Alberta Royalty Review

[srp71]

Hey Big Moose,I tend to agree with you on this.There is alot of finger pointing and fearmongering going on here,but I seem to recall that this slow down was started even before Stelmach was voted in as Premier,or a Royalty Review was even thought of.Yes it is a cycle.Since it started to slow down we have heard lots about getting the prices back down to reality.Well this is the OC's own fault.They are the ones that wanted to go ball's to the wall over the last few years,when it could have been on a more level field.Who's laughing?It certainly isn't the service companies.We are moving rig's right now that some of the bids are as low as 40 or 50% of cost.This just to keep the guys workin'.The prices were driven up due to supply and demand.Things look bleak right now but it will turn around in short order.After all,weve had a good run and we all knew it wouldn't last forever.It will come back again.

[Dead Moose]

History has proven over and over again that more $$$ in the hands of a government body is a very BAD thing. They just **** it away.
Like has been said before, "Those who do not learn from history's lessons are destined to repeat them".

Good discussion on this thread. It's great to hear from people directly involved in various parts of the O/G industries, as well as those who know their economics.

Just got word that Leader Energy is done.. ...apparently its over for them.. ...the project was cancelled so they had no choice but to shut er down...

You know, that's happened to me over and over again in my industry. No one sheds a tear for us when the pink slips get handed out.

The way I see it is this:

a.) Alberta's O/G economy is cyclical. If people haven't figured that out, then there's a problem.
b.) I, for one, don't mind seeing a cooling of our economy... There are a few people that are making lots of money now (and yes, I know they are working hard and making sacrifices to do so) but the rest of us are sitting here at the same wage, struggling to keep up with the rising costs of living in Alberta. But I choose to stay here and do whatever it takes to stay employed here, because I know the principle in point a.) to be true, and inevitable.

Cheers,
Stinky B.

[The Elkster]

I was going to write out a big reply but I think one word sums it up ENVY.

We all know the salaries in each sector beforehand and make career choices with that knowledge readily at hand. Everyone has an equal chance to get into the O&G game or other high paying fields. If they choose not to for whatever reason then that's their decision and the resulting pay is a direct result of their decisions. Don't like it then change careers. C'est la vie. If you think the gov't should MAKE it fair somehow then you may want to consider a move to russia or china.

[russ]

Originally Posted by The Elkster

I was going to write out a big reply but I think one word sums it up ENVY.

We all know the salaries in each sector beforehand and make career choices with that knowledge readily at hand. Everyone has an equal chance to get into the O&G game or other high paying fields. If they choose not to for whatever reason then that's their decision and the resulting pay is a direct result of their decisions. Don't like it then change careers. C'est la vie. If you think the gov't should MAKE it fair somehow then you may want to consider a move to russia or china.

Have you EVER stopped and thought what it would be like if no one did those menial jobs that you clearly down on?

[steveo10]

Must be nice to be a Driller/push/consultant in Alberta... go work month in month out overseas and would not have to worry about the royalities

I was going to write out a big reply but I think one word sums it up ENVY.

Heh, my sides hurt.

Yep, I like my job, and I enjoy what I do... I just find it odd when people get all shocked when the O/G gravy train runs out of, well, gravy.

Stinky B.

[The Elkster]

Originally Posted by russ

Have you EVER stopped and thought what it would be like if no one did those menial jobs that you clearly down on?

I'm not down on those jobs at all but it's a nice effort to twist words. I'm responding to those that complain about their low paying employment situation and that’s all. I respect that those positions need to be filled and in the end if enough people moved away from them employers would have to pay more to fill them. What bugs me is when the supply/demand dynamic is manipulated by bringing in labor from other countries but that’s another issue. I've worked with many administrative staff and they are as good as any person but the fact is that many don't have the urge to go to that next level and deal with the added challenge or stress or workload...and that’s fine...but there is a cost and I don't think one should whine about money if they themselves have made that decision and not been forced into it or have no alternative.

All I'm saying is that there are opportunities for better paying jobs out there if one has a problem with their current salary. IMO to complain about compensation and whine about others compensation with the opportunities out there is just wrong. All one has to do is take control of their destiny and make the effort.

Problem is that the royalty increases being supported most loudly by low income people are going to take away opportunities for those same people to move up. What many don't realize is that the people that are likely to be hurt most by a slow down are the very same people who are supporting this royalty change. People who haven't made enough to save for a slow time and who are living on a razors edge of finance.

