Lots of Traffic!

[cowman]

In my neck of the woods it is getting so you can hardly drive down the road for all oil field traffic. Popping in wells like there is no tommorrow!
These coalbed rigs can drill a well and case it in 36 hours and they are running 24/7. The pipeline crews are so far behind it might take years to get all the pipe laid!
July 1st is when the ruling comes down about how many wells per quarter will be allowed. The companies are asking for 9 per zone...and apparently there are 3 decent coalbed zones worth producing! So I guess that might be a maximum of 27/quarter! Like to have the rental check for that every year?

[farmers_son]

How can agriculture compete with that kind of activity and that kind of money?

While the rental cheque would be nice and there are more and more farms that are still operating because of surface rental revenue not everyone is getting a oil/gas well drilled on their place this year.

Whether we are talking about keeping the kids home on the farm, or buying a new pickup, getting machining done in town, agriculture in Alberta has to compete with the oil industry. Even the school teachers are quitting to go work in the oil patch.

In our closest town there are four new Hummers driving the streets and it is for certain they are not owned by farmers.

Fortunes are made almost overnight in the oil patch and in agriculture fortunes have been lost in about the same amount of time. Part or all of the Alberta Advantage for agriculture is lost because ag has to compete with oil.

Dare we start to think it is time that the province increased its royalty rates? I recall Doug Horner saying Alberta had contributed enough to BSE and did not match the feds on the last program. But the province has no end of money to hand over to the oil industry in the way of royalty breaks and credits. Just a thought.

Maybe there is a reason farmers in Alberta cannot compete with the oil guys. This province has two major commodity based resource industries and I suggest that ag does not get the same breaks that oil does. There is not a level playing field.

[farmers_son]

farmers_son, do you ever wonder what Alberta would be like without the oil and gas industry ? In the fifties when the Pembina field was discovered, there were some farmers in the area and most of them if they were young enough went out to work in the oilpatch and never looked back. Some of them became successful businessmen and their sons are carrying on the business.
The one problem with the above was that many farmers were so pleased to get oil revenue of some sort they allowed seismic to traverse anywhere they wanted to on their land, and after they got the small check for the inconvenience etc., they realized what a mess they had to contend with.

Also, many farmers signed off on reclaimation of wellsites without any knowledge of what was actually left on the site. We bought sucn a property and spent years cleaning up the mess and finally were able to have Ab Env. come back in on the property after the Reclaimation Act was passed to do a proper cleanup.

As far as Ag competing with industry goes, my feeling is that we all have to shop around to get the best deal we can, remembering that all business we deal with are trying to make a buck too.

As for the Hummer goes, my dentist drives one, so they aren't exclusive to the oilpatch.

[cakadu]

One in three jobs in Alberta owes itself to agriculture - nothing to sneeze at. It's just that when most people - my own family included - think of agriculture they think of primary production and the smell of manure.

Yes indeed, let's pause and think a moment about where we might be if we didn't have all of this oil and gas exploration leaving a huge, irreparable footprint behind it.

My father-in-law worked in the oil patch for more than 50 years and can tell stories like many can about how there was absolutely no money in oil until after the discovery of Leduc #1. It was awful, hard work for next to no money. Then of course, the age of cars, gas heat etc. came along and the demand for oil was on.

If we didn't have all of this cash floating around that needed to have some place to shelter it, then the "hobby" farmers that many are against wouldn't be buying cattle and not caring if they made any money on them or not.

Farmers_son makes an extremely good point about R & D tax credits in the oil industry. If those same tax credits were available in the agriculture industry, think of what we could do with them. We might actually find crops that would be in demand for biofuels, bioproducts, nutraceuticals etc. that a producer could actually get paid a decent dollar for because there would be a value chain going that would demand these products versus products being sold for the price that people can get for them.

There is so much talk about value-adding and the 20/10 by 2010 and yet there is very little being done in the way of facilitating the change and the wherewithall to get this happening.

There is a sunset on all these non-renewable resources that we are pulling out of the ground and then what are we going to do?

As for the "need" for a Hummer in this part of the country, that is open for debate. But then again, I have never been one to require something to show that I have arrived.

[farmers_son]

I was at an auction today and talked to a neighbour who said they are having great difficulty hiring help on the farm because they cannot compete with the oil patch wages.

Check out: http://www.eub.gov.ab.ca/bbs/products/STs/st59/st59-current.pdf

According to the EUB, there were 8869 wells drilled in Alberta in the first 3 months of 2005 or the equivalent of 35,500 wells this year. Stats Can counted about 50,000 farms in Alberta in 2001, decreasing at the rate of 2% annually. Of course not all wells are drilled in the White Zone but if half are then there is about a one in three chance that a land man will be knocking on your door to put a well on your land this year. Maybe that is the governments answer to the farm crisis but I think it is a poor answer.

There are 130,000 operating wells in the province.

