Test Fair Share?? Test

Rural Issues


Fair Share??

Oct 16, 2007 | 21:30 1 Fair Share

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest, the oil man) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33.

But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).

The tenth (the ALBERTA oil man)now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four NDP'ers in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth, the Alberta oil man, and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D. - Professor of Economics, University of Georgia
For those who understand, no explanation is needed. For those who do not understand, no explanation is possible. Reply With Quote
Oct 18, 2007 | 01:35 2 What a load of crapola you peddle. Designed to justify cries for less taxation by those with higher incomes than the average Joe. I have seen this BS pasted all over the internet by the rightards who think that services that we need every day...police, fire protection, health services, postal service, etc., etc., should be provided but don't want TAXES assessed from them to PAY for these services and others. Reply With Quote
Oct 18, 2007 | 21:57 3 Well Willy, in my province it is the "police, fire protection, health services, postal service, highway workers, Sask power workers and sasktel workers, and all other "government" employees that are paid the highest wages. They demand Alberta oil workers type salaries in the Saskatchewan economy!!

So much for the righteousness of the left and NDP elements. Given the opportunity they grub and skim and pry from the public every $ they can.

And Id bet you pay the bare minimum of tax when you can!! Reply With Quote
Oct 20, 2007 | 09:14 4 Another insightful reply from Wil. True lefty response - attack the messenger but offer no truthful alternative opinion.

Tell us then oh enlightened one, who exactly does pay the majority of the taxes in our society. I trust you can back it up with sources right?

This story has been told before, and it is good to hear it again and again. The reason it keeps going is that it is true poor willy and no lefty can ever discount its accuracy. Reply With Quote
Oct 20, 2007 | 18:41 5 Silverback: I have paid my share of taxes in my lifetime. I didn't begrudge doing so (actually I had no choice in the matter).

I used RRSPs when possible to mitigate paying tax...nothing wrong with that either.

I get so tired of people who have all of the sudden "made it big", who greedily want to keep most of the new-found riches and brag about...if THEY want medical care THEY should be allowed to pay for it themselves and opt out of the medicare system and its expense (paid for out of taxes).

Equating medicare with communism is totally b.s. as well.

Getting back to "Fair Share" for the "big oil" people...Ralph Klein and his gang made sure that their foreign investors got the gravy and we got the bowl. Time for a change, and if Stelmach won't do it, then it is time to put in another party that will. Reply With Quote
Oct 21, 2007 | 10:13 6 There are countries that have a lot lower taxes than Canada , BUT You wouldn't want to live there.

Quit bitc-- and pay your taxes and be thankful you live in the society that we've got here in Canada.

If you live in Alberta remember this is a democracy , the cons have been in for 40 years , get them out and revamp your royalty structure so your not giving it away and then ,maybe your gov't could reopen the hospitals and schools and whatever else it Closed because they had no money.

Heck you could be like Alaska where Every man,woman and child gets a cheque from oil revenues each and every year. Reply With Quote
Oct 21, 2007 | 13:24 7 Willy and mustard suffer from the same infliction that so many in Saskatchewan suffer from.

They have no understanding of whart it takes to create wealth.

And Mustard...you have not had a "Conservative" government for 40 years...no one in canada rrealy has!!

They are Conservative in name only...and have acted quite liberal with your money.

A big swing further to the left would be a big mistake...but if that is what turns you on...move to Cuba. Reply With Quote
Oct 21, 2007 | 23:09 8 ivbinconned: I know how to create wealth...I've been doing it all of my life. Every time I milked a cow, or slopped a hog, or seeded a crop and harvested it, I created wealth.

Wealth is created from LABOUR or LABOR if you are an American.

Now, I am tired of creating wealth and I want you to keep on paying taxes and I will gladly cash my pension checks and thank you profusely. Please keep it up.

No, I don't want to live in Cuba...shortage of toilet paper and toothpaste doesn't appeal to me. I am a capitalist with a social conscience. Somewhat like your NDPers in Saskatchewan. Reply With Quote
Oct 25, 2007 | 11:07 9 Thanks for the post. iv.... Excellent comparison for those who have actually "earned" the dollars.

What it ignores when compared to the Alberta resource situation is the principle that the resources are owned by the Alberta people. A "fair share" has to accept this principle.

When someone thinks that by providing a service for some one some how makes them an owner of that asset that really grinds my gears. Reply With Quote
Oct 25, 2007 | 13:01 10 Thanks lifer for your reply.

