Return Of The Work Camps II

An excellent article from the Guardian on Fort McMurray reminds us that homelessness is not just an urban issue for Calgary and Edmonton but a way of life for construction workers, the folks who did not protest at the Leg last week. Work Camps have returned to Alberta, not unlike the old Relief Camps for unemployed workers during the dirty Thirties or the internment camps of WWI which built the Banff and Jasper national parks. The difference is of course these camps are full of volunteer wage slaves.

For many, purpose-built work camps provide the best solution, and are often the only option for the blue-collar workers needed to build the sites. The work camps are small towns in their own right - Suncor's Borealis camp, the largest such facility in North America, sleeps 7,500, as does CNRL's Horizon camp - but with few of a small town's compensations. The only plus is a negligible commute. It's a short walk from Syncrude's Mildred Lake camp to the refinery. The long, low trailers are surrounded by barbed wire and sandwiched between, on one side, belching silver towers and pipes, and on the other a highway and seas of mined-out sand. Inside the trailers, men in dressing gowns wander down interminable, hospital-bare hallways; the rooms are cells, maybe 7ft by 14ft, furnished with a small single bed. Men - it is usually men, though there are some women, in separate facilities - can spend anything from a few days to years living in these rooms. A Somali cab driver who worked as a security guard at one of the camps told me they all developed coughs. "And their faces started to look like they were made of rubber."

H/T to Galloping Beaver


SEE:

The Other Alberta Boom

Padrone Me Is This Alberta

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Stelmach's Royalty Give Away

As I said here Stelmach's Royalty announcement is a sell out.

Alberta's bid to wring more cash from the oil sands with a controversial royalty hike wound up as little more than "smoke and mirrors", one of the province's advisers said on Monday, as it backed away from key elements of a review panel's recommendations.

Pedro van Meurs, who has consulted on royalty regimes in 70 jurisdictions, said the Alberta government left cash on the table when it announced a new royalty scheme last week.

But van Meurs said the changes are at best a minor increase and the province's has lost a once-in-a-generation chance to get what he considers a fair share of the burgeoning sector's revenues.

"It's pretty disastrous," van Meurs told Reuters. "Instead of having a simple tax, what we are now going to see is very complicated system that is more smoke and mirrors than reality."

Van Meurs was a consultant for the review panel that recommended higher rates and a per-barrel tax on oil sands production.

"It's absolutely a minor increase," he said. "The most idiotic thing is that Alberta already had 25 percent."

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The Sky Is Not Falling

After all the sturm and drang, the wailing and whining, the threats, doom-saying and warnings, from Big Oil the sky did not fall down on Friday after Alberta CEO Ed Stelmach announced his royalty compromise. Ok everyone take a Valium. Capitalism remains alive and well in the oil patch. In fact it is still booming.

Energy sector stable amid royalties hike
Market reacts calmly to royalty rules

Citigroup Investment Research energy analyst Doug Leggate has crunched the numbers, and he just doesn't see what all the fuss is about in the Alberta oil sands over the province's new royalty plans.

The negative after-market reaction to Alberta’s proposed royalty changes for the energy sector appears overdone and may present an opportunity to buy some names in the sector, says Citigroup analyst Doug Leggate.

He recommends keeping an eye on preferred names in the sector like Suncor Energy Inc. (SU/TSX) and Canadian Natural Resources Ltd. (CNQ/TSX), but admits there will likely be a strong response to any change from the industry.

“...Versus the level of oil prices we estimate are currently being discounted in the major Canadian oil sands players, the impact on valuations looks benign,” Mr. Leggate wrote.

So while he acknowledged that the new regime gives away some upside, the analyst thinks plenty of core value remains with investors.

Friday's market response to Stelmach's decision was less dramatic than some experts expected. Shares in Suncor (TSX:SU) opened down 3.4 per cent, while shares in Petro-Canada (TSX:PCA) and Imperial Oil (TSX:IMO)were down less than one per cent.

