Wednesday, October 05, 2005

Corporate Welfare for Big Oil

Yesterday was a baaaaad day for big oil, at least in the media as the following stories will show. But it was good day for the public, it was finally revealed for all to see that Corporate Tax Breaks are simply Corporate Welfare. When they say gimme more, gimme a tax break, they are taking money out of the public purse for private profit. And not only that they cheat on their taxes say it ain't so.

Environmentalists: End tax breaks to oil sands
In the period 1996 to 2002, the federal government spent $7.9 billion on subsidies for oil and gas producers, including $484 million to the tar-sands operations, according to a study done for the Pembina Institute, a non-partisan think-tank based in Alberta. The full cost of a new tar-sands plant can be written off in its first year of operation, rather than being written off over the plant's useful life. The accelerated write-off has the effect of lowering the operator's tax bill. Federal Environment Commissioner Johanne Gelinas raised concerns about tax treatment of the oil and gas industry in her 2000 report, but concluded it was impossible to calculate the value of tax breaks from available data. A Finance Department official, speaking on condition of anonymity, said several of the industry's tax breaks have been ended since that report was issued. The official could not give the value of current tax breaks.

Tax breaks for Big Oil? When they are gouging us at the pump and well head? Say it ain't so! But it is. And that's your Canadian tax dollars going to pay welfare to Big Oil. It gets worse, they also screw Albertans out of royalty payments AND get a subsidy from the Alberta Government.

The Alberta Government can't seem to be able to keep track of the royalties big oil is supposed to pay. And they also subsidize big oil. Must be because in Alberta the government isn't in the 'business of being in business'. And apparently its not in the business of accounting for what its owed by big oil. Yep that's an effective way to protect the interests of Albertans who OWN the oil and gas. NOT.

So when it comes to the oil business its all back slapping between Tories in the oil patch and Tories in the government over lunch at the Petroleum club, so what if a few million goes missing or the Tories continue with an outmoded subsidy originally put into place in the 1980's when times were tough. Hey whose watching the farm ya have to ask. Well it ain't Ralph and his pals.

EDMONTON - Hundreds of millions of dollars of energy royalties that should go to the Alberta government could instead be flowing to oil and natural gas companies because of poor controls, Auditor-General Fred Dunn said Monday. His report also questioned the value of paying out $102 million in "financial assistance" last year to energy companies that are making record profits. With the oilpatch largely a self-reporting entity, the province can't always track oil and gas volumes back to the well head, Dunn said. And with certain wells paying different royalty rates to the government, companies could report volumes from a well that pays less, he added. "Clearly, the industry is very careful on making sure that they are going to be paying the lower royalty."

Ah yes self regulation, love that, it means trust the fox in the hen house when he says he ain't stealing no chickens. Tories in the Oil Patch control Tories in the Legislature, rather than visa versa. And we elect these guys to do what? Oh yeah make money off VLT's. And this is NOT a new problem....

Liberal energy critic Hugh MacDonald MLA for Edmonton-Gold Bar said the royalty-collection system has been a problem for more than a decade and he called the government "irresponsible" and "cavalier" in its approach to what it knows is a problem. MacDonald said the lax enforcement is a symptom of the government's blind faith in business to regulate itself. He also slammed the Alberta Royalty Tax Credit program that Dunn noted in his report seemed to have no purpose other than to "provide financial assistance to the oil and gas industry."

And this outdated Tax Break gets the attention of the usual suspects in the Tory cheerleading section of the Edmonton Sun....the boosters have been actually booing lately which is a nice change for them...... Sportsfisherman and Business Columnist, formerly the provincial and muncipal affairs columnist and former pro-Ralph booster, Neil Waugh writes: "But it only gets worse when Dunn finally gets an answer to the question auditors have been asking since 1992. What the heck is the royalty tax credit supposed to do? Especially when there are other royalty incentive programs for low-production wells. The response was so bizarre that Dunn feels he must put it in quotation marks just to prove he hasn't torqued it."It's to provide financial assistance to the oil and gas industry,"{Greg Melchin's energy department} Melchin's men beamed. You've got to be kidding, Greg.This year the Tories are doling out $102 million in oilpatch welfare at a time when oil is over $65 US a barrel, gas is $12 per gigajoule and energy companies are racking up record profits. Apparently, "extensive discussions" were held with the energy bureaucrats before they coughed up their totally unacceptable answer. " Not to be left out Editor and Chief Curmudgeon Paul Stanway writes: "At a time when most oil is selling for better than $60 US a barrel, and natural gas is going for a mind-boggling $12 per gigajoule, why is the Alberta government doling out $102 million in royalty tax credits to oil and gas companies? It's a good question, and the response from Alberta Energy was beyond lame. The tax credits are "providing financial assistance to the oil and gas industry," the department explained. Well, duh! But why are they providing this assistance? Now, here's a chunk of change the Klein government can be saving for the Alberta taxpayer right now. The tax credit scheme should be ended quicker than you can say "prosperity bonus.""