But I will once again post a question that I have posted before but no one has every attempted to answer.

IF the pioneers and explorers and risk takers and gold panners had all been told, "go ahead, dig, drill and explore if you want to take the risk...but what ever you find...what ever you gain...THAT, you must remember belongs to everyone"!!!

Would there ever have been a gold rush? Would there ever have been a "Leduc"??

It is beyond me why some can't see that if Coppers boys are getting paid a great wage working in the oil patch that, THAT TOO, should be looked at, as a "royalty" PAID to Albertans!!

Funnel more throough the government and watch the abuse !!!

Also through the high wages paid to workers in the oil and gas sector...higher taxes than usual are getting paid into the pot!! "A royaty"and public benifit!! Reply With Quote
Oct 25, 2007 | 14:48 11 Or put another way...from another site...

"Everyone is talking about a "fair" royalty without defining what is fair!"

So the oil/gas companies get to
-speculate on land,
- rent the mineral rights from the government
- pay landowners / residence to do seismic (who then pay taxes to the government
- Do the seismic (paying a seismic company who pay taxes, then the employees pay taxes
- Analyse the results (employees get paid who then pay taxes
- Pay to drill a well (drillers/employees pay taxes)
- hopefully discover marketable reserves
- Pay to design and build facilities to produce reserves (companies/employees paying taxes all the way along)
- Give the government their royalties
- Find a buyer for the "peoples" energy
- Final, if they should turn a profit.....pay corporate taxes.

So Eddie Strom er Stelmach wants to upset the apple cart to score points the the socialists.

Alberta is ROLLING in taxes.

The larger the oil/gas producer the easier their capital will leave the province for better rates of return. It all about RoR, which includes costs of production(very high in Alberta) and Risk (was Low in Alberta but is now increasing).

The report was incomplete anyways and always bad policy to go off of incomplete information

As an armchair economist it's always amusing to hear people ranting on about "Big Oil" presumably vs those "mom and pop" offshore drilling and tar sand upgrader projects we all reminesce about. Since the tar sands belong to "the people" perhaps a compromise can be reached whereby for every 100lbs of tar sand mined by "Big Oil" a 100 lb bag of tar sand can be shipped to the home of every Canadian who wants one to do with as they please. As for being "exploited" by "Big Oil", my brother, who works in the oil patch has in turn "exploited" "Big Oil" over the years to the tune of a two storey house, maintenance for a wife, four children and several dogs, cats and hamsters, cars, minivans, vacations and a pension. Numerous others have done the same. Given a choice between the exploitation and the bags of tar sand delivered to the basement, I as a low tax paying Albertan will take the exploitation thank you very much. The fastest way to kill the economy out here will be to morph overnight into another tin pot, business unfriendly jurisdiction in which contracts and government business agreements are worth less than the toilette paper in the washrooms. That's not to say it won't happen. I saw it before with the NEP. Only this time, I've got a wad of cash to clean up on some cheap foreclosed houses.

Re: Big oil, big money etc. We need to get rid of the term "oil," and use "kilowatts." The word "oil" conjures thoughts of a thick, gooey liquid that sticks to your Carhart coveralls or your garage floor. A liquid that spews smoke into the atmosphere when ignited, and makes Calgary oil men greedy and rich.
One US gallon of heavy diesel equals 40 Kilowatt hours. I don't know what a gallon of crude works out to, but a metric tonne of Fort McMurry crude works out to approx. 11,700 Kilowatt hours of energy. For you English chaps, One horsepower hour=.75 Kilowatt hours.
Kilowatts can always be re-converted back to any other form or source of energy.
A lot of the negative attitude towards oil companies is generated by the CBC and Radio-Canada. Have you ever noticed how they always use film footage of the Fort Mac refineries that was shot in sub zero weather. In reality, what you see going up into the atmosphere is water vapour. The film does however tickle the fanny of the "Suzukian Cult."
They (CBC-R-Canada) do the same when they film the power stations at Estevan and Coronach. In sub-zero weather, you can see the stack on the power station at Coronach from 60 miles away. On a warm day, no visible smoke is emmitted. Reply With Quote
Oct 25, 2007 | 15:53 12 "IF the pioneers and explorers and risk takers and gold panners had all been told, "go ahead, dig, drill and explore if you want to take the risk...but what ever you find...what ever you gain...THAT, you must remember belongs to everyone"!!!"

