AB and $50 oil

[stonepicker]

So can I use some of your land for free, no rental required in poorer years? Even in the good years these oil companies only had to pay 1% of gross revenue until they had everything paid for. So in a farm scenario even when grain prices are sky high I would get to use your land for 1% of gross revenue until I'd paid all the development costs - paid for all new machinery, grain driers, bins, B-trains - even the interest on any money I needed to borrow would be an allowable development cost. I'd be able to cut any trees on your land, leave a mess behind and sell them for firewood. I'm sure you'd be one of the first to shout socialism if anyone suggested anyone taking your land over like this.

Anyways can you provide me with the years that the oil companies paid the huge royalties you claimed in your last post? I can't find that in any data I've seen.

I call bullshit on the above happening with any regularity. ( there would be an uprising ) Just google alta. oil royalties and click on the one that compares alta. with sask. and texas ( you haven't been looking too hard )

[grassfarmer]

Stonepicker that's no bullshit the 1% system is what's been in place since the mid 80's in the oil sands. Until they reach payout which is defined as "the first time when the developer has recovered all the allowed costs of the project, including a return allowance on those costs equal to the Government of Canada long-term bond rate"


Here is how the 2009/10 review worked for Albertans - as the man said in the opening video it's no wonder there is a large deficit in AB.

"The repercussion for royalties was that in 2009/2010, the Alberta government collected 6.1 billion dollars in royalties for the oil and gas sector. This was a drop of $3 billion. Over the next five years, Alberta collected $13.5 billion less in royalty than in the previous five years. Instead of getting the expected $2 billion per year increase, Alberta saw a $3 billion per year decrease. The decrease was composed of a $5 billion per year decrease in gas royalty partially offset by increases in oil royalty and oil sands royalty. The total value of hydrocarbon production was about the same during each five-year period"

So how does your claim that they pay higher royalties in years of higher oil prices stand up to scrutiny when we compare this oil price chart with the above figures?


From a 2009 low of $30 it rose to north of $90 - higher prices = lower royalties.

You mentioned Texas - one document I read showed that both Texas and North Dakota had a steady royalty rate of 24-26%, year in year out regardless of oil prices. Seems like a smarter system to me.