| Random Nbr |
Released Comment |
| RRE6000 |
To whom it may concern; As an Albertan I am writing to express my deep concern for the potential implementation of the recommendations outlined in the Royalty Review Report submitted to the Alberta Government on September 18th, 2007. As a geo-science professional employed with a major Canadian oil & gas producer I have seen first hand how the cost pressures that the industry is facing have greatly limited the number of economic projects that can be executed. Industry activity is already on the decline (especially on the natural gas side), and any additional burden to the economics of these projects will prove to be catastrophic to activity levels all across Alberta. The government still has a chance to act appropriately and restore confidence in the Alberta oil and gas industry. Continue to make Alberta a first choice for world oil & gas investment by providing an economically attractive, politically stable, trustworthy environment where businesses can expect a fair rate of return on their investments. It will be easy for energy companies to move their capital to more competitive areas elsewhere if need be should the panel’s recommendations get implemented. It will not be easy for the hundred of thousands of Albertans whose livelihood depends on a healthy, active, competitive industry, not to mention the long term loss in revenue to the provincial government’s treasury in terms of lost royalties on projects never carried out. I urge Mr. Stelmach's government to do the right thing and protect the economic prosperity of Alberta for today and tomorrow. Thank-you. |
| RRE6001 |
Premier Stelmach: Please be careful. By implementing "your plan" you will have a smaller dish to grab from!! I'm sick of being taxed and now am concerned whether I will have a job for you to tax! |
| RRE6002 |
The government should accept all the panel's recommendations. |
| RRE6003 |
My feelings about the "black mail" of the oil companies is that they need their bluff called. There are companies who will continue to invest in Alberta despite increased royalties. Personally, I wouldn't mind an economic slowdown. Part of my own finances have a dependency on oil and gas and with that consideration I still want the royalties raised. [Information Removed] |
| RRE6004 |
the oil induster is all ready in slow down for the past 12 months. We are having a very finding work already.[Information Removed]have employes pepole plus thier families . to increase roalyties that much now is bad timing . you must consider the fall out it will create from your actions.thank you . |
| RRE6005 |
I think that more time and industry input needs to be taken here. Alberta has been doing well as a province but a word of caution for the Government Pigs get fat Hogs get slaughtered......some royalties are better then none which is what you will get if you force the oil companies to shut down activity in the province of Alberta. Anyone who thinks that this move will not shut down the oil industry in Alberta is not thinking very clear. It's not rocket science when you look at the information. I have always voted PC but I can guarantee you that that will not be in the case in the future.......truly this administration is not thinking of the loss of jobs, loss of revenue it is now getting on GST because of the amount of spending in Alberta at present. Look at what some of the young people are having to spend on mortgages right now to buy a house in Alberta..........if there is no oil activity or a significant reduction in the activity these people will lose their homes. Just what we need more homeless people. People who work in the oil industry work very hard and make a significant contribution to the Alberta economy..................please do not mess with a good thing. [Information Removed] |
| RRE6006 |
I am a young professional just beginning my career in the oil and gas industry. The proposed changes by the review commitee will have very wide reaching consequences on the province and everyone who lives here. From an immigrant perspective if the proposed changes are implemented and layoffs come, I would have to leave this province and likely would not return. I can say from living in another province for most of my life that the people of Alberta have no idea how wealthy this province is until they have been somewhere else. Many of the programs and services Albertans have access to just don't exist elsewhere. As many have said the review has compared apples to oranges in many aspects of their report. The effects of adopting these changes will cripple this province severely, people will lose their jobs and homes, and I would suspect that unemployment would reach record highs. Working for a large Canadian company I have already seen first hand the consequences of low gas prices. The combination of low gas prices as well as increased royalties would reach much further than expected. Winning in the short term by increased royalties could also mean losing in the long term for everyone. Remember that corporate shareholders don't invest in things that are not profitable. Cheers [Information Removed] |
| RRE6007 |
I agree with the recommendations of the Report. What disturbs me is that certain members of the press, with connections to the oil industry, are making personal attacks on the panel members. This is not appropriate. As well, one Calgary editorial writer suggested that representatives of the oil industry were presenting their views to members of the government at private dinners. Again, this is inappropriate. It also presents a bad "optic". In the future, the Government of Alberta should require the oil industry to present accurate cost data on a yearly basis. |
| RRE6008 |
Premier Stelmach, I understand that you are looking for public input on the Royalty Review Report. I would urge you to fully adopt the measures outlined in the report. Best Regards, [Information Removed] |
| RRE6009 |
Mr. Stelmach - you are not Premier as you have not been elected - I give you respect for actually commissioning and releasing the Royalty Review which is the opinion of Albertans. However, you and the present government have been responsible for the cover-ups, corruption and robbery by the Oil industry of the owners of the resources of Alberta; that is merely the people. Your constituency has been the Energy industry and you have been loyal lapdogs. We now know exactly what the priorities of this arrogant government have been for the past decade: to keep the money flowing to the rich and to keep the people in the dark. The time has come for a change. The days of plundering and raping this province are over - the people have spoken and you duty is clear: if you believe even in a pretense of democracy, accountability and fairness you will implement the Royalty Reviews' recommendations in FULL. This is what Albertans want, deserve and you will will give it to them or face the consequences when you summon the courage to call an election. [Information Removed]Life-long Albertan, Registered Nurse, Calgary |
| RRE6010 |
If the government adopts the royalty review panels recommendations the following will and I stress will happen. There will be job losses accross Alberta the likes of which haven't been seen before. Not just jobs directly linked to the Oil and Gas industry but spanning all industries in Alberta. The government will actually see it's royalty and tax revenues decline. This is because mass unemployment doesn't generate tax revenue. In particular natural gas weighted E&P companies will cease investment in Alberta and this will result in the Alberta government's oil and gas royalty grab backfiring and actually reduce the governments take. In a province that has several billion dollars in surplus, how can it be justified to take more from the industry that put that surplus in the Alberta government's coffers. In addition there must be a differentiation between GAS production and OIL production and the resultant royalty revenues associated with each. They are NOT EQUAL. Global oil demand and prices are at an all time high. Gas prices have declined to the point where most of the gas produced in Alberta is uneconomic. I say this as a Geologist who works for a gas weighted Canadian owned and operated E&P company. I am intimately aware of the cost structure associated with exploration, development, and production of gas in Alberta. Under current gas prices, most of the gas produced in Alberta is subeconomic to marginally economic. The only reason gas companies are still drilling wells is the hope that prices will rebound. The royalty review panels recommendations will be the straw that broke the camels back triggering the fallout that I predict will happen. I suggest that you go back to the drawing board and make sure that you have qualified people reviewing the royalty regulations. This would include government, oil and gas industry experts, service industry experts and educated taxpaying Albertans. Ensure that you have up to date, reliable, and unbiased data to work with. Don't turn Alberta into a hostile environment for gas producers to operate in, because quite simply, these E&P companies will invest elsewhere, jobs will be lost (in Alberta), and the government will lose revenue. Regards. [Information Removed] |
| RRE6011 |
I can't even believe that this is being considered. Two billion dollars is a drop in the bucket compared to what we will lose. Although only 10 percent of this province is employed in the oilfield, 100 percent of it will feel the fallback from this. When you look at the boom this province has had, it is directly from the oilfield. We have a chance to slow down and not bust, but this gov't is going to cost people their jobs, their livelyhoods and so much more. As one of the many new homeowners and parents in this province, I am scared what my life will be like in a year or even six months. I don't think two billion will cover the unemployment that we could see. So many people will be forced to move. Doesn't anybody in this gov't remember the 80's? To even consider this is madness. I just hope that you people will listen to the logic I've spoken. |
| RRE6012 |
The goverment has my full support for raising the royalty rates closer to the rates that other juristictions charge, even if [Information Removed] goes through with its threats as proposed in the Globe and Mail. "[Information Removed] would slash spending if Alberta hikes royalties". I have pay world prices for gasoline and I firmly believe that the resource can stay in the ground if there is not fair compensation to the citizens (shareholders/stakeholders) of Alberta. |
| RRE6013 |
Premier Ed Stelmach: As a voter and an upcoming university graduate with a BSc. in Engineering, I am currently in the process of looking for jobs and am alarmed at the lack of postings from energy companies this fall. In a world of $80/bbl oil, the fact that these companies, which are a significant portion of the Alberta economy, are reluctant to hire new-graduates is a sign of their concern over the potential changes. This is an especially alarming observation in view of the changing demographics of the workforce and the ongoing need for technical personnel in this province. As a result of these potential changes, as indicated in the recent royalty review report, industry is becoming increasingly worried over the potential changes and the impact these changes will have. This is being reflected in the current job market. In particular, with increasing labour (and material) costs, the Athabasca oil-sands projects are already experiencing significant pressure due to rising costs. These projects, which account for a large portion of ongoing development within the Alberta energy industry, have the potential to become uneconomic if an increase in royalties were to add to already existing pressures. The companies currently investing in these projects will invest their money elsewhere if they cannot achieve a competitive rate of return within Alberta. Ultimately, the release of the royalty review report, without implementation of any of its recommendations has already began to negatively impact this portion of the Alberta economy and the associated job market. I urge you to carefully evaluate the negative impact of the royalty review on industry as a whole, and on the future of Alberta's economy as it may already be forcing university graduates to look for work outside the province. Thank you for your careful consideration of this issue, [Information Removed] |
| RRE6014 |
Good afternoon, I feel obliged to write this comment due to an experience I had today with a fellow Albertan who commented on what they perceived to be a “small impact” of the royalty review on their daily life. This appears to be a misconception on behalf of many Albertans – one that is incorrect. I ask that the government and my representative (Alana DeLong) study this report with great care and perhaps consult with economists who can clearly state the devastating implications of these recommended actions. We need to clearly understand and publicly state, in simple terms that by raising royalties in an effort to increase government income we are also causing the run off effect of a large number of layoffs in the oil sector. This will then move into other sectors of the economy as people begin to default on their mortgages, credit payment, decrease consumer spending and thereby also decrease the tax base within the province. We have much more to consider here than just the level of royalties – we must also consider the Alberta economy as a whole. In short, I do not agree with this review and feel that the report (as agreed by fellow economists) is greatly flawed. Thank you for your time, [Information Removed] |
| RRE6015 |