I don't wish anyone ill will or bad finances but your life is dictated by your choices not someone else’s as is often blamed. Nobody wants to criticize themselves go figure.

.

[russ]

Originally Posted by The Elkster

I was going to write out a big reply but I think one word sums it up ENVY.

We all know the salaries in each sector beforehand and make career choices with that knowledge readily at hand. Everyone has an equal chance to get into the O&G game or other high paying fields. If they choose not to for whatever reason then that's their decision and the resulting pay is a direct result of their decisions. Don't like it then change careers. C'est la vie. If you think the gov't should MAKE it fair somehow then you may want to consider a move to russia or china.

Yeah - you don't look down on anyone.

[Deer Hunter]

Russ,
I'm envious of the people doing your so called meaningless jobs. They have lost a lot less money than I have in the past month thanks to Ed and his media sponsered public crusade against what made this province great, hard working people with risk seeking capital. I'm not looking for sympathy, but will instead rethink my investment in Alberta and Alberta businesses.

I thought the risk was in drilling the well, not government involvement in successful industry. I was wrong.

Off to BC and Saskatchewan we go. Remember, big oil is made up of lots of small people. Grandma's, uncle's, kids and their RESP's. I'm glad Ed and the rest of the pro royalty folks like ****ing around in the individuals bank accounts. Maybe those people will remember that next time we tip the waiter, pay to much for an Alberta sold vehicle, buy a gun, donate to the United Way or whatever else you have a choice to buy somewheres else or not spend. Everyone has a choice, even Ed.

Originally Posted by The Elkster

We all know the salaries in each sector beforehand and make career choices with that knowledge readily at hand. Everyone has an equal chance to get into the O&G game or other high paying fields. If they choose not to for whatever reason then that's their decision and the resulting pay is a direct result of their decisions. Don't like it then change careers. C'est la vie. .

Does this not also apply to all the o/g workers that are up in arms right now? Hell, I have family who did the o/g thing but with all the ups and downs they decided to come work for me, more stable, not feast or feathers, chance for advancement, pretty much equal money. You all knew the career you are going into had very high ups and downs, it has throughout history.

[russ]

Originally Posted by Deer Hunter

Russ,
I'm envious of the people doing your so called meaningless jobs.

I never once called jobs meaningless. It's a response to Elksters comment that we can all go work in the patch and make the big bucks.

Troller hit the nail on the head, how can you not know the patch has ups and downs? It's been this way as long as I can remember. BTW, the further downstream you are, the more protected you job is. The flip side is less money in the short term, more overall in the long run.

[The Elkster]

Originally Posted by russ

I never once called jobs meaningless. It's a response to Elksters comment that we can all go work in the patch and make the big bucks.

Troller hit the nail on the head, how can you not know the patch has ups and downs? It's been this way as long as I can remember. BTW, the further downstream you are, the more protected you job is. The flip side is less money in the short term, more overall in the long run.

I only mentioned going into the patch because people are criticizing the patch and what people in the patch make. When I talk about higher paying jobs as a reachable option I didn't mean just O&G it can be in anything from O&G to medical to business to management. All I'm saying is that there are all kinds of opportunities out there so don't sit there and whine about a lower paying job or be envious that someone else has a higher paying job. Use that energy to reposition yourself better. Thats it thats all.

I am not complaining about royalties so much as stating what a change in royalties will mean to everyone. I don't think some understand all the cost and impacts and it's important that people have all that info. before they make their conclusions. We compare royalies to other countries with totally different cost structures and most seem to think that makes sense. Ummm not really. That holds about the same validity as comparing the gas price in the UK to the US. In that case unless you compare ALL the taxes you don't get the full picture (ie lower gas tax but higher sales tax perhaps). In the case of O&G unless you compare ALL the costs to get the O&G to market (very different in different countries) then you don't get the full picture of why the difference in royalties and thus the perception that we're being ripped off. In a place where O&G is expensive to get out of the ground that leaves less room to charge royalties and still allow for a sufficient return on capital to attract investment. The stability of our industry only goes so far. Companies aren't going to invest in negative returns just because we're a "safe place". The option is to say "tough beans we don't care about the facts, live with it" to the developer and tax them anyway. Yeah like having them not invest billions here will really be best for ANY albertan including non-O&G personnel. If one thinks that they are living with their head in the sand. Why not ask one of the states or provinces begging for investement if the lack of billions of dollars of cash inflow is helping or hurting the average folk.

