PMO PO Danny Williams

Slightly overwhelmed by all the election coverage yesterday was news that Danny Williams was not going to attend the crowning of the new leader of his provincial PC party, his replacement. Party brass all were shocked and dismayed.

Shocked that Williams won't attend tribute: premier

While some have suggested it was because of this;

Former aide to Danny Williams backs away from oil board

I think this had more to do with it

Tories, Quebec ink oil exploration deal

The Conservatives are getting rid of a long-standing irritant with the Quebec government just days before an expected election call, signing a deal that opens the door to oil exploration in the St. Lawrence and fuels hopes for economic development in poor parts of the province.

The agreement to be unveiled on Thursday in Gatineau, Que., will lead to exploration for billions of barrels of oil and natural gas in the Old Harry field in the Gulf of St. Lawrence, which straddles Quebec’s boundary with Newfoundland.

A 1967 Supreme Court of Canada ruling upheld the federal government’s ownership of offshore resources.

A joint secretariat will be set up to oversee federal-provincial responsibilities regarding the management of the offshore resources and an independent tribunal will mediate potential conflicts, including an overseas boundary dispute between Quebec and Newfoundland and Labrador. Millions of dollars in royalties are at stake.

The Old Harry site straddles a boundary defined in 1964 by Quebec and the four Atlantic provinces. The boundary places most of the Old Harry oil and gas reserves on Quebec’s side of the line. Newfoundland and Labrador is challenging the boundary, and the announcement gives the province an equal say over the makeup of the tribunal.

Another interesting point about this deal was that it was done in private, days before the election call, and it resulted in this....

Federal Tories buy the silence of the Quebec Liberals

And it was hard to believe Christian Paradis, who is Prime Minister Harper's Quebec political lieutenant as well as natural-resources minister, when he said Thursday's agreement on the Old Harry offshore oil and gas deposits had nothing to do with the federal election.

It was easier to believe Quebec's natural-resources minister, Nathalie Normandeau, who said that "never have the planets been so well aligned" for what looked like the hasty settlement of a 12-year-old difference between Ottawa and Quebec.

And the agreement on Old Harry is only one sign of an apparent political arrangement between the federal Conservatives and the Quebec Liberals.

The arrangement was apparently made between Harper and Premier Charest in a private meeting last week, when the prime minister came to the provincial capital to announce an airport expansion.

In the deal, the Quebec Liberals would refrain from criticizing the Conservatives, the party most likely to form the next government, possibly a majority government, until the federal election is over.In return, the Conservative government would sign agreements giving Quebec more money.

On Wednesday, Charest defended the Harper government against criticism from the sovereignist parties in Ottawa and Quebec City over the absence of a harmonization settlement in the federal budget.

And he said that in this federal campaign, h...e will not publish an open letter asking the parties to state their positions on issues of particular concern to his government, as he had in the past. Charest said "the idea of a letter is a bit passé," even though his intervention in the 2008 campaign to criticize the Conservatives for culture spending cuts had proven effective

Pallin's Pipeline

Sarah Pallin's American nativist politics ends when it comes to oil. The Alaskan Govenor is in the pocket of one of Canada's oldest and leading Pipeline companies; TransCanada Pipelines. But shhhh don't tell anyone. Her Drill Baby Drill rhetoric belies the fact that you can drill all you want in Alaska but the point is to get the oil and gas to a refinery. And Alaska for all its ground assets does not have refinering capacity, so that oil and gas has to get shipped south. And who will do the shipping? TransCanada Pipelines, tying Alaska into its Keystone pipeline project.

The controversial pipeline will ship bitumen from the Tarsands south to the Gulf Coast for refining. In Alberta, and in fact across Canada, the pipeline is controversial for several reasons, one is it runs through disputed Lubicon Cree land, and secondly it shows that we remain hewers of coal and drawers of oil, rather than having true energy independence by doing secondary and tertiary production; refining here. Unlike Alaska, Alberta has refineries, and refining capacity.But thanks to TransCanada's cozy relationship to the Stelmach regime, like its cozy relationship with Pallin, we and the Alaskans get screwed.

During the election Harper announced that if elected he would restrict exports of bitumen, the Stelmach regime remained uncharacteristically silent over the issue. Usually Ottawa intrusion into Alberta's energy patch would elicit a hue and cry of outrage with the usual rantings about the NEP. However Harpers move was to assure Americans that Canada has continues to view them as the primary preferred customer for our oil.

With the current fiscal meltdown most of the refining expansion planned for Upgrader Alley in Alberta are now on hold which gives carte blanche to TransCanada to ship our oil and jobs south . As Ross Perot once said; can you hear that giant sucking sound as Alberta and Alaska oil jobs go south?

As Ms. Palin takes to the road to campaign with Mr. McCain, invoking the pipeline as a major victory, some Alaska lawmakers who initially endorsed her plan now believe it was a mistake. State Senator Bert Stedman, a Republican who is co-chairman of the finance committee, said that in its contract with the chosen developer, TransCanada, the state bargained away too much leverage with little guarantee of success.

Of the five companies that eventually bid, Ms. Palin’s administration chose TransCanada Pipelines, which operates 36,500 miles of pipeline across North America. TransCanada had previously tried to negotiate a pipeline deal with the Murkowski administration, but was sidelined by the governor in favor of the big oil companies, some officials who were involved in the talks said. That contributed to the rift that led to the departures of Mr. Irwin, Ms. Rutherford and five others from the state Department of Natural Resources.
The proposal that TransCanada negotiated with the Murkowski administration was structured differently from the current one and had no provision for a $500 million state subsidy, said two people who reviewed it and who spoke on condition of anonymity because the proposal remains confidential.
Of the Palin aides familiar with TransCanada from those earlier negotiations, Ms. Rutherford had an unusually close connection. For 10 months in 2003, she was a partner in a consulting and lobbying firm whose clients included Foothills Pipe Lines Ltd., a subsidiary of TransCanada.
Ms. Rutherford said in an interview that after TransCanada submitted its pipeline proposal to the Palin administration, she and the governor never discussed whether her role on the team might be viewed as improper or give the appearance of a conflict of interest.
Ms. Rutherford, who said she had not lobbied for Foothills but had done research and analysis, stated that she was not one of the pipeline team members who recommended a developer to Ms. Palin. That was done by Mr. Irwin and Patrick S. Galvin, the commissioner of the Department of Revenue, she said.