I strongly disagree that the government of Alberta should adjust royalities at this time as per the tabled Royalty Plan. Gas prices are low, activities are less than normal, proceeds from current royalties are feeding the success of this province and any changes at this time will only cripple our already staggering economy. Your system of thinking falls along with this type of thinking below: Since it is tax season let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh would pay $7. The eighth would pay $12. The ninth would pay $18. The tenth man (the richest) would pay $59. So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80. The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so: The fifth man, like the first four, now paid nothing (100% savings). The sixth now paid $2 instead of $3 (33%savings). The seventh now pay $5 instead of $7 (28%savings). The eighth now paid $9 instead of $12 (25% savings). The ninth now paid $14 instead of $18 (22% savings). The tenth now paid $49 instead of $59 (16% savings). Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!" "Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!" "That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill! And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier. [Information Removed] For those who understand, no explanation is needed. For those who do not understand, no explanation is possible. |
| RRE6016 |
To Whom it May Concern: I understand how touchy a topic this is in Alberta. I will not claim to know all the complexities of the issues as that would be an out right lie. However, I will give you my two cents based on what I do know and believe to be true. 1) The oil companies are making good money and should give back to the people and province that help them accomplish this. It seems to me they have been cheating the system in the tar sands projects by claiming that they are not all done thier project developments thus paying a lesser portion of the royalties. If this is in fact true... they are lucky we have not gotten back pay thus far. and should of course start paying the appropriate amount IMMEDIATLEY. it is not fair to cheat the system like that especially when this industry in specific puts so many strains on the communities of the north. We need the money to properly position and advance the province for the future so we are not always dependant on this industry. One concern I do have is this industry getting a double hit with the environmental card being played by our Federal Government. I do think the oil industry should be more responsible. At the same time it has to be viable and sustanibale. This is where we will have to help phase in things I guess. However if they are cheating the provincial system how do they expect us to come to their aid when they are soley out for themselves. Its a partnership that we seek that will benifit all. I trust that our government will do what is in our best interest and if that means holding out like the Danny Williams then so be it. Out there in Newfoundland they had nit invest the money yet. The money is already invest here. Who are they kidding... going to stop or slow things down... if they are not growing they are diying. They will slow things down on purpose to get puplic opinion on their side... we have to wait them out and call thier bluff just like Danny Williams. I am sick and tired of the BS they try to pull and am proud of Mr. Stelmachs Government for standing up to them. I am 100% behind you in this fight. Best Regards, [Information Removed] |
| RRE6017 |
Dear Mr. Premier, As an Albertan, born and raised in Calgary I am deeply disturbed by the Alberta Government's Royalty Review process. I feel that a quick and extreme increase in the Royalty Rates will only serve to stifle the imvestment in the Oil and Gas sector. There are benefits to Alberta as a whole which are not limited to the Royalties, which include the Landsale returns, jobs for Albertans, spending in the retail sector and investment in the community. Given the rapid rise in commodity prices, there are opportunities to change the fiscal takes and to increase royalties. However, these changes should be implemented carefully and after a collaborative, in-depth consultations process similar to that followed to create generic fiscal terms for the oilsands a decade ago. Before implementing the current proposals, the Government needs to fully understand the impacts of proposed changes so that we do not stall investment which is the real driver of our prosperity and the “Alberta Advantage.” Regards [Information Removed] |
| RRE6018 |
Don't let bad data contribute to poor decision making. Please walk cautiously and don't let your record to date become you legacy. |
| RRE6019 |
I think it's another tax grab goverments take non of the risk but like to take the profits. It wasn't to long a go when Alberta said het where open for investment in the oil sands. Know you have investment you want to up the royalties. How can we trust goverments. Just like the feds backtracking on trust funds. If the raise the fees. I for one will pull my investments out and go else where |
| RRE6020 |
As a business owner I'm very concerned about how the government is about to approach this very sensitive issue. Capital investment, jobs and our pride at stake if not handled carefully. Please don't turn our province back ten years. The royalty increase should be negotiated fairly and and fazed in over a period of time. Lets every body just cool down and look at the big picture and look for a middle of the road solution. Signed Concerned (Medium & Heavy Duty Transportation Industry) |
| RRE6021 |
I have read through parts of the final report & agree with the recommendations within. Our current royalty schedule is clearly out of date and the people of this province are not being fairly compensated. Collection of the royalties from oil sands seems to be the worst case. Implement the recommendations. [Information Removed] |
| RRE6022 |
In reading the report it seems that Alberta is already getting a fair share of oil and gas revenue. Did the panel include the funds received from land sales, which is substantial. I am concerned that increasing the royalties on conventional oil and gas will further slow down an industry that is already slow due to soft gas prices. |
| RRE6023 |
Higher oil sands royalties could cut 13 per cent or more of the value from current and planned projects. A rise to 64 per cent from 47 per cent, including royalties, taxes and other levies would lead to cut backs in the operational sectors of the business. What this will do is affect the very core of the peoples that you are asking for votes. Imagine the negative effect of the increase in the royalties leading to future stagnation of planned projects, leading to loss of work and/or under employment of your voters. Imagine the loss in the Alberta Govt. revenue in personal taxes, EI, CPP and others that sustain the social programs presently enjoyed and providing a good quality of life to your voters. I stronly suggest the Govt. to reasses its position, review the drastic increase of appx. 17% in its proposed levies. As your voters you are biting the hand that is feeding us!!! |
| RRE6024 |
The Royalty Review Panel's recommendations are flawed in that they assume that government take is something that should be viewed in isolation, without regard to investment returns. Any revised royalty structure must result in returns that allow for investment. The oil sands severance tax in particular is draconion and will result in a loss of jobs and therefore a weaker economy in Alberta. I am very concerned that the government will "get it wrong" and cause devastation to the provincial economy. |
| RRE6025 |
The Government should increase Royalty Payments to the Province by increments . 2007 = 8%, 2008 = 4% more, and in 2009 = 6% more. I would need more info on the industry, to increase above 18%. Thank you, [Information Removed] |
| RRE6026 |
Mr. Stelmach, I am a wife of someone who has worked in the oil industry for almost 40 yrs. I also have a son who works in this industry. They have worked many long hours and sometimes in very dangerous surcumstances. I believe it is because of all the workers in the oilfield that the rest of the province has become so prosperous. We live in a province that does not have to pay sales tax and have a fairly reasonable income tax. The "patch has slowed down considerably over the past year and will probably cause a lot of families to lose their homes if the proposal to raise the government take comes about. I do not think at this time that our province needs to give more to the government as we are in fairly good financial state because of the hard work of our oil workers. Please take this into consideration. Sincerely [Information Removed] |
| RRE6027 |
I think this review is going to ruin this province and you should be very conserned about what you are doing to alot of people that work in the industry. This industry in Alberta will go under. Nobody can afford what you are asking and I think maybe you should check your numbers again before you go ahead with this. |
| RRE6028 |
What is the point of raise the royalties, if hundres of people will lose their Job. We as albertans may get 2 billion more but his generation won't see the billions of dolares that the oil and gas companies were going to invest in the oli patch. The botton line is that the common people want is a good job, no more money so our goverment can spend at their will. Please keep in mind that if Alberta falls in a crisis, all Canada will fall. |
| RRE6029 |
I encourage Premier Stelmach to increase the royalty rates as they have been too low, and we support adoption of the report. The only area that might receive some consideration is the area of natural gas royalties, as the price has been low and perhaps profits are not as great as in the oil and bitumen areas. But do not decrease royalties on natural gas either. I am sure that the oil companies will not leave or carry out their threats of decreasing activity, because where could they do better than here? |
| RRE6030 |
As a long time Albertan who cares about the well being of our province I am disappointed in the approach that has been taken on this royality review. Please do not make quick far reaching decisions based on a report with flawed stale, incomplete data that will if implement actually reduce the economic health of our province. |
| RRE6031 |
If the proposed royalty changes are implemented, I will absolutely loose my job in the oil patch which I have had for 25 years along with many many other people in all sectors of the province. You must realize that it is oil money that drives this province and all sectors are going to be adversely affected. It is pure greed that is driving the province as we have do debt and actually make money every year. What problem are you trying to fix? You will surely create many, not solve any. |
| RRE6032 |
YES, we should raise the royalty rates! Do not listen to the fear-mongering coming from a loud minority of stakeholders. Rest assured the silent majority of Albertans wants these rates raised. I am an engineer, and travel throughout the province on work, going to a variety of industrial sites, from Power Plants to the Oilsands facilities. A straw poll that I have taken of roughly 200 people shows an overwhelming majority (about 4 of 5) people want the royalty rates raised. Further, about 2 of every 5 want them raised MORE than the proposed 20%. Further, in reading the original document online, I see the panel recommends actually LOWERING the rates for certain wells. Specifically, “These recommendations would see 57% and 82% of Alberta’s conventional oil and natural gas wells, respectively, paying less in royalties, with the remaining higher-production wells paying more.” This makes total sense. I can’t believe the news coverage has not pointed this out more effectively. Look --- Albertans are very reasonable people. If they were more aware of the facts of the proposed changes, I’m certain even more than the estimated (my straw poll, Calgary Herald poll showing close to 70%) 70-80% would be on board as well. Perhaps the government simply needs to hire a PR firm to get their message out, prior to instituting the panel’s recommendations. I got a chuckle out of the threat by Conoco-Phillips to pull out of their commitment in the Oilsands. I say, “fine, goodbye, and don’t let the door hit you in the rear-end on the way out.” Their position is nothing more than politicking. If they back out of their plans, we know that another company will gladly take their place in that same property. It may be delayed by a few years, but it will eventually get done. And, it would not hurt Alberta at all if the pace of development of the white-hot Oilsands slowed down a bit. The price of oil will continue to rise as it gets more and more difficult to extract throughout the world, and the demand for this non-renewable resource will be even stronger. Alberta, and Albertans, should stand to benefit even further by slowing the development of the Oilsands, and allowing more of the resource to be developed when the price of oil is north of $100. So, for the benefit of all Albertans, please… RAISE THE ROYALTY RATES!! But before you do so, hire a decent PR firm and get the REAL story out. Thank you for your time. [Information Removed] |
| RRE6033 |
