Albertans React Strongly to Stelmach's Royalty Plan - Support, but Plenty of Anger

It was reported that 80% of Albertans supported Premier Ed Stelmach's royalty policy to boost the royalty amount to 20%.

But the proposals have received overwhelming support from Albertans, with polls showing eight of ten backing a higher take. (Globe's Report on Business)

In 2006, 84% of Albertans felt there should be a review of oil sands revenue.

A most recent reaction, at least at the Calgary Herald "Sound Off" web page, is largely anger towards him. It would be interesting to know how many of the 200+ commenters from the Calgary Herald "Sound Off" site, had vested interests in the oil sector.

There were a full range of views - from complete support to "let's wait and see" to complete outrage.

The outrage had its ignoramus angles, like assuming because Premier Stelmach worked on a farm in a past career, that he couldn't possibly be capable to make wise decisions for his fellow Albertans. It's seen in references like

"OK< can Albertans please take the farmer out of the office and put him back in the fields?",

"what do you expect from a pig farmer?",

It was interesting that the National Post writer, Claudia Cattaneo, made a similiar reference/inference to Mr. Stelmach's background, just a few days ago,

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

What an ignorant attitude! Stelmach indeed worked on a farm, and also attended the University of Alberta studying pre-law, but because of a family tradegy, had to return to the family farm. He has had 11 years experience in retail business, managed on a shoestring budget, and let's not forget he served in four different portfolios including, Minister of Agriculture, and Minister of Transportation in Alberta's government (see bio). Anyway, I digress - back to comments of outrage.

"Goodbye Ed...don't let your government pension hit you in *ss on the way out the door next election",

"Often wonder how the people of Venezuela and Ecuador can be so uneducated to blindly fall for the arguments of Chavez and his cronies. Can't they see they're killing there own economy's? Then I look outside and see people in this province fall for the same thing. Sad.",

to

"It's funny how on TV interviews, those people who wanted more from the oil companies are all barbers or cashiers or other low level uneducated workers. Gee I wonder why."

Support references included:

"Well Done Mr.Stelmach, it is after all the people who voted you in to act in their best interest and that you have done."

"The increase is great for Alberta!! Alberta has one of the lowest royalty rates in the world and it's by far the safest in the world for security and for investment climate."

to

"For all of you fear-mongers, think about this as an owner would. Would you really pay somebody more than 50% to extract a resource you own when you could just do it yourself? I'm all for a free-market approach, but a market is not an end in itself - societal goals are what the market serves, and so there has to be some kind of goal-setting in government to reflect societal priorities. If a few of the oil companies want to leave (and they won't), let them. When oil's really scarce a decade from now, they'll be clamouring for even 20%, never mind over 30."

Others suggested that Premier Stelmach let the people decide on this royalty increase idea. Some say he should have asked for a higher royalty amount, while some say he is taking the middle road. From this cubicle in the Atlantic, he appears to be a level-headed Premier, who does not appear arrogant and loud, and is willing to risk, to some extent his political career, or at least some political support. Making the royalty increase policy his platform in the next Alberta election might just end this debate very quickly.

Alberta's Ed Stelmach - the new Hugo Chavez?

A couple of hours ago, Alberta's Premier Ed Stelmach went on live television to announce a new royalty regime for oil and gas developments. The new regime will put an extra $1.4 billion into Alberta coffers by 2010. This is about a 25% reduction from the recommendations of a panel set up to study the new royalty plan. A National Post editorial thinks that this is so significant that it will end Alberta's boom, and compares Alberta to "banana-republics" like Venezuela (Chavez) because it is not being friendly to big oil, in fact, starting a "new anti-oil industry" era.

I have to wonder about how many $billions oil companies have made already from the Alberta oilsands, and how much they will still profit even with Alberta's new royalty policy. It was not stated in the NP piece. Are oil companies really just scrapping by? From reading the National Post, one might think so. How much profit is enough?

When one hears references that the oil sector will hurt as a result, one should not necessarily view it as some poor sap of a business put out of business. Today, the Globe & Mail reported that Suncor's profits were down. It will earn a third quarter profit of $ 677 million, but that's down from $682 million from a year ago:(

Many already think that big oil, like banks, are the poster children for greed. Like banks, oil companies are regularly making record profits in quarterly reports, and will likely "survive" Alberta's new royalty rate. Despite being a rich province that has eliminated its debt a few years back, Alberta still has problems in health care, and it's share of social problems. An extra $1.4 billion could go a long way to alleviating problems and helping secure peoples' future and well being.

NP's Claudia Cattaneo says that the oil companies are responsible for "lining the pockets" of Alberta, but from an outside observer's point of view, it was quite reciprocal. Alberta has been very friendly with oil & gas companies, but it seems they will always have allies with Canada's "national" newspapers.