TransCanada is already building the $5.2-billion Keystone pipeline, which will carry 590,000 barrels a day from Hardisty, Alta., to refinery hubs in Illinois and Oklahoma from 2009. The expansion will take an extra 500,000 barrels a day to refineries in Houston and Port Arthur, Tex.
As well as the confirmed supplies and the possible construction delay, TransCanada said it has increased its stake in Keystone and the expansion as its partner, ConocoPhillips Corp. of Houston, has reduced its share from 50 per cent to 20.1 per cent. TransCanada now has 79.9 per cent of the pipeline, although shippers will have an option to take a 15-per-cent stake.
ConocoPhillips spokesman Bill Graham said the company is still committed to Keystone, and will be a major shipper on the pipeline, but he wouldn't comment on why the company had reduced its interest.

Currently, Alberta exports 500,000 barrels of bitumen daily to the U.S., about 40 per cent of total production of the tar-like substance from the oilsands. That will rise to one million barrels a day by 2010 when two new pipelines, the Alberta Clipper and Keystone pipelines, take bitumen to Texas and Illinois respectively.
Bitumen must be upgraded into heavy oil before it can be sent to refineries to be made into gasoline and other fuels.
Stringham disputed the suggestion that oil companies are sending bitumen south for upgrading to avoid Canada's greenhouse gas emission standards, which come into effect in 2010.
Everyone expects the U.S will have some similar standards soon, he says.
Besides, the decision on where to build an upgrader for bitumen is based on economics, not the environment, says Stringham. In some ways, Alberta is a preferred place to build an upgrader, given the low taxes and stable political environment, though high labour costs are a problem these days.

But building bitumen upgraders isn't easy in the Edmonton region's upgrader alley.
Last month, the BA Heartland upgrader, partly completed near Fort Saskatchewan, was suddenly mothballed. The credit crisis in the U.S. was the major reason cited by the company for closing down the project at this time.
The very same day, however, ConocoPhillips and Calgary-based Encana began work in the U.S. on a $3.6-billion refinery retrofit to handle Alberta bitumen flowing to Illinois.

No wonder, then, that Harper's policy to keep the bitumen here was hailed as good news in the Fort Saskatchewan area where there are plans for a dozen upgraders. "Our group feels it's a very progressive move," said Neil Shelly, executive director of Alberta's Heartland Industrial area.
"It levels the playing field for us because we will be capturing carbon dioxide at the plants in this area, and the U.S. does not have those requirements that entail an additional cost." Gil McGowan, president of the Alberta Federation of Labour, agrees those upgrading jobs should stay in Canada.
But he doesn't hold out much hope that Harper's bitumen policy will actually reduce the flow of jobs or bitumen down the pipeline.
In fact, McGowan suggests that Harper is sending a reassuring message across the border that energy hungry America will remain Canada's preferred customer and that China, with its lower environmental standards, will be on the prohibited list.
Even if the Democrats win the U.S. election, they too will want a continental energy policy, as that's the only way to reduce U.S. dependence on Venezuelan and Middle East oil.
"He's sending a signal to Washington and Houston that if he is prime minister, Canada will continue the continental energy system," says McGowan "It's the worst kind of election promise. ... He's able to give the impression he was doing something to protect jobs, without taking concrete action.
"What this really does is tie the hands of Alberta producers from looking for other customers." Pipeline builder Enbridge Inc. is one of the few companies going after those new customers in China and Southeast Asia. It's the biggest shipper of bitumen to the U.S and is currently building a $4.2-billion pipeline to the Pacific Coast, dubbed the Northern Gateway, initially to serve China.

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Pipelines Are Safer

Then transporting oil by tanker. Three tanker spills in under a week, one in Ukraine, one in San Fransisco Bay and one in Hobart, Australia.

Long stretches of Russia's Black Sea coast face an ecological catastrophe, local authorities said on Monday, after a fierce storm broke up a tanker, disgorging hundreds of tons of oil on to the shore.

Emergency services crews are attending an accident in Hobart where a petrol tanker rolled late this morning. Fire fighters arrived at the scene just before midday to find the tanker leaking some of the 14,000 litres of diesel on board.

About 58,000 gallons of oil has spilled from a South Korea-bound container ship that ran into the San Francisco-Oakland Bay Bridge Wednesday in dense fog.

It's not a popular sentiment I know, but pipelines are safer. Safer than train or truck transport and certainly far safer than ocean tanker transportation.

Oil spill inevitable, islanders hear
Queen Charlotte Islands Observer, Canada - 24 Oct 2007
Both speakers said once a spill happens, it could take several days before response teams reach it. "There are only two tugs.to rescue a disabled tanker, ...

Compare the amount of tanker accidents that have occurred and the ecological damage to the ocean and shore line compared to the one recent pipeline accident.

Table 1: Number of spills over 7 tonnes

Year	7-700 tonnes	>700 tonnes
1970	6	29
1971	18	14
1972	48	27
1973	27	32
1974	89	28
1975	95	22
1976	67	26
1977	68	17
1978	58	23
1979	60	34
1980	52	13
1981	54	7
1982	45	4
1983	52	13
1984	25	8
1985	31	8
1986	27	7
1987	27	10
1988	11	10
1989	32	13
1990	51	14
1991	29	7
1992	31	10
1993	31	11
1994	26	9
1995	20	3
1996	20	3
1997	28	10
1998	25	5
1999	19	6
2000	19	4
2001	16	3
2002	12	3
2003	15	4
2004	16	5
2005	21	3
2006	14	4

While the BP pipeline break was irresponsible, it was a rare event.

Oil From Pipeline Breaks Enters a Wildlife Refuge

AP

Published: October 31, 1984

Workers set up portable dams today to stem flows from two broken pipelines that poured some 1,500 barrels of oil into a wildlife refuge and a lake.