I fully understand the need for stability in Alberta’s economy and one of the main steps is to remain competitive in the energy sector. Undoubtedly, the oil and gas moguls will argue that the royalty rates paid even now are to either too high or at best just right. No corporation of highly paid executives will want to scale back their bonuses and stock options because of higher royalties to the province. They are responsible to stock holders. They have also threatened to take their business else where as a bullying tactic. It is no different from (if you do this I am taking my toys and running away) but where are they going to go? I am sure that any educated person would be able to see that USA is the largest consumer of our energy products. The demand will fluctuate at different time of war and peace depending on whom the USA is going to pick a fight with next. Nevertheless, that demand will never go away and they will always be ready and willing to absorb production surpluses from Canada. The distribution of wealth is a factor to be considered. These companies will not build hospitals, schools, or transportation systems. These responsibilities fall within our governance systems through our elected officials. It is our responsibility as good land lords to assure that we take good care of our own, our people our families. Our stockholders are the Alberta people. Corporations are motivated by profit and that is not a bad thing if it is not excessive. I am sure that a raise of some percent in royalties of the resources that are owned by the Alberta people will not hurt these multinational oil companies making Billions. I doubt it would even bring the price up. Now their stock price might suffer for a short time until traders see that they will continue to be profitable after royalty increases. The USA being who they are wanting a safe and secure supply of energy that they can depend on. They will always be on our doorstep for energy. They will keep pumping money into Canada to assure that supply. Who else on the face of this earth will give that to them, Alberta and Canada. The royalty review commission has made a bold statement not unlike statements made by a union of people to it’s employer. We need a raise. The Stelmac Government should strongly consider giving the people it is responsible to, a raise of some sort and use that additional revenue to build a vibrant and strong Alberta for all. |
| RRE6034 |
If the royalty review is implemented in full it will be devestating to Alberta. There will be companies that stay, but when the huge companies like Encana and Conaco-Phillips pull work, it will mean a loss of jobs for thousands of Albertans, right from office workers in Calgary to the crews in the fields, to the trades people and restaurant/store people as well. There are hundreds of students who will be finished their training next spring without the jobs to go to.(how many of these can afford to retrain?) These companies donate huge amounts of money to charities like the United Way and Encana has built a state of the art wing at SAIT for petroleum studies. They build and maintain roads that benefit forestry and farmers. It is a reality if some of the big companies pull out, there just won't be as much work. I am glad the media has reported that the operation costs the review panel used were outdated, and it costs much more today to do business. Hopefully, a reasonable solution will be found so that we dont lose these companies. Changing public perception now will be hard as so many people think all those who work in the oil/gas field are rich, but this just isn't the case. If need be, I hope the government will take additional time to make a good plan, even if it means going past the Oct. l5th date to ensure we don't lose employers like Encana and Conaco-Phiilips. Thanks |
| RRE6035 |
It is with deep concern that I am writing this letter. I truly believe that the implementation of the Panel’s recommendations will have a devastating effect on Albertan’s wealth and the government’s ability to fund social programs for many decades to come. Just the release of the Panel’s recommendations resulted in large equity losses to Alberta based companies on that day. Albertans already have less wealth today then they did before the threat. Undoubtedly, this destruction of value would increase even more if the government implements them. Governments need to engage in activities that help their citizens, not hurt them. While the equity market only acts as a barometer for future corporate profits, the net effect on Albertans will be many times that amount. Corporations will simply redirect their capital expenditures into areas which provide them their highest rate of return (ROR). We have already witnessed discussions to redeploy budget to British Columbia and the United States. All Albertans, in all walks of life (including car dealers, waiters, construction workers, ranchers, anyone who has a mutual fund in their RSP account etc), will be adversely impacted. Investors require fiscal and political security. They need to know the rules won’t change on them after they invest. It was less then a year ago when Alberta P&NG production commanded the highest price in the world on property dispositions. Unfortunately this is no longer true today; due to the Harper government changing its treatment of Trusts, upcoming carbon tax implementation and now the Alberta government is contemplating vast changes to the royalty structure. Hundreds of billions of investment into Alberta was made on the economic assumptions relying on the published Crown sliding scale royalty rate. Now that money is spent, the rules are being changed? This is not right! We expect it from the myopic governments of Venezuela, Ecuador, Indonesia, Nigeria, former Soviet countries, etc. – but not from within the Canadian borders. The potential impact of this could be even far more far reaching and devastating. If potential investors believe that the various levels of Canadian governments can no longer be trusted. This will adversely impact Canadian investment in all sectors, including sectors outside of energy. It was the foresight of previous Alberta governments that enacted the philosophy of the “Alberta Advantage”. This philosophy has served Albertans extremely well. On page 90 of the Fair Share Report, it states; “ie making Alberta a favourable jurisdiction in which to conduct an energy extraction business”. Strangely, recent events imply that it is some how wrong or a bad thing to have a favourable jurisdiction. There is a misleading perception on the street that the “rich oil companies” are sitting on a pile of cash and the Alberta people are not getting their fair share. That money is not in anyone’s bank account. Majority of the money is re-invested back to grow the business and relatively small piece is distributed to the shareholders (large number holding mutual funds in their RSP portfolio). That money fuels the Alberta and Canadian economy! This is going to have a larger impact not only on Alberta, but on communities across Canada. How many men and women from Atlantic Canada are employed by the oil and gas industry? Please consider these few points when making this enormous decision. We have to make sure we get this right. |
| RRE6036 |
Why are we going for more royalties, lets direct the oil companies to build refineries in Alberta instead of Texas. Just recently the government approved a pipeline to the USA for shipping bitumen to this State. Again why do we not have refineries in Alberta to support the the countries requirements. These refineries would produce additional jobs, manufactured products, wealth etc. This stipulation can be based over x number of years. A refinery cost approximate 6/7 billion that's 12 to 14 years @ your 2 billion dollar a year proposed annual increase. We are talking 50/60 years to of top production of about 3/5 million b/p/d going to the USA, we Canadian's have got to be smarter then this. Historically governments do not give allot back to the people if that we so why are the taxes in Alberta as high as they are, almost what you pay in BC, depending on annual income. Give the private sector the reason and tools to invest in the country, government should set policy that will benefit the country/province long term. Case in proof look at Alberta Trust Fund a paltry 16 billion after 20 years with high taxes and oil spin off. No you'll not make me believe governments will save money for the people long term [Information Removed] |
| RRE6037 |
As an oil company employee I am very concerned about the recommendations made pertaining to conventional oil and gas operations. As it stands right now activity levels have been severely curtailed due to high operating costs in Alberta as well as low natural gas prices. Increasing the royalty take will severely impact already challenged project economics. Please leave the royalties where they are! |
| RRE6038 |
As a resident of the province of Alberta and an employyee of the oil and gas idustry I would like to remind people of the devasting effect that the NEP had on this province in 1981. The oil and gas industry employees many citizens of this province who put money back into the economy. If a portion of these people are layed off due to a reduction in spending by the Operators in the industry all buisneses in Albberta will fell a reduction in sales/profits. Does this province really want to see the unemployment rate increase and be responsible for the hardships many family may be expected to endure? I believe that industry already pays ther fair share and any increases in royalty taxation must be reviewed carefully. [Information Removed] |
| RRE6039 |
There has been much media coverage around the Royalty Review. I certainly hope the Premier is up to the challenge. No doubt the oil company's are going to apply an enormous amount of pressure to conserve their interests. I would like to say that it's about time that the interests of Albertans were brought to the forefront. You only need to take a look at revenues these oil company's are making to realize they are not hurting. Case in point: [Information Removed] 2006 profits, their building of the [Information Removed]in Calgary. Look at the price of gas the average Albertan has to pay. "We will stop production OR we will move our operations to Saskachewan", please give me a break. I would call their bluff Mr. Premier. They are not going to stop these projects after all the money they have committed to them. Please, let these company's go ahead and move to Saskatechewan, lets see how they like dealing with a NDP govenment. Albertan's should be seeing these royalities raised in parity with what is happening in other parts of the world. We could use this money to fund health, education and infrastructure projects that are very much needed. Don't cave Mr. Stelmach, stand up for Albertans!!! |
| RRE6040 |
I expect the Government will fully implement the Auditor General's recommendations because the resources belong to Albertans and the resource will continue to be very profitably exploited regardless of any given multinational's current rehtoric. I also think the Parkland Institute's recent recommendations are a very interesting proposition and should be closely examined. It would give every Albertan a stake in ownership of our own resources. A similar approach was implemented by the Alberta Government in the 1970s when Albertans were entitled the opportunity to buy ownership of Suncor at $10 per share. These are Albertans' resources and we are fully entitled to profit from their exploitation, either through royalties or corporate ownerhsip. Multinationals' interests are simply not Albertans' interests, as evidenced by their threats to abandon us should royalties rise. Corporations only have a duty to shareholders. The Government's duty to is only to its constituents, and this should be evidenced by taking in all royalties on our behalf or possibly giving us shares in corporate ownership. |
| RRE6041 |
The oil industry is already threatning to invest a billion less next year. They make their billions with our resources, their threats are idle, they might actually invest less next year but they will be right back as they need our resources to keep making money. If we don't sell next year we will sell the year after or the year after that. Stop giving our resources away for next to nothing, charge the oil companies more. Their profits come from our pockets at the pumps. Charge the rich and help the less fortunate, not those who take advantage of the system but those who are truly in need. [Information Removed] |
| RRE6042 |
Its about time this Government got a backbone and started collecting our fair share of royalties. If [Information Removed] and the rest of Big oil don't like it they can pack up their offices and move to Houston. I am sure someone else will step in to develop these resources at $80+ per barrel. |
| RRE6043 |
The Royalty review, doesn't need to be reviewed by industry and government. The review heard from oil representatives, the public and others with concerns that it was too low. I made a submission and claimed we had lost nearly $58 billion in revenues due to low royalty rates. This was based on 25 years of low royalty rates, so it was pretty close to the estimate of $2 billion that the panel has stated. It is time to stop the "whining welfare oil companies from getting away with grand larceny, due to collusion from government and bureaucrats. RAISE THE DAMNED RATES, OR SUFFER THE CONSEQUENCES. The Alberta government have betrayed the people by "selling us out" to big Oil. SMARTEN UP! |
| RRE6044 |