Petro-Canada's Mr. Brenneman told his conference call that the royalty decision won't delay his company's plans to continue its work at Fort Hills, its 60-per-cent-owned oil sands mine and upgrader project north of Fort McMurray. "We intend to progress this through to the sanction point," he said. He indicated that Petrocan should reach the point where it is ready to make a final decision on whether to proceed with the project in about 12 months.

Petro-Canada's third-quarter profit climbed 14 per cent as oil and gas output surged by nearly a third, the country's No. 4 oil producer and refiner said Thursday.

The company extracts 20 per cent of its cash flow from oil and gas operations in Alberta, and is currently planning the $26-billion Fort Hills oilsands development there.

In the quarter, Petro-Canada earned $776 million, or $1.59 a share, up from year-earlier $678 million, or $1.36. Including one-time gains and charges, earnings from continuing operations rose to $630 million, or $1.29 a share, from $564 million, or $1.13 a share.

And if there are market swings they are the result of other factors than the royalty compromise, ironically because of the emissions caps; the Alberta Green Tax as well as labour costs in Alberta's overheated economy.

The downside is that this method of assessing royalties encourages more inflation in this already red-hot economy. There's little incentive to keep costs down on oilsands plants when you have a royalty holiday until construction costs are paid off. The higher the construction costs, the longer the royalty holiday. (After costs are paid off, royalties jump to 25 per cent, rising to 40 per cent when oil reaches $120 a barrel, under Stelmach's proposals.) Yet, it's precisely those rapidly rising costs in construction and labour that are being felt in all sectors of the provincial economy. As Fort McMurray Mayor Melissa Blake says, "we used to call that the Fort McMurray factor -- 30- to 40-per- cent higher price. Now it's all over the province." At this rate of economic growth, her city of 65,000 will have a population of 100,000 in another five years, Blake said in an interview. Good grief.

Suncor has also had to do mechanical upgrades this year and is looking at costs involved in upgrading its refining processes. All part of the day to day cost of doing business. However it's share prices rose despite the minor drop in third quarter earnings.

Suncor cuts targets as profit drops on oilsands output

Suncor cut its oilsands production target for the year and raised cost estimates because of shutdowns and limits on emissions. Alberta regulators capped production from Suncor's Firebag deposit at 42,000 barrels of bitumen a day until it can reduce emissions, the company said. Bitumen is a heavy crude extracted from the tar sands.

Suncor's shares rose $1.46, or 1.4 per cent, to $102.75 on the Toronto Stock Exchange. The stock has gained 12 per cent this year.
Suncor earnings slip as emission caps take toll

Suncor Energy Inc. said Thursday its third-quarter profit fell due to a drop in oilsands sales volumes, and it lowered its production outlook for this year because of maintenance at its oilsands operations near Fort McMurray.

Suncor cut its oilsands production target for the year and raised cost estimates because of shutdowns and limits on emissions. Alberta regulators capped production from Suncor's Firebag deposit at 42,000 barrels of bitumen a day until it can reduce emissions, the company said. Bitumen is a heavy crude extracted from the oilsands.

"We're taking a number of steps to address regulator concerns including accelerating the construction of emission abatement equipment," CEO Richard George said in the statement. "At the same time, we're also examining ways to increase bitumen supply from our mining operations to help offset supply restraints at Firebag."

Suncor eyes US for major oil facilities

Mr. George, the company's longtime executive, said Suncor is working towards charting growth beyond Voyageur and Suncor will most likely seek opportunities that do not stretch far from its core oilsands business.

"We're sitting on huge reserves, some of which haven't even been described publicly, and I still think the core and heart of this (company) is going to be the oilsands," he said, adding that tie-ins or joint-ventures between Suncor and companies in the Fort McMurray area looking for upgrading capacity for raw bitumen represents one opportunity.

"Just continuing to build upgraders probably isn't (our growth plan) but I don't want to preclude anything. Will you see Suncor exploring in North Africa of West Africa? Probably not."

"We have leased land outside Edmonton and that is a possibility and we will also look farther south as well," he said, adding costs to build upgraders and refineries in Fort McMurray are more than double those on the refining hub along the U.S. Gulf Coast.

And the impact of Flaherty's Income Trust Tax plays as much a role in Syncrude's profit outlook as does the Alberta Green Tax. So in balance the impact of the royalty increase is only one factor in Syncrude's future forecasting of its production output.

