A comment on another post on the Blog about CAPP's claim in an Edmonton Journal Letter to the Editor that the Royalty Review Review Panel is no longer in full agreement on their recommendations is worth a post in itself. the anonymous commenter thinks because a consultant's advice on striking a balance between royalties or tax increases was not accepted by the Panel that the credibility of the whole report is suspect.
The commenter challenges me as to if I have even read the van Meurs Edmonton Journal piece. I have read the van Meurs op-ed and have it in front of me as I write this post.
Mr. van Meurs is not, and never was, a panel member or an author of the report. He was a consultant retained by the Review Panel to give advice. He wanted to see a higher severance tax and lower royalties as the approach to take to give Albertans their "Fair Share."
The expert panellists, who were actually tasked with the review job and appointed by the Premier decided a lower tax instead of a higher royalty was the best way to go.
So what? They disagreed but the process worked and a unanimous set of recommendations came out of the review panel.
Thanks to van Meurs' authenticity and integrity, Albertans got to see some of the differences and the range of options considered in the review. That is reassuring to me as to the quality of the deliberations.
This review process is a very different approach to openness and transparency in government than the cosy industry arrangements done behind closed doors in 2004.
Back then there was an internal review and a recommendation for royalty increases but they were refused by the Minister. Why? Because he felt there was enough cash flow into government already -not if is was fair to Albertans and no consideration of the resource ownership issues and the breach of the public trust such an attitude displays.
Or even consider earlier this year when the Energy Minister said, in the Legislature, that he had done an updated internal royalty review. Now we see that the AG finds out it that was not the case at all. Shame!
Remember also the intellectual dishonesty of some in the energy industry that used van Meurs' report on Alberta royalties from 10 years ago. They quoted old data at the public hearings on the Royalty Review to justify the status quo.
Yes. that is right. They had the gall to stand up in public and based on such outdated 10 year old information to say that there was nothing that needed to update royalties in Alberta. As if 1997 reflected 2007 realities and current public policy purposes.
The industry today says the panel used incorrect and non-current information in arriving at its recommendations. Too bad the Review Panel couldn't have put some industry players under oath at the public hearings to see if they would still so blatantly misrepresent the facts.
This attitude by some industry players - not all - is simply trying to play Albertans for suckers. It has been a successful industry strategy under the old Klein regime but it is not going to work anymore.
The expert panellists, who were actually tasked with the review job and appointed by the Premier decided a lower tax instead of a higher royalty was the best way to go.
So what? They disagreed but the process worked and a unanimous set of recommendations came out of the review panel.
Thanks to van Meurs' authenticity and integrity, Albertans got to see some of the differences and the range of options considered in the review. That is reassuring to me as to the quality of the deliberations.
This review process is a very different approach to openness and transparency in government than the cosy industry arrangements done behind closed doors in 2004.
Back then there was an internal review and a recommendation for royalty increases but they were refused by the Minister. Why? Because he felt there was enough cash flow into government already -not if is was fair to Albertans and no consideration of the resource ownership issues and the breach of the public trust such an attitude displays.
Or even consider earlier this year when the Energy Minister said, in the Legislature, that he had done an updated internal royalty review. Now we see that the AG finds out it that was not the case at all. Shame!
Remember also the intellectual dishonesty of some in the energy industry that used van Meurs' report on Alberta royalties from 10 years ago. They quoted old data at the public hearings on the Royalty Review to justify the status quo.
Yes. that is right. They had the gall to stand up in public and based on such outdated 10 year old information to say that there was nothing that needed to update royalties in Alberta. As if 1997 reflected 2007 realities and current public policy purposes.
The industry today says the panel used incorrect and non-current information in arriving at its recommendations. Too bad the Review Panel couldn't have put some industry players under oath at the public hearings to see if they would still so blatantly misrepresent the facts.
This attitude by some industry players - not all - is simply trying to play Albertans for suckers. It has been a successful industry strategy under the old Klein regime but it is not going to work anymore.