Honourable Mr. Stelmach, As a concerned Albertan I have spent a considerable amount of time to study the review panel's report, industry counter arguments, and public documents from governments, university studies, and financial analysts. After looking at opinions from all sides I can come to no other conclusion than that the current royalty regime is indeed out of date and overly generous. Not only has this cost Albertans a lot in lost revenues, the run-away development has greatly increased the cost of living, leading to significant hardship for low- and middle-income earners. To educate other Albertans I have submitted my findings as a letter to the Edmonton Journal with information that allows others to consult key reports themselves so they can form their own opinion. A copy of my letter has been attached below. Albertans expect and demand that our government acts in the best interest of its citizens. I expect no less than the full implementation of the royalty review panel's recommendations, including the important recommendations on accountability and reporting. This decision is too important to let politics or a blame-game get in the way. We need a realistic oil sands strategy that looks beyond the pure economics and I will carefully look at your decisions. [Information Removed] ============================================== (letter to the editor of the Edmonton Journal, dd Oct 8, 2007) Google's view of the oil sands Just type ("favourable tax and royalty regime") into Google and 4 of the 5 hits deal with the Alberta oil sands. With a bit of Google smarts you can find a lot more. Many are presentations that try to convince investors to put their money into oil sands projects and one of the sales pitches is "Alberta has a favourable tax and royalty regime". Clearly the energy companies and investment brokers knew for a long time what the royalty review panel just made public. The governor general's report now tells us that the Alberta government was also well aware of this fact. Next type ("alberta oil sands" canceled delayed "labour shortage") into Google and you will get 28 hits many of them dealing with already ongoing cancellations or delays of oil sands projects due to labour shortages and escalating costs. In a 2007 report from the Canadian Association of Petroleum Producers (page 16) they argue that because capital costs for a 100,000 barrel/day facility has tripled from $3.3 to $10 billion, since 2001, while crude prices have increase 2 to 2.5 times, the current royalty regime remains fair. However, why did we see 300% inflation in a 6 year period? Could it be because the very favourable royalty and tax regime, combined with the many economic and geopolitical attractions of the oil sands, triggered a mad rush to claim a stake in the second largest oil reserve in the world? In this view, the economics of some oil sands projects has become marginal not because royalties are too high but because companies have chosen to trade profitability for rapid growth. In other words, with a more realistic royalty regime, part of the profit margin that has been lost to hyperinflation could have benefited all Albertans instead of the oil field construction and building materials industries. Reduced inflation and labour shortages would also help soften construction costs for the province, its citizens, and the petro-chemical and other industries. Increasing the royalty rates as proposed by the review panel will in all likelihood slow down oil sands development, as threatened by the oil executives, but it should never have expanded at the rate we are currently experiencing anyway. As construction speed slows and labour shortages are resolved, the extra royalty payments will be offset by lower construction cost, restoring profitability. Salary increases will likely slow down but this is compensated by lower inflation. For instance, in the Oct 5 2007 Alberta Finance government report, the earnings increase is a pleasing 4.7% compared to 3.2% for all of Canada. However, the consumer price inflation was also 4.7% in Alberta compared to just 1.7% for all of Canada. Finally type ("peak oil" "economic consequences" site:.gov) into Google and it should be clear from these US-government pages that, although oil sands development may slow a little, industry and the world are not going to abandon the second largest oil source on the planet. The 2005 Hirsch report to the US House subcommittee (5th Google hit) is particularly revealing. Peak oil is expected anywhere between now and 2025 and "it became abundantly clear that effective mitigation will be dependent on the implementation of mega-projects and mega-changes at the maximum possible rate." Clearly, the US government favours massive oil sands development to feed their addiction but it is our government's responsibility to not only get our fair share, but to balance the economic benefits with the social, and environmental costs. [Information Removed] Edmonton, Alberta [Information Removed] Canada |
| RRE6045 |
I am a 22-year old single mother of a 6-year old boy. I am currently an employee of a large gas firm in Calgary, but less than 2 years ago and for my whole life I was just an average Albertan. I am writing because I am very concerned over the recommendations of the Royalty Review Panel. I am unsure of the experience, knowledge or diligence of the Panel itself so I am unsure of how it ensured that it obtained accurate, correct information. I believe this should be a concern of yours when reviewing the report as well. My main concern about the recommendations is that it will have a significant negative impact on Albertans. Too many companies have indicated that they will pull out countless dollars and cut drilling programs in Alberta, I strongly believe that this is not a threat due to the fact that these companies have indicated where else they will put their money. I am only 22 years old but I do know that it is not above our government (at any level) to act irrationally. It is sad that at 22, I have already realized the lack of faith I should instill in government, although I've voted since the day I was able to to try to change this. I can say this by actions of government such as the NEP and the 2006 Hallowe'en massacre (changes to income trust tax breaks). When I first had my son, I received a lot of help. I had extended health coverage for my son, I received the AFETC, CCTB, GST cheques. Now I am getting the chance to pay forward the help that I received. My new job has enabled me to invest in real estate, put money away, I have started to pay taxes and now receive very little money from programs such as AFETC, CCTB and GST. I do not receive subsidy for daycare premiums and have never lived in subsidized housing. This is all due to my career success and the last 2 years have been the best being attributed to my new career in the petroleum and natural gas industry. I had my first vacation this year and took my son to Disneyland. My son's best friend is the child of a single mother of 2 children – she receives a grant to go to school and not have to work while doing it, she receives subsidized daycare, subsidized housing, subsidized extracurricular activities for her children and because of my success in my new career I have also been able to help her give her kids the best opportunities while growing up (help with food costs, extracurricular activity costs, clothing costs, etc.). A lot of these programs are sponsored at a provincial level. It is clear to me that the recommendations not only threaten my livelihood but the livelihood of all Albertans, directly in industry or indirectly but benefiting thereof. |
| RRE6046 |
You are using outdated information for your report. It is imperative that you get up to speed with the current information. Should Ed's party not respond accordingly, many people will be severly hurt and it may become a distinct possibility that Ed and his party do not get voted in again. [Information Removed] |
| RRE6047 |
If you want to destroy a good thing and kill the oil industry in Alberta just so you can show everyone how much of a man you are than go ahead ED. |
| RRE6048 |
I was deeply concerned after reading the report from the royalty review panel. What I found the most concerning was the fact that a rise in royalties of the proposed magnitude may scare of the large amounts of capital required to get many oilsands projects off the ground. There are a number of smaller companies currently pursuing smaller in-situ projects which will still require several hundred million dollars each of capital. These companies do not currently have production large enough to generate the kinds of revenues to support these projects so they are forced to raise capital in the equity markets. Take for instance [Information Removed] oil and gas who just this month commissioned their [Information Removed]project, this would not have been possible without raising several hundred million dollars of funds. Some of the more notable smaller Alberta Based companies which will require capital over the next few years for their projects include: [Information Removed], [Information Removed], [Information Removed], [Information Removed], [Information Removed], [Information Removed], [Information Removed], [Information Removed], [Information Removed], [Information Removed]and several others. These projects are not the prime projects that we see from the likes of [Information Removed], [Information Removed]etc., they are less robust projects and the proposed royalties may cause some of them to not be funded. By making it more challenging for these projects to get the money required you are opening the door for larger, multi-nationals to develop the projects. This is a shame as many Albertans are working very hard on these projects and are also investors in these projects. I believe that the royalty review panel has carried out both a superficial and incomplete assessment of a change in royalties. It is my belief, that they have identified the maximum rent available to the province; they have however lacked the wisdom and sophistication of what they have framed. The oil industry is a margin business both because of the maturity of the basin in the conventional business, but also the very nature of the oil sand business. When a margin business losses a material share of net revenue, in this case in excess of 20% there is a material shift upwards in the required commodity price for many of the projects to proceed. We have seen this in gas drilling in 2007 with 40% fewer gas wells and a decline in production of close to 1 billion cubic feet per day. The impact of the recommendations would be expected to include: 1. A decline in activity until commodity prices rise to support project development. 2. A compounded effect of that decline as the required investment capital is reduced in availability, increased in cost if raised and therefore further increasing the required commodity prices to advance projects. 3. Service sector companies through reduced activity will see the erosion of the volume and value of work and employment will decrease. Alberta’s GDP may be much less than it might have been and government revenue may in fact shrink as they garner a thicker slice, but of a smaller pie. Other points would include: 1. The principle of ability to pay is distorted by the proposed (OSST) oilsands severance tax. This is a gross tax where at current prices it is not the ~ 5% impact on the net to a company but potentially a 10-12% impact from cash flow available to a company as there is no deductibility in tax or other cost factors. 2. The proposal shifts foreign exchange risk to companies. In other words government revenues would be insulated from changes in exchange rates this of course is at the expense of the company share. The severance tax in combination with the foreign exchange risk becomes regressive in lower commodity prices, this will make any slow down worse. 3. The bitumen price question has a potential to be a significant and serious wild card to the determent of companies and perhaps the province. There is clearly a transfer price question for integrated projects. This should be addressed; however a non-integrated project only receives what it can. If deemed prices calculated by a formula do not reflect market prices either the government or company will lose, clearly not an objective. This recommendation in particular is very problematic and not well understood, notwithstanding the recommendation made. The harsh criticism of the committee to others would be particularly well applied to this recommendation of their own. 4. Small companies will be under pressure. In a margin business scale is everything. [Information Removed]is both respected and despised for what it is in the retail margin business. In the oil business this will increase the pressure on being big to survive. The numerous small companies of the conventional, but more particularly the oil sands will be consolidated. The business will be more dominated by the multi-national and activity will be constrained. |
| RRE6049 |
Please spend the extra 2 billion dollars on health care and education. |
| RRE6050 |
This panel of experts spent reams of pages pointing out how much the government can get away with, but with very little space addressing the implications of the hike. It's just too childish to think that business will operate the same with the rate hike. With lower investment surely expected with the hike, the real gain should be calculated based on lower employment, and pinched shops, hotels, and restaurants, and ensure that "People" are getting better with the hike. |
| RRE6051 |
You are going send ALL Albertans in a tail spin!! Our lively hood will be gone. If this happens friends and family will lose everything they own!!! Make the right decision!!! |
| RRE6052 |
After hearing this week’s news, I'm very, very concerned the Alberta oil and gas industry cannot withstand another blow similar to the decision to tax income trusts. At some point the cost of doing business in Alberta is too high, and large corporations will look elsewhere in the world. I know many people employed in the oil and gas industry who've been notified that there are going to be several repercussions including projects being cut, staff being laid off, bonuses being eliminated, etc... Is this necessary???? Considering my own business relies on those companies, I imagine slashing budgets will trickle down and affect my bottom line significantly. |
| RRE6053 |
