Lots of Traffic!

[farmers_son]

You asked when that deal was written up. In 1997 the province developed a new oil sands regime where royalties would be 1% of gross revenue. The oil sands represent by far the majority of the provinces oil reserves.

The crown owns 81% of the provinces energy reserves.

[farmers_son]

Linda, any concerned citizen is within their rights to inquire about how the formula for royalties was developed and why Alberta's is lower than many other producing nations .

Surface rights groups tend to concern themselves with the rights of the property owner when negotiating with oil and gas companies, but the royalties the province receives is a different issue.

If the majority of citizens feel that the province is not getting the best return on royalties then pressure can be put to bear on decision makers to review the compensation formula etc.

Personally, I would not count on a huge outcry from Albertans because many of them count on the resource industry for their livelihood.

[cowman]

grassfarmer: I suspect the NFU addendum is the same one the surface rights groups put out? I will also add you can write anything extra you might feel is necessary into an addendum?
Believe it or not I am becoming impressed with the actions of the NFU! They are coming across as a very sensible grassroots organization, of late! They seem to have their ducks in a row.

[farmers_son]

The oil industry has always used the threat of pullbacks in activity causing oilfield workers to be unemployed to lever better deals from the province. Maybe that argument held water when oil was $11 a barrel, not so much so at today’s prices.

And I guess if you work in the oilfield you are receiving a benefit from the Alberta Advantage. If you are a full time farmer, not so much benefit except for the few thousand dollars a year you might get if a well is drilled on your property. That is a big if for many producers who do not have a well on their land, and I would say that is most of us.

Only 7% of the provinces workforce are employed in the mining, oil and gas sector. Granted there are spin off jobs but the economy of this province is bigger than oil and gas. There is a breakdown of Alberta companies by sales and by employment at:

http://www.alberta-canada.com/statpub/topabco.cfm#2

The energy sector dominates the list of top companies by sales but not by employment which suggests to me that the bulk of the benefit from Alberta’s oil and gas is flowing south of the border through corporate profits and not that much is flowing to the people of this province, even those who do work in the oil patch.

The Province's policy of cheap royalties for oil and gas is questionable. Most Albertans are not participating in the Alberta Advantage, the royalties the province collects are not as large as many believe, and a few companies, mostly American, are reaping the benefit of the provinces non renewable energy reserves.

[Horse]

Farmers son it sure is nice to have another voice in the wilderness with me I have been trying to get peoples attention on this subject for yrs . now that some of the farmers are hurting we will get a few more ears. that is until some form of govmt throws out a few coins then they all forget what they saw as an injustice .
Here in alta they are probably in the 150/200 mill subsidy to app 4000 lease holders per yr for oil revenue and most are required to keep a few cows to get the cash therefore driving down the price to the rest of us.
Now watch the defence come for the lease holders .

[farmers_son]

I would not say that I am a voice in that wilderness. I am saying basically the opposite, that not enough of this provinces energy windfall is finding its way into not only farmers hands but the general population of this province. Unless you work in the oil patch the Alberta Advantage may be passing you by.

The province is not getting that much money from royalties, really about the equivalent of a sales tax. I am thinking the energy will be gone with all the money going to a few oil companies and what will be left? We have not diversified into manufacturing, Alberta Agriculture Food and Rural Development has not done much in the way of Rural Development (unless the provinces idea of Rural Development is a well site on the farmers land) and so forth. Unless the province collects a reasonable royalty, their fair share of the oil and gas in the province, they will not have sufficient resources to adequately diversify Alberta’s economy so the prosperity can continue when the resources are gone, which will be in my lifetime.

Not only no money for packing plants but no money for value adding in other sectors, agriculture, forestry, tourism, manufacturing.
Instead the rest of the economy has to compete with an overheated energy sector and finds that they cannot attract either labour or capital to their projects. This drives potential initiatives away.