I respect those pioneers and am thankful that they have come to this country and have helped develop it into what it is today. And we are talking about today not yesterday.

The report states that "Albertans own the resources" do you agree with this statement?
Does this mean that the knowledge and effort to develop this great resource belongs to all Albertans?

"Fair" does need to be defined. Is it fair that Alberta's "METR" (marginal effective tax rate) as defined by the report is lower then the U.S?

Is it fair that the committee used for the royalty review was slanted towards business?

Is it fair that what they put out as minimum changes will be compromised on?

Is it fair that ones fear of government waste can drive them?("Funnel more throough the government and watch the abuse !!! ").

A balance of respect needs to be found. Reply With Quote
Oct 25, 2007 | 22:33 13 "And we are talking about today not yesterday."


People may change....but

Principles NEVER change! Reply With Quote
Oct 26, 2007 | 08:46 14 I am from sask so you have to consider where this is coming from(behind the iron curtain) Fair is fair when it comes to royalties and we won't ever be able to determine what is really fair to satisfy everybody, but before you people in alberta get carried away this royalty bit remember what happened in saskatchewan fifty years ago, we had a premier that told the oil companies that the people of saskatchewan would determine how and when the oil would be developed and with that one statement the oil companies all pulled out and moved to alberta. So a friendly warning be careful how you treat the goose that laid the golden egg. Reply With Quote
Oct 26, 2007 | 09:12 15 New royalties will end Alberta's boom

Start of a new anti-oil industry era?

Claudia Cattaneo
National Post
Thursday, October 25, 2007

This is not Alberta's finest hour.

Premier Ed Stelmach rolled out a new deal yesterday on oil and gas development, the mainstay of his economy and Canada's biggest spender, that is sure to deflate a phenomenal boom and redefine the province's image. In Calgary, the mood was somber among big players and small. The new terms re-enforce the message that even in the country's top oil producing province, this is a new anti-oil industry era.

Under the new royalty framework, which will come into effect in barely a year, government take on oilsands projects will increase to a usurious 65%, from 47%, at today's oil prices, dramatically reducing the incentive of gambling billions of capital on projects in one of the most challenging regions of Canada, northeastern Alberta. Oilsands projects, including those already up and running, will start paying the public purse even before recovering their investment at rates as high as 9%, rather than the current 1%, and after investment is recovered, at a rate of up to 40%, from the current 25%, depending on oil prices.

Under the new policy, the province appears to have has shrugged off its potential to be a global energy leader and opted instead for mediocrity, bigger government and an adversarial relationship with the sector that has lined its pockets.

It's a deal that places Alberta alongside the hydrocarbon-rich Banana Republics of this world - places like Kazakhstan, Venezuela and Ecuador - where deals are ripped up and promises broken.

To those in the private sector who were willing to move mountains to turn low-grade oilsands deposits into highly coveted oil supplies to meet the world's energy needs, the new framework will feel like a slap in the face.

Those outside Alberta - from oil companies to pension funds - that were invited not long ago by the previous government of Ralph Klein to partake in the development of its energy riches, will take note that this is government that can't be trusted. In an egregious move, the new framework says existing legal agreements will be renegotiated, suggesting possible legal battles between the province and the two companies that pioneered the oilsands business, Suncor Energy Inc. and Syncrude Canada Ltd. There will be no grandfathering, which means the new rules will spread the pain equally among all players.

Energy consumers will also feel the hit. Canada's oilsands are one of the few places globally that can produce more oil. With the government demanding a bigger share of an already economically challenged business, supply growth will not be as aggressive as planned, pushing oil prices even higher.

The natural gas side of the business, which is already feeling pain in Canada, was done no favours in this process and supplies could fall even more than under current projections.

So what prompted Canada's overachieving province to burst its own balloon? Albertans became convinced that they were getting ripped off by Big Oil, that development was overheated, that they could stand to benefit more from high oil prices. The issues blossomed from a lack of understand of the existing royalty regime, and Mr. Stelmach's milked the misconceptions to score political points.

The premier, a farmer from Northern Alberta, showed little appreciation for the implications of his actions, suggesting the sector will continue to thrive.

Now the ball is in the oil and gas industry's court. Will it follow through with its threats, or will it go back to work?