I sent this as a letter to the Editor at the Calgary Herald. Thought you should know my views as well. Royalty Review How ironic is that for 25 years we have looked with angst at the federal government in fear they would enact another National Energy Program and destroy our oil industry only to have our own government do it to us instead. To those of you that think the oil business can absorb 20 percent increase in royalties, please simply think what would a 20 percent increase in your costs right now do to your business or to your ability to pay your bills at home if all your home expenses suddenly went up 20 percent. How would that impact your spending? Should there be some change in the royalty program? Perhaps but if so the change needs to recognize that there aren’t any more big easy finds out there. Western Canada is a mature basin and as a result new finds are smaller and much more expensive. In addition while there is lots of oil in the tar sands, getting it is out involves huge expenditures in infrastructure and then input energy and operating costs. Do I have a vested interest in the outcome? Absolutely I do. Potentially my employment is at stake, the same as older family members jobs were at risk and lost during the NEP. Do not kill the goose that lays the golden egg. [Information Removed] |
| RRE6054 |
Mr. Stelmach; Ido not know if Encana and all the other big oil companies are bluffing but I will tell you what if they arn't the land of milk and honey (AB) will become a have not province.I know the people of Alberta deserve a fair deal so lets make sure it is fair to both parites. Wheather or not people want to believe it, but it was the oil and gas industry that made Alberta what it is today. Lets try and keep it that way. Thank You |
| RRE6055 |
Dear Mr Stelmach Please consult and negotiate with Alberta's energy producers. Alberta does not like it when Ottawa dictates and energy producers do not like it either. Alberta has succeeded because of a stable, fertile investment landscape. That MUST be preserved and in fact enhanced. Too high of royalties especially those that are put in place without consultation and negotiation produce mistrust and resentment. Consultation and negotiation, in my opinion, are required because it builds trust AND helps to bring clarity to the issue with respect to 'fact finding'. The last thing Alberta needs to do is hinder the fertile corporate climate in ths province. As you know, energy producers bring huge wealth to the province in terms of direct jobs, spin offs, capital investment and very importantly, foreign trade dollars. In other words, they essentially produce a product for export. It is all fine to have a domestic service economy, but for real sustainable wealth creation we need to maintain an environment conducive to real exportable product creation. Real investment creates real lasting jobs and real lasting tax base revenue for Alberta. Hindering real investment will result in less tax revenue even with increased royalties. So, in my view, the royalty report is a good starting point, but it should remain as such. I feel that it is your responsibility to consult, negotiate with the energy producers and seek out the many aspects of the report that are not complete. We have already seen the ill effects of a unilateral Trust taxation change has made. A royalty is simply another form of taxation. The ill monetary effects are on the industry, investors, Alberta and Canada in general. The other side of the ill effects is the damage done to trust and respect between government, industry and voters. The Trust taxation changes are disliked primarily for how they were implimented, without consultation or negotiation. One other thing to keep in mind is that the Trust taxation change has definitely hurt the Harper government politically. Your government has an opportunity to do things better. To not be hasty, greedy and be sure to consult and negotiate. You would want nothing less if it were Ottawa coming for a bigger slice of the pie. ++++++++++++++++++++++++++++++++ The process is as important as the result. +++++++++++++++++++++++++++++++++ As an aside, your government should strive to have energy companies process as much ernergy related products in Alberta rather than have them simply export the product for processing in the USA. Alberta should strive to keep ALL the spin-off jobs here. That is wealth creation and tax base creation. Thank you for your time and I trust and hope that your royalty plan will result in a win-win for Alberta and energy producers. There is enough wealth here that that result should be farily easy to achive. I would like nothing more than to wake up and feel proud to be an Albertan because the 'process' was fair leading to a fair result for all. The day of the federal Trust Taxation annoucement made me feel angry and sad to be a Canadian because of the way it was handled. And, I was not even invested in Trusts at the time. To me it was simply gross mis-management by the federal Tories. I am hoping that your government will raise the bar and handle the royalty issue responsibly. By the way, I do not and have never worked in the energy industry but I do think I know a thing or two about how important that industry is to Alberta in terms of jobs and tax base. I also think I know a thing or two about how to achieve a win-win solution via consultation,negotiation and inclusion. It is simply common sense. Thank you and good luck. [Information Removed] |
| RRE6056 |
The report is seriously flawed, and is not based on accurate information which is being used for its projections. The decrease in activity and loss of Jobs in Alberta is not being factored into the analysis. Why would a pannel that is looking into Royalties be made up of persons with a oil and gas background??? Would you trust a report about medical practice that was not primarily writen by doctors???? |
| RRE6057 |
I hope we finally get our fair share. |
| RRE6058 |
Despite the threats from oil companies, I believe the alberta government should implement what is suggested in the report. It is good for all albertans, if the oil companies scale down their opertation so that we can have workers for city developments and others. It is not good for cities when the prices to build/maintain road sky rocketed. I hope the Stelmach's government is strong enough to carry out the recommendation from the report |
| RRE6059 |
No need to play a game of chicken - history would tell that private industry is always the driver behind the enonomy. We are going fine as a province, why should we changing the balance. Such a increase of rpyalty is totally uncalled for. A concerned Albertan. |
| RRE6060 |
I am very disapointed in Encana's tactics to control royalty review decisions. Scare tatics should not influence government decisions. Mr. Getty was in such a hurry to divesify business in Alberta and gave the Lumber Companies huge breaks in stumpage---too much. If he would have waited the companies would have paid larger prices ! Our energy is needed and if Encana cannot make it in Alberta then all we have to do is wait and other companies will line up to take over where Encana stopped. We may have some short term pain but will have long term gain if we "stick to our guns" ! I do not pretend to know what royalty price increase is fair but would take the advice of the review panel. Do not let big business make our Provincial Policies. They have made billions over the years ! Albertan's own our resources and should benefit the most. Please have the fortitude to make the "big boys" blink ! It is to all Albertan's benefit to get fair dollars for our resources for someday they will be gone as will Encana ! [Information Removed] PS: Been in business for [Information Removed]years and have seen the pressure that oil companies have put on our provincial leaders many times--it's business and is fed by corporate greed with no concience towards Albertan's welfare !!! |
| RRE6061 |
Well done report. It appears, as landlords, we're overdue for a rent increase. |
| RRE6062 |
I think that a longer and deeper look at this issue must be completed BEFORE anything is done. The Oil industry is in a downturn at the moment and as a concerned citizen I think that any MORE pressure on the fargile state of the Oli economy will have a serious detrimental impact on ALL Albertans. |
| RRE6063 |
Further to my comments of [Information Removed]: Having had more of an opportunity to read through the Royalty Review Panel Final Report, I am left with far more questions and concerns. This is due in large part to the verbage utilized within the report being vague and ambiguous. This is an unfortunate circumstance considering the relevance of this report and the impact it will have to the provincial government and the industry. Obviously, the review panel was of the position that it needed to address the concerns of Albertan's. I believe that the average Albertan who is not directly employed in the oil and gas industry will not have read the document and will be relying upon news sources for their information and will base their opinion upon that. I also believe that the Royalty Review Panel is attempting to address the efficiency of the "system" within it's report. I do not believe that this process is an appropriate forum for that. This review should be about royalties and that's it. Discussing the operating environment of Alberta Energy and the Energy and Utilities Board should be done on a different platform after the royalty regime is decided upon. The oil and gas industry is complex. The current royalty programs are complex. They will continue to be complex in their administration as I do not believe that every operating scenario can be bundled up in one nice neat little package. The panel suggests that there is a necessity to even the playing field and simplify royalty programs. It suggests that the Crown would be the authority on determining Capital Cost Allowance deductions. If the panel truely wanted to even the playing field then the Crown would be subject to the same gathering, compression and processing fees as Freehold royalty owners. Certainly the Crown is not suggesting that the industry hand over the responsibility of determining what is a fair and equitable royalty deduction to every individual citizen that we pay Freehold royalties to? How will the government determine what is economical and fair? Will a Jumping Pound formula be used? Will the industry be required to provide some type of annual reporting? Don't we already do this? If the intent of the royalty panel was to leave the CCA as is then why didn't they say so? Why create an environment of distrust? With respect to NGL royalties. What exactly does "whether stripped from the gas stream" mean? Is the panel suggesting that the royalty trigger move from processed NGL's to produced NGL's based upon the In-Stream Compenents? Once again very ambigious. There is no discussion around the cost of processing NGL's from the gas stream or allowing for a discounted reference price. Has the review panel not taken into consideration that there are pipeline specifications on all products. Does the Crown not have to participate in the cost of ensuring their product meets pipeling specifications? Does the Crown not have to allocate any of their production to plant process shrinkage? Where is the even playing field? The review panels thoughts on Oil Sands are almost laughable. References are made to deductions being allowed at a Corporate Income Tax level. I was not aware that the Provincial Government could determine Federal Tax Credits. Is the panel suggesting that the Provincial Government would lobby on behalf of the industry to implement these credits so that the Crown can get their "Fair Share"? Not only does the industry have to utilize the the BVM for royalty payment, but the suggestion is that we calculate our payout statements on this BVM price. What exactly is the BVM? Oh right, nobody knows - how do we address this in our economical analysis? How do you expect the industry to speak on this subject to it's shareholders? I'm certain that Premier Stelmach is taking some heat on this subject, but so are the corporate executive of the industry. This report has done nothing for the business relationship between the government and industry. I also suggest that this report has not endeared the Premier's office with Alberta Energy or the Energy and Utilities Board. What this report has done is create a level of fear and anxiety in the industry. When people fear for their jobs they stop spending money. The level of stress will be directly related to a companies project portfolios in Alberta. Do they have Oil Sands? Do they have Coalbed Methane? Do they have unused capital in gas facilities that have not reached their Remaining Useful Life? Do they have designated plant types? Do they have gas units? A friend at Conoco Phillips told me a statement from the President was circulating trying to reassure people. What are you doing to reassure people? How much foreign investment is the Crown willing to allow? I'm sure China, India and other developing countries will be very interested in taking Encana's spot. |
| RRE6064 |
I've read the report and can't believe, heard the reports in the media that the oil companies think some fundamental mistakes were made. I also know that the price of oil goes up before every long weekend due to some highly complex formula, but it never seems to come down. They made how many billions in profits? I've also heard them say that our economy might cool down if royalties are increased. Maybe this would actually be good for Alberta. Wages wouldn't then to sky rocket out of sight, housing would be more affordable, etc. Lets think of the long term of what we want for our province. Longer lasting oil reserves, a more stable economy, it wouldn't all be bad, except of course for the oil executives who would likely lose out on some multi million dollar bonuses and decreased profits for the oil companies. |
| RRE6065 |
i am in agreement royalties should be increased to bring them in line with other jurisdictions-maybe they should be increased over a period of 3 yrs. i do not believe oil cos. will stop drilling or back off oil sands dev.as the world needs the oil even @ $80.00 per bbl. |
| RRE6066 |
