I see from the Front Page of the Edmonton Journal and Gary Lamphier’s continued excellent business coverage on the RRR the Hunter Panel on Royalty Review is not going to stay out of the fray. Some of them made the rounds to some media people yesterday and are ready, willing and able to actively explain their processes, findings and continue to clarify the issues and their recommendations. Good for them.
There are some oil company executives who are now becoming insulting and calling names like some school yard bully. One such person recently appeared on a radio show saying Bill Hunter, the Chair of the Panel and former president of Alberta-Pacific Forest Industries was a “lumberjack” and suggesting he didn’t know the energy industry.
I have worked in both industries and I can tell you one thing though. If the oil and gas industry took a similar responsible stewardship view of their obligations to the citizens as owners of the natural resources as does the forest industry, the energy industry would not be in the public relations and political jam they are in now over rents and royalties.
The Edmonton Journal Headlines today says it all about the tactics being used by some – clearly not all of the oil patch leadership. Bill Hunter the Review Chair says “We’re Not a Bunch of Morons” is the front page of today’s Edmonton Journal. The inside story headline states the Panel position “Industry Argument ‘Distorts Picture.’”
These reactions from some of the industry “leaders” remind me of some “practical” advice from one of my professors in Law School. He said “If the law is against you argue the facts. If the facts are against you, argue the law. If both the facts and law are against you, then call the other side names.” Let’s hope the players keep this pubic consideration about this very important matter to all Albertans at a professional level and in a civil manner – even where we disagree.
This complex issue of providing for responsible, sustainable and optimal development of our oil sands is one of the most important economic, environmental, social AND POLITICAL decisions facing Alberta.
The record shows the development of the oil sands has not been well planned by our political level, not well regulated by our regulatory agencies and not well administrated by our bureaucracy. The impacts and implications of this decision will be felt for a long time to come.
This resource belongs to all citizens of Alberta and we need to be sure we, and industry and government are all clear about that. As Albertans we need all the various parties to work together but the ultimate decision is ours. Let your MLA know what you think responsible development and sustainable stewardship of your oils sands means. I will soon post on some of my ideas and those of others I have spoken with on the subject.
I believe that the oil executive are allowed to question the expertise of the person seeking to destroy billions of their wealth. Maybe we should question Hunter instead of blindly following his report.
ReplyDeleteQuestion away but please present a cogent arguments supported by substantitive evidence and outline alternatives - don't call people names. To revert to this behaviour lead me to believe you can't do the other necessary stuff of intelligent questioning.
ReplyDeleteThe Tristone report is an excellent spot from which you can learn, Ken.
ReplyDeleteIn addition, there are many petroleum economics modelling software packages that have Chairman Hunter's scheme now built in.
Perhaps if you spend some days modelling the impact you'll understand the issues.
Encana's engineers did and came up with a technical, not-biased answer. It isn't bullying; it is reality.
Question for you, Ken. What is the "govenvment take" from the forestry industry in terms of its stumpage fees + lease sales + taxes? Anything like 50% of the gross revenue stream? Please get back to us with the answer and the backup.
Antoher question, Ken. First some background. You are probably not aware that 19% of the mineral rights in the Province of Alberta are NOT OWNED BY THE Alberta Crown? The bulk of that 19% comprises of "freehold leases" which are owned privately. Yet, the Chairman Hunter recommendation is to place additional tax on the production from these leases. The question is; why? These leases are not the property of the people of Alberta. Isn't this simply a tax grab, like the rest of the Chairman's recommendations?
Finally, it looked you were calling names and being generally disrespectful towards some specific oil industry leaders. Sure puts your argument into perspective.
Anon @ 3:40 AM - Tristone's analysis is a place where I learn a lot. I found it to be focused on one aspect and seeking to sustain subsidies for deep well gas exploration activities. It plead high costs and low prices and asks the rest of Albertans to forego a Fair Share because the management of those high price services continue to hold out for high prices even with a market that will not justify them.
ReplyDeleteAs for freehold leases...we are not taxing the leases we attempting to extract reasonable rents for the subsurface natural resources that are owed by all Albertans and protected in our Constitution.
The energy industry does not want to compare itself to the forest industry in terms or responsible and sustainable integrated resource management and stewardship practices. The energy industry would be seen in a very poor light in such a comparison.
And besides forests are renewable resources - different concept altogether.
I like the part in your comment that included "EnCana's engineers…came up" and "non-biased answer" in the same sentence. I have no doubt about the professionalism and competence of the EnCana engineers but I have been a lawyer too long to believe the efforts will be unbiased. It is possible to be the case and it can be proven to being unbiased - but saying don't make it so. The fact so many energy industry people choose to comment on this Blog – and I presume others - anonymously makes one wonder how secure they feel about being “unbiased.”
Royalties are not a tax grab - read the "Our Fair Share" ROYALTY Review - IT IS AN EXCELLENT SPOT FROM WHICH TO LEARN.
News flash sir, there is nothing left in the cookie jar. E&Ps operating in Alberta have NOT been able to generate a profit for 18 months, and we are now asking them for more $. Wow, the ignorance out there is astounding.
ReplyDeleteScary.
New flash? They made record profits for 3 consecutive years before that and have priced themselves out of the market based on current commodity prices. The greed and self-interest that such attitudes represent is scary.
ReplyDeleteThe fact that they expect the rest of us who lost billions of past royalties our government left on the table in a cozy collusion with the industry and now that same industry expects the new government to continue to take it in the ear for all the citizens of Alberta is the real scary part of this story.
This industry seem to like to keep good market windfall record profits entirely to themselves and then expects the rest of us to continue pay even more when the marketplace no longer serve up their excessive profits.
If this is what passes in the energy sector as free market enterprisers...Spare me!