CanPol - Alberta edition

[notyoueither]

NYE Its obvious that thre are placers that are far more risky to invest than Alberta-- places where they have blatantly stolen investments and infrastructure. BUt my question to you . . Should Alberta be aiming only to not be among the worst places to invest? Because your comparable and examples are some of the worst

They were significant petroleum jurisdictions in the report.

My point is that industry cries of being pole-axed are largely hot air. The tax burden on them is still comparatively low in Alberta.

The gas sector may have some legitimate beef to grind. However, this is mostly about the oilsands. Has been since the review got under way while gas royalties were falling off a cliff.

[Flubber]

Wait. I thought the oil industry had these massively complex models that they run all the numbers through. You mean they do not take other taxation into account?



Royalties are one piece of the pie. The GoA had ample room to increase royalties due to relatively low levels of taxation as of ~2005-06 compared to other jurisdictions with significant petroleum resources.

Hmmm -- the report showed some places with higher percentage government takes and some places with lower. You cited all the higher ones and none of the lower ones.

Oh and nye if you want to advocate a higher take in the oil industry, are you also advocating higher corporate taxes on everyone else? Since thats part of this discussion when you get into 'take" . . .


Also I would dispute that the oilsands mine should be compared directly with many of the other oil and gas regimes and the royalties applicable to conventional single well production. OIlsands production in the mass mine model requires massive investment and larger risk than conventional plays and there must be sufficient flexibility to allow a sufficient rate of return. Its a very different proposition to begin expending tens of billions and not start production for 5 years versus spending one million and being able to start production in two months. The economics of the two are not even slightly comparable and that is why iwithin Alberta they get completely different royalty treatment

[Flubber]

However, this is mostly about the oilsands. Has been since the review got under way while gas royalties were falling off a cliff.

huh? Do you mean this thread ? Perhaops because that is what you and aher have discussed mainly but natural gas is a very big issue. There are substantial gas plays that could be a big part of continuing revenue and employment for years to come .

[Asher]

They were significant petroleum jurisdictions in the report.

My point is that industry cries of being pole-axed are largely hot air.

I am seriously very sick of this "discussion" because it's going nowhere.

But I'll just point out that you've repeatedly claimed this. It doesn't stand up to a simple logical analysis, it doesn't stand up to simple observation, and it doesn't stand up to what people know who are actually in the industry.

What is simply happening here is you've stuck your head in the sand. You want the government to pull in more money from the oil companies, who do not directly benefit you in any way aside from government revenue. You'd prefer Alberta not institute a PST (which WOULD impact you) so you'd rather instead Alberta take that money by screwing the energy industry and the people that work in it rather than you and your business.

Let's just be honest about it here. If you were truly so terribly concerned about the lack of revenues coming from the falling natural gas fortunes, why not institute a PST like all of the other provinces? Why would you possibly defend reneging on old agreements and massively jacking royalty rates?



Edit: Forgot you do advocate a sales tax as well. My apologies. I guess you're just in favour of maximizing government revenue...

[Flubber]

My point is that industry cries of being pole-axed are largely hot air. The tax burden on them is still comparatively low in Alberta.

Hmmm are you advocating that the general tax burden be increased in Alberta?

Oil companies have to compete with other non-oil industries for investment dollars. Once the "economic rent" payable for the resource extraction has been paid, there is no justification for taxing the oil industry more harshly than other industries.

Do you object to other industries being taxed less than in other places?

[notyoueither]

Hmmm -- the report showed some places with higher percentage government takes and some places with lower. You cited all the higher ones and none of the lower ones.

Oh and nye if you want to advocate a higher take in the oil industry, are you also advocating higher corporate taxes on everyone else? Since thats part of this discussion when you get into 'take" . . .