I have concerns about Alberta (and Canada in general) losing it's gains if the recommendations of the Royalty Review are implemented. If we look to the world market, Canada is no where near the top of the list when it comes to returns on investment. This is already an expensive country to do business in, but one we can be proud of. This is because the cost of doing business in Canada already includes fair and equitable labour standards, environmental protection, good returns to taxpayers and land owners, and overall stability in its markets, all of which make Canada an expensive, yet enviable place to be in the oil & gas business. Canadians should be proud of that, continue to set such a good example of fair practices and should be very concerned about sending the message that it's preferable to invest in countries where labour, environment and economic stability are disregarded in favour of higher returns. We have a good balance in this country and a strong future of plentiful resources. Let's not upset that by asking for immediate payouts that jeopardize our future prosperity. |
| RRE6067 |
I strongly urge the Government of Alberta to implement the recommendations of the Royalty Review. Thanks for listening to the opinion of Alberta voters. |
| RRE6068 |
RE: the royalty review report I have serious concerns about the effects of following the recomendations in this report will have on the Alberta economy which, in turn, will have a very real social impact on Albertans. The businesses involved will make the best 'business' decision they can based on the expected returns on their investments. If the incentive for them to invest in Alberta is taken away, why would they continue? Why woudn't they invest somewhere else, globally? This can only result in current projects being cancelled and new ones not starting. The result will be a very high number of people losing their jobs. This has a two-fold effect on all of Alberta. 1. The royalties that would be paid on current projects will not materialize because many of those projects will be cancelled. This means an actual decrease in royalty revenues to the province, when the goal of increased royalty rates is to increase royalty revenue. Revenue that is currently budgetted for will not happen. 2. More importantly, there will be tremendous social hardship on Alberta's families. We are all aware that many Albertan's earn a living from the Oil Industry, whether directly or indirectly. - there will be a sudden increase in the unemployment rate in Alberta - greater demand on the unemployment insurance system in a very short time frame - there will be more money spent on social services for those in need - physical and mental health of people will decline - people will end up losing their homes and potentially become homeless - financial institutions will have people forfeiting on their mortgages and other loans - statistics prove that when families experience a sudden and drastic financial hardship, there is an increase in spousal abuse, child abuse, alcohol abuse, drug abuse and divorce - there will be more bankruptcies - the infrastructure for the purpose of providing support to people who are experiencing financial, mental and/or physical problems will be seriously drained due to the sudden increase in need - it will cost more money to support the programs that people will need; food banks, homeless shelters, welfare, women's shelters, drug rehab facilities, etc - there will also be an increase in the crime rate...again, requiring more finances to increase the number of RCMP necessary - children will be included in this - children who do not have proper nutrition, clothing and especially a roof over their heads cannot be successful at school - they are the future leaders of this province, the country and the world I am a 40 year old Albertan who is very proud to have been born and raised in this province. I clearly remember what families went through after the 80's. There are a lot more people in Alberta now and it will be a lot worse this time. Alberta has a wonderful economic situation right now. Please don't put that at risk in an attempt to create more revenue when the actual result can only be to decrease revenue and increase expenses. The net effect would be devastating to all Albertans. |
| RRE6069 |
I am a very concerned Albertan at what our provincial government is seriously debating doing to the people of Alberta by raising royalties rate. The oil and gas industry is the industry that has provide dAlbertan's with the life style that we are so fortunate to enjoy. The oil and gas industry still has not gotten off of its "knees' based on what the federal government did to our industry last year with the royalty trust situation. People in our provincial government should be intelligent enough to recognize this. Also the reaction to the royalty trust situation has reduced activitiy in this sector over the past year, which will naturally effect the amount of money going in to the provincial governments pockets. Tell me how just 2 years ago the people of Alberta were given $400 each as Mr. Kline wanted the people to share in the windfall of the province and NOW the government wants to rape the industry to the point it will walk away from Alberta and spend its money in BC or SK. On top of this many small O & G companies will be closing their doors due to this situation. Many people are not thinking that this royalty structure is going to have a major impact on gas wells in Alberta. As gas prices are presently very low compared to where it has been in the past few years WHY would the government want to take more now. The impact of this is that industry dollars will be unable to continue to drill for this product and on top of this many of the wells will become uneconomic and we will find many gas wells in this province shut in. When this happens what will happen to the dollars that would go into the provinces pockets. On top of this has the governement looked at how much it makes every two weeks at Alberta Crown land sales. The money that industry will be able to spend and hand over to the province is going to be much much lower. Also when the NEP was imposed upon the O & G industry in the early 1980's approximately 85,000 jobs were lost. Does the Alberta government have any idea how many jobs will be lost this time around and then how does that effect the economy of our Province. People will be potential be facing the home foreclosures as we experiencedat that time. The small O & G companies and the royalties trust are struggling enough today with the impact of Oct 31/06 and are now desperately trying to reinvent themselfves I am so confused as to why our governments in this country keep pushing this industry down and keep expecting it to reinvent itself over and over again. Our basin in Western Canada is becoming more mature every day and this industry can only take so many hits. IF this government insists on moving forward with itsdecision it will be a much worse blood bath than the last time Alberta was put in this position. By moving forward with this we will not have as much money for education, health care, infracture or for supporting our single Moms and their children or our seniors living on the poverty line. Is this worth it. I would like to understand how the people that we have elected to protect us are actually looking to destroy our quality of life. THINK OF THE RIPEL EFFECT YOU ARE CAUSING. You have already stopped what is happening behind the doors of the O & G companies - daily projects are being cancelled due to economics. Rig and crews are already sitting and IF you do this more will be sitting, next will be lay off sin the sector. Now people will be drawing on EI to exist - what a pull on the economy of this Country. Now how much have you really gained or has the province truly LOST and ultimately has HURT and HURT deeply the people of this province in every possible way |
| RRE6070 |
Three weeks after the release of the report the verdict seems to be that the public likes it inasmuch as it promises more money for Albertans. The public have not been told of the economic cost which will be heavy at a minimum. We must keep the "Alberta Advantage" ..do not throw it away..please do not divide this province. Thank you. |
| RRE6071 |
If this royalty proposal goes forward unmodified, the provincial government and the "people" will get a bigger share of a much smaller pie! Please consider the following: - The profitability in Alberta's oil and gas industry is reflected in the bonuses that the province gets in land sales from a competitive bidding process. - The vast majority of the profits received by the oil companies are directly/indirectly reinvested in Alberta. - Unemployment is presently at its lowest level in the last 30 years. - Consumer confidence generated by the rise in housing prices (directly as a result of oil and gas activity) has translated into solid performance in the retail sector. When governments attempt to control economic performance they do so with small incremental changes to interest rates and money supply. This cautious approach is critical because of the potential to seriously disrupt the delicate balance of economic forces (multiplier effect etc.). Why proceed along a path that will surely upset Alberta's enviable good fortune that was won in large part by many years of entrepreneurial and scientific tenacity? I seriously question the merit and comprehensiveness of the economic assumptions that contributed to this radical royalty proposal. Will the “people” really be served? [Information Removed] |
| RRE6072 |
Hey lets not bite off the hand that feeds us. Alberta has to realize that it is the Oil & Gas industry that makes this province the best place in Canada to live, not agriculture. After reading in the Sun today that [Information Removed] expects to pay 400 million in royalties as well as reinvesting some 1.8 billion in the province, my question is what has the Alberta government done with this money? And what amount did the other 599 Oil & Gas companies pay in royalties and how was that money spent. This latest greediness of the Alberta Government, regardless of what the auditor's report states, is counter productive, as the O&G industry will slow production and do their investing elsewhere, and really who could blame them. Please, please give a lot of thought to Alberta's response to this report. As a concerned Albertan who works in this industry, as do so many others in this province and who would like to think we will still have jobs, I am watching this outcome very closely and expect the government to consider everything. The uninformed think the oil companies are just raking in the dough, but they have to realize that the costs have risen dramatically over the past few years and the profit margin has remained pretty much the same. The government also has a responsibility to deliver all the facts to the public. Yes, lets figure the royalties once the costs have been taken into consideration. Certainly no one in the government was jumping up and down to help the industry when oil was selling at $10.00 a barrel. |
| RRE6073 |
I am very dissapointed with both the Federal and Provincial Conservative Government... Who is taking care of our prosperity? The oil and gas sector continues to get blow after blow from both the Feds and the Province Grazing Lease Holders in Alberta have way to much clout when it comes to securing leases roads and easments on Crown Land in which they hold the Grazing Lease. We are paying them like freeholders and are continually held up by their demands. (is this still not the land of the Alberta People?) Traditional Land Use Consultation....just looking for trouble with this one - once again more delays and costs for access and construction and no clear rules or expected payment schedules for the Consultation and field tours. ASRD, Industry and First nations are stumbling around with this and trouble is brewing and projects are not moving forward. Now the Royalty review...do we not have a huge surplus already? Should we not encourage growth and prosperity to all Abertans through the development of our resources by providing jobs and successful companies. Increase the royalites, make acquistions harder and harder, reduce the profit margin what happens ...everyone goes to Saskatchewan to do business. And lastly the Feds all the uncertainty with Koyoto and what will be expected by Industry and the worst thing of all the worst thing of all the Income Trust slap. Keep it up governments and we will be in a recession before you know it. |
| RRE6074 |