Whats interesting in both these stories is that NO ONE can tell how much BIG OIL IS GETTING IN TAX BREAKS! Or how much they are stealing at the well head by not paying the royalties they should!

The Alberta Tax Royalty Credit was instituted back in 1992, and as the Alberta Federation of Labour has shown, it is directly responsible for the deficit short fall the province experienced one year later. A deficit that became the excuse for the Ralph Revolution, the rolling back of public sector wages and reductions in funding to public services!

If the tax subsidy of the Alberta Government was $102 million last year, multiple that by 13 years since it was created and thats a cool 1.5 billion dollars given in tax breaks just by the Alberta Government to Tar Sands development, with nothing to show for it. Add to that a cool half billion in Federal tax subsidies and Albertans and Canadians have just paid to rent their own house.

Tar Sands financing is condominium financing. We got oil billions of dollars worth of oil in them thar Tar Sands so we pay Big Oil to extract it and then pay us wait for it in 10-25 years, after they become profitable, and we also give them subsidies to keep them happy, and all the time we DONT OWN ANY OF IT. Does this make any sense? Nope. WE NEED TO NATIONALIZE BIG OIL. Hey we practically own them anyway with all these subsidies.

And we know that it is not just the Tar Sands that are profitable so is gas well exploration, at $12 a gigajoule for natural gas, more rigs are drilling. And like the Tar Sands they are getting subsidies as well from the Alberta government. How much? We don't know, cause no-ones talking at Alberta Energy, Greg Melchin's energy department.

At the height of the forthcoming winter drilling season, when the 748-rig western fleet is expected to be virtually fully employed, completing a record year of more than 24,000 wells. About 75 per cent of the drilling is in Alberta. But the number of rigs is expanding in response to demand for more wells by exploration and production companies, with about three-quarters of the drilling aimed at natural gas. The western fleet, all owned by Alberta companies or international firms with Canadian operations based in the province, is forecast to grow to 780 rigs by the end of the year, up from about 550 in the 1990s.

So while the Feds and Alberta government subsidize big oil and gas at the well head what do they do about rising oil and gas costs? Well promise one time energy rebates err kickbacks to you and me. Big deal.

Feds to unveil home heating aid package
It was not clear how much of the $2 billion will be "new" money. The sum might include funds from the Kyoto implementation plan. It could also include $100 million for energy efficiency that was added to the budget last year as part of an NDP-Liberal deal to keep the minority Liberals in power. $250 heat rebates in works $250 bucks will do little to stop the gouging by Big Oil

Homeowners should expect to get burned over heating Rising oil and natural-gas prices combine with cold forecasts to drive soaring costs

Natural-gas prices have doubled in less than four months. And some commodity analysts say prices could be three times higher than in the spring if a prolonged cold snap hits North America.

Edward de Gale describes the situation as "a natural disaster waiting to happen."

"For many Canadians," Mr. de Gale said, "this is going to be a particularly cruel winter."

Heating bills may not start mounting immediately -- Environment Canada is predicting a balmy autumn for most of the country. But come December, central Canada, especially Ontario, is expected to face a winter colder than last year's, according to the department's long-term outlook. Even worse, Environment Canada's definition of a normal winter is largely derived from the more frigid seasons of decades past, meaning that the coming spring may be much colder than those in recent memory

They would be better able to deal with both the current gouging at the pump and the rising costs of gas powered utilities by NOT giving big oil corporate welfare. Then using those tax subsidies for reducing emissions and setting Kyoto standards. In Alberta's case we would not be paying increased utility costs if we Regulated the Industry, which was privatized/deregulated only few years ago, on the promise of .....wait for it......lower costs to consumers. Ha Ha Ha Ha. I can't stop laughing for crying.

Province extends natural gas rebate program for October
Alberta New Democrat Opposition Leader Brian Mason said last week Direct Energy's application to hike natural gas rates by 23% in October to $11.805 per GJ for Alberta North customers, and $12.262 per GJ for Alberta South customers is unacceptable. At the time Mason said rebates didn't kick in until November, and he urged the Energy and Utilities Board to reject the application. He noted the government's deregulation policy mandates Direct Energy to engage in "price-gouging," by requiring the monthly gas price to be based on the highly volatile spot market. Meanwhile, SaskEnergy customers in Saskatchewan will only pay $6.97 per GJ in October, a full 70 per cent less than Albertans, before the rebates announced today, Mason noted. Even with the new rebates, Albertans will be paying more than a $1 more a GJ for gas this month than their counterparts.


But the tar sands are also a huge and growing source of greenhouse gas emissions, Already, Fort McMurray's two oil-sands plants are Canada's fourth-largest source of carbon dioxide, the main greenhouse gas.