The first reviews are damning. Rick George, chief executive of Suncor, a company that rarely enters the fray, said the changes "are substantial and could have a significant impact on industry economics. Imperial Oil Ltd. said "these are substantial changes to the royalty structure and will result in much higher costs."

Glen Schmidt, CEO of oilsands startup Laricina Energy Ltd, said: "Clearly the government has increased its take, clearly it has an impact on economics, and it may have a secondary impact on our cost of capital, which has an impact on our ability to invest."

One thing is certain: Oil companies are ruthless operators. When faced with an adversarial government, they sit it out until conditions improve. It wouldn't be surprising if they took action just to make the point. Reply With Quote
Oct 26, 2007 | 09:57 16 This could cause Exxon's profits to tumble from $47 Billion in 2006 to $46.9 Billion . Reply With Quote
Oct 26, 2007 | 12:43 17 ivbinconned: Thank gawd our Premier (not yours), took decisive action regarding royalties...not as much as I would like to have seen though.

If the oil companies move to Saskatchewan, I am sure that you will be out there welcoming them with open arms and letting them steal you blind as Ralph Klein did in Alberta. WE wouldn't have had near the problem in determining a fair royalty return if Getty and Ralph had not stacked the deck in favour of the oil companies in the first place.

Ralph Klein and his gang cost us a mint in more ways than you can imagine. Stelmach is doing something FOR Albertans instead of TO Albertans. What a refreshing change. Reply With Quote
Oct 26, 2007 | 18:23 18 Royalty decision all about politics
Stelmach seeks support, but most Tory voters not interested in making 'Big Oil' pay
Lorne Gunter, Freelance
Published: 2:47 am
The first indication I had that Premier Ed Stelmach's Thursday royalty announcement was going to be as atrocious as it was -- and it was just about as atrocious as it could be -- came Wednesday when a source inside the government boasted to me "It's going to be politically popular, but the oil companies are going to hate it!"

That's something to be proud of? Knowing, deliberately angering the province's biggest industry purely for the sake of political gain?

And that is all Thursday's announcement was all about -- politics. It was not about being fair to both Albertans and the energy companies -- the resource owners and the extractors. It was not about planning for the future or ensuring a legacy for our children and grandchildren, as the premier claimed.

And it certainly wasn't about "stability and predictability," even though the premier claimed at least a dozen times that that was his goal.

By breaking existing royalty deals with Alberta's two largest oilsands companies -- Syncrude and Suncor -- Stelmach has shown his government is unreliable, that even after companies have invested tens of billions under signed-and-sealed investment contracts, the Tories are willing to go back on their word whenever it suits them.

Thursday's ill-advised, unnecessary, investment-repelling cash grab was purely and simply about saving the political skin of a floundering, indecisive, tin-eared politician.

And in the end, the crew around Stelmach couldn't even get the politics right.

The general mood in Alberta has shifted since the royalty review panel released its report in mid-September.

After the province's energy companies started showing how the recommended royalty gouge would hurt their bottom lines and provoke them to move jobs and billions in investments elsewhere, many Albertans (though not all) lost their initial zeal to make "Big Oil" pay and pay and pay.

This is, I would guess, especially true among people inclined to vote for, donate to and work on behalf of Tory candidates.

Just as the premier earlier this year badly misjudged the enthusiasm within his party for rent controls, he has also misjudged the support his new high royalties will garner among bedrock Conservatives.

A turnoff to Tory voters?

After having built expectations so high of new riches in the public trough, Stelmach had to agree to raise royalties. Still, by raising them as much has he has -- almost as far as the poorly crafted royalty panel report recommended -- he will very likely turn off tens of thousands of Tory voters, without winning over enough Liberal and NDP vote to compensate.

That's especially bad news for Tory re-election hopes since Tory seat totals fluctuate up and down based not on increases and decreases in opposition party vote totals. (The Liberals, for example, have lost popular votes in each of the last three elections.) Rather, Tory success depends on convincing their own base to come out and vote rather than sitting on their hands.

Unfortunately, Thursday's assault on the province's principal employer and the source of its current prosperity will do nothing to marshal Tories to get out and cast ballots. Energy investors, oil and gas executives, oil service entrepreneurs and even rig workers are disproportionately Tory, and since yesterday's announcement will disproportionately harm their livelihoods they are likely to stay home in droves at the next election. Reply With Quote
Oct 26, 2007 | 19:05 19 Ivbinconned: Lorne Gunter is so full of it most of the time. All of the neighbours that I have spoken to, agree with Stelmach and believe that his plan will work just fine. Such a relief to have that ignorant Ralph Klein OUT (but unfortunately not forgotten), and a sensible man as Premier.