One of the spills came from a line owned by the Mobil Pipeline Company and the other was from a pipeline belonging to Total Petroleum Corporation. A Mobil spokesman said the company believed the spills were under control. Other booms were placed to prevent the oil from spreading farther into Lake Texoma and the Tishomingo Wildlife Refuge near the Oklahoma- Texas border.

State officials said no dead fish or oil- coated birds had been reported.

Compared to the irresponsible use of old out dated sea going tankers that cross the globe. And we only hear about the spills that occur near shore lines.

US navy to stage oil spill exercise at Bahrain port

The BP pipeline accident could have been avoided if the "Green" oil company had actually bothered to maintain its pipeline properly. Which it didn't. But even then the amount of oil spilled pales in comparison to that of oil tankers. And the ecological damage was far easier to contain.

BP fined $20 million for Alaska oil spills

JEANNETTE J. LEE
The Associated Press

ANCHORAGE - BP America will pay $20 million and plead guilty to a misdemeanor violation of the federal Clean Water Act for a crude spill on Alaska's oil-rich North Slope, Justice Department officials said Thursday
The company's long-standing pattern of cost-cutting and mismanagement at Prudhoe Bay, the nation's largest oil field, was a major cause of the 200,000-gallon spill in March 2006, U.S. Attorney Nelson Cohen said in a news conference.

"The company failed to invest enough money, in time and people, to maintain the integrity of the pipeline," Cohen said. The spill was the largest ever in the North Slope fields, which border the Arctic Ocean.

The agreement was one of several struck between the London-based oil and gas giant and federal investigators in the resolution of probes across the U.S.

"These agreements are an admission that, in these instances, our operations failed to meet our own standards and the requirements of the law. For that, we apologize," BP America Chairman and President Bob Malone said in statement.

In Alaska, federal attorneys said the company has admitted its failure to adequately monitor and clean its transit pipelines despite the challenging operating conditions in the Arctic oil fields it co-owns with Exxon Mobil Corp. and ConocoPhillips. BP operates the fields on behalf of all the owners.

When compared to the amount of oil tanker accidents that have occurred pipelines are far safer for transporting oil and natural gas. And San Fransisco home of the latest spill which has huge refining operations is a good example.

"Human error factors" probably were involved in a ship crash and oil spill that killed nearly 400 birds in San Francisco Bay and prompted a federal criminal probe, the U.S. Coast Guard said Monday.

A spill of this nature always seems to conjure up images of the Exxon Valdez, the big tanker that ran aground in Alaska in 1989. ExxonMobil (NYSE: XOM) is involved in litigation concerning that incident to this day.

Spills can occur in a variety of ways. For instance, last year a BP (NYSE: BP)resulting in a spill and a shutdown for repairs.
pipeline serving the Prudhoe Bay field crumbled,

More bizarre was the February 2002 spill 17 miles southwest of the Golden Gate Bridge. That spill was attributed to the SS Jacob Luckenbach, which had sunk 50 years earlier, only to have its fuel begin seeping to the surface after half a century.

Here is a look at major oil spills in or around the San Francisco Bay Area.

— 2007: About 58,000 gallons spill into San Francisco Bay after a ship strikes into a tower on the San Francisco-Oakland Bay Bridge.

— 2004: More than 120,000 gallons spilled in Suisun Marsh from Kinder Morgan pipeline.

— 1996: 40,000 gallons spilled from a military vessel near Pier 70.

— 1988: 400,000 gallons spilled when Shell refinery drain line breaks.

— 1984: 1.5 million gallons spilled just outside the Golden Gate Bridge when an explosion damages a tanker ship.

— 1971: 840,000 gallons spilled when two Standard Oil tankers collided.

— 1937: 2.7 million gallons spilled when an oil tanker collided with a passenger ship

And what are the legal results of these spills? Well not what you think. The laws around clean up are not clear and governments are playing both catch up and catch the culprit. Despite the long history of tanker spills.

A revised rule that forces shipping companies to shoulder the cost of cleaning up pollution from maritime accidents, such as oil spills, in China's waters, is likely to take effect next year, if not sooner, a senior official with China Maritime Safety Administration (MSA) said Wednesday.

If the revised regulation is approved by the State Council, companies such as Sinopec, PetroChina and the China National Offshore Oil Corp (CNOOC) will be required to contribute to a special compensation and clean-up fund, Liu Gongcheng, executive director of China MSA, said.

Figures showed more than 90 percent of China's oil imports - 145 million tons last year - is transported by sea. Some 163,000 tankers of all sizes sailed into and out of China's ports last year, an average of 446 every day.

"The size of oil tankers is also getting bigger, up to 300,000 tons, which has added to the risk," Liu said. "If only 1 percent of the oil is spilled, we will be confronted with a catastrophe."

Oil spills can wreak havoc on sea life, fishing and tourism. They cost millions of yuan to clean up and even more in compensation and damages, he said.

The oil spill from the tanker Prestige, which sank off Spain in November 2002, leaked 77,000 tons of oil that caused several billion dollars worth of damage.

In the past year, there have been several oil spills in domestic seawaters that involved 500 to 600 tons of oil, but didn't cause serious pollution due to emergency response, Liu said.

EU court annuls ship pollution law on technicality

The European Union's top court struck down an EU law holding captains and shipowners criminally responsible for polluting the sea on Tuesday, saying the legislation had not been properly drafted.

The law was agreed in 2005, shortly after oil tanker spills damaged coastlines in France and Spain.

The legislation will now have to rewritten after the Luxembourg-based court said in a statement that national governments had ignored the executive European Commission during the legislative process.

Under the law, captains, owners or companies chartering ships could be prosecuted and fined heavily for major sea pollution.

It was introduced after the tanker Prestige spilled over 60,000 tonnes of oil off northwestern Spain in 2002. In a similar environmental catastrophe, the tanker Erika discharged about 20,000 of oil in 1999 off the French coast.