Alberta, Oct 26 (Reuters) - The firm with the biggest stake in the Syncrude Canada Ltd. oil sands venture said on Friday it is willing to talk to the Alberta government on changing Syncrude's royalty structure, but issued a reminder that its terms are part of a legal contract.

Canadian Oil Sands Trust (COS_u.TO: Quote, Profile, Research), which has a 37 percent stake in the sprawling oil sands mining and synthetic crude venture, said its terms have helped prompt C$8.5 billion ($8.9 billion) in Syncrude spending over the past five years and create 5,000 jobs.

Its royalty terms and those of rival Suncor Energy Inc (SU.TO: Quote, Profile, Research), do not expire until the end of 2015. Premier Ed Stelmach has said Alberta would negotiate with the two operations to agree a transition to the new royalty framework.

Canadian Oil Sands Trust units were were off 69 Canadian cents, or 2 percent, at C$32.90 on the Toronto Stock Exchange.

Meanwhile the impact of the royalty announcement has not deterred Syncrude from looking for 5000 workers to meet its current needs and those down the pike.

There's plenty of work to be had in the booming Alberta oilsands, but you've got to be serious about working there.

Fort McMurray, Alta.-based Syncrude was one of the employers on hand at Thursday's seventh annual Career and Skilled Trades Learning Experience (CASTLE) job and career fair, a first for the oil giant.

"We're looking all across the country," said Syncrude recruiter Dominic House. "We've gone from Vancouver Island to Newfoundland."

Staff at the Syncrude table had a list of 21 different permanent positions currently in demand at the company, including plant operators, boilermakers, engineers in all disciplines and information technology analysts.

"About the only thing we don't hire are plumbers and carpenters," said House. "That work is contracted out."

Not only is the oil boom in Alberta causing a labour shortage, but Syncrude faces a host of retirements, with an attrition rate of eight to nine per cent, he said.

"We're trying to get up to 5,000 employees," said House, adding the company now employs some 4,600 people.

Exciting as all this might sound, he was finding few takers at the CASTLE event.

"Housing cost is the number one deterrent," said House.

In labour-starved Fort McMurray, he said, "you can work at a Burger King and make $15 an hour.

"But in order to afford the housing, you'd better work a lot of hours," he added. "A person making $15 could not survive alone."

All in all Stelmach's royalty compromise turns out to not to have been as balanced as he claims it leaves Albertans without a real share in the wealth being created by the extraction of our resources, and it does not even begin to pay for the social costs of the expansion of the oilsands. It is in effect too little too late.

Inflation is also eroding people's earning power. That's the observation of none other than this fall's TD Bank report on the Alberta economy.

"While average incomes have been rising, the bulk of the gains have been enjoyed at the high end of the income spectrum," says the report. People earning more than $100,000 are enjoying rising incomes. That includes lots of oilpatch workers, not just head office middle managers.

While low-income earners are most at risk, "perhaps the bigger surprise" is that middle-income earners are also hard pressed to record any gains after inflation, says the bank report.

People earning $60,000 or less have remained static or slipped back in inflation- adjusted dollars, according to the bank report.

This is also the province with the regressive flat income tax, which means high-income earners pay the same ten per cent as low-income earners. So the tax system does nothing to mitigate a growing income gap.

So Martha and Henry might have a few questions for Stelmach about a royalty regime that keeps the accelerator to the floor.

They might also note that the dire predictions that investors would dump their energy stocks and flee Alberta didn't happen. On the Toronto exchange Friday, the energy sector was up 0.17.

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Alberta Election In The Offing

Here is the slogan Alberta CEO Ed Stelmach and his Tired Old Tories will be using in the upcoming election he prepared us for in his Ed TV show last night; The Future Is Bright" and " Our Future is Secure"

The future of our province is indeed bright."

We will secure Alberta’s future.

We need new ideas — new attitudes — to secure Alberta’s future.

In the case of the last slogan there was nothing new in his speech last night, no new ideas, nor any new commitments. It was Forward To The Past. It was a pre-election announcement speech. And it didn't fail to disappoint.