Also I would dispute that the oilsands mine should be compared directly with many of the other oil and gas regimes and the royalties applicable to conventional single well production. OIlsands production in the mass mine model requires massive investment and larger risk than conventional plays and there must be sufficient flexibility to allow a sufficient rate of return. Its a very different proposition to begin expending tens of billions and not start production for 5 years versus spending one million and being able to start production in two months. The economics of the two are not even slightly comparable and that is why iwithin Alberta they get completely different royalty treatment

I was looking at significant oil resources. Oklahoma isn't what it used to be.

And yes, I do advocate higher taxes on all Albertans. I think I mentioned a sales tax. I think I went on earlier about that.

Also the oilsands still get their pre-payout favourable treatment. Just not as generous since the revenues from gas and conventional oil are no longer there to pay the bills.

[notyoueither]

huh? Do you mean this thread ? Perhaops because that is what you and aher have discussed mainly but natural gas is a very big issue. There are substantial gas plays that could be a big part of continuing revenue and employment for years to come .

The royalty review.

[notyoueither]

Hmmm are you advocating that the general tax burden be increased in Alberta?

Oil companies have to compete with other non-oil industries for investment dollars. Once the "economic rent" payable for the resource extraction has been paid, there is no justification for taxing the oil industry more harshly than other industries.

Do you object to other industries being taxed less than in other places?

You are obfuscating.

Oil is not like other industries. It is a finite resource that belongs to the people of Alberta.

Pay up! you petro-cheapskate!

[notyoueither]

To be honest with you, I would be perfectly fine with the industry doing a reverse Chavez and cutting off their noses to spite their faces.

Statoil is not a bad model to follow.

[Asher]

You are obfuscating.

Oil is not like other industries. It is a finite resource that belongs to the people of Alberta.

Not after you negotiate deals with the companies for its extraction. I think the legal principle is still lost on you here.

You can't sign a contract for payment, leave it for a couple years, then unilaterally decide to tear it up and charge more "because you own it".

I'm actually shocked that was permitted and shocked more principled Albertans didn't stand up and call them out on it. People like you just wanted the cash-grab, I guess.

[Flubber]

The royalty review.

wow-- If you think the problems with the royalty review were totally about the oil sands, then you really don't have a clue.

There are lots of companies that do dick all oilsands stuff that found the royalty review reports and results apalling

[Asher]

I'd like to see nye explains the litany of "temporary" agreements to undo the results of the royalty review for virtually everyone BUT the oil sands, and I'd like to see him explain why the actions of the royalty review are now under review themselves by the Government of Alberta if everyone believed they had no impact on investment viability in Alberta...

[Flubber]

You are obfuscating.

Oil is not like other industries. It is a finite resource that belongs to the people of Alberta.

Pay up! you petro-cheapskate!

Wait a second-- If you are going to compare "government take" across jurisdictions-- IT is relevant what the general taxation level is in the province. A trucking comnpany may pay less tax in Alberta than Sask. Why shouldn't an oil company have a similar treatment on the general taxation portion of what they pay?

[notyoueither]

Not after you negotiate deals with the companies for its extraction. I think the legal principle is still lost on you here.

You can't sign a contract for payment, leave it for a couple years, then unilaterally decide to tear it up and charge more "because you own it".

I'm actually shocked that was permitted and shocked more principled Albertans didn't stand up and call them out on it. People like you just wanted the cash-grab, I guess.

Only Suncor and Syncrude had contracts.

They were doing their own bit of weaseling, having avoided going over the 1% royalty rate for close to forty years.

The government told them the jig was up. They were going to have to start paying, either through renegotiating the deals or the government would use the power of taxation in other ways.

Nobody, anywhere in the province has any sort of contract that assures them they will not be taxed, or that the government cannot change tax levels. Except the natives.

[notyoueither]

wow-- If you think the problems with the royalty review were totally about the oil sands, then you really don't have a clue.

There are lots of companies that do dick all oilsands stuff that found the royalty review reports and results apalling

No. I mean the point of the entire process was the oilsands.

Gas royalties were rapidly declining.

Do the math.