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Friday, September 28, 2007

EnCana Says It Will Lower Investment If Royalties Rise.

In the face of paying more royalties EnCana is threatening to cut $1B of capital spending in Alberta next year? This is sounding a lot like a latter-day Peter Pocklington Oiler Hockey Team gambit to me. “If you don’t submit to my demands I am taking the team out of Edmonton” what his mantra. He "left town" (sic) and nobody in Edmonton misses him.

Very low natural gas prices and the extremely high cost of drilling would not be a factor at play at all here would it? In any event given the market factor realities perhaps prudent business management practices would suggest such a strategic move is wise in any event; royalties notwithstanding.

Besides, this pull back and slowdown would help the overall Alberta economy to catch up to the growth pressures. We would have more trades, labour, material and other services available for all the projects that our municipalities so desperately need. They have money too. Right now the prices the municipalities have to pay for these projects are way out of line because of this over heated economy. This EnCana's move may be a blessing in the bigger picture.

Premier Stelmach is telling everybody in the patch to slow down and catch their breath. I would also add – if you have alternatives then bring forth some sound arguments with verifiable evidence to support them. If you have a better idea on how to get Albertans a fair share for their resources, that also shows a way towards more responsible sustainable development with enhanced resource stewardship – I will be the first to support it. We are looking for win-win here so be sure your ideas deliver on that goal too.

In the meantime don’t try to use intimidation tactics with either my government or with the citizens of Alberta - who are your landlords. Besides it's bad PR and it sucks as an example of Corporate Social Responsibility too.