Rather than ask what would Alberta be like if there was no oil and gas industry, maybe we could ask what would Alberta be like if the province charged the oil industry a more realistic royalty rate on its energy reserves? Maybe it is high time that someone pointed out that the energy industry is getting a deal from government on those reserves.

Really, what deal has agriculture got that is comparable? What would agriculture be like in this province if ag got the same level of investment from government that the energy sector has received?

The next time Doug Horner says the province has contributed enough to BSE or when we hear that Manitoba can afford to invest in producer packing plants but Alberta cannot then who could blame producers who look out their pickup truck windows as they drive down their gravel secondary roads and see all the oil/gas activity taking place and wonder where is the Alberta Advantage for them?

Why can’t Alberta agriculture be more than a breeding pool for oil workers?

[cakadu]

If, as both you and cowman have suggested farmers_son, we see an increase in drilling activity that is unprecedented then what happens when agricultural land is rendered unusable because of pipelines, right-of-ways, leases and drilling rights?

Cowman, in our county in particular, there has been lots of talk about preserving agricultural land. How will that happen when it gets eaten up by the oil and gas industry? I suppose on the one hand it will be preserved alright, but then that takes away many options for future development.

The saddest part of all is that farmers, in order to keep some money coming in, are signing away the rights to their land without fully understanding what ramifications there might be for it. Once you've leased it, that's it.

I believe that one more item should be added to your list as well, farmers_son and that would be that money should be given to enhance, restore and repair areas that have been used for drilling activity. In other words, there should be money put into coffers to ensure that reclamation orders are carried out; that restoration efforts should be attempted to restore some environmental and ecological integrity.

We spend so much money trying to find it and bring it out of the ground, shouldn't we now be spending money trying to undo the damage we've done?

I know that it is hard to "bite the hand" that feeds so many, but I firmly believe that you have to give back and so far we have done a very poor job of that.

[cowman]

Linda: The municipality is holding three meetings for residents to "participate" in land use policy on monday, tuesday, wednesday of this week. Spruceview at 6 pm on wednesday would be your best bet!
I suspect the main focus of these meetings will be to sell the peasants the concept of "preserving farmland"...in other words how they are going to limit your right to realize maximum value for your land! However it might be useful to ask how allowing up to 27 wells per quarter is going to do that? Ecana, MGV, and Apache intend to drill 1,000 wells in the area east of highway 2 this summer and they expect 2,500 more next year. But don't worry, they may not get around to your area right away, but they are coming!
farmers son: Without a doubt the oil and gas industry in Alberta has got a sweet heart deal that is better than most places. Alberta gets around $4/bl in royalties...Alaska gets $9...Norway gets $11! I would suggest someone is asleep at the switch? Or getting a few bucks under the table?

[cowman]

In our area the council that was given the boot last fall had amended the land use by-law to allow up to three parcels per quarter, depending on soil classification and other extenuating circumstances eg: affect on neighbours etc.

The final decision is left up to the Planning Commission.

The direction they are going is to refuse subdivision on any lands Class 2 or better .
A recent application thre three parcels out of a quarter in the midsts of the farming community fifteen miles from town was amended by the Planning Commission and only one parcel was allowed.
This was due to the huge opposition from neighbours.

Our area has a lot of class four soils but they are well suited to forage and pasture production which supports the cow/calf sector.

We have over 30,000 oil and gas leases in the municipality and hundreds and hundreds of miles of pipline as well as a significant amount of crown land.
There is a large grazing reserve in the Green Zone which has seen significant drilling activity over the years.


Exploration for coalbed methane has just begun in this area, but the real concern is the number of sour wells being proposed and drilled in the populated areas.

One thing that each of the candidates for Ralphs job should be asked is whether they will support an increase in royalties to help with the cost of providing the infrastructure necessary for the industry and all Albertans.

[grassfarmer]

I'm personally not too well versed on the oil business but I know the NFU has been active over the winter on the issue. They have been highlighting their opposition to the EUB's proposed changes addressed in the AEUB bulletin 2005-08 and Bulletin 2005-09. These proposals will lead to a doubling of the density of oil and gas well drilling with less notification and hearing opportunities for landowners. The NFU has become a member of the "Coalition for Alberta's Future" a group of 14 organisations concerned with the state and lack of monitoring of this gas and oil extraction boom. The NFU have also developed a standard addendum to be added to any surface lease you sign to give additional protection to the landowners rights and property. The landsmen don't jump with joy when they see it but they do sign them!

[cakadu]

So to make sure that I understand this correctly, the oil and gas companies only pay the government - also known as us the taxpayers - $4/bbl that they take out of the ground? How long ago was that deal written up and does anyone know if there have ever been any discussions to up the amount being paid? How would you go about asking that the government or whomever would be in the position of hiking the royalties to seriously consider an increase? Given that the amount of drilling activity is only going to increase, shouldn't there be some review of this end of things as well?

Hearing this I wonder if we are moving far too quickly to fully comprehend just exactly what we are doing and what the long-term consequences are going to be.

You're right emrald, maybe these are things we should be asking any wannabe about.

[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 .