O&G is cyclical like almost everything else and it was indeed in a slowdown before the change and I don't think its all bad either. I certainly factored that into my decision and have budgeted accordingly. My worry is that the royalty increase will pile on and really accellerate a bad situation into a really bad one. I'm confident that I have enough to weather a storm but my worry is that many do not and I don't like to see that. That is where I'm coming from when I write. If I didn't care about others I would just not say anything.

[59whiskers]

When this royalty thing goes through I will not wait for a government hand out if the economy goes south. I have learned to live within my means and invested small amounts of money in several different companies over the years. Before the last recession in the 1980's some people were living well beyond their means and they got slammed when the NEP and high bank interest rates got them. A lot of younger people are in deep in debt, most of them were babies during the last recession. People that are lobbying government for more royalties are not investors and have no clue how oil, gas, and agriculture businesses work. Sure the government will get more royalties but the average income person will not reap huge benefits. The best education anyone can get about oil and gas companies is to buy a small amount of penny stock for companies that are doing business in Alberta and abroad. I challenge all the supporters of this royalty review to take a chance to make some real money for themselves by becoming investors and not wait for someone else to do it for you.

[TreeGuy]

I've really resisted getting back into this but....

Firstly, as an Albertan and a Canadian, I want to extend a huge 'thank you' to everyone in the field. Your hard work and sacrifices have made this province what it is today and made us the economic powerhouse of North America. You are paid very well for your hard work and skills, and also to keep you around due to the cyclical nature of the industry. Those of us who have/do support the royatly review have nothing against you. Thank you for doing a job we cannot.

Now, with that being said, it's time for a reality check. Gas exploration and development has been on the decline since before 2006. Even with a 50% reduction this year, development will still be above average on a 10 year scale. Gas producers will loudly proclaim that the increase in royalties have shut them down this year. NOT true. The increase does NOT come into effect until 2009, so this year is the same as usual. The cutbacks being blamed on the government are ones that were coming anyway.

The price of gas has remained stagnent, US storage capacities are at all time record levels, the winters are warmer, the US economy is toying with collapse and the Loonie is the highest it has been since 1870! Now put that on top of a tight labour market and quadrupled consturction costs.........

Here's an example. It's a $1.4b grab. It's a $470m grab from gas. Encana (sorry to keep harping on 'em but its a good model) turned about $6.86b profit last year. CNR were down to $700m this past quarter from (I think) $850m this time last year.

Now, if you take into account Encana has a $1B hole in the ground on 6th ave right now, and add on the ENTIRE $1.4b stemech grab, they would be able to support the entire O/G increase for the industry, build their office tower and STILL turn a $4.46B PROFIT for the year!

Guys, I am behind ya, but start doing the math. I am fully aware that alot of your development capital is raised via stockholders, but to cry poor on the backs of the guys in the field because your last quarters earnings were $700m as compared to $800m last year is bullsh*t. A $0.51 quarterly share loss has almost NOTHING to economically do with a royalty increase that does not take effect until next year! Companies have a year to come up with a game plan for their investors, and the companies that can come up with the best plan will prosper. Numbers will trump emotions, and I wish the best to all who have been burned by this. Just don't blame the government right away and take a hard look at how the company you work for does it's business.

Tree

This is a copy of a letter sent to Mr.Ed. Sums up what I have been thinking, and saved me a buttload of typing.