Puerto Rico Investigators Search for Oil Spill Culprit As Coast Cleanup Ends

Crews have completed a cleanup of an extensive oil spill that fouled rocky shoreline and mangrove thickets along Puerto Rico's southwest coast, but pollution investigators are still searching for the spill's cause.

Roughly 19,000 gallons of contaminated water have been siphoned from the Caribbean Sea since the spill slicked miles of coastline in late August, and 1,000 cubic yards of oily debris have been gathered by cleanup crews clad in protective suits and boots, the U.S. Coast Guard said Monday.

"We will continue to thoroughly investigate this incident and monitor the affected area in case any new recoverable oil is identified that needs to be cleaned up," said Capt. James E. Tunstall, commander of Coast Guard operations in the eastern Caribbean.

Marshland and mangroves in the western section of the town of La Parguera are still surrounded by a floating absorbent boom, but the protective barrier is expected to be removed before the end of the week.

"We're definitely happy they did such a good job cleaning the area up," said Angel Rovira, owner of a dive shop that ferries tourists and locals to a pristine coral reef several miles off the southwest coast of the U.S. Caribbean territory.

The nearly two-month effort to clean more than 30 miles of coastline from Guayanilla Bay to La Parguera cost more than $6 million.

Coast Guard investigators have indicated that New York-based General Maritime Corp., which owns and operates a fleet of crude oil tankers, is the likely source of the spill. A tanker owned by the company, the Genmar Progress, was anchored in the area when drifting bands of oil were first reported.

In late September, U.S. pollution investigators boarded the 1991-built tanker while it was docked in Port Arthur, Texas.

In a Monday phone interview, General Maritime spokesman Darrel Wilson said the company is cooperating fully with authorities, but stressed it has yet to be determined that its ship is definitely to blame.

A whistle-blower's courage and federal prosecutors in Alaska have given Washington state some extra protection against oil spills in local waters

And their actions have resulted in something that didn't happen after a mysterious spill blackened Vashon Island beaches three years ago: criminal accountability for ConocoPhillips, the nation's third-largest oil company.

None of the new requirements is the direct result of the October 2004 spill in Dalco Passage in southern Puget Sound, which was discovered in the middle of the night by a tugboat captain.

But instead, ConocoPhillips got tagged for a much smaller spill, in the middle of the Pacific Ocean in January 2004. After that spill, ship's officers conducted an elaborate cover-up that was caught on videotape.

Two and a half billion dollars isn't a lot of money if you're Exxon Mobil.

That's the amount the oil company may be ordered to pay as punishment for the Valdez oil spill in Alaska 18 years ago. The 11-million-gallon spill soiled 1,200 miles of pristine coastline and, according to some locals, permanently disrupted the fishing business in the area.

A case to make Exxon Mobil pay punitive damages has been snaking through the courts since 1994. Originally, the damages were set at $5 billion, and an appeals court later cut them to $2.5 billion.

Now, the U.S. Supreme Court will decide whether Exxon Mobil has to pay anything at all.

Regardless of how the court rules, the answer is the same: not really.

Even if the Supremes let stand the lower court decision and demand Exxon Mobil pay up immediately, the company would, in effect, pay nothing.

Exxon Mobil could pay most of the judgment from the interest it would have earned on the money during the time the case has been pending.

An Exxon Mobil spokesman said the company believes the punitive damages will be set aside, and therefore it hasn't set aside any money to pay the judgment.

At the end of last year, Exxon Mobil had a cash hoard of $28 billion. So it's not hurting for funds. But what if it had earmarked a $5 billion slice of those reserves to pay the Valdez damages when they were first awarded in 1994, just on the chance it might lose the case?

And then there is the idea of shipping Liquefied Natural Gas (LNG) instead of using a natural gas pipeline.

Safety Concerns Tie Up LNG Development

Fall River, Massachusetts, has long drawn its identity from the water. First it came from the textile trade, and lately it's because of opposition to one of the nation's first land-based liquefied natural gas, or LNG, terminals slated to be built in the coastal enclave of nearly 100,000 people.

Longtime mayor Ed Lambert, who left office on Friday, has led the opposition to an LNG terminal in the city's backyard. Nine thousand people live within one mile of the 73-acre industrial site along the Taunton River where Weaver's Cove Energy, a subsidiary of energy giant Hess, hopes to build the terminal.

"To put them in the middle of an urban neighborhood, simply to enhance the profit margin of the energy industry, is significantly wrong," Lambert told us when we surveyed the proposed plant site earlier this year. Houses begin a block away, many lying on dead end streets with no outlet in the direction away from the site.

"It truly is like needlessly painting a bulls-eye on a working class community," Lambert says.

The fear, in a post-9/11 world, stems from what might happen if an LNG tanker were attacked or even it suffered an accident, such as a collision at sea. According to a Government Accountability Office report issued earlier this year, all but one of 19 experts surveyed believe an LNG spill could "present hazards to the public."

The debate over LNG safety is increasing as clean-burning natural gas now accounts for almost 25 percent of all energy consumed in this country. In the past year, 95% of all new electricity generated in the U.S. came from natural gas, according to the Federal Energy Regulatory Commission, the agency which reviews all LNG proposals and green-lighted

So when folks oppose projects like the Mackenzie Valley pipeline and the Alaska Gas pipeline for 'ecological' reasons let's remember that pipeline breaks are far rarer and their ecological impact has been far less than the alternative; rusty outdated ocean going tankers.

At around 00:45 GMT on 01 December 2003, a rupture in the pipeline occurred at approximately 120 km south of Grande Prairie, Alberta. 14 hours later, another rupture and fire occurred 15 km downstream from the initial incident. According to TransCanada PipeLines, the breaks were immediately isolated, and any already escaped gas was allowed to burn off.

This is not to say that pipeline companies like TransCanada are any less jerks when it comes to the folks whose land they want to build on. They are after all Big Oil.

But for most Green activists the bottom line is that they would prefer the end of all reliance on gas and oil, period. Which of course is not going to happen any time soon since oil and gas fuels capitalism.