Add these possible Election slogans;

we will get it done!

sound and practical environmental vision.

And this one; Strong communities built with strong families.

Strong communities are much more than roads and buildings.

They’re built with strong families.

Suddenly I am having a flashback to 1971 and Peter Lougheed.

Central to our future prosperity is a commitment to add value to our traditional strengths in energy, agriculture, forestry, tourism, and health sciences.

We must build on those strengths, and develop new areas of promise.

This will involve making choices — and even taking some risks.

But being timid and doing nothing is a far greater threat to our future.

The diversification of our economy will be driven by the creativity and innovation of Albertans.

While we all waited with baited breathe in anticipation of the much predicted announcement on Oil Royalties, it didn't come last night. Near the end of his forty minute snoozer that we got told that the government would take decisive action but we have to wait till later today to find out what it is says Mr. Ed. Big Oils Talking Horse.

As I’m sure you know, the review panel delivered their recommendations a few weeks ago. I made their report public as soon as we received it — so that it could receive the widest possible public debate.

And that’s certainly happened.

We’ve taken the time to give this important issue the serious thought Albertans would expect from their government.

And we’ve taken the time to get it right.

Now we’re ready to take decisive action.

Tomorrow we’ll be releasing details of a new royalty framework. One that delivers the fair share Albertans rightly expect from the development of their resources.

The Royalty report was released a month ago, giving the Big Oil Lobby lots of time to create a climate of fear. And Ed is trembling. And what do you think he will announce. Well it won't be anything the Royalty Report recommends. As he told us in his wrap up. And of course he will be announcing his historic betrayl of the Volk of Alberta in Calgary with the Petro-Towers of Big Oil as his backdrop.

A province where government gets out of your way — and where you can keep the fruits of your hard work.

That’s my promise as your Premier.

So if you snoozed through his bland, milquetoast TV show last night you didn't miss anything. It was all platitudes and homilies spun by Farmer Ed. Paid for by you and I as it was broadcast on CTV. And it didn't get broadcast on radio.

Also passing strange it was not broadcast on the hour. It wasn't broadcast at 6pm or 6:30 pm but at 6:40. So if you were channel flipping looking for it well it was easy to miss, just like so much this Tired Old Government does. It came right after the weather report which reflects the farmer mentality of our Premier.

He is a lame duck Premier like his historic predecessor that other farmer Premier; Harry Strom. And his decision on Royalties will determine if he will repeat Harry's folly. So far he has been true to script.

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Turncoat Dwarkin Recants

As I posted here yesterday the Big Oil ringer Dr Judith Dwarkin who sat on the Oil Royalty Panel issued her own report on the Oil Royalties, one that was countering her own panels recommendations and denounced her fellow committee members in unflattering terms. Her paper was sanctioned by her company in defense of their pals in the Petroleum Club in Calgary.

Ken Chapman, who has been also doing stellar work covering the reaction to the Royalty review, has published her recantation.

Ken is a thoughtful public policy wonk who also happens to be a Conservative, though he prefers the company of Progressive Bloggers to the partisan whingnuts over at the Blogging Tories. Good on ya Ken.

Once again the One Party State in Alberta resembles other One Party State's where officials make statements and then recant.

Don't Let Big Oil Set Our Royalty Rates make sure Ed hears from you


SEE:

Hugo Stelmach

I Am Malcontent

Who Will Decide About Royalties

Headline Says It All

Ohhh Pulllleeeaasse

Alberta Needs A Chavez

Albertans Are Simpletons Says Government

Royalty Is NOT A Tax

Fearless Prediction Confirmed

Morons

More Shills For Big Oil

Stelmach Sells Out

King Ralph Shills For Big Oil

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Alberta Oil Royalty Sell Out

Looks like we will not be getting any real news about Farmer Ed's plans around oil royalties when he does his Ed TV program next week.

Alberta royalty details now expected by month end

Instead he spent this week spinning why he is not going to get tough on Big Oil, preparing us for lowered expectations regarding his royalty review.

Stelmach touts benefits of existing royalties

Having met with the oil boys in private and having his Energy Minister do the same they knew this was coming down the pike.