Dear Ed,
We have a small oilfield rental business in Grande Prairie; we've been in business for 5 years. We have 3 children and are very concerned with your recent decision on raising the royalties. We lived through the national energy program nightmare in the early 80's and witnessed many devastating consequences to the federal decision and feel that you have done exactly the wrong thing at the wrong time. Allow me to explain my side of the story.
The dollar is too high to attract US investment; the commodity price is too low and unstable as natural gas is all over the map. The reserves are too high to stimulate new gas drilling along the foothills. The price of labor and services is through the roof as the last seven year flurry of activity has driven costs up dramatically. The US lumber exports are dropping and will continue to stay down as the "Baby Boomers" retire and sell out /downsize their living accommodations. Weyerhaeuser is shutting down the OSB side and will lay off 130 employees. Ainsworth in GP is also shutting down for a period. Calf prices are in the toilet over the US dollar and feed prices are rising, thus we can kiss the Ag industry goodbye for a while longer. In summation, our diverse and boisterous economy is losing ground in the Ag, Forestry, and now the oil & gas exploration/production industry due to your recent push for "Alberta’s Future".
The opportunity to ask the oil & gas sector for a raise is not when they are handing you your lay off notice, the time was 2 years ago when natural gas was $14, oil was $60 and the dollar was $.80. My point is, when the farmer was being beaten down, at least he could get a job working a rig, pipelining, driving cement truck to rigs, seismic work, service rigs, endless service companies, maintenance, lease construction, hotshot driver, mechanic, Kal Tire… hopefully your getting this. When the log truck driver needed a job due to soft wood lumber disputes with the US, he too could find employment in any number of the aforementioned fields. The reason I know this is not from a book or study or any review panel, but from personal experience as a farmer /rancher, class 1 driver, derrick man of 11 years (that’s on a drilling rig in case you don't know), environmental consultant, production tester, small business owner that used to employ 4 people. I know this as I've laid off the guys that did work here before you were so bold as to take on the big bad oil company.
Your timing could not have been worse, the mishandling of the decision making process was unbelievable, why were the decisions not made behind closed doors before getting the entire industry ready to bolt out of the province, did I mention that CNRL shut down 10 rigs in GP in a single phone call, or the 7 in one day in Edson. I understand that Ralphy gave too much for too long and that sucked for all of us, but now wait... we are debt free, lots of money in the account, jobs galore (3% Unemployment) Canada's golden goose that gives lots in transfer payments to other provinces because we seem to have an excess of cash, some of the largest and newest finds in the oil sector throughout the world, let alone what could have happened in Peace River if you would have stayed the course, or did I mention the activity that was planned for Grande Cache south to Rocky Mtn House....not so much now. In second summation, you say Alberta's future is your priority; my future consists of the 3 kids I have to take care of. The bank will let me miss 3 payments, Daimler Chrysler has a thing about there money as well and there's $3000/mth that they want consistently. After that short future, I'm pretty much done as are the rest of the service companies, car dealerships, drilling contractors...etc, all in the name of Alberta having more money 3, 4, 5 years from now, or maybe not even then.
By the way, what is the plan with this windfall you were hoping to get from royalties? Should we use it to bail out the farmer/rancher going down or the lumber industry, certainly it won't go to the oil & gas worker or maybe it will be in the form of a UI cheque. No that’s the Fed's problem. Maybe we can build an 80 million dollar aquatics center in GP that mayor wanted so bad, and we can all go for a swim at $15 admission per adult $12/ teen an $10/youth. I hope through my snide comments that you, your staff, your buddies (advisors), review committee members, professors of economics and party members, etc will realize you've made a grave error in how you went about handling the affairs of the public which you represent. That’s right, did you forget, you work for me as a public official not the other way around! We now are looking at refinancing everything and moving to Colorado or Wyoming for work now as GP is going down. Please advise me on this issue of where the future money is going, and if you say it's for the teachers union, bleeding heart lobbyists, cabinet member raises, campaign expenses, or anything of that nature, you should probably watch your "political back". Where the hell is Ralph anyway?

Signed;
Misrepresented

[First Lady]

Hello everyone. This thread showed up in a google search I have set up to keep an eye on interest in the Royalty Review.
With that in mind I would like to invite anyone interested to the following:

Concerned about Alberta and its future?
The Alberta Alliance is & we would like to meet you!

We invite you to attend a Town Hall style meeting in Calgary

Location:
Blackfoot Inn - Heritage Room
5940 Blackfoot Trail, S.E.
Calgary, AB.

Date:
Tuesday, November 27, 2007

Time:
7:00 PM

Speakers:

Duane Mather, President and CEO of Nabors Canada

John Murdoch, President and CEO of Madison Energy

Paul Hinman, MLA and Leader of the Alberta Alliance Party

The Alberta Alliance was founded on grassroots principles, we welcome all to attend. You will learn more about our party, in particular our stance on the Royalty Review. Members of our provincial council and future candidates will also be in attendance. We look forward to meeting you and sharing our vision for our province’s future.

We would also like to welcome our many new members and thank them for their generous donations.
Through them this event and the advertising have been made possible.
Listen for our radio advertising on QR77, starting on Monday

If you have any questions, please feel free to contact me.

Thanks,
Jane Morgan, CFO
Alberta Alliance Party
1-888-262-1888
www.albertaalliance.ca
info@albertaalliance.ca

First Lady

[First Lady]

Originally Posted by troller

Would that be a thumbs down for the meeting, the party or me personally?