The oil pool that I live over is 3/4 gone and what did we get out of it...practically nothing...but boy did they ever screw up the highways. Costs a fortune to repair them and the wear and tear is constant.

BIG OIL should pay BIG royalties. Reply With Quote
Oct 28, 2007 | 00:39 20 Wilagrow...if you owned the mineral rights on your land, would you rlease your claim to the government for the benifit of the government to do with as it pleases??

Render not unto Caesar

Terence Corcoran
Financial Post

Friday, October 05, 2007

Two thousand years ago, the Roman emperor Tiberius, no friend of freedom and under whose reign Jesus Christ was executed, declared the Roman state to be exclusive owner of all mineral rights. Since around that time, just about every government through history has found it convenient to seize ownership of underground mineral rights and extract fat "royalties."

The idea of government ownership of mineral rights -- gold, copper, coal, oil, gas, etc. -- is today so entrenched it is beyond question, even among the extraction industries who pay the royalties. "Render unto Caesar the things which are Caesar's," as Jesus Christ reportedly said before Caesar's underlings orchestrated his execution. Today in Canada, rendering unto Caesar means rendering unto the emperor of Alberta new royalties that would pull another $2-billion into government coffers.

Modern Caesars, of course, have reworked the language, so that the rendering is now supposedly done onto "the people," the citizens and voters for whom the government claims to act as beneficial surrogate. When the Alberta Royalty Review Panel last month recommended a new royalty regime for Alberta oil and gas, it said the resources "belong to the people" and the people are not getting a "fair share" of revenue from their mineral rights.

The review panel's report played this angle to the hilt. Royalties, it claimed, are different from taxes. "When a government designs a tax system, it must justify every dollar or fraction of a dollar it takes away from wage earners and business, because that money belongs to the people who earned it. Alberta's natural resources belong to Albertans, and this is a different proposition. The design of a royalty and tax system for energy resources therefore must justify every dollar that does not go to the owners."

Even Tiberius could have used these guys. So now "every dollar" of revenue from mineral resources belongs to Caesar, and every dollar that Caesar doesn't get must be justified.

Not to make too sensational a point about this, but we have over the centuries moved from Caesarism to communism in resource ownership. It need not be this way. In fact, it isn't always this way, even in Alberta. Private owners, under freehold, own almost 9% of mineral rights in the province. These owners render nothing onto Caesar, although they do pay a special freehold tax.

These freehold lands, the result of the evolution of land allocation through Canadian history, control their own mineral properties. Some freehold land is owned by major corporations, including EnCana and Imperial Oil. Parts of Imperial Oil's original Leduc find were on freehold land that the government had no control over. The government received no royalty payments.

Alberta historian and author James Gray, in his book Troublemaker!, writes that after Imperial found oil at Leduc in 1947, "the lucky farmers who had their oil rights were able to set themselves up for life with the cash bonuses and royalties they got from the oil companies. Across the road, their neighbours on land for which the government retained the mineral rights were lucky to get a few hundred dollars compensation for the damage done by a drilling site on their land."

In earlier days when Canadian governments granted land to homesteaders and others, including the CPR, the owners assumed both surface rights and sub-surface rights. Over time, in Alberta, the government came to control 81% of mineral rights (Ottawa and native bands control the remainder). But governments did not come to own resources by any natural right. They took it -- through legislation, federal-provincial agreement and other means.

Today only 3% of Alberta's oilsands mineral rights are owned by freeholder. If private owners owned 100% of the oilsands, the scale and form of development might today be much different. How different is impossible to say. Without governments trying to manage and direct things, there might be a lot less of it, or maybe a lot more development but through smaller-scale projects.

Under freehold, royalty payments-- if the rights were owned by other than the developer -- would get negotiated on a case-by-case basis. How and if royalties were paid would be a private matter, determined by contract and property rights. It happens all the time in any business and property development. There's no Caesar sitting by claiming ownership and demanding payment.

Public ownership and royalties are a pretext for taxation and political control. The government of Alberta collects no royalties from farmers who grow grains, the raw material for ethanol, on surface land. But the province arbitrarily demands royalties from energy firms that produce oil, the raw material for gasoline, from land underneath the grain field.