Royalty proposal 'overly aggressive': Panel member

A key member of the panel that recommended controversial increases to oil and gas royalties in Alberta has distanced herself from its conclusions, calling them "overly aggressive" and "dumb" in some cases.

Judith Dwarkin, chief economist at Ross Smith Energy Group Ltd., a top Calgary-based independent energy research firm, co-wrote a new report that criticizes the panel for lacking the "requisite industry expertise and time" to adequately make certain recommendations, resulting in flawed conclusions.

Ms. Dwarkin, who holds a doctorate in economics and at one time was responsible for evaluating Alberta's oil-and-gas royalty system for the Department of Energy, was seen as the most credible member of her six-person panel because of her extensive experience.

A report we have never seen because the Minister has kept it secret. She was the governments Big Oil ringer on the committee so this should come as no surprise.

So what could we hear from Farmer Ed when it comes to royalties. Well not 20%, not 10% nope. Wait for it.....

Making the rounds in Calgary's financial community yesterday was speculation that the province has arrived at a decision to boost royalties on oilsands projects - but not as much as is currently discounted in stock prices.

The scenario - under which royalties would increase to 5% from 1% before project payout, and to 30% from 25% after investment is recovered, and also involves the scrapping of a proposal for a new super royalty - was seen as positive for Canadian oilsands players, whose stocks rallied as oil was rocketing higher.

Meanwhile despite all the doom and gloom being raised over the royalty report it has had little real impact on the industry.

Here is the stock chart for the year for one the oilsands giant; Suncor. And despite a blip in September, after the royalty review announcement the shares just keep going up, and up, and up....In fact they are doing better than they were last spring prior to the Royalty Review report.

Canadian stocks rally, led by energy and mining

Suncor Energy closes at all-time high

And as usual it had less to do with royalties than the oil and gas market.

Oil Slips

Crude oil fell 0.8 percent to $88.77 a barrel on speculation that U.S. supplies are sufficient to meet demand, after rising above $90 in New York for the first time,

EnCana Corp., the nation's largest natural-gas producer, fell C$2.60, or 4 percent, to C$62.85. Smaller rival Canadian Natural Resources Ltd. retreated C$2.96 to C$74.83. Suncor Energy, the world's second-largest oil-sands miner, dropped C$2.44 from a record to C$100.96.

A measure of energy shares, after gaining 4.1 percent this week before today as oil touched daily records, retreated 2.7 percent today. It helped the S&P/TSX climb 11 percent this year before today. Seven of the benchmark's 10 subgroups fell more than 2 percent today.

Don't Let Big Oil Set Our Royalty Rates make sure Ed hears from you


SEE:

Hugo Stelmach

I Am Malcontent

Who Will Decide About Royalties

Headline Says It All

Ohhh Pulllleeeaasse

Alberta Needs A Chavez

Albertans Are Simpletons Says Government

Royalty Is NOT A Tax

Fearless Prediction Confirmed

Morons

More Shills For Big Oil

Stelmach Sells Out

King Ralph Shills For Big Oil

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Bill Hunter, Alberta Royalty Review,
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AFL Demo Falls Flat On Its Face

Ouch. Suppose we called a demonstration and no one came?

The majority of the 15 workers that did show up were probably Wobblies who have been active on every wildcat picket line over this last month. Dual carders, folks who belong to both the IWW and their regular trade union. The IWW has been gaining support amongst the building trades union rank and file pissed off at their union's lack of democracy.

While the union bosses couldn't organize a rally, demo, or meeting bigger than a gathering in a phone booth, cause they are pork choppers, far removed from the rank and file. And when they do organize rallies its the paid union staff that show up.

This is not only disappointing but shows that the real resistance of the workers in Alberta not only to our bad labour laws, but to the Oil royalty rip off will be led by rank and file militants not the labour bureaucracy. That was what made last months wildcat actions successful. But as soon as the labour bureaucrats joined in well it died.