Originally Posted by First Lady

Would that be a thumbs down for the meeting, the party or me personally?

None of the above, the post in general. It would be for using google to sign up on boards to promote your political party. This is an outdoors board, very few political discussion on parties, more just venting on issues we come across.

To sign up with the sole intent to push your party, I feel, is in bad taste.

[Buckhead]

Originally Posted by First Lady

Would that be a thumbs down for the meeting, the party or me personally?

The answer should be obvious. You posted in poor taste.

This is the Alberta Outdoorsmen Forum - not the Alberta Political Forum.

Hence it is a site where outdoorsmen can speak their minds and discuss issues with each other.

Not a site where political parties should be able to get free advertising.

[First Lady]

Originally Posted by troller

None of the above, the post in general. It would be for using google to sign up on boards to promote your political party.

I did not use google to sign up.

I used google to identify forums where the issue was being discussed. This thread has over 4000 views, it gets picked up in searches.

This is an outdoors board, very few political discussion on parties, more just venting on issues we come across.

I would say there are quite few. A search of "government" on here nets over 500 results and the name "Ted Morton" over 100.

I think some of the greatest issues faced by hunters and outdoor enthusiasts are caused by government intervention and an over abundance of stupid laws (ie: gun registry)

To sign up with the sole intent to push your party, I feel, is in bad taste.

I am sorry you interpeted it as a push for the party. I was simply bringing an important meeting to the attention of those who might be interested.

I have not tried to push the parties views or even my own in my posting.

[First Lady]

Originally Posted by Buckhead

Hence it is a site where outdoorsmen can speak their minds and discuss issues with each other.

Not a site where political parties should be able to get free advertising.

If Mr. Morton signed up to discuss similiar issues would he have been met with this same disdain?

Originally Posted by First Lady

If Mr. Morton signed up to discuss similiar issues would he have been met with this same disdain?

yes, this is an outdoors board, not a political forum.

Originally Posted by First Lady

I did not use google to sign up.

I used google to identify forums where the issue was being discussed. This thread has over 4000 views, it gets picked up in searches.

Glad to see you caught on to what I was saying.

I would say there are quite few. A search of "government" on here nets over 500 results and the name "Ted Morton" over 100.

I think some of the greatest issues faced by hunters and outdoor enthusiasts are caused by government intervention and an over abundance of stupid laws (ie: gun registry)

Of course there is "government" and "Morton". They generally come up when someone is ****ed off. This is NOT the gun registry, we have other threads for that.

I am sorry you interpeted it as a push for the party. I was simply bringing an important meeting to the attention of those who might be interested.

I have not tried to push the parties views or even my own in my posting.

To me, the mere fact you posted that shows you are pushing a party agenda.



I'm done discussing this with you. It just keeps bumping your post and I won't do that anymore.

[First Lady]

Originally Posted by troller

Of course there is "government" and "Morton". They generally come up when someone is ****ed off.

So in your opinion people would prefer to just bitch to one another, rather than discuss the issues with people who may actually listen and be able to do something.

This is NOT the gun registry, we have other threads for that.

I realize that, I was simply citing it as an example. Just as there are plenty of other politically motivated threads…. Like these three very recent ones.

http://www.outdoorsmenforum.ca/showthread.php?t=8516

http://www.outdoorsmenforum.ca/showthread.php?t=8495

http://www.outdoorsmenforum.ca/showthread.php?t=8169

To me, the mere fact you posted that shows you are pushing a party agenda.

I already apologized for giving you that impression.

Emails and phone calls from other members of this forum would indicate there are those who are glad that I brought it to their attention and do not feel the way you do.

[Bushrat]

First Lady, you need to improve your site if you want input, its to slow, my attention span couldn't handle it. I think the survey is worthy, sooner or later we got to make decisions about the future of this land we live on.

[First Lady]

Originally Posted by Bushrat

First Lady, you need to improve your site if you want input, its to slow, my attention span couldn't handle it. I think the survey is worthy, sooner or later we got to make decisions about the future of this land we live on.

What survey are you referring to? We don't currently have one on our website.

[Splitbrow]

My 2 bits... wow what a post...

For everyone a little confused about the royalties do NOT just look at the % taken as a result of royalties. If you look at overall government take, Alberta's is the lowest in Canada even after the recent changes. Do some checking...

So why go off to sask or bc? Thats a poor argument...

Split...