The greater sham, however, is the claim of the Alberta review panel that higher royalties are needed to raise the "people's share" of underground mineral resources. On the contrary, the plan will reduce the people's share. If new royalties drive away investment -- which even the panel agrees will happen -- the lost investment and spending -- in the tens of billions of dollars -- will be much greater than the increased royalties collected by government.

Contrary to the review panel's fraudulent claim that "the people" will win, the fact is that the people will lose and the winner will be Caesar.

National Post 2007 Reply With Quote
Oct 28, 2007 | 10:21 21 Stelmach at mercy of voters, oilpatch
Don Braid, Calgary Herald
Published: Saturday, October 27, 2007
When a premier rides down the middle of the road, the people watching might throw flowers, but they could also lob pies.

Premier Ed Stelmach is wide open to both greetings as he hits the open highway in his political convertible, a nakedly vulnerable leader through his own choice.

The farmer from Lamont has upended the province with his royalty policy. He did it against the advice of many Tories who have kept this party in office since 1971.

Stelmach has a truly curious habit of doing things backwards.

With no public mandate as premier, he could have postponed the royalty review until an election was safely won, as Peter Lougheed did in 1972.

Lougheed had four years left on his mandate when he began his own royalty upheaval. There was plenty of time to iron out kinks and recover from disasters.

Stelmach decided to do the royalty fix first. Now his future is at the mercy of voter and industry reaction.

This is risk-taking on a scale that would terrify a high-wire artist at Cirque du Soleil. The gamble could destroy Ed Stelmach by next spring, when his party holds its next convention.

This is the same party, remember, that dumped Ralph Klein, the longest-serving and most popular premier in modern Canadian history.

In 1992 these same Tories started an internal campaign against Premier Don Getty. He was gone in little more than a year.

A party that dumps premiers who win majority governments will tear Ed Stelmach apart in a heartbeat.

He has governed on sufferance so far because the amiable Alberta public was ready to give him a chance.

Sensing this, his caucus retreated into watchful, nervous silence while Stelmach took the government down untracked paths.

But if the public rejects the royalty policy, Stelmach will have no fallback authority.

He was third pick to lead a government still packed with Ralph Klein's friends and fans. The royalty battle was his idea alone. Some leadership candidates didn't think it was the big issue Stelmach insists he heard about so often.

On Day One of reaction to the policy, catastrophe was at least averted in the stock market. Hence the deep shudder of relief in the premier's office.

The overall business estimates, from expert companies like FirstEnergy Capital, were quite positive. Nobody is calling for a wholesale flight of capital.

Ominously, though, FirstEnergy also concluded: "Big Oil Wins, Little Oil Loses."

"Economics will be challenged for both natural gas and oil projects . . . You're a technically proficient geoscientist or engineer and want to be an entrepreneur in Alberta? Go somewhere else."

In the small oil and gas sector, a solid core of Tory support, boiling anger was building even before the policy came out.

For weeks I've been in contact with Lee Baker, a sincere and honest small player in the patch.

He concluded Friday that although his deep gas well might survive, "our high-volume project in northern Alberta is hit hard. We will likely cancel a six-well project for the area."

Mark Rennenberg, a Calgary consultant, sent a bitter e-mail to Stelmach Friday.

"I am one of the 'little people' in this province who go to their job everyday and work hard to earn a living," Rennenberg told the premier.

"After today, I will not be supporting the Progressive Conservative party of Alberta. And I doubt that I ever will again." Today Ed Stelmach totters on his own high wire with political safety a misty distance ahead. Mysteriously, he doesn't even seem aware of the long fall below. Reply With Quote
Oct 28, 2007 | 12:53 22 Ivbinconned: Cry me a river!!! Your articles aren't worth the paper they are written on. Sore losers who made a mint off of stupid Getty and Klein policies will now PAY for their **** of the land and its resources.

Most of the people I talk to say..."go gittum Ed", "thank gawd we have a Premier with guts."

In an old Edmonton Journal many moons ago, there was an article which revealed that between 1/4 and 1/3 of Ralph's cabinet had connections to the resource industries (primarily oil, natural gas or timber). It also detailed SOME of the ex-politicos and former government employees who "found" jobs with the resource extraction industries AFTER they left government.

Darn, I wish now that I had saved it.

So what do you say to that? Do you think that government policies are not shaped by self-interest? Is that the reason the oil companies got such a sweetheart deal in the past? Reply With Quote
Oct 28, 2007 | 13:56 23 I will gladly answer that!!! When you stop ignoring what I ask you.

