Alberta tarsands

[cowman]

Over on gasbuddy.com they state with new technology the cost of producing a barrel of crude at the tarsands is $13.21! They also state the tarsands have 8 times the reserves that Saudi Arabia has and more reserves than all the members of OPEC combined! Within a year they will be the number one supplier of foreign oil to the USA?
So maybe the USA should be treating us a little better?
Now think about that $13.21 cost? I assume the 63 cents a barrel royalty the Alberta government gets is included in that cost? And this oil sells for over $60! Maybe its time the government did a little more than "study" this problem? Maybe its time we got a little raise? Do you think Ed Stelmach will find after he gets done "studying the problem" that Alberta should get a few more bucks?

[FarmRanger]

Is it acting like a Liberal when you subsidize a sector until it becomes viable and contributing to the economy?

The oilsands were "subsidized" for how many years until they became a huge engine in the Alberta and Canadian economy?

I'm not saying biofuel will be anything even remotely as big as oilsands. Potential new industries might need a kickstart from the taxpayer to get started?

[just_wondering]

Farmranger
I believe that biofuels will have a greater effect on farm commodittee prices than the tar sands ever could. It is a function of supplly and demand internationally with govt around the world getting into the green fuels movement the days of oversupply every year are over. If Harper/Strahl get on board to support farm prices this way, then the days of waiting by the mailbox for subsidy cheques are over.
I need policy that alows me to thrive rather than this mentality of the gov't owes me a living.
As a side note these subsidies are designed to be short term to get the industry on its feet.

[Zaphod]

If they are trying to keep up with US subsidies on biofuel, you'd better expect to be in it for the long haul. There is no sign that they will be scaling back any time soon, despite the profits being made in ethanol. If you want to subsidize farming with biofuel, that's fine, but we're fooling ourselves to think that biodiesel is viable on its own unless crude goes back to $75 and stays there.

[charliep]

Likely also need to be cautious about the impact on other sectors. Increasing ethanol will have an impact on the livestock sector. Increased competition for feedgrains is a good thing. If you are subsidizing ethanol production, shouldn't the livestock industry have equal access to support?

I will also note the 2 new crushing plants in Saskatchewan (don't know if both will get built) main target oil market will be human consumption. Vegetable oil is still worth far more than biodiesel.

Finally, I think as farmers everyone needs to be watch the consumer demand side. Demand pull based on environmental issues will move this industry far faster than strictly concentrating on benefits to the farm community. As a question, how many of you would spend a nickel a litre more for bio diesel/ethanol blend than you would for regular farm fuel?

[chuckChuck]

The oil industry has huge had huge subsidies/incentives that have cost taxpayers alot of money. Many jobs in this country are the result of subsidies and incentives that have continued under various governments of all stripes. The US has strong political reasons for subsidizing bio-fuel because they are very vulnerable, being totally dependent upon imported oil. They also have strong political reasons for subsidizing agriculture at a much higher level than we do. Those subsidies will continue as long as farm state votes are dependent upon subsidies. Interestingly Norway is investing almost all government oil revenues outside of the country in an endowment fund that reduces the inflationary effect of the oil boom and will pay dividends for generations down the road. Thanks to King Ralph and company the Alberta model is spend it now and forget about a long term strategy.

[cowman]

chuckchuck: A lot of what you say is true. However...very few fledgling industries get off the ground without some assistance? I would suggest to you that bio fuel serves a deeper purpose than just the "profit and loss" market?
This bio fuel market will never replace the petroleum industry? But it sure as hell could make agriculture more viable in this country? And Lord knows...we sure need something?
It won't replace food production but will remove a lot of the bottom end of product and therefore push up prices? Is that a bad thing?
Hugh Segal stated in his report on the senate that without doing "something", agriculture will cease to exist in this country! Does it make sense to throw a few pennies to save it?
There is a lot of money out there and the environment is becoming a concern for just about anyone who is ALIVE?
Canada needs to step up to the plate, with every other developed nation, and do what they can do? Why not a win-win solution?

