Alberta surplus

[cowman]

The Alberta government announced this huge surplus yesterday and right away the professional parasites started to form a line to get in on the gravy train! Educators were drooling at the prospect of more pay, less work, and building more palaces called schools! Health care organizations were busy crying about the poor conditions they have to deal with! And old Dave Bracconier was licking his lips over how much he could blow in Calgary!
Now myself, I think fixing up highway II might be a good idea? And building a decent road to Fort McMurray should be high on the prioity list?
The rest(with a good nest egg held back) should go back to the people? The people of Alberta own the oil and gas...and they should reap the benifit? A "prosperity check"...just like the one we got for 2005? Let the people decide where they will spend their money instead of pounding it down those black holes called education and healthcare? I believe we already spend more on those two gems than any other province(per capita)?

[seedsman]

There won't be much of a surplus in a few years of the current spending continues. This fiscal year it is around 27 billion !
There is enough injected into education and health care it just needs more vision in the direction its spent vs building brick and mortar.

[raymondb]

The Alberta Government charges a very low royalty rate for the tarsands oil. Don't you think that the Companies making the huge profits from the tarsands in Fort McMurray should pay for the road? Or perhaps the royalty rate we receive for our oil should be increased to pay for the road we build. I am starting to feel that we respond because of media coverage and not with our heads.

[cowman]

The report I saw also said spending was way up to $27 billion! They tried to sort of imply that was due to the "prosperity checks" but in reality that only cost $1.4 billion so that really doesn't wash?
The report also said the $7.4 surplus was more than the total Saskatchewan budget! Now I realize Saskatchewan is smaller than Alberta(population wise) but I really wonder how the Sask. government can run things so cheaply? Makes you wonder who the socialists are here! Seems they have their spending under better control than Alberta!
If Saskatchewan has 1 million people and Alberta has 3 million...shouldn't Alberta be able to run the province at about $21 billion? On a par with Saskatchewan of course?
That would free up another $6 billion to give back to the people! Or another $2,000 for every man, woman and child in Alberta!
Sometimes I don't think people realize how much of their money goes out to our "Rolls Royce" social programs? Money that could go right into their pockets?
That is one reason I see the "prosperity checks" as being a good thing? It wakes people up to the fact that the government is blowing a lot of THEIR money on needless social programs.

[cowman]

raymond: I do agree that Alberta royalty rates are not very good, whether heavy oil or conventional. I do believe the government is taking some steps to rectify that but the fact is they are not as high as they should be?
I think Alberta gets $4/barrel(overall) while Alaska gets $9 and Norway $11?
Most freehold land, the royalty rate is from 15% to 20% so the freeholder would get a gross royalty return of $9 to $12 barrel on a $60 barrel of oil. Of course you would also have to pay your share of expenses so a more realistic royalty might be $6 to $10 a barrel? Maybe the government needs to hire some old farmers to do their negotiating for them? LOL

[Horse]

We need to start getting a decent return for our resources being oil or gas or coal or stumpage water you name it and if it takes away some of the [ wait for it cowman] $1000 a day men then boo hoo.
With app 30% of the workers in the oil patchthat leaves 70% that are not and probably 50% of those are like myself to old to get the big money and the young and the single parents that cant get the big money but we all have to pay the price for the new rich. If this gov was at all cap[able of runing a tight ship there should be money enough for everyone not to say all should get the same wages but we should all be able to live a decent livestyle.

[cowman]

I see in the paper that Ensign has an ad for drilling consultants...$650/day? Drillers $475/day? Long way to $1,000/day?
The fact is the wages in the oil field are pretty well set on a global market? You might make $1,000/day in Yemen or the Sudan or something but unlikely in Alberta? I guess if they cut the wages here drastically we would see the work force move into the overseas market?
When you consider how much a decent well produces a year the wages of the workers are sort of a joke? I mean when gas is worth $7.50 a gigajoule or how about earlier when it was $15.50?
The cost of labor is very miniscule compared to revenues. The oil company doesn't need to grind the workers to turn a profit.
I believe though that the government should be getting a bigger slice of the oil and gas pie! It was necessary to keep royaltys low on the tarsands or no one would have taken a chance on them?
If you consider the $650/day above, is that really so out of line? At 10 hours a day that is $65/hour? But the consultant is there on the rig 24 hours!
Now consider this: A decent lawyer costs $250/hr.? How about a school teacher? Right in that $65/hour?
If anything I would say the drilling consultant isn't being paid enough!

