I am off to do some yard work but I could not resist taking a moment to provide readers of this Blog with the link to Gary Lamphier’s column in today’s Edmonton Journal. This column is an example of a quality journalist at the top of his game. It does not hurt that he and I agree on the royalties and related energy industry issues either.
So be careful of who apparently speaks with "authority." As often as not, they don't know what they are talking about, have no direct experience and has vested interests to protect and promote...such as the so called "influential financial analyst" in the recent Globe and Mail piece and exposed in Gary's column today.
Saturday, October 06, 2007
Friday, October 05, 2007
Big Money Meeting Behind Closed Doors Today with Deputy Premier
So the National Post reports that some of the large capital investors are meeting behind closed doors with Deputy Premier Stevens today to add to “the-sky-is-falling message that for the energy industry to pay a fair share of taxes and royalties will put Alberta into recession. While the next story in this link shows unemployment in Canada is at a 33 year low.
I am sure there is a need for some confidentiality in these discussion with Deputy Premier Stevens. But as one of our Trustees for our natural resources, I am sure he will fully disclose what his visitors have presented to him by the end of today. Albertan deserve to know and transparency demands it.
The Globe and Mail Report on Business front page below the fold story today is interesting too. The headline is “Wall Street to Alberta: Don’t be so Stupid.” An “influential New York based analyst with Oppenheimer & Co.” is quoted as saying raising taxes on industries that are the “lifeblood of your economy…It’s so stupid – I thought these people were more sophisticated than that.”
Speaking of a lack of sophistication, I wonder if this influential analyst has read the Auditor General’s Report. We were such rubes that we have left $6B of oil and gas royalties alone on the table since 2005. That would have paid for school repairs, teacher’s unfunded pension liabilities and increases staff wages to liveable levels in Alberta’s social services sectors so we would not be endangering lives of disables Albertans.
The “Influential Analyst” says Albertan should attract investor, not repel investors.” Sir, perhaps you have been out of the loop as to the facts in Alberta. We have $140B of investors from all over the world keen to participate in Alberta with a 1% pre-production royalty and a 25% - soon to be 33% production royalty payable on their net profits. Pretty damn attractive I’d say…and based on the amount of money coming in…pretty damn effective too.
I find this other item in the Globe story too. It says this past May the Alberta Finance Minister, Dr. Lyle Oberg “returned to the city (New York) to assure analysts and investors that the new government of Premier Stelmach was …committed to a business-friendly investment climate.” A quote attributed to “one American Canada watcher” who was at the Oberg speech says: “There was never any indication there would be a move like this.”
Strange that Dr. Oberg did not mention this in his May meeting with the money men of New York. The Premier had announced the review on February 16, 2007 and it was to report to Dr. Oberg by August 31, 2007. It actually reported on Sept 18 but that is a quibble. Makes you wonder how far you can trust someone who omits such key information doesn’t it!
Too bad the Canada watcher did not know that this now Alberta Finance Minister was once kicked out of the government Caucus for his “misleading statements” over Klein’s political skeletons. Could the $6B royalty boondoggle Auditor General Dunn discovered have been the “skeleton Oberg was talking about? If so why didn’t he say so?
The Globe and Mail Report on Business front page below the fold story today is interesting too. The headline is “Wall Street to Alberta: Don’t be so Stupid.” An “influential New York based analyst with Oppenheimer & Co.” is quoted as saying raising taxes on industries that are the “lifeblood of your economy…It’s so stupid – I thought these people were more sophisticated than that.”
Speaking of a lack of sophistication, I wonder if this influential analyst has read the Auditor General’s Report. We were such rubes that we have left $6B of oil and gas royalties alone on the table since 2005. That would have paid for school repairs, teacher’s unfunded pension liabilities and increases staff wages to liveable levels in Alberta’s social services sectors so we would not be endangering lives of disables Albertans.
The “Influential Analyst” says Albertan should attract investor, not repel investors.” Sir, perhaps you have been out of the loop as to the facts in Alberta. We have $140B of investors from all over the world keen to participate in Alberta with a 1% pre-production royalty and a 25% - soon to be 33% production royalty payable on their net profits. Pretty damn attractive I’d say…and based on the amount of money coming in…pretty damn effective too.
I find this other item in the Globe story too. It says this past May the Alberta Finance Minister, Dr. Lyle Oberg “returned to the city (New York) to assure analysts and investors that the new government of Premier Stelmach was …committed to a business-friendly investment climate.” A quote attributed to “one American Canada watcher” who was at the Oberg speech says: “There was never any indication there would be a move like this.”
Strange that Dr. Oberg did not mention this in his May meeting with the money men of New York. The Premier had announced the review on February 16, 2007 and it was to report to Dr. Oberg by August 31, 2007. It actually reported on Sept 18 but that is a quibble. Makes you wonder how far you can trust someone who omits such key information doesn’t it!
Too bad the Canada watcher did not know that this now Alberta Finance Minister was once kicked out of the government Caucus for his “misleading statements” over Klein’s political skeletons. Could the $6B royalty boondoggle Auditor General Dunn discovered have been the “skeleton Oberg was talking about? If so why didn’t he say so?