"Wilagrow...if you owned the mineral rights on your land, would you release your claim, giving it to the government, for the benifit of the "government" to do with as it pleases??"

And, as you well know, I have NEVER been a defender of Ralph Klein...the liberal. Reply With Quote
Oct 28, 2007 | 16:47 24 ivbinconned: ...if you owned the mineral rights on your land, would you release your claim, giving it to the government, for the benifit (benefit) of government" to do with as it pleases??"

The answer is NO. Government has laws however, that say that they can expropriate...so we as individuals have limited control.

However, your question is moot as WE as individual Albertans, have not owned the mineral rights since 1905...same as Saskatchewan. The few people in this area with mineral rights inherited land owned before 1905. When oil companies buy a Crown lease, they don't OWN the mineral rights either, only the right to the use of the lease and extract the named resources. However, the government has the final say...the lease has limitations. Reply With Quote
Oct 28, 2007 | 21:02 25 I've been too busy to check out this site for a few days, but this post intrigues me. As Ivebin says my sons have been very busy and fortunate working in the resource industry. One will remain busy, but the other has already been advised that some of his winter work program is being put on HOLD. My son's and I do not agree on the royalty issue, in fact, we have agreed to put the subject in the PARKING LOT when in each other's company.

The Premier got handed a mess as far as royalties go from Ralph, and he had the guts to order the royalty review, make it public and act on it.
Stocks haven't tumbled into the toilet, in fact, some, including the company my #2 son consults for have increased.
There was a downturn in the drilling industry long before this issue arose, rigs have been sitting idle all year, but it is convenient to now blame Ed.

To put it plain and simple, I am a lot more concerned about the future of the cattle producers in our Province than I am in the fallout from the new royalties. Reply With Quote
Oct 28, 2007 | 23:48 26 And on that point I hope that the dollar keeps climbing to the point that some canadian enity will buy the packing plants. Reply With Quote
Oct 29, 2007 | 11:44 27 Review was long overdue, thanks for the firesale (to date) Ralph. Alberta deserves the better deal that has been outlined by P Stelmach. Now lets address the issue of pollution, caused by oil & gas guys. Land, rivers, streams, and lakes used/abused by industry. Fresh water depleted and ruined. The air quality we suck in, being ruined. Enough buck passing. LETS DO SOMETHING! How about it PM Harp, not just a continuing release of hot air, which by the way contributes to global warming. The economy is very important, but not the only thing that makes for a decent life in Kanadia. Reply With Quote
Oct 29, 2007 | 18:24 28 Easterners like me came to Alberta to make money working in the oilfield. We didn't come out to shovel S*%& for bitter old ranchers for $5/hour.
Anybody on this forum including they naysayers cannot deny that the province would be a backwater of dying little towns without the oilfield but I guess that would make them happy.
Wilagro says he wants everyone who gets ahead to pay more? Kind of takes away the incentive to work harder doesn't it?
When I left PEI in 94 to find work in the oilfield, I called a bunch of guys back there to come on out as there was money for the taking. They are still back there 13 years later collecting unemployment. I guess they are getting their "fair share" of my tax dollars. Reply With Quote
Oct 29, 2007 | 22:45 29 One would have to be a narrow minded shallow thinker, driven by envy and jealousy, to not acknowledge the fact that those good paying oil and gas sector jobs are an indirect kind of "royalty"! That you dont work there Willy and Burburtis your choice!

Try to look at the big picture!!Not just whats in it for little old me.

While socialists are always building castles in the sky, capitalists and free enterprisers build them on the ground. Reply With Quote
Oct 30, 2007 | 00:44 30 For gawds sake ivbinconned, I AM A CAPITALIST. I bought my farm with real money, I equipped my farm with real money, I broke up land and employed real money to do so. So stick it in your ear.

Because I would like to see realistic royalties paid to the province for tar sands exploitation, you go on that socialism rant again.

Increased royalties will not decrease the high wages that "spudsucker" gets. Nobody said "cut the oil workers wages". Even executives in the Calgary offices for these oil companies ADMIT that it won't affect their bottom line...they have already made multi-billions under old Ralph's weak scheme.

Bleeding this province dry of oil without proper compensation to US is unforgivable. Oil hit $93 a barrel today and the current royalty scheme returns a pittance. Reply With Quote