The victory of the Entente in the World War was in the last analysis a victory of the superior war technology of America. For the first time oil triumphed over coal for the heating of the submarines and ships, of the aircraft, motors, tanks, etc., was accomplished with oil and by a technology which had undergone especially high development in America and opposite which the German technology was backward. After the ending of the World War, the most pressing imperative for America, if it did not want to lose again the hegemony won over world economic domains, was to bring the oil production of the world into its hands in order to thus monopolise the guarantees of its ascendancy.

From the Bourgeois to the Proletarian Revolution by Otto Ruhle 1924

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Morons

"We are not morons" was the screaming front page headline in the Edmonton Journal yesterday

Alberta's royalty review panel fired back Wednesday at industry critics of its report, arguing its call to hike energy royalties by 20 per cent is reasonable by global standards and based on sound data provided by the oilpatch itself.

Since issuing its report to the Stelmach government last week, the panel led by former Al-Pac president Bill Hunter has been accused by some in the energy sector and investment community of basing its report's controversial conclusions on flawed math that doesn't reflect reality. Hunter and fellow panelists said the industry's arguments distort the real picture as they see it.

"We're not a bunch of morons, as is indicated by some of the folks who are fighting against us," Hunter said in a group interview with Journal columnists and reporters Wednesday.

Nope they aren't morons, but the guys in the Tired Old Tory government are as another report showed today.

The provincial government sat on a report for seven years that outlined massive failures in policing its $100-million-a-year farm fuel benefit program, before similar concerns were raised by Alberta’s auditor general in 2006.

Now it must explain how Albertans can be sure the almost $1-billion spent on the program in that time was used wisely, said Liberal critic Hugh MacDonald.

Auditor General Fred Dunn said last year the process “does not verify the information in application forms before issuing a certificate” for the program, which gives farmers a six-cents per litre deduction on diesel, and eliminates the tax on both diesel and gas the government would normally get.

“Nor does it have any other processes to ensure that only eligible individuals get certificates -- or to identify people who became ineligible,” Dunn wrote, adding that the “department has not completed a renewal process or requested confirmation of eligibility from registrants since 1997.”

But the government did produce an audit of the renewal process -- one year later, in 1998. And the 10-page document outlined identical concerns to the auditor’s in 2006, which themselves came three years after Dunn declared the program “high risk”.

Which is what the Royalty Review also said, that the Government lost $8 billion in royalties paid. It went somewhere but nobody knows where or if it was even collected.

It's a joy to watch capitalists tarred with the same brush as the left by Big Oil. Of course the facts back the Royalty Review board not the Petro Bullies.

In 2006, Alberta's top five energy firms alone earned more than $17 billion. That's twice the province's 2007 budget surplus, and eight times the $2-billion annual hike in royalty fees called for by a government-appointed review panel.

Drillers complain that their sector -- already hit by low natural gas prices and a surplus of rigs -- would be decimated if the report is implemented.

But panel members stress that 82 per cent of conventional natural gas wells, and 57 per cent of conventional oil wells, would actually see royalty rates decline, based on 2006 prices.

Report finds Alberta still a bargain, even with higher royalties

Higher oil sands royalties could cut 13 per cent of the value from current and planned projects around Fort McMurray, but Alberta would remain one of the cheaper places to do business in the world even with more money going to government, according to research by British energy consultancy Wood Mackenzie.

Of 100 fiscal regimes around the world analyzed by Wood Mackenzie, money paid to government in the oil sands is ranked as the 11th-most generous system for industry. Should higher royalties and taxes be instituted, the ranking would fall to 44th, still in the top half.

Canada’s oil nationalism

Sudden change in fiscal regimes is bad for planning. Yet it is hardly surprising that a resource-rich government wants a bigger slice of the pie when oil is topping $80 a barrel. At an estimated 64 per cent share of the value of oil sands projects, Alberta’s “take” would remain moderate compared with the likes of Venezuela and Russia. And the Canadians are at least being upfront about simply wanting a bigger cheque, rather than hiding behind professed environmental concerns.

The biggest impact would come from an increase in the royalty on production after initial investment has been recovered, hitting operators with projects already up and running. The value of projects still in the investment phase should suffer less, as the affected cash flows are further in the future. Rather cynically, the proposals largely preserve the attraction for new developers, while milking existing producers a little more – after all, where will the latter go?

The silver lining is that this measure could cool a sector suffering rampant cost inflation – and cut speculative valuations on potential takeover targets – by making potential new entrants think twice. Moreover, if the pace of development really does slow, it will be time to upgrade long-term oil price projections in those project models.

Gee I said that here.

And a comment in Ken Chapman's blog also points out the simple empirical fact that ;

In "Alberta's Royalty Review and the Law of Grandparenting" IAPR Fellow Nigel Bankes, a Professor in the Faculty of Law, reviews the law on this question and concludes that the royalty review panel has proposed nothing that violates existing contracts or is otherwise inappropriate or unusual.

Big Oil is painting all of us as morons, the real morons of course run the Government of Alberta on their behalf.

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

SEE:

Stelmach Sells Out

More Shills For Big Oil

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Stelmach Sells Out

Uh oh prepare for a sell out by Prince Ed. He has appointed Ron Stevens to oversee reactions to the Royalty Report , the most negative coming form the self interested oil tycoons, and he announced in Toronto that any decision will be in favour of big oil.

"I've promised Albertans a royalty regime that is fair to the companies who are investing billions of dollars to develop Alberta's resources," Stelmach said, according to a text copy of his speech.

Ron is also Minister responsible for the Oil Sands Secretariat, so the deal is sealed.

Rick Bell commenting in the Calgary Sun wonders too if Prince Eddie will take on the dragon of big oil, and has his doubts.

Now, Premier Ed has this panel report. Those in Big Oil's culture of entitlement who cry catastrophe but still strut the flash-the-cash attitude downtown won't surrender a copper, reminding the Tories who wags the dog.

Big Oil wring their well-manicured pinkies in front of Deputy Premier Ron Stevens, a Calgary lawyer who hears more blues than in the old days at the King Eddy.

Energy Minister Mel Knight, the Spymaster, so named because of the Energy and Utilities Board's hiring of private eyes to spy on citizens opposing a power line, has his deep thinkers give the panel report a look-see.