Thursday, October 04, 2007
Report Shows Calgary's Quality of Life is "Brutal"
I found this Editorial in the Calgary Herald today to be very informative and telling. A recent report card has been issued on the quality of life in Calgary and the results are termed “brutal.”
Noting the report card gave “barely” passing marks in most categories but 10 C’s and D’s in key community indicators like health, arts and culture, the gap between rich and poor, the environment and housing, which received a “D-.” Ouch.
The best score in the community based self assessment of life in Calgary was a B- in opportunities for learning and work. Speaking of work, Calgarians log more work hours in multiple jobs just to make ends meet than anywhere else in Canada except for the 46,000 people in the NWT. That is not much of a quality of life enhancement.
The editorial questions the science of the survey since it was only 600 who participated and in an on-line process. The kicker here really is that the survey was targeted at community leaders. That is powerful stuff. The community leaders are often the influentials and opinion makers and trend setters in any group, including citizens. What they say means something. They counts, have clout and cause changes.
To not have the usual Stats Can breakdown of demographic alignment is not a fault in such research because it is about informing public policy design for policy makers. Politicians are influenced mostly by community leaders because that is who they mostly talk to. What opinions are held by influentials is critical to impacting political and policy changes.
The Influentials are the ones who show up and get things done in a community. I would rather know what influentials are thinking, saying and doing than any so-called scientific survey. Especially if I am trying to determine what the opinion makers feel is important about a community’s quality of life and what needs attention.
Based on this brutal assessment of the quality of life in Calgary by key Calgarians, perhaps the Big Oil Beltliners will want to reassess their lobbying strategy currently aimed at intimidating Albertans and bullying the province all determined to keep the economic pot boiling and the economy overheated. They seem to think this should be done at any cost so long as the costs can be passed on to consumers and citizens.
They are happily aligned with the Libertarian movement that says keeping royalties low is keeping money away from government and that is a worthy goal in itself. It is however not providing the necessary funds for government help to solve the obvious challenges to living a quality life in Calgary today nor is it securing a positive future for the next generations of Calgarians either.
Noting the report card gave “barely” passing marks in most categories but 10 C’s and D’s in key community indicators like health, arts and culture, the gap between rich and poor, the environment and housing, which received a “D-.” Ouch.
The best score in the community based self assessment of life in Calgary was a B- in opportunities for learning and work. Speaking of work, Calgarians log more work hours in multiple jobs just to make ends meet than anywhere else in Canada except for the 46,000 people in the NWT. That is not much of a quality of life enhancement.
The editorial questions the science of the survey since it was only 600 who participated and in an on-line process. The kicker here really is that the survey was targeted at community leaders. That is powerful stuff. The community leaders are often the influentials and opinion makers and trend setters in any group, including citizens. What they say means something. They counts, have clout and cause changes.
To not have the usual Stats Can breakdown of demographic alignment is not a fault in such research because it is about informing public policy design for policy makers. Politicians are influenced mostly by community leaders because that is who they mostly talk to. What opinions are held by influentials is critical to impacting political and policy changes.
The Influentials are the ones who show up and get things done in a community. I would rather know what influentials are thinking, saying and doing than any so-called scientific survey. Especially if I am trying to determine what the opinion makers feel is important about a community’s quality of life and what needs attention.
Based on this brutal assessment of the quality of life in Calgary by key Calgarians, perhaps the Big Oil Beltliners will want to reassess their lobbying strategy currently aimed at intimidating Albertans and bullying the province all determined to keep the economic pot boiling and the economy overheated. They seem to think this should be done at any cost so long as the costs can be passed on to consumers and citizens.
They are happily aligned with the Libertarian movement that says keeping royalties low is keeping money away from government and that is a worthy goal in itself. It is however not providing the necessary funds for government help to solve the obvious challenges to living a quality life in Calgary today nor is it securing a positive future for the next generations of Calgarians either.
American Financial Advisor and Business Forecaster Recommends Investing in Alberta's Energy Sector
There are growing indications of an American recession on the horizon. The smart surviving American investor will be looking for secure investment alternatives. The Kiplinger Letter is advising Americans to invest in Alberta based energy income trusts.
Here are some key quotes that some in the Alberta based Big Oil would see as heresy because they are good news about the future of the energy sector in Alberta even considering a royalty increase.
"The trusts have recovered nicely from a big drop last year after Canada enacted legislation that would have the effect of forcing many income trusts to reorganize as corporations, effective in 2011. Currently, Canadian trusts operate similarly to U.S. royalty trusts and real estate investment trusts. As long as the trust passes through most of the income it generates to shareholders, it avoids or defers income taxes."
"Meanwhile, current yields on many of these trusts read like those of a roster of junk bonds issued by companies in bankruptcy: Harvest Energy (HTE), 17%; Canetic Resources Trust (CNE), 15%; Penn West Energy Trust (PWE) 13%, and Enerplus Resources (ERF), 11%. High yields generally suggest big risks, but how high can the risk be for trusts that own proven energy reserves?"