While the Oil Bosses bused in their workers and paid them to attend their Anti-Royalty Rally at the Leg on Wednesday the AFL's excuse is that their demo was poorly attended cause it was payday. Well that was a brilliant move wasn't it. The pork choppers don't even know when pay day is up in Fort McMurray. Or when shift changes occur. Talk about being out of touch. They should have just organized a counter demo in Edmonton instead.

Unions drive message home despite poor turnout

By CAROL CHRISTIAN
Fort McMurray Today staff
Friday October 19, 2007

It may have been a tiny crowd at a royalty rally for oilsands workers Thursday night but that didn’t undermine their support for changes to the current royalty system.
About 15 people attended the rally hosted by the Alberta Federation of Labour (AFL). Gil McGowan, AFL president, wasn’t really surprised at the turnout given it was payday, and shift change day so many workers had already left town.
He explained the AFL went ahead with the meeting because of concerns Premier Ed Stelmach was going to announce his decision on the royalty panel recommendations today. That didn’t happen at press time; the premier is rumoured to have television airtime booked next Wednesday.
McGowan presented his top 10 reasons why big business won’t leave Alberta even though companies are “rattling their sabres” and threatening to pull out of the province.
“The oil is here. They’re going to stay here because there’s money to be made and there’s nowhere else to go,” stated McGowan. Other reasons included that oil companies have always known the government has the right to unilaterally raise royalties and companies are not going to turn their backs on billions of dollars of investments already made here.
He mentioned other jurisdictions like Alaska and Britain have increased royalty rates by as much as 80 per cent yet it hasn’t scared off investment. The royalty review panel is recommending a 20 per cent increase for Alberta.
McGowan pointed out some of the same companies threatening to leave Alberta continue to invest in Venezuela where royalties are higher than here and profit margins lower.
“We don’t have to be intimidated by the scare tactics being employed by big oil,” said McGowan.

While the premier is talking tough, there’s still a concern about closed door meetings between government and big oil companies, he said. Believing the companies are trying to intimate the government McGowan is urging workers and Albertans to tell their MLAs not to lose their nerve.
“We have to help them get the backbone they need to stand up to big oil,” he stated. “The time for accepting bargain basement royalties is over.” If government cows to oil companies, McGowan added Albertans can show their displeasure at the ballot box.
Petition letters to the premier available at the rally said the royalty report should be seen as a bare minimum for action. Anything less than that is a failure by government to stand up for the best interests of Albertans.
“Any effort to water down the recommendations would be a unnecessary capitulation to big oil,” said McGowan.
The local rally was held for workers in contrast to the one the day before at the legislature in Edmonton organized by business. Referring to that rally as a “paid political commercial brought to you by ownership,” Barry Salmon, an International Brotherhood of Electrical Workers (IBEW) official, said owners are more interested in their own bottom line than the best interests of Albertans.
Salmon said the panel came up with a mediocre report that was already a compromise favouring big oil.
This was intended to set a marker so when government introduces its decision, it will be seen as a compromise. “Albertans will believe its acceptable because they will be told it’s a compromise between the royalty recommendations and big oil demands.
“We’re being had,” he said, adding Albertans are now involved in a shell game with the government and big oil.
As part of their scare tactics, oil companies are threatening some 19,000 jobs, said Mel Kraley, IBEW assistant business manager. Yet, he noted, there some 21,000 temporary foreign workers in Alberta. McGowan believes the number of workers is closer to 60,000.
Several workers in attendance took the opportunity to express their concerns.
Ron Davidovich said the government should “feel ashamed” for finally asking for royalty review. “We’ve got billions of dollars lost in this province,” he added at a time when seniors can’t get the care they need and are struggling on fixed incomes. The extra $2 billion from increased royalties could help seniors among other things, he said.
“As soon as we encroach on them (oil companies) ... we hear some nice stories,” said Roland Lefort, an official with the Communication, Energy and Paperworkers union.
He added when the Kyoto Accord was first introduced, oil companies bemoaned the financial hardship it would cause. As a result, “Albertans believed Kyoto was going to destroy the economy.” The royalty review is no different, Lefort said.