Those numbskulls couldn't do the math on the existing royalties. Beautiful.

NDP Leader Brian Mason likens the move to handing over the keys of the new locomotive to those who have been asleep at the wheel.

No matter. It comes down to Ed. Does he have the guts to be the leader for all Albertans or is he just the latest dude along for the ride willing to risk a train wreck?

Since Ed wants to hear from all Albertans make sure he hears from you.

SEE:

More Shills For Big Oil

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King Ralph Shills For Big Oil

Well that didn't take long. King Ralph went from Premier to Oil Lobbyist in a blink of an eye. Faster than Lougheed and even Getty, his old big oil nemesis.

Klein slams Alberta royalty recommendation

And luckily he did it in Alberta, where weak tea lobbyist legislation was only just passed this spring. So it doesn't affect him. And he is doing it as they say; pro bono. Yep the Big Guy is out defending the Oil lobby and his own political decisions when it comes to selling out Albertans to the Calgary Oil Lobby.

Remember Ken Kowalski's 1994 appointment to chair the Alberta Energy and Utilities Board? It stirred up so much oilpatch opposition that then premier Ralph Klein had to rescind the post he gave the former deputy premier who'd been freshly bounced from cabinet.

Governments in Alberta and elsewhere have traditionally rewarded loyal supporters with plum appointments, often over the hue and cry of opposition parties and the general public.

The Kowalski appointment enraged a sector with considerably more clout: Big Oil. When it said the position required somebody more qualified and less political, Klein was forced to respond.

For a decade Albertans have been ripped off of profits from our resources, shoring up the oil industry with subsidies directly and indirectly, the latter being our penny on the dollar royalty rate for developing the tarsands. The result was the famous neo-con Klein Revolution, for which he annually collected gold medals from the Fraser Institute, which then went on to hire him once he retired as premier.

Should we be surprised he defends his regimes sell out of Alberta, native and Canadian resources? Of course not. He was after all the Premier the Party of Calgary picked. The Party of Calgary has become the bugaboo of Edmonton Sun columnist Neil Waugh, who describes them as the oil aristocracy.

Which, in a sentence, is Big Oil's strategy as the Stelmach Tories attempt to claw back $2 billion a year in energy revenues - largely from Calgary's oilsands aristocrats,who have been awarding themselves multimillion-dollar annual salaries while the owners of the resource get a penny on the dollar payout until the massive capital costs are recovered.

While Rick Bell his counterpart at the Calgary Sun gleefully pulls Big Oils beard in his column. Reminding us from his window view of Petro Plaza,

The outrage from the highest offices in the tallest towers is so loud it is being heard all over the provincial government.

Tory MLAs are being reminded of who runs the show, or who think they run the show, or who did the show until now.

On Tuesday, mere minutes after a report called for the province to hike oil and gas royalties and get a fair share for the resource Albertans own, the oil industry sent the provincial powers a simple one word e-mail.

It read: "Disaster."

Interesting the oilpatch isn't commenting on the fact, on natural gas alone, Albertans are out about $6 billion. That's $6 billion that could have gone to affordable housing, schools, health facilities, other public building projects, a tax break, savings to the Heritage Fund and on and on.

The reality is that the Hunt Report outright says that Albertans have been shortchanged for a decade when it comes to oil royalties.

Royalty review calls for massive jump in oilsands payouts

A panel reviewing the fairness of Alberta's royalty take from oil and gas development said today Albertans are not collecting a fair share and recommended a massive jump in royalties paid by oilsands projects.

The six-member panel headed by Bill Hunter recommended that the government's overall take from oilsands projects be raised to 64%, from 49% today. The panel recommends leaving the 1% pre-payout royalty unchanged, but that the post-pay out royalty be increased to 33%, from 25%.

"Albertans do not receive their fair share from energy development and they have not, in fact, been receiving their fair share for quite some time," Mr. Hunter said in a letter to Alberta Finance Minister Lyle Oberg. "Royalty rates and formulas have not kept pace with changes in the resource base, world energy markets and conditions in other energy rich jurisdictions. Albertans own the resource."

Billions of dollars have been pocketed by the private interests while Ralph declared debt and deficit hysteria, cut jobs, delayed infrastructure, destroyed the health care system by laying off nurses and reducing graduates for their jobs and those of doctors, contracting out services, etc. He told us we were broke, and had to tighten our belts, the debt and deficit crisis was described by King Ralph as the need to not renovate our house, but to demolish and rebuild.

One of his would be heir apparent's is our current provincial treasurer Lyle Oberg, a true believer, who says dark days are upon us. Of course he too opposes asking for what belongs to the people, a just royalty for our resources.

In that wonderfully twisted world of social conservatism the politics of giving unto Caesar has become the economics of giving unto Big Oil. The logic goes like this, if it weren't for big oil the PC party would be nothing, so it does it all it can for Big Oil. Now like all One Party States this logic is then transformed into what is good for Big Oil is good for Alberta.

The irony is that this royalty scam was not even created by Klein. Rather it was created after the collapse of the global oil market in 1984 by then Petro Premier Don Getty. Don being the oil boys insider for the moment, Klein was able to scape goat him for all of Alberta's economic problems which were a result of the market melt down, the recession of the eighties. So when the momentary debt and deficit crunch came world wide, Klein was ready to step in. Rather than end the tax and royalty holiday for Big Oil, he continued it and turned on the people of Alberta to pay for the deficit.

Deficits are not permanent, they are a year by year accounting phenomena. A debt on the other hand exists and transfers from year to year. A debt is what you owe someone else. You cannot have a debt to yourself. But in the wonderful Wizard of Oz Topsy turvy world of neo-con logic, government financed and owned infrastructure was seen as a business cost rather than as an asset.

The wailing and gnashing of teeth from the industry lobbyists, including Klein, and those in the investment business is predictable if somewhat disingenuous. After all this is Alberta, not Saskatchewan or Manitoba. This is a Tory run one party state at the beck and call of the Petroleum Club in Calgary. And the panel doing the review well it was stacked with capitalists.