Ken:
ReplyDeleteDon't twist my words please.
1. I pointed out that there was a disagreement between van Meurs and the panel on the post-payout royalty and that is indeed the case. CAPP accurately pointed that out.
2. Van Meurs was a consultant retained by Alberta Energy, not the Panel.
3. The Panel decided that a high royalty and a lower tax were the way to go. Van Meurs suggested a lower royalty and higher tax. You got that mixed up.
4. Industry was not given access to van Meurs updated reports before the public hearings phase closed, despite the facts that van Meurs was asked a number of times for updated information. In fact, the reports to which you refer were not released until after the Panel report was tabled on September 18.
5. A significant amount of cost data was provided by industry at the hearings process. Some members the Panel decided not to use it. Please read the submissions from industry.
I prefer to deal in the facts. You prefer to deal in fiction.
Anon@ 4:38
ReplyDeleteTo clarify your points and my post:
1 – Dr. van Meurs liked the idea of keeping a post payout royalty of 25% to keep a level playing field with Suncor and Syncrude. He said in the Op-ed, there was "A variety of ways to increase government revenues from oilsands are possible, but not recommended." He talked about a base royalty of 3% increasing with oil prices having some of the same advantages as a bitumen tax" but noted the tax "is far superior because of its revenue stabilization features...."
2 According to the "Our Fair Share" Review on page 23 van Meurs worked for the Panel. The Review Reports notes that the industry using van Meurs 1997 royalty report conclusion that in 1997 the Alberta take "ranked very high" so, according to industry nothing needed to change. The next sentence on page 23 says "...BUT Dr. van Meurs' MORE RECENT, UP TO DATE, WORK FOR THE PANEL INDICATES THAT THE VERY OPPOSITE IS NOW UNEQUIVOCALLY TRUE." Dr. van Meurs clearly worked for the Panel CONTRARY TO WHAT YOU SAY!
3 I agree with what you say here and I do not think I have it mixed up.
4 This Review was done for the Stelmach government. It was sent to the Stelmach government who in an unprecedented fashion released it publicly immediately.
They said they would take a month to check the facts. Industry has not more of a prior right (not anymore anyway) to receive advanced copies of a government report than do the rest of us who BTW actually own the resource.
But to keep the industry happy the government agreed to some more after the fact good old fashion closed door private meetings with the industry - this time with the Deputy Premier. None of the proceedings of those meetings have yet been made public...is this collusion cosiness all over again? Better not be.
We in the public have not seen the copies of what came out of those behind-closed-door meetings. Please use your influence to get the industry to provide copies to the public of exactly what they submitted to the Deputy Premier. We are entitled to know.
5 I have read all the industry submissions and some of the private citizens input too. How do you know the Panel decided not to use the cost data submitted by industry? Were you on the Panel? I think they dealt wit the industyr in put rather well in the Review Report section "What Was Said" paged 35 to 43 and specifically the industry position starting at page 40.
You are being presumptuous again over fact and fiction. Perhaps you need to read the Review more carefully. It is complex and comprehensive stuff. You seem to what to pick fights all the time. Why?
Why are you still hiding being a curtain of anonymity? That, along with your factual inaccuracies seriously erodes your credibility.
Take off your veil and show your face.
We know they decided not to use cost information because NONE of it is correct. The comparisons are off, everything is off. Just because you keep insisting that the panel used industry info does not make it true.
ReplyDeleteThe only reason anybody used van Meurs prior study is that we knew he was working for DOE. And quite frankly, only some of that info is out of date. The comparison data used in the report is awful and twisted for PR purposes (don't get me wrong, I admire that, but its not factual). For instance, Alberta is not below Texas.
If you do an apples-apples comparison, you will find that the royalty is actually pretty similar. What is different is that the average well in Texas costs approx. $2/mcf less there than it does here. Info completely ignored by the panel.
Or perhaps they just didn't work that hard at it.