Our thoughts and feedback on the Royalty Review Report As seen by the directly effected. You always hear concerns about what the Oil & Gas industry did to the housing market and how there is a housing crisis, again caused by the Industry. However, did you hear about how Oil & Gas contributed to a 15 Billion dollar Heritage Fund? Did you hear what the Oil & Gas Industry has done for Alberta and local communities? In my opinion the bottom line is the Provincial Government is upset about the losses of Royalties due to the increasing dollar. During the last election there was extensive media coverage regarding Affordable Housing and the Recycling Program, however where was the Media coverage of the potential “bomb” that is about to be dropped on Alberta and cause mass destruction? All because of the Government is looking for a solution. If the Government puts forth this increase, this may cause many Albertan’s to have to go bankrupt which may cause a lot of mental/emotional stress on people, families, marriages, children and the general health of the directly effected. However, many will be affected because most live in a financially extended society and these homes, toys, vehicles etc. will end up going back to the banks and these monies owing on them are higher than the values itself. The banks will have to compensate for their losses which will result in an increase of interest and in turn drive up payments. Thus again may result in more people being unable to provide for their families and keep a roof over their heads. Some people may have insurance to cover financial loss or if in-turn life insurance, might be required to be paid out, due to extreme stresses, that too will then cause insurances to increase. Have we even touched on the full extent of the mushroom effect of what will happen? There is 30 billion dollars in reserve, stop looking for a short term solution for the increase of the Canadian Dollar. Every increase of .01 cent = 1 Billion dollars of lost Royalties. Albertan’s should not have to pay for a prosperous Canadian dollar. Idea: What about an Oil & Gas Alberta Infrastructure Program to support the housing issue crisis fund? Loan 5 Billion to “the Fund” from the Heritage Fund; Oil & Gas “the Fund” to repay within 1-2 years; This gives 1-2 years to re-access Royalties with proper knowledge; How you disburse “the Fund”, TBA. This way it would be a win, win, win, win situation all around. In conclusion there is 30 Billion dollars in Alberta savings. This I imagine is called the “Rainy Day Fund” if you proceed with the current review recommendations……. ……………………………………WELL ALBERTA??????????????? WHERE IS THE ARK!!!!! (translation: cause it is gonna pour) Please put a freeze on the devastating destructive proposal and hire a new panel with industry knowledge and start over. |
| RRE6075 |
According to the CAPP website, the official view is as follows: "On September 18 the Alberta Royalty Review Panel presented its final report to the Government of Alberta. The report calls for significantly higher royalties and taxes, but suggests there will be no overall impact on industry investment, activity and growth. " Despite this official statement, all major oil companies and several minor ones issued statements to past and present employees, giving notification of cessation of drilling activity in Alberta. Most notable was that received by EnCana Corp. I'm sure you are aware of that e-mail; request a copy if not. Three out of the four members of this family depend on Alberta oilpatch revenue. (The fourth is excluded only because of serious injuries sustained in an MVA.) As of today, we will all be seeking work - due more to necessity than choice - outside of the province. Furthermore, because of the warnings received of the possible impact this decision would make on Alberta-based oil companies and those providing services to same, we moved approximately $250,000.00 to companies not based in this province. These have been painful decisions. Not, however, as painful as it would be to lose assets and investments gained at great cost to this family. For decades, we have spent weeks, sometimes months, without being able to all be together at once. It was worth it. We have much. Then again, we have much to lose. Is there no compromise possible? Is there no compromise possible? |
| RRE6076 |
I work for [Information Removed], we have already seen a decrease in activity over last year of 35%, what this "Fare share" meens to me is, loss of my job, because our customers have already responded to the royalty review with announced cut backs, This loss in investment correlates directly to lost opportunities and to lost jobs... Please be responsable, and actually do what is "fair", because 20% of nothing is nothing, the drilling and search for natural gas and oil will be elsewhere, no longer Alberta the land of plenty, rather, Alberta, the land of the unemployed. |
| RRE6077 |
I would like to know if the Province's recent changes to environmental policy and the associated costs for oil and gas operators will be considered in conjunction with the Royalty Report. More specifically the costs of technology to meet the GHG targets for air emissions and/or the $15/t penalties to the technology fund. Also costs associated with the more stringent guidelines put forth by the Water for Life strategy which will likely make SAGD and EOR projects more costly due to reduction in fresh water usage and the additional costs of other options. Thanks |
| RRE6078 |
Our household feels that 20% is a bit much. 7-10% would be plenty. Even though most of the Shares belong to places other than Canada we would not want them to pull out and find resorses elsewhere. Thank-you for the opportunity to have a say in the growth and survival, not just inAlberta but the rest of the country. My husband pays 40% to the government and our family knows how it feels to be gouged.We would not want to put that burden on anyone else. Thanks again and hope to here back. [Information Removed] |
| RRE6079 |
If I understand correctly, the oil and gas basin we live in is very mature. This means that new pools are harder and harder to find. This is not the time to be raising royalties on conventional oil and gas - you will shut down exploration - which is already very limited. |
| RRE6080 |
While I have not had the opportunity to read the Royalty Report I have carefully followed the ensuing discussions about it's contents. I am supportive of the changes recommended in the Report and believe the total Report should be implemented. Albertans own the resource and should be the chief beneficiaries of resource development. I also believe that rules for development should be tightened (such as requiring recycled water to be used in drilling) and more careful oversight provided. [Information Removed] |
| RRE6081 |
Don't do me any favors! These Royalty increases that are recommended are supposed to help "Albertans" get their piece of the pie.......well I am an Albertan. However your "help" could put me out of a job. If my company decides to drill fewer wells - which is what they are saying, then they need fewer employees and if I am at the bottom of the list - I could lose my job. My husband is employed on the service side of the industry and they too are talking about layoffs due to the slow down of business - if both of us lost our jobs it would be devastating. Your solution to helping us two Albertan's would be by either having to pay us unemployement insurance while we search for new jobs or welfare if we are unable to find new ones. Great plan - (insert sarcasm here) This report and these plans appear to be led by a group who is poorly informed and has had their head in the sand about the industry over the past year - Not only do you want more eggs from the supposed "golden goose" you want to eat the goose as well. This is like me being from the oil industry doing a review and report of the way the government operates and spends. I don't know a thing about how your office operates and I would never assume to be an expert and come in and make decisions so flippantly about your business. Likewise should be said about your group and this industry. |
| RRE6082 |
Drillers dread royalty backlash UPDATED: 2007-09-29 02:19:42 MST Already limping sector fears job losses and fewer wells being dug in the future [Information Removed] Implementing the province's energy royalty review in its current form will deliver a crippling blow to a sector of the oil and gas industry that's been limping for more than a year, drillers said yesterday. If accepted, the review will make drilling for gas in the province too expensive and will result in fewer wells being dug and more jobs being lost, said Don Herring, president of the Canadian Association of Oilwell Drilling Contractors. "The state of the natural gas industry, over the last few years ... is already showing seriously declining activity," he said. "The wheels are starting to fall off." During 2006, there were 373 drilling rigs working in Alberta, providing 9,400 rig jobs, said Herring. As of the end of May, there were only 61 rigs employing 1,525 employees. That decline is due to the low price of natural gas in the world markets, which is having a disastrous effect on the provincial drilling sector, which in turn gets 70% of its work from drilling gas wells, said Herring. Those are pains that those who mine the oilsands or drill for oil, which is currently trading at record levels, haven't experienced, he added. And at risk are some of the best-paying jobs in the province. Last year, a rig manager earned an average of $160,000, while drillers often made in excess of $100,000, said Herring. But unlike other industries, where a surplus of labour translates into lower wages in order to keep a viable work force on the ground, bringing down pay is something the drilling sector in Alberta is not willing to consider, he said. "We have never in Canada looked at bringing down wages -- we're not willing to drive away experienced crews," said Herring. "The few people who are in the industry are very experienced and we need to keep them there." |
| RRE6083 |
Adam Smith said, "The proprietor of stock is necessarily a citizen of the world, and is not necessarily attached to any particular country. He would be apt to abandon the country in which he was exposed to a vexatious inquisition, in order to be assessed to a burdensome tax, and would remove his stock to some other country where he could either carry on his business, or enjoy his fortune more at his ease. By removing his stock he would put an end to all the industry which it had maintained in the country which he left. Stock cultivates land; stock employs labour. A tax which tended to drive away stock from any particular country, would so far tend to dry up every source of revenue, both to the sovereign and to the society. Not only the profits of stock, but the rent of land and the wages of labour, would necessarily be more or less diminished by its removal." [The Wealth of Nations, Book V, Chapter II] That was 1776. I ask the government, has Mr. Smith been wrong, so far? |
| RRE6084 |
I am extremely impressesd with this report and also impressed with Premier Stelmachs bold decision to call for the report. This would not have been allowed by Ralph Klein who was so secretive that his actions were always suspect of being influenced with back room interference. I ask that this report be implimented without change as I have checked its claims and I find them accurate. I also ask that the Premier and the Minister not take any notice of the threats from [Information Removed]who are too greedy by half. Its now the turn of the "People of Alberta". If this report recommendation is not accepted in its entirety or if it is watered down to benefit the oil companies, I will never vote conservative again. Thank you for this oppertunity to express my opinion. [Information Removed], a proud Albertan and Canadian. |
| RRE6085 |
It's time - don't listen to all this whining from the oil and gas companies - they have been profiting billions for the past 35 years and now it's time they paid their share. It really doesn't matter if some of them pull out - they will be back. where else will they go to find the product? We need higher royalties NOW and they all know it. Do NOT be swayed by their petulance! [Information Removed], Rocky Mtn. House |
| RRE6086 |
test |
| RRE6087 |
Leave it alone, I already feel an effect from companies and I only have a single water truck. Will certainly put me out of business. How greedy do we need to be. |
| RRE6088 |
Agree wholeheartedly with the findings of the report and suggest that they be followed through. |
| RRE6089 |
People who lives in Calgary for a long time will not forget the year of 1982. Will we follow the step of 1982 by adding thr royality tax. It is just a short term gain. I am so afraid of economic crash. We do not want to be forced to leave Alberta and look for the jobs in the other province or even country. |
| RRE6090 |
Dear Mr. Premier, I am a third generation Albertan holding [Information Removed]. I own a third generation [Information Removed]. As I speak to Oil and Gas Entreprenuers and business people regarding the Royalty Review, I gather a sense of deflation in their approach to their careers. If the Panel's recommendations are carried out, Alberta will quickly lose investment, technical expertise, rural employment, and, most importantly, the entreprenurial spirit that this province is built on. Please maintain a close royalty structure to what exists and plan wisely for future Albertans. Sincerely, [Information Removed] Calgary |
| RRE6091 |