The report was written by a six-member, blue-ribbon panel named by the government. The members included two economics professors, a chief economist for an Calgary-based energy research firm, a businessman, a forestry executive and a former senior executive with an oil company.

If anything, the panel was seen as too pro-business. In fact, the appointment of Sam Spanglet to the panel caused a stir back in February when news broke that the former oil executive still had "a couple of million" dollars worth of stock options with Shell Canada.

As if to bolster the opposition's accusation, the Canadian Association of Petroleum Producers was reportedly pleased with the panel's members and their credibility.

It seemed just about everyone was predicting the panel would deliver an industry-friendly conclusion.

One of the funniest comments comes from an one of those dime a dozen investment newsletters;

"Do they really wish to kill this golden goose with one fell swing of the tax axe?" said economist Dennis Gartman, editor of the Gartman Letter, an influential investment newsletter based in Virginia, who was "shedding tears" about Alberta going "socialist" and wondering whether the provincial government has "gone mad."

Socialist, well gee where has he been. Let's see Alberta is dominated by one party, a party that has been in power so long it naturally thinks it is the government. One that has subsidized the oil industry at the cost of the owners fair share. That spells socialism to me....well state capitalism actually, but for the rabid right they are the same. As ex- King Ralph pointed out;

"It was a regime created by industry and government. Those kinds of rules don't change on a whim. Companies are nervous."

And then there are those who, like our Treasurer Lyle Oberg, are doom and gloom proponents who claim that the sky is falling and once again are declaring impending debt and deficits. The reality is that it was the royalty holiday that Getty gave the industry that led to the deficit crisis of 93-95 that gave Klein an excuse to implement the Fraser Institutes neo-con revolution in Alberta.

On page 23, for example, the report points out "The panel was constantly told by companies and by energy industry trade groups that Alberta ranked very high in Government Take." However, those companies and groups were citing from an outdated 1997 report by an international expert. The review panel commissioned the same international expert who compiled new data and concluded "the very opposite is now unequivocally true."

In this case its also the oil and gas industries who are claiming a crisis in their industry and again have their hands out asking for more state subsidies.

Yet, because of public expectations, it's unlikely the panel will recommend what's needed at this time: a reduction in royalties to salvage what's left of this vital part of the sector. Indeed, there are indications the slump is not just another cycle, but a structural change that will require new thinking from everyone -- industry, government and labour -- to reduce costs so it can compete with the cheap imports of liquefied natural gas invading the U.S. market, once dominated by Alberta producers.

Oh you didn't know there was a slump in the oil and gas business? It didn't appear that there was according to the markets this week.

Oil prices hit record highs

Oil dips, but gas prices set to rise

Taking Cues From Fed, Speculators Bid Up Oil

More oil firms hike fuel prices

Crude oil sails over $80 buoyed by bullish mkt

Oil near new high amid tight supplies

Well there is. It's called peak oil and the industry is panicking over its potential impact. Alberta's conventional oil and gas reserves will peak in 2020 and begin to decline, as will provincial revenues. And so the oil business in Alberta is focused on developing the tarsands output, regardless of costs to the public or the environment, by then.

A litany of Canadian investment banks also pulled no punches in their assessment of the proposals in the Our Fair Share report.

FirstEnergy Capital Corp. warned the proposed measures, in a report entitled "Albertastan? Misguided Intentions and the Fair Share Option," would be "negative if adopted, and will slow down the development of oilsands."

Well frankly that's a good thing since the boom is artificial and has caused untold problems in Alberta. We need a planned economy from our 'socialist' government, since the oil sands development has gotten out of control.

Since Prince Eddies government refuses to adopt such a plan, then if the royalty regime forces a slow down all the better. Alberta is an overheated economy. One that is sure to bust big, because no boom is sustainable. And woe betide Albertans if that happens. The boom of the seventies and early eighties was followed by a quarter century recession in the province. One that was used as an excuse to rack up surpluses at the expense of public services and infrastructure expenditures.

Stelmach says he'd stand up to big oil

Be still my beating heart. Anyone who thinks Farmer Ed is going to accept this report in whole, has missed the fact he has not accepted the recommendations of any public reports that he called for upon his appointment as Alberta's CEO. He has adopted the minimum to make him look good sometimes that has meant rejecting the public reports and making a big deal out of the fact he asked for them.

We need only remember the Alberta Housing Report, which called for rent controls. He rejected this outright. He has rejected the public commission calling for controlled growth and a slow down in oil sands development as well.

A columnist at the U of C student newspaper the Gauntlet sums it up well.

Furthermore, even if the provincial government does go for the whole 20 per cent increase, Alberta’s royalty rates will still be some of the lowest in the world. And don’t try to tell me that all the oil companies will uproot and flee the country the second people start talking about increasing royalties. As a fellow editor commented to me recently, “They’re in the oil business. They’ll go where the oil is.” The oil companies have invested too much money and stand to make far too much money for them to vanish in a cloud of carbon monoxide like the conservatives are arguing.

Anybody who has studied the provincial Conservatives in even the shallowest capacity knows that Premier Ed “Steady Eddy” Stelmach will likely not raise royalties at all come Oct. when he makes the decision. If royalties are increased, it will likely be by just enough for Stelmach to seem like a populist without putting even the slightest dent in Big Oil’s beer budget. This isn’t necessarily is bad thing; the quality of life in Alberta will continue to improve at the same rate it always has if nothing is done. There’s no immediate negative consequence in deferring to the oil companies on this one, and that’s likely why nothing will be done: nobody wants to rock the boat. However, it’s worth considering the possibilities of even a slight increase.

And those who are in the known when it comes to economics agree. Big Oil will stomp their feet and wail but all is for naught. They will go where the oil is and if they don't well there are the Chinese, and Japanese, and....

Alberta premier walks into lion‘s den with business leaders over royalty review

Many of the business leaders attending the event said whether Stelmach chooses in the coming weeks to adopt the report‘s recommendations or not will be his most important decision, not just for now but for generations to come.