[cowman]

farmers son: You must figure on living one hell of a long life if you think the oil will be long gone! Conventional yes, but not the oil sands.
I totally agree that the province is not getting enough of the revenue, but I will also say they are giving away too much also? I think it was $12 billion last year? If royalties rose significantly a huge slice of that would go to Ottawa?
Saskatchewan will become a "have" province this year and start to send money to the black hole in Ottawa. BC, Alberta, and Saskatchewan...all sending money to feed Quebec! Someone is making a bundle on our oil and gas...and it just isn't the oil companies!
I'd rather see the oil and gas companies get the money than a bunch of eastern slackards...at least the oil companies spend some of the loot in the west!
Horse: While I agree that the grazing leases need to be reformed...you need to realize it likely won't happen? That is just politics and Jack Horner pretty well whipped Klein on that one?
Also you should realize that everyone in Alberta benifits from the oil and gas in this province? Where do you think the money came from for all the government "cow welfare" checks? Sask. and Manitoba never got the level of support we did.

[farmers_son]

You might be interested to read the Alberta budget at:

http://www.finance.gov.ab.ca/publications/budget/budget2005/fiscal.html#12

Equalization payments are cash transfer payments by the federal government of Canada to less wealthy Canadian provinces to equalize the provinces' "fiscal capacity" or their ability to deliver government services.

Contrary to popular belief, it does not redistribute wealth from richer provinces to poorer ones, since money for equalization payments comes from general federal government funds. Rather, as with every federal program, it is paid for most by the individual Canadian taxpayers who pay the most taxes, whatever their province of residence. Ontario and Alberta are the only provinces that do not receive equalization payments, but as discussed, the money for equalization payments to the other provinces is not somehow taken from their treasuries.

Unlike conditional transfer payments such as the Canada Health and Social Transfer, the money the provinces receive through equalization can be spent in any way the provincial government desires. The payments help guarantee equal levels of health care, education, and welfare in all the provinces.

Today the total amount of the Federal Equalization Program is around 10 billion Canadian dollars per year.

See: http://www.nationmaster.com/encyclopedia/Equalization-payments

Alberta expects to receive $3.5 billion in transfers from Ottawa for such things as Health Care.

Alberta has received about $6 billion per year oil and gas royalties over the last 10 years, roughly the amount it collects in personal and corporate income taxes.

[farmers_son]

farmers_son, in order to really understand the impact of the oil and gas industry in Alberta, you need to also consider the amount of tax dollars this industry pays to municipalities. In resource based municipalities the machinery and equipment, pipeline assessment will likely make up 80 of the assessment. Farmland on the other hand will make up less than 10% of the assessment in many municipalities.
Granted, having the pressure that the resource industry puts on local infrastructure costs dollars, but the added assessment also allows for municipal funds to be used for recreation projects, seniors lodges etc.
I have had the opportunity to visit nearly every rural municipality and some of the municipalities would give their eye teeth for some resource assessment in order to provide essential services without having the local residents having to pay hefty property taxes.
It is a real eyeopener to check the assessment of each rural municipality and cross reference it with the mill rate.

[farmers_son]

Yes, but…The value of oil and gas production in Alberta would be in excess of $70 billion dollars in 2004. 81% of that oil and gas is owned by all Albertans, not the oil companies. That oil and gas is owned by all Albertans, not just those Albertans who work in the oil patch, or those Albertans who live in municipalities which have pipelines and well sites. That oil and gas is owned by all Albertans, not just those who have well sites on their farms or who can afford to invest in junior oil companies. I am thinking that the benefits of this tremendous non renewable, depleting resource are not being shared by all Albertans. That the benefits of the oil and gas under this province accrue to the oil and gas industry and are not being captured by the province to diversify the economy for the days when the drilling activity decreases, and the conventional oil is hard to find, and the pipelines are all built. Then the oil patch workers are laid off, there are no other jobs to go to and the profits simply go to the more often than not American companies through unseen underground pipelines. That oil and gas is not for the benefit of the oil and gas companies, it should be for the benefit of the Albertans who own it, shouldn’t it? We have forgotten that.