Don't Let Big Oil Set Our Royalty Rates make sure Ed hears from you

See:

I Am Malcontent

Who Will Decide About Royalties

Alberta's Tar Sands Gamble

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Robot Protest

Robot comes from the Russian word Robotnichki, meaning drudgery and worker. A wage slave by any other name.

And when the Oil Rig bosses pay their wage slaves to protest on their behalf against the workers own self interest this is what you get.

During the speeches, the workers showed little emotion, cheering only sporadically.

The Alberta government said yesterday that only $15.2-million was spent on new exploration rights for conventional oil and natural gas in a bimonthly auction.

It is the lowest total this year for conventional energy, a sector in which proposals for higher royalties have provoked considerable anger from industry.

For exploration rights in the oil sands, $15.7-million was collected, which ranks as a median result for the year, ahead of 10 other auctions. With oil prices at a record, the call for higher royalties on that resource has caused less controversy.

In sum, the sale of exploration rights so far this year is down 62 per cent to $1.18-billion from $3.14-billion in the same period a year earlier.

Exploration rights on Crown land in Alberta are posted for sale by the provincial government at the request of individual companies and are awarded in a blind auction where energy firms submit sealed bids. The government take from these auctions can vary dramatically as energy companies spend aggressively when commodity prices are high but pull back quickly when they fall.

A record take of $3.43-billion was reached in 2006, up more than 50 per cent from the previous record of $2.26-billion in 2005. That, in turn, surpassed the long-standing record of $1.15-billion set in 1997, which was reached in part because of the first oil sands boom following the adoption of a generous royalty regime.

This year's decline mirrors collapses recorded in 1981, 1999 and 2002.

That's because such auctions tend to generate less money in Alberta than in other jurisdictions, generally because access to drill for oil and natural gas is seasonal and in the oil sands the raw resource is of lower quality than in major oil fields elsewhere.

Don't Let Big Oil Set Our Royalty Rates make sure Ed hears from you

See:

Real Oil Workers Rally

I Am Malcontent

Who Will Decide About Royalties

Alberta's Tar Sands Gamble

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Rent A Crowd

The right wing press pundits and those opposed to Albertans getting their fair share will make a big deal out of the Oil Bosses Venezuelan Style Protest at the Leg today. Until you realize that the workers there were bussed in by the bosses and paid to be there, complete with signs provided by their bosses.

Also most of them have not read the Royalty Report nor know what its recommendations are. And thanks to your's truly helping get the message out about this right wing demo a counter protest occurred.

The workers, many carrying signs printed by Ensign Energy, the drilling giant based out out of Calgary, and wearing hard hats brought by the company for the occasion, said they fear losing their livelihoods if the report's recommendations are accepted.

Whether the crowd had considered the accuracy of the report was another matter; while several said they felt it was flawed, they either admitted they hadn't read it, or, in several cases, that they didn't really understand the complexities of the royalty structure. Many also confirmed their employers had given them a paid day off to attend the rally.

And about two dozen pro-report demonstrators also showed up. Alan Boyle said he worked in the oilpatch for nearly 40 years. "I don't blame these people for being apprehensive because the message they're getting is fear and they're following that. They're scared for their jobs. I notice some older fellas who in the 80s were perhaps hurt when the NEP came in."

But Boyle also said based on the price of oil, the only reason for companies to fear monger about slowing down is because they want to make more money, instead of paying the public its fair share -- something that repeated reports from multiple economists suggests hasn't happened in years.

"It's generally fear and these people are bought and paid for. I don't think the royalty review is way out of line. I think it's quite fair. I don't really see where, based on the price of oil per barrel right now, that any company is really hurting. There are traditionally seasonal sectors feeling the pinch right now but that's got nothing to do with oil royalties."

The AFL issued in a statement criticizing the Wednesday event planned for the Alberta legislature in Edmonton. Gil McGowan, president of the AFL, said:

"These are people who have bought into the scare tactics currently being used by Big Oil. Obviously, they have a right to speak for themselves. But let's be clear: they don't speak for anything close to a majority of Albertans working in the oil patch or related industries." "It's always scary when the people who sign your paycheques start talking about job loss," says McGowan. "But it's clear that a strong majority of workers in this province - regardless of what industries they happen to be in - want a much better deal on the resources that we all own collectively as citizens. And they're not about to back down just because a few cranky CEOs have been rattling their sabres." "Right now, Big Oil is behaving like a kid throwing a tantrum," concludes McGowan. "They're stamping their feet and making threats. But they're not about to leave the sandbox - because there's too much money to be made and, frankly, because there's nowhere else for them to go."