“My view is that the province should just out of hand reject this report because ... the decisions that they made are totally out of touch with the economy and what‘s happening around the world right now,‘‘ said Doug Mitchell, co-chairman of the forum.

“I don‘t see any credibility whatsoever in the report.‘‘

But one energy specialist said regardless of what Stelmach decides, the oilsands are too rich and vast for industry to ignore.

Ken Moors, a managing partner of Risk Management Associates in Pittsburgh, Pa., said he has brokered royalty deals around the globe and he believes Stelmach has been smart to make this dispute a public one.

“This is a rare opportunity for a democracy to do things in the open,‘‘ he said.

“But you must remember that every other time these royalty situations have been advanced in other countries, they‘ve been advanced in a market in which the expectation was that supply was going down. This is the only example I‘ve ever seen where these are being introduced in a market where the supply is bound to go up.‘‘

He said the province will still be very competitive with other countries.

"It is not going to take place . . . this is the only major supply side push left in the international oil market, so people either invest here or they see their profit margins dwindling in the future -- there is no other alternative," he said.

That is rich, There Is No Alternative. TINA. The famous neo-con excuse for selling off government services to embrace the Market. And now the shoe is on the other foot for Big Oil. TINA. LOL.

Amongst the sturm and drang of capitalist outrage in columns in the National and Financial Post comes a whiff of wisdom if not prudent observation.

Royalty review just good business

Diane Francis, Financial Post

Published: Saturday, September 22, 2007

It's important to note that what is being discussed is not taxation but the royalty paid to Albertans who own the lion's share of subsurface mineral rights in the province. And they are not getting as much revenue from their resources as competing jurisdictions are, according to the report. Industry spokesmen dispute the numbers and say Alberta's take is already high enough, and any higher will drive away investment.

For instance, conventional oil and gas royalties and taxes in the U.S. average 67% while they are 50% in Alberta, said the report.

Non-conventional oil production -- offshore and heavy oil -- is another interesting story. Heavy oil royalties in Cold Lake are 60% compared with Nor-way's offshore royalties of 76%, California's heavy-oil royalties (and taxes) of 67.5% and Venezuela's 72%.

To me, both the markets and media have been hysterical about nothing. Stelmach is not some fiscal confiscator. He's the CEO of the most valuable jurisdiction in the Western hemisphere and his review of royalties is simply prudent business practice.

Just like Danny Williams is doing in Newfoundland except in order to get his folks the best deal he didn't sell the goose, just a part of the golden egg. Funny thing the same folks whining over the Alberta Royalty report said this about Danny's provincial version of Petro-Can;

Paul Barnes, the St. John's-based spokesman for the Canadian Association of Petroleum Producers, said state equity stakes are common throughout the world beyond North America and Europe. He said his members are prepared to negotiate exact figures for specific deals. "It's not overly concerning to our members that equity participation is on the table here because we experience it on worldwide basis."

Gee you don't hear that from the CAPP when it comes to Alberta's Royalty Revue.

"At first blush," gulped Canadian Association of Petroleum Producers spokesman Greg "Sky is Falling" Stringham, "this is far worse than anticipated."

So what is all the fuss about, why the chicken little exercise in outrage? What does this dastardly commie socialist pinko report say. Well it is damning of years of incompetence by an entrenched and debouched Tory party of Calgary Oil insiders.

A tired old party that instead of collecting what is owed to Albertans by Big Oil for the past decade, forget just the last few years of booming oil prices, gave them a royalty holiday paid for by Albertans. We paid in increased user fees, privatization, contracting out, wage freezes in the public sector, caps on AISH payments and claw backs,kicking the poor off welfare, selling off the ALCB at fire sale prices, systemic mistreatment of seniors in seniors homes, the Health Care premium which is a tax grab, failure to invest in infrastructure, firing of nurses and doctors, capping of nursing and doctor graduates in Alberta universities, not only closing but blowing up hospitals, lack of vocational and technical education that has led to current labour shortages, etc. etc.

The government makes more money off gambling then it does off either royalties or taxes on conventional oil and gas and the tarsands.

And no matter what Stelmach does, he cannot make up for being part of a government that at best was asleep at the wheel for two decades, at worst was implementing harsh cuts and reconstructing the state according to a neo-con agenda that was never for the benefit of the people of Alberta but to please the Fraser Institute and its pals.

Stelmach will never, ever, ask for the billions Big Oil owes the people of Alberta who had to pay for Ralph Klein's renovation of the province for their and the Fraser Institutes benefit.

The Conservative regime has forgotten that natural resources belong to Albertans and not developers, says the report from the royalty review panel appointed by the same government.

And the Alberta Energy ministry is bracing for another unsparing probe next month of how it handles royalties from Auditor General Fred Dunn.

His office has chided the government in past years for being unable to effectively track what companies owe in royalties, and suggested the problem was costing hundreds of millions of dollars in royalty losses.

But the royalty review panel took the criticisms much further, recommending a new oversight body and far better reporting to the public.

"During our review we discovered an absence of accountability from the government to Albertans, the owners of resources," panel chairman Bill Hunter told reporters this week. "We encountered significant difficulty in accessing information -- to have even simple questions answered."

"How the administration or public leaders make informed decisions in this vital arena is an open question," says the review report, made public Tuesday.

"In the case of Alberta's multibillion-dollar energy reserves, seen as an enterprise, the onus on government to inform the public should actually be orders of magnitude higher," the report said. "Stated politely, this standard of disclosure is not presently being met.

"The panel is of the opinion that the government has not built up sufficient expertise and capacity to administer and manage this complexity."

It also identified a specific problem of missing money, or "what preliminarily seems like a pattern of material deferral of payments that is not in the interests of Albertans."

Once again the real Alberta Deficit is revealed, the democratic deficit. So the next time some Alberta Conservative MLA or MP, they are after all joined at the hip, talks about accountability, transparency, honest government, usually pointing fingers at Liberals in Ottawa, just ask them if they know where the missing billions from Big Oil are squirreled away.


Read it for yourself.

Royalty Review Panel final report

SEE:

Transparency Alberta Style

Closing The Barn Door

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