This is a cc of a letter emailed to my MLS [Information Removed][Information Removed]Priddis, AB, [Information Removed] September 5, 2007 Honourable Ted Morton 6, 160 Maclaurin Drive Calgary, AB Canada T3Z 3S4 Dear Honourable Ted Morton, I’m quite concerned with the potential impact of the “Fair Share” reports recommendations on myself and Alberta as a whole. This is the first time I’ve written a letter to an elected representative, I hope that you are able to give my concerns due consideration during the resolution of this issue within the Government. Let me start by saying that I have actually read the “Our Fair Share” report, the Alberta Government’s publications explaining the current royalty regime, and the transcript of the June meeting between the royalty review panels and stakeholders along with several other reports and publications. My initial reaction was I don’t completely understand the royalties but the idea of a review sounded good. I read a few guidance documents on royalties and was actually surprised by how much royalty we actually do collect, it was more than I had expected. Then I read the “Fair Share Report” which said that was not enough and backed up the conclusions with data that is difficult to verify and understand. My approach was to then to understand to report’s goals and how the recommendations will accomplish those goals. Admittedly, my analysis is a bit simple but it is a good start to check the conclusions. If you can’t square the detailed analysis with this simple one then there is a problem. The simple premise I came up with is that the Gas companies know where they make the best return so that’s where they spend. I do the same when choosing my RRSP’s If the Royalty rates and other costs of business are low and revenues high, then the companies should be throwing money at Alberta. Conversely if the costs are to high and revenues low the companies will spend in other parts of the world. What I know (and can verify if you have the time) is that in Alberta 2007 and 2008 budgets are down, drilling activity is down, construction activity is down, price of natural gas is low, the value of my house has leveled off or dropped, and the Canadian dollar is high. That was before the “Fair Share” report. The “Fair Share” report states that one of its goals is to “retain Alberta’s competitive advantage.” I find that very difficult to square with the current state of the Natural Gas industry. If we are currently so competitive, and we are just giving away our resources, why is activity cut back? Another goal is to “be responsive to changes in the economic environment faced by the industry.” Again, I don’t see where the goal matches the recommendations or evidence that the panel noticed the current economic realities. The gas companies were already reacting to these realities and cutting back. The panel has ignored those reactions and further ignored that industry would react to further changes in the economics. Investment, in terms of properties may stay but new money to maintain or expand production will go elsewhere. Did anyone notice Royalties are charged on production? Or that most of the jobs and spending are related to new drills? Now, I don’t worry about the Natural Gas Companies. The Companies will still make the profits they were planning on, just not in Alberta. The recent announcements by [Information Removed]and others about further cut backs don’t look like bluffs or threats to me. They look like a statement of their business case. The statement and recommendations by international banks agree. The arguments on the other side of the fence look largely political, impassioned or ill-informed to me. There are numerous comments by folks who say the royalty rate isn’t high enough but don’t even know what it currently is. I can understand some of it, after all who doesn’t want to squeeze a multi-national corporation in favour of the little guy. What makes me nervous is that I see Albertans as the ones losing out if the recommendations are followed as is. The more I’ve read recently the more I do believe that the Royalties do need to be revised, but not as drastically as is recommended, especially when the sensitivity of industry / economy to the changes hasn’t been addressed. A significant change at this time, with minimal consultation seems foolhardy at best. I’ve been here for 12 years and for the first time I’m worried about my job and my home. Thank you for your time and I hope you address these concerns within the party. Regards, [Information Removed] Priddis, AB Cc: Alberta Government (Royal Review Feedback site) |
| RRE6092 |
I am an Albertan who works in the oil sector. I am seriously concerned about the news that your government is considering raising royalty payments at this time. Within the last few days, an exceeding significant number of oil companies have either suspended or cancelled their drilling programs while they wait for an announcement regarding this issue. In the short term, this means that there will be little or no work for many in the industry. The potential long term effect is that work is cancelled indefinitely and layoffs begin. For obvious reasons, I do not need to illustrate the “trickle down” effect that will have on our local economy. Currently there are many individuals who work in the oil industry that are suffering. Due to many factors such as changes to the tax structure of trust companies, and the soaring cost of projects, many contract companies have experienced a 35% reduction in the amount of business. There are contract companies who are moving equipment and people out of Alberta and rolling back wages, as we speak, due to concerns with the lack of work and impending royalty issues. With the current slow down that I am seeing, it is not out of the realm of possibility to forecast an oil industry recession if the government does not proceed carefully. If the royalty change goes through in the way it has been proposed, high producing wells will have to pay higher taxes. This sounds like a good idea, however it will minimize the ability of these larger wells to support the industry as they currently do by paying to: keep the existing low production wells running, assist in the new wells being drilled and completed, and keep the small companies that I work in business. If the good wells generate insufficient income there will be a shortfall on cashflow to stay in business and to pay the day to day bills. All of us in the conventional energy sector will see an immediate negative personal financial impact. I agree that additional dollars should be retained for Albertans and their future. Penalizing the oil industry today will in no way lead to a brighter tomorrow. I also think that it is unfair to imply that the only time Alberta can get their fair share is at the wellhead. The money I get is taxed at the energy company level, is taxed at my company, is taxed as income when I get it, and pays many taxes, levies and user fees when it leaves my hands. With the Province running a surplus why would you risk all these other revenue streams to get an additional cut of royalties? What would the value of the tax loss be if the oil companies quit spending their money on capital projects? This number should be determined before proceeding. It goes without saying that a halt on capital project spending would have a massive effect on the people of Alberta. The characterization that these profits go to a few rich people to make them richer is misleading. Some of these oil and gas company shares I own, to save for my retirement. Higher taxes and royalties means not only do I earn less, but the money that I have saved for my retirement goes out the window too. It has been my experience that the companies that make money in the patch tend to hire more people, and those people pay taxes. The already significant contributions that the goverment takes through taxes (whether it be income to the individual or the company) pay for a large amount of the public welfare programs our province has in existence. Our industry is a major, if not the main, contributor to our provinces surplus. I have heard that you, Mr. Stelmach, will not be intimidated by big oil. Fair enough, but big oil has already shown that they will reduce spending due to increase costs. I think that it is fair to say that they will take their money and go elsewhere if it doesn't work out. For the ordinary Albertan's sake you must consider the timelines for your plan, the impact it will have, and proceed with caution. In my opinion both your political and my financial future, as well as the financial future of many Albertans, not limited to those that exist in the inductry, are in jeopardy if you choose to proceed with the implementation of this plan at the current rate. Respectfully, [Information Removed] |
| RRE6093 |
Unless multinationals pay their fair share to extract resources from the province, they will milk the resource until it no longer exists, and move elsewhere. All the jobs they created will disappear, Albertans will be left with nothing..Alberta is bottom of the world in royalty fees, we are being duped by threats that the oil companies will pull out. |
| RRE6094 |
I forgot to mention, in my previous e-mail, that the oil industry have also thretened to lay off employees if they are charged more. Do we not need workers in every sector of our economy? People might lose a job, but there are many more out there that we can't fill. Keep your poker face on, it's all a bluff. [Information Removed] |
| RRE6095 |
I really don't think that increasing royalties is a wise idea at this point in time. The majority of drilling in the Western Canadian Sedimentary Basin is for natural gas, the stocks in the underground in the U.S are at near record levels. This has lead to a substantial reduction in drilling activity in Alberta already. Increasing royalties will make this process even more uneconomical leading to even further cut in activity and job losses. This proposal will make property values in areas like Grande Prairie and Medicine Hat drop drasticlly. I personnally feel the majority of Albertans do not want to see all the work go out the window because of goverment greed. |
| RRE6096 |
I am very concerned with the recommendations being made by the Royalty Review Panel. Firstly, it seems that the assumptions regarding costs and rates of return are unrealistic. I am concerned that such an important decision regarding royalties could be made by the government using flawed data. Secondly, it seems that the proposed royalty system may be at odds with Alberta's environmental policies. The proposed royalty system will incent companies to drill numerous vertical wells with low productivity instead of using the multi-lateral wells that are more efficient and use a smaller environmetal footprint. The higher productivity wells are penalized under the proposed system and in some cases are not economically viable. Thirdly, I can't help but feel that the analysis is incomplete because it does not assess the potential impact to the communities of Alberta as a whole. The government should undertake to assess the true economic impact to the province taking into account the potential loss of investment as a result of this change. A major pullback in investment would have a crippling effect on this province given its reliance on the oil and gas industry. If the intent is to find a way to provide Albertan's with a "fair share" then please work with the oil and gas industry to truly make it fair. Consult with industry leaders to arrive at a system that will not be based on flawed data and that will not work in contradiction to Alberta's environmental policy. Thank you. |
| RRE6097 |
To the Right Honourable Premier Ed Stelmach, There seems to be a lot of people who encounter obstacles. These people would like to know if there are small business grants to help these people create work for themselves. These people see the importance of support for the economic growth and infrastructure. That is only way Alberta got to where it is at now. Isn't there some way to input funds from the royalties to helping Albertans connect with the information they need to succeed? I have written to you before about employment issues and employers who won't show any regard for people with health issues. These people also have years, sometimes decades, of experience behind them and they want to show what they can do. In terms of business it would offer an element of competition which hasn't been oberved in 25 to 30 years. People doing the job successfully. Is there some way we can be helped. Better access? Thank you for time and consideration. [Information Removed]Calgary, Alberta |
| RRE6098 |
Please tell me that you have looked at other factors in this review, especially in conventional oil and gas exploration and development. How many risk dollars has the Crown allocated to oil and gas exploration and development? None! Enough said. Don't shoot the Golden Goose Ed! |
| RRE6099 |
I feel that the royalty percentage should be raised as there is a lot of dollars made in 1 day, and over the years has accummulated to milions of dollars. A person I know who works in Ft. McMurray agrees as well - the percentage should be increased. As there is many millions of dollars made and is kept with the company, eg. CEO's, the wealth should be shared as many Albertans have to make ends meet and any assistance is helpful. And since a good majority of wealth is kept with the company, for they continue to build, who knows if you will see further royalty dollars as their construction continues to be ongoing/never ending. Their threats, are just that, threats, as they would not like to lose the good lavish lifestyle they live and are accustomed to, which in the end, the employees who work for them/Albertans are the ones who help them achieve their goals, but yet they are not willing to share the wealth, as they should. In summary, I feel (and my friend) that the percentage should be increased and the wealth should be shared, as there are many Albertans that need a good helping hand. And since the people help achieve their goals, then the wealth should be shared more. thank you, [Information Removed] |
| RRE6100 |
My family has already gone through one of our worst years, we took a chance and decided to move from BC to AB, now we are struggling financialy, for the last few months the work has been few and far between, now we are in a stand still, and the worst is yet to come. We have been working in the oil industry for over 10 years and made a life. My husband loves his job and thought moving to Alberta would be a step in the right direction. Apparently that could be a decision we will live to regret. Please reconsider your choices, they will devastate my family and thousands of others. |
| RRE6101 |
I think that this is absolutely ridiculous that the alberta government would even consider making these changes to the most prosperous industry in western canada. While BC and saskatchewan are lowering royalties to encourage exploration and development while alberta is raising them - are we trying to discourage economic growth in Alberta. We want business to continue to prosper in alberta, not drive it away - by raising royalties you will chase the large companies out of alberta, and probably chase the conservatives right out of the government - i know i would never vote for them again as would none of my friends....Use your heads!!!!!! |
| RRE6102 |
Totally disagree with the reports recommendations for massive royalty increases. The oil & gas industry creat |