[cowman]

I have a son who is a drilling consultant. Lately he has been asked to look after two rigs at a time, and his pay is about 1.25% of the regular days pay plus expenses....he's not complaining and the company is getting a bargain .
There is money to be made by consultants but in the drilling side of things and the workovers of old wells, consultants need to posess a lot of common sense and experience.
When you consider that consultants that sit in an office assisting business, municipalities etc. are paid $250 an hour, what drilling consultants are paid seems fair enough when, as cowman says, you consider the profits industry is reaping !

[cowman]

Just thinking about this. There is an oil well up the road that produces 800 barrels of crude a day...plus some gas. That would be considered a fairly decent well around here and it is seldom not pumping. So at 800 b/day at $60/ barrel that means $48,000 day or for a 300 day year, $14,400,000! Not too shabby for a $500,000 well! I believe it has been producing for about 8 years! I would think the gas would probably cover any production expenses?
The coalbed wells around here produce approximately $52,000/month/well. This is actual production figures on a pooled field. Costs are very minimal as this is dry gas with no hydro carbons to remove. Basically all that is required is compression so as to be able to enter the NOVA pipeline. Total costs per month per well is $1682(including surface lease money)! Consider also that these wells cost in the neighborhood of $100,000 to drill and low pressure(cheap) pipelines...all included in the cost structure? Royalties are 15% to 18% or $7800 to $9320 per month with the mineral rights holder picking up his share of the expenses! Now obviously the gas isn't bringing what you pay to heat your house...Nova and Enmax or whoever is tacking their profit and costs on there too?

[Horse]

ITHER MY NEIBOURS ARE DAM LYERS OR YOUR NEIBOURS ARE i KNOW OF 2 PEOPLE THAT ARE GETTING 1200$/DAYFOR CONSULTING AND 1 THAT HAS A CONTRACT WELL CHECKING SERVICE THAT ALSO GETS 750$ CONSULTING ON EVERYTHING FROM BUILDING A LEASE TO PIPELINE TO WHO KNOWS WHAT all at the same time.sorry about the capitals.
Then on top of that there is the what shall I call it where he signs tickets for shall we say favors the latest if you buy my boat I will give you X amount of work and he is not the only one doing it . THE WHOLE DAM PATCH IS RUN ON GRAFT..
I know those who will say no way but I worked the patch and still know a lot of people in it and they dont think they are wrong because it is thier entitlment .
BOy if you thoyght the liberals are corupt they cant hold a candle to the oil patch.

[Horse]

horse, unfortunately money or the smell of it sometimes does bring out the worst in some people. I wouldn't tar the entire industry with the same brush. I have known many people involved in the oil and gas industry and they are hard working, honest people just trying to get by...mind you, I have known my share of scoundrels as well !!

[Horse]

You coment on lawyers and municipal consultants getting $250/hr and you may be right but does 2 wrongs make a right and if I see my county consul paying those fees you can bet I am going to scream long and loud and that is more than I can do about my cost of gas.

[Horse]

horse, municipalities require the services of consultants in land use planning, environmental issues such as solid waste disposal ( landfills etc.) on a regular basis. I would be willing to bet that your county uses the services of a law firm that whose expertise if rural municipal law, when the need arises and I can guarantee you their rates are higher than consultants.
These charges are a cost of doing business these days when there are so many hoops municipalities need to go through in order to operate.

Before you holler at them perhaps you need to ask to see the annual budget and find out exactly how much the municipality sets aside for consulting fees .

[cowman]

Horse: I will definitely agree with you that there is a lot of under the table stuff that goes on. That is just the cost of doing business. I buy a fair amount of whisky over the year and don't drink!
The funniest one I ever had to do was buy a guy a pair of lizard skin cowboy boots! But it was well worth it. "one hand washes the other"?

[Horse]

Do you realy think the oil patch could stand the smell test if the public at large had the facts as to why gas is .84 cents and natural gas at 8$ I think it would make one hell of a debate and dont give me the world market BS.