[mustardman]

Cowman I sure hope your right , these give away royalties have got to stop.
A piddly 1 % royalty on tarsands oil!!!! Maybe if oil was $20 a barrel but not at these prices. I'm living in Saskatchewan and I would like our royalties to raise but if we do , the industry always says it will move west where royalties are cheaper. The 2 gov't have to work together on getting a sustainable royalty structure set up.

Don't forget Sask has thousands of lakes in the North and we are being dumped on from acid rain that comes directly from the tar sands. The cost of cleaning this up will come out of Sask coffers as this is a prov. jurisdiction even though it was created in another province.
Mr. Stelmach needs to talk to someone like Peter Lougheed , now there was a premier who new how to negotiate a good deal for the province not just for the oil companies.

[cowman]

mustardman: Well maybe I shouldn't have quoted the 1% too much, as I think that is a short term thing that doesn't last forever? I think after awhile the companies have to pony up some more money?...Not real sure what that is...I will do some research.
When most of these ageements were signed oil was in that $30 range and I don't think the government accounted for the rise in prices in the original agreements, but again, I could be wrong?
It is a commonly held belief that Alberta gets approx. $4 in royalties for every barrel of oil(synthetic and conventional)? Alaska gets $9 and Norway gets $11? I would suggest to you that most freeholders(Albertans that own mineral rights) would be getting right around $8? That is from my own experience.
Now I realize the tarsands cost more money than conventional crude, but you really have to ask, how little money is the government getting for tarsands when they come up with a balance of $4?
I also realize there are environmental issues and those have to be addressed sometime?

[chuckChuck]

Cowman, I agree many sectors need incentives to get going but unless the Conservatives are serious about assisting farmers in building a stake in the industry the benefits may not accrue to farmers. We may see a temporary boost to prices for some grains and oilseeds but it is not clear whether these will be lasting increases or just another flash in the pan. The removal of the Crow was supposed to revolutionize western agriculture but the pork and cattle industries are facing alot of pressure and an uncertain future because of FX rates and increasing feed prices. Prairie governments have also invested heavily with incentives and subsidies to attract investment in livestock. What I find ironic is that it's okay to subsidize grain farmers with a 5% ethanol and 2% bio-diesel regulation but it's not okay to support the Wheat Board's monopoly selling position even when the majority of farmers support it. The Conservatives seem willing to interfere in the marketplace on one hand but are not willing to allow farmers to operate their own marketing board.

[silverback]

Blah, blah

It is not ok for some farmers to force their neighbors to market their grain the same way they think it should be done!

How can it be that we can't decide on the definition of marriage because it would infringe on the rights of a same sex group, but it's ok for the CWB to allow 40-50% of farmers to submit to the will of the balance?

What is it going to be? Either the majority cannot impose it's will on a minority or it can. Pick.

[Lifer]

Is not the biofuel strategy at this time more of a domestic development and use issue.

The Wheat Board is working with a commodity that is primarily export at this time.

[chuckChuck]

SilverBack. Obviously a majority can and does impose on the minority when it comes to economic issues. Economic rights are not protected by the Charter, basic human rights are. Even Harper and Strahl support the supply management monopoly boards for dairy and poultry. Why the special treatment from Strahl and Harper for these Boards and not the Wheat Board? Either they support marketing boards or they don't. Which is it?

[lesm]

chuck chuck. i don't ever recall hearing minister strahl saying that he won't allow you to operate your own marketing board.in fact ,I believe he said he would help you set up a better board for those who wanted it. for the life of me, i can't figure out why you pro board people are so adament about forcing your ideologies upon me.is it the fear that i may make more money than you? or what? please explain so as i could sleep better at nites.

[chuckChuck]

lesm. A wheat board without a monopoly is useless. No elevators and no terminals and having to rely on competitors in an open market to handle the grain with no guaranteed supply?? Please explain how this might work because even the Strahl friendly Task Force put the idea of a dual market to rest. It is either an open market or the CWB monopoly. Choose one but not both. Trying to pretend that anything close to what the CWB offers now will be available under an open market scenario is unrealistic. As far as imposing an ideology, that is exactly what Chuck Strahl is doing against the choice of the majority. If you hadn't noticed, 60% of farmers voted in favour of single desk Wheat Board directors. 8 out of 10 elected directors currently support the single desk. You either believe in democracy or you don't.