shipping the prices are cheaper. | |
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| Oil Royalties
Posted: 11/5/2007 2:18:36 PM |
This thread is so full of BS information it's not even funny.
Theonly1, in my initial post I stated that anyone could feel free to (gently) correct me on my statements and understanding.
I have spent a lot of time reading press releases and the Royalty Report itself. The opinions I have expressed are based on my understanding of the issues.
Please provide us the BS-free information so that the thread can be more accurate. | |
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| Oil Royalties
Posted: 11/5/2007 3:06:16 PM | I wasn't pointing specifically to one person...
http://www.albertaroyaltyreview.ca/panel/final_report.pdf
It's mostly all there. The only thing is that they haven't hard assigned totals to any particular commodity and said it would be on a sliding scale. Stelmach could be the worst public speaker to ever win an election... if you watched his announcement it was horrible!
(the royalty removed tax holidays... ie, you pay taxes on the first drop you take out whereas you used to be able to drill until you broke even andthen pay taxes, allowing for lower margin wells to be drilled)
(no final numbers have been decided... the industry IS 75% Natural Gas, who's price has been tanking (no pun intended) over the last 18 months with slight rebounds recently)
(refineries are chosen for their accesibility... Alberta is landlocked)
(the review was a good move, but poorly implimented... forcing a company to "cut the fat" to break even is stupid, putting a squeeze on allows a company to plan ahead to cut the fat to increase profits... no one likes to backed into a corner!)
If gas drilling slows down, that will decrease supply which should cause the price to go up. Yes?
I did take some economics at uni, but that was a very long time ago!
In theory yes, but you're dealing with reserves and alternate solutions. The simple supply and demand curve is based on a one of a kind product that can't be easily replaced... IE - solar energy, electricity, coal... so on and so forth... Quebec is a great example, it's all Hydro there because it's readily available...
As for Bombardier... here's some added hate for you...
"It is time to take a hard look at how much the taxpayer has paid out to Bombardier over the past two decades. Since 1982, Bombardier and its subsidiaries have received $36-million in grants and $736-million in repayable contributions – for a grand total of $772-million. These amounts do not include billions of dollars in financing provided through Export Development Canada. Federal law does not permit citizens to know the extent of Ottawa’s support of Big Business through this Crown corporation; but according to the EDC, as of Dec. 31, 2003, the company had $6.5-billion in outstanding loans to the aerospace industry and provided “significant support for Bombardier.” "
(consider this is tied to aerospace though, so it would be the equivalent of bankrolling NASA, and it's not for your skidoo, they are run as seperate entities as far as I know) | |
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| Oil Royalties
Posted: 11/5/2007 11:51:47 PM | Bombardier makes me sick to my stomach.
Here' s the Bombardier patter.
Oh look we scored a bit contract!!!!
Oh no we need a bunch of money.
Oh look we scored another huge contract!
oh no, we need even more money.
But of course its in the east (Kaybeck even?) so the Libranos would bend over backwards, with suitcases full of OUR money to have them in their pocket. Good riddance of one, hopefully the other will wither and die as well.
I would NEVER buy Bombardier anything. No matter what the price. | |
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