He described the legislature rally, organized by owners of small energy and oilfield service companies, as “essentially a bosses’ rally.”

While it’s being billed as a “grassroots oil workers rally,” McGowan wondered how it could be when most of the companies don’t work in the northern Alberta oil patch, including Fort McMurray. He added those involved are mostly natural gas employers. At a time when many industry players have already admitted the gas industry is slowing as basins mature and prices increase, McGowan said these companies are using those pre-existing market conditions as scare tactics.
“These employers have been trying to say their recent layoffs are a sign of things to come when in fact they have almost nothing to do with the current royalty regime or the one being proposed by the royalty panel,” he said. “Their problem has nothing to do with current royalty regime or the proposed one. They’re caused by the recent slump in the price for natural gas.”

As for the claims about the slow down in the conventional gas and oil patch, that is the nature of the business. Last spring was too warm for some patch operations. Guys I know working in the patch who start in December or January weren't getting started till late February early March. This fall appears to be another Indian Summer so again the patch will start up later than usual.

Dave Hamsing, who runs a drilling company south of Calgary, said companies are already scaling back operations, waiting to see how the government responds to the royalty review.

Hamsing has only two rigs booked this winter, after six were cancelled. He fears another bust in Alberta is a possibility.

"The ones who suffer from the fallout will be us, the service companies, entrepreneurs, employees, families. The rest of Alberta is going to suffer if they implement the royalty report in its state," said Derrick Jacobson, owner of a small oil service company in Red Deer.

"It's not threats anymore, I mean some companies have shifted operations to Saskatchewan already."

Jacobson called Wednesday's protest in Edmonton a "grassroots oil workers rally," but the involvement of a high-priced public relations firm is raising questions.

Don't believe me,well then lets ask Mr.Right Wing his-self, Neil Waugh;

Threat of job losses in the oilpatch due to royalty boost may just be a Big Oil invention

But it was a great day for the flat-earth believers in the Calgary oil towers and their compliant, soon-to-be communications directors.

Fortress Stelmach had been finally breached and the Stalmachistas are fleeing for the hills after the Cowtown oil aristocrats launched their third and final desperate assault - code-named the "Perfect Storm."

That is where tens of thousands of oilpatch workers would lose their jobs if the modest royalty tweaks go through - not to mention their double wides and dually diesels.

THE PROBLEM IS REAL

Of course, there is a problem. The winter drilling season is going to be a bust. And the summer one was nothing to brag about either.

Big Oil has already pulled back their big budgets. Rigs are racked and trucks haven't turned a wheel all summer, especially in Stelmach's rural heartland.

Big Oil invented the storm. Now they want to pin the blame on Stelmach, as rig moving king pin Murray Mullen tried to do last week when he announced the "temporary layoff" of 100 truck drivers and swampers.

Yep today's protest was the Oil Rig Bosses blaming the Royalty report for the fact that they had a poor spring and summer and are preparing for a slow start this winter. It has nothing to do with our getting our fair share and everything to do with the weather.

But heck you know they would look silly if they protested the weather.

Come to think of it I wonder if they have considered the impact of Global Warming on their jobs.

Nah, that's just another socialist plot like the Royalty Report.

Representatives from the fledgling Wild Rose Party and the Alberta Alliance, Alberta's two ultra-right wing parties, also addressed the crowd. Alliance leader Paul Hinman, the MLA for Cardston-Taber, called the recommendations a colossal mistake. "It's pure politics to talk about 'fair share' because that's how you make everybody upset, by saying 'you didn't get your fair share'," he said.

Don't Let Big Oil Set Our Royalty Rates make sure Ed hears from you

SEE:

Our Resources, Our Future, Our Decisions

Real Oil Workers Rally

I Am Malcontent

Who Will Decide About Royalties

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