"There is optimism galore. And, frankly, there should be. Until the price of oil and gas starts to fall sharply, something that's unlikely unless there is a global recession, or Canada restricts investment in the energy sector, these investments offer about the best ratio of reward to risk that one can imagine. "
Albertans should not be terrorized or deterred from demanding a fair share of resource royalties. The doom and gloom rhetoric in some media is mostly a self-serving fear campaign coming from the Burghers in the Bubble of the Calgary Beltline.
Here are some key quotes that some in the Alberta based Big Oil would see as heresy because they are good news about the future of the energy sector in Alberta even considering a royalty increase.
"The trusts have recovered nicely from a big drop last year after Canada enacted legislation that would have the effect of forcing many income trusts to reorganize as corporations, effective in 2011. Currently, Canadian trusts operate similarly to U.S. royalty trusts and real estate investment trusts. As long as the trust passes through most of the income it generates to shareholders, it avoids or defers income taxes."
"Meanwhile, current yields on many of these trusts read like those of a roster of junk bonds issued by companies in bankruptcy: Harvest Energy (HTE), 17%; Canetic Resources Trust (CNE), 15%; Penn West Energy Trust (PWE) 13%, and Enerplus Resources (ERF), 11%. High yields generally suggest big risks, but how high can the risk be for trusts that own proven energy reserves?"
"There is optimism galore. And, frankly, there should be. Until the price of oil and gas starts to fall sharply, something that's unlikely unless there is a global recession, or Canada restricts investment in the energy sector, these investments offer about the best ratio of reward to risk that one can imagine. "
Albertans should not be terrorized or deterred from demanding a fair share of resource royalties. The doom and gloom rhetoric in some media is mostly a self-serving fear campaign coming from the Burghers in the Bubble of the Calgary Beltline.
More Industy Absurdity on Albertan's Resource Ownership and the Royalty Review
Hey Alberta, if you were unsure of the unvarnished corporate attitude about whose oil is it anyway, well Terence Corcoran’s column in the Financial Post today should clarify things for you.
Corcoran is a seasoned business writer and I have always seen him as Canada’s Milton Friedman. But if his observations today reflect the corporate lens and values as to who owns Alberta’s natural resources, then citizens and customers better wake up to what is on the horizon and assert our ownership rights through our government -as our TRUSTEE!
If Corcoran's comments represent Big Oil's attitude that is they who should ultimate owns and control the energy resources of Alberta then they need a reality check. Last guy who tried to assert inappropriate power over the citizens of Alberta's birthright to our natural resources was Pierre Trudeau and the NEP. Who do these Big Oil guys think they are - the reincarnation of Pierre Trudeau?
Corcoran’s final paragraph is the ultimate reduction of logic to the absurd. He alleges that “the real problem with the royalty issue is the degree to which the panel reinforced the legitimacy of the idea that Albertans collectively ‘own’ the resources through there government.”
Read the Canadian Constitution Mr. Corcoran, Section 92A (1) to be exact. Let me save you some time in looking it up. Here is the text:
92A. (1) In each province, the legislature may exclusively make laws in relation to
(a) exploration for non-renewable natural resources in the province;
(b) development, conservation and management of non-renewable natural resources and forestry resources in the province, including laws in relation to the rate of primary production therefrom; and
(c) development, conservation and management of sites and facilities in the province for the generation and production of electrical energy.
Corcoran is a seasoned business writer and I have always seen him as Canada’s Milton Friedman. But if his observations today reflect the corporate lens and values as to who owns Alberta’s natural resources, then citizens and customers better wake up to what is on the horizon and assert our ownership rights through our government -as our TRUSTEE!
If Corcoran's comments represent Big Oil's attitude that is they who should ultimate owns and control the energy resources of Alberta then they need a reality check. Last guy who tried to assert inappropriate power over the citizens of Alberta's birthright to our natural resources was Pierre Trudeau and the NEP. Who do these Big Oil guys think they are - the reincarnation of Pierre Trudeau?
Corcoran’s final paragraph is the ultimate reduction of logic to the absurd. He alleges that “the real problem with the royalty issue is the degree to which the panel reinforced the legitimacy of the idea that Albertans collectively ‘own’ the resources through there government.”
Read the Canadian Constitution Mr. Corcoran, Section 92A (1) to be exact. Let me save you some time in looking it up. Here is the text:
92A. (1) In each province, the legislature may exclusively make laws in relation to
(a) exploration for non-renewable natural resources in the province;
(b) development, conservation and management of non-renewable natural resources and forestry resources in the province, including laws in relation to the rate of primary production therefrom; and
(c) development, conservation and management of sites and facilities in the province for the generation and production of electrical energy.
Do these guys who think this way not understand the Rule of Law?
His second absurd point is an extension of the first. He equates Albertan’s collective ownership to other counties in the world with state owned resources and tier history of “…an ugly record of plunder, nationalization and monarchical control at the expense of property rights and economic freedom.”
How out of touch is this fellow? To compare Alberta with Nigeria, Venezuela, Bolivia and Kazakhstan, as he and some other pillars of industry and commerce, including have recently done, is untrue and insulting to all Albertans. It shows how dangerously out of touch with Albertan and Canadian values some of these people really are.
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