Here is the continuation of the energy industry political strategy – unnerve small town and rural Alberta – the Stelmach “base” - with fear mongering. Talisman is now musing in yet another “open letter,” this time to Premier Stelmach about withdrawing $500m of activity from Alberta if royalties go up.
It is a mere coincidence I am sure that on September 7th Talisman signalled in the Financial Post they were already thinking of cutting spending in Canada and the US by as much as 32% “…due to weak natural gas prices.”
This is positioning and posturing and classic issues framing to divert attention for the real issues. Royalties are too low and there is lots of room for them to go up. Secondly, our government have been breathtakingly inept at reviewing them and collecting them.
The Federal LIbera Adscam was touted as a $250m scam that was proven to be more like $40 million by Gomery in the end - and much of that loss was due to fraud. But it brought down a government, crippled the Liberals and may well have destroyed that political party in the process.
We have no indications of fraud at all in this Alberta royalty sham. But the Auditor General says we have about a $6BILLION loss due to royalty leakage caused by governance drift, incompetence and ineptitude.
Step 1 for Stelmach was to set up the royalty review. Good for him.
It is a mere coincidence I am sure that on September 7th Talisman signalled in the Financial Post they were already thinking of cutting spending in Canada and the US by as much as 32% “…due to weak natural gas prices.”
This is positioning and posturing and classic issues framing to divert attention for the real issues. Royalties are too low and there is lots of room for them to go up. Secondly, our government have been breathtakingly inept at reviewing them and collecting them.
The Federal LIbera Adscam was touted as a $250m scam that was proven to be more like $40 million by Gomery in the end - and much of that loss was due to fraud. But it brought down a government, crippled the Liberals and may well have destroyed that political party in the process.
We have no indications of fraud at all in this Alberta royalty sham. But the Auditor General says we have about a $6BILLION loss due to royalty leakage caused by governance drift, incompetence and ineptitude.
Step 1 for Stelmach was to set up the royalty review. Good for him.
Step 2 for Stelmach is to implement it becise it is timely and fair and Albertans want it to happen. Otherwise;
Step 3 will see a lot of PC MLAs cleaning out their Legislature desks after the next election.
No posturing necessary, they've run the numbers on this disastrous report. This is an additional $500M on top of that.
ReplyDeleteCosts and low returns were already forcing companies to allocate investment elsewhere. Additional costs from implementation of the RR recommendations will lead to a severe cut in gas drilling in Alberta, particularly in the NW corner. This, BTW, is the most valuable drilling in the deep basin. The removal of deep gas incentive will end this drilling.
Lower costs and higher returns make a lot of other places in the world look more attractive. And 'the others' you reference below aren't moving into these areas. Those leases will still be held by the companies who have paid for them for several years.
There is room to move in all this, but pushing for full adoption of the report is naive and shortsighted.
Randy
Anon 2:40 pm...I agree totally with you. I believe that there is a middle ground to ensure that Albetans get their fair share and the energy industry gets a reasonable rate of return on their investment. It is unfortunate that the debate has become so polarized and that individuals such as Ken Chapman are unwilling to take an objective look at the facts. I could rebut his argument point by point, but it is useless, because he is not willing to examine the evidence in its totality. He has got so caught up in his own rhetoric that he has lost sight of the big picture. I suggest that it would be more useful for you to direct your comments to those who are charged with making the decision on behalf of Albertans. At least in that forum, you may get a fair hearing.
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