All those tax breaks and profits guess who whines the most about Kyoto? Why Big Oil and their lackies in the Alberta Government. And guess who is NOT doing anything about implementing Kyoto? The Alberta Government. Instead of taxing Big Oil and setting emission standards Alberta is doing.....nothing. Oh yeah giving em tax breaks, subsidies, corporate welfare.....and complaining Kyoto will hurt the industry. So like they did with the Federal Gun Registry, they refuse to implement the Federal Kyoto Accords.

Provinces chided on climate change


Monday, October 3, 2005

Globe and Mail Update

The ways Canada's provinces are addressing climate change are "piecemeal, scattered, and in some cases, "non-existent," a new report from the David Suzuki foundation said Monday.

The study analyzed various provincial government policies on climate change and found that most did not have a specific plan to cut emissions of greenhouse gases.

The Suzuki Foundation undertook the study in part because although the Kyoto Protocol to reduce emissions was signed at the federal level, it is up to the provinces to implement the policies.

"The Canadian government has been rightly criticized for its inaction on climate change,” said Dale Marshall, a climate-change policy analyst with the Suzuki foundation who authored the report. “But provinces and territories have escaped the same criticism despite considerable inaction on their part.

"Canada's stalling on reducing greenhouse-gas emissions has as much to do with provincial opposition and intransigence as the federal government's lack of commitment or effectiveness.”

His report, All Over the Map, looked at where provinces are at in terms of their current emissions levels and then looked at their plans for reducing greenhouse gasses and evaluated their records.

Mr. Marshall found that New Brunswick, Nova Scotia and the Yukon have no climate change plans at all.

He called the plans put out by British Columbia, Newfoundland and Labrador "weak and vague."

Mr. Marshall also slammed Alberta and Saskatchewan for their oil and gas, and other, industry emissions, which are "skyrocketing" with no plans to place limits on them.

Although Ontario has low emissions per capita and has promised to remove coal-fired power plants, the report found, it has plan to address climate change and has weakened promises to cut electricity demand.

On the other hand, he lauded Manitoba, Quebec and Prince Edward Island for coming up with concrete ideas and for already taking action to reduce emissions.

He said that when the Kyoto protocol became law earlier this year, everyone assumed that reducing emissions fell on the shoulders of the federal government. In the report, however, he emphasizes that while that is partly true, some energy responsibilities fall under provincial jurisdiction.

For example, he said, it is the provinces that must ensure that buildings are up to code and increase energy efficiency. The provinces are also responsible for important changes related to climate change, such as management of natural gas and electricity.

They must therefore, he said, be on board to help citizens and businesses reduce usage.

For the most part, he said, provinces have failed to pay proper attention to the necessary reductions.

To meet its Kyoto target by 2012, Canada must cut emissions by 270 tonnes a year – 6 per cent below 1990 levels.

Canada agreed to decrease its emissions at a meeting in Kyoto in 1997. That agreement became international law in early 2005.

Kyoto signatories from all over the world meet in Montreal in December to discuss the next step in the process.

Yet business wants a level playing field when it comes to Kyoto. Yep if they have to be taxed and regulated everyone should be taxed and regualted, cause thats the only way to implement the Kyoto accords. Self Regulation as we see in Alberta does NOT work. Never has, never will. And business is the first to admit that. Regulate us they tell the state, cause without regulations we will cheat.

And who is NOT in favour of regulations? Why the Provincial Governments and even the Feds, who have no plan around Kyoto. And its not just in Canada, its an international problem with Kyoto as Guardian Columnist George Monbiot points out.

The State does not want to Regulate, because it has accepted the ideology of the marketplace, after having the right wing lobby them for thirty years, it is now the ruling ideology of the State. And now business is saying the opposite when it comes the Kyoto and Climate Change.

It would seem that I was wrong about big business

Corporations are ready to act on global warming but are thwarted by ministers who resist regulation in the name of the market

George Monbiot
Tuesday September 20, 2005
The Guardian

This was not, I now discover, the first time that the corporations have demanded regulation. In January the chairman of Shell, Lord Oxburgh, insisted that "governments in developed countries need to introduce taxes, regulations or plans ... to increase the cost of emitting carbon dioxide". He listed the technologies required to replace fossil fuels, and remarked that "none of this is going to happen if the market is left to itself". In August the heads of United Utilities, British Gas, Scottish Power and the National Grid joined Friends of the Earth and Greenpeace in calling for "tougher regulations for the built environment".

So much for the perpetual demand of the thinktanks to "get government off the backs of business". Any firm that wants to develop the new technologies wants tough new rules. It is regulation that creates the market.

So why won't the government act? Because it is siding with the dirty companies against the clean ones. Deregulation has become the test of its manhood: the sign that it has put the bad old days of economic planning behind it.

No comments: