Observations on the Royalty Review Panel Open House

In the following I will share the observations of a man who attended last night’s Royalty Review Panel Open House in Calgary, originally posted on Instaface or Facegram or whatever it’s called. This man is an entrepreneur in the Alberta oil industry, so it seems reasonable that he understands many of the underlying issues. His reporting rings true to me and it should deeply unsettle not just Albertans, but also the other Canadians who gobble up the transfer payments out of Alberta:

Well I went ahead and attended the Royalty Review Panel Open House in Calgary last evening to see what they had to say. They had lots of stand up displays with hundreds of factoids about supply, world prices, reserves and a whole bunch of other information most of us Albertans have known about for decades. Interestingly enough they had whiteboards for attendees to write comments, Trevor Marr took pictures and the attendees were hammering the government hard on the many points you’ve already posted, read, liked and shared on these pages.

I spoke and asked questions about the risk of engaging in a review at a time when prices are low and royalty revenues are already in full collapse. The Al Gore trained political hack, ATB CEO Dave Mowat did confirm that the government would be lucky to collect $3 Billion this year, down from $9 Billion last year. He couldn’t answer why if we were at $13 Billion prior to the last review and it contributed to a drop to $9B since and were now down at less than $3B, what good could possibly come from throwing two plus years of uncertainty into the mix now? He kept referring to how they were sure that they could OPTIMIZE the royalty rates. But no, the full report wouldn’t be shared with Albertans as a large portion of their process was so complicated it could only be done by 3 separate expert non public panels that they are hiring to work for a whole month. But the end result would be the best Royalty Rate system ever done and the OPTIMIZED recommendations would be provided to the NDP government by December 31st, 2015. He also said that since oil would be phased out over the next 20-30 years, it can no longer be viewed as a finite resource since we have more than will ever be able to be sold! He said the inability to get to markets wasn’t relevant to the rate structure! He also said if our oil wasn’t competitive in the world markets not having pipelines to those possible clients didn’t matter. He said it wasn’t their concern if other taxations such as corporate tax rate increases or carbon tax burdens were put on our oil and gas industry as they were only mandated to recommend a royalty rate structure that was based upon 4 core principles that could guide all the future rate reviews. He suggested that every two years or so they might want to adjust rates! He admitted that the $65 Billion in annual investment by the oil and gas industry was dependent upon both pricing and royalty competitiveness. He wouldn’t say how much lower the investment is this year nor how much investment might be withheld due to the not knowing what the rates are going to be. He couldn’t answer as to how long it might take the NDP government to implement their recommendations or even if they would.

I came away convinced that the whole process is a traveling Gong Show run by ideologues who are so enamored with their own intelligence that they actually believe that they can squeeze more revenue out of the resources that we own by performing a superb OPTIMIZATION of the rates. They have no concept of RISK. Dave Mowat declared that the USA is no longer a trusted customer, that they have become our biggest competitor and since they produce so much oil relative to our miniscule output, we cannot compete. I also spoke with Peter Tertzakian from the panel who accused the PC’s of not collecting enough over the past decades. He also had absolutely no concern that the revenues had fallen due to the low prices, he expressed a concern that Albertans weren’t getting enough revenue from the oil being sold with no concern that the O&G industry were operating at a loss as is!

In other words, much like Rachel’s NDP government, nobody on this Royalty Review Panel are prepared to Stand Up For Alberta! They do not understand risk management, product promotion, stability needs of large long term investment, spinoff benefits from capital investment, incentivization potential, access to tidewater ports and human cost impacts from reduced employment opportunities. We must redouble our efforts to wake them up. I got under their skin, Mowat tried to label me as smug but apologized when I called him out for attempting to assign a negative connotation on a brief facial expression I might have had while listening to another speaker grill him. Although someone in the back did holler that I should be the next Energy Minister. 🙂

Let me call attention to a few of the most startling comments here.

[Mowat] also said that since oil would be phased out over the next 20-30 years, it can no longer be viewed as a finite resource since we have more than will ever be able to be sold!

WHAT.

Dave Mowat declared that the USA is no longer a trusted customer, that they have become our biggest competitor and since they produce so much oil relative to our miniscule output, we cannot compete.

WHAT.

I also spoke with Peter Tertzakian from the panel who accused the PC’s of not collecting enough over the past decades. He also had absolutely no concern that the revenues had fallen due to the low prices, he expressed a concern that Albertans weren’t getting enough revenue from the oil being sold with no concern that the O&G industry were operating at a loss as is!

WHAT.

We shouldn’t be surprised by foolishness coming out of a Royalty Review Panel that is chaired by Al Gore fanboy Dave Mowat, but this is actually worse than I expected. If such considerations are guiding the panel’s recommendations, Alberta is in a lot of trouble.

The entire royalty review is based on asinine premises as demonstrated above along with the laughable pretense of caring what the public has to say.

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Alberta Floods 2013: Zero Connection to “Climate Change”

(Updated! See below)

Various manipulators with socialistic agendas have emerged in the aftermath of the epic Alberta floods to make unscientific declarations about how these floods were caused by “climate change.”

What kind of climate change? Probably global warming, but they don’t actually say so. Global warming ended about 17 years ago.

Global warming propaganda suffered a devastating blow in November 2009 when hackers released emails from the UK’s Climate Research Unit. These emails revealed the depths of deception on the global warming issue. These emails turned the subsequent  Copenhagen meeting on global warming into a big joke and the movement has never recovered. Now propagandists rely on the phrase “climate change” to try and deflect attention from the fact that there is basically no evidence for global warming.

Back in 1975, scientists blamed heavy rain and flooding on global cooling. So who knows?

In any case, it is unlikely that the epic Alberta floods have any connection whatsoever to “climate change”. Downtown Calgary is built right between two rivers — we’re lucky this kind of thing doesn’t happen more often.

Evidence suggests that it used to happen more often. Here are some historical cases of extreme Calgary flooding:

CALGARY (June 1897) Bow River rises about five metres turning downtown into a lake, washing out bridges, short-circuiting electricity and cutting Canadian Pacific’s line to Vancouver.

CALGARY (June 1915) The Bow washes away Centre Street Bridge, nearly drowning two city officials. Sheep Creek floods Okotoks and cuts gas mains, leaving Calgarians without cooking fuel.

CALGARY (June 1923) The Elbow River breaks the 1915 record by 20 centimetres when it rises to 2.9 metres. The Bow River, though it rises 1.5 metres above normal, is still about .6 metres under the 1915 record height.

CALGARY (June 1929) Bow, Elbow and Highwood rivers overflow to submerge High River as well as southwest and northwest city districts under a metre of muddy water. It takes a heavy toll on zoo animals.

CALGARY (June 1932) On June 1, 1932, Calgary receives 79.2 mm over a 24-hour period, just .6 mm less than the average rainfall for the whole month. The empty reservoir of the recently completed Glenmore Dam prevents major damage.

It might seem obvious, but High River’s name didn’t come from nowhere:

HIGH RIVER (May 1942) The town lies under two metres of water after rains swell the Highwood River, forcing evacuation of homes.

And here is a picture of the 1932 Calgary flood. Looks a bit familiar, doesn’t it (note the water level relative to the Centre Street bridge)?

flood

UPDATE: A crushing blow to the climate change propagandists: We are informed by the Weather Network that before the 2013 flood, the eight worst recorded floods in Alberta history occurred before 1933. In 1879 and 1897, the floods were about 35% worse.

floods 

Read more at the Calgary Herald

Alberta Floods 2013: Government’s Absurd Water Usage Restrictions

Don’t wash wash your cars… unless you go to a commercial car wash.

• Limit toilet flushing.
• Limit showers to five minutes or less and keep baths shallow.
• Hold off on doing laundry.
• Only use your dishwasher if absolutely necessary and you have a full load.
• Turn off taps when brushing teeth or shaving.
Don’t wash your vehicle.

Effective immediately and until further notice, the use of tap water outdoors is suspended….

There are exceptions to the Water Utility Bylaw. They include:
• Washing outdoor surfaces for health and safety reasons for childcare facilities, food and beverage establishments and kennel and animal care facilities.
• Washing of vehicles to follow health and safety regulations.
• Watering of plants, shrubs and trees offered for sale.
Businesses that have a license to operate exterior window washing services and car washes.

— Read more at Calgary City News Blog

Ron Paul in Calgary

Last Friday, I attended the Ron Paul speech at the “Making Alberta Safe for Capitalism” summit.  This was at the Westin Ballroom in downtown Calgary. I was among approximately 300 attendees, which included financial professionals, publishers, IT nerds, engineers, students, neocons, and more.

I would like to note how this attracted virtually NO media attention. I do not think there is any “conspiracy” here — rather, it is simply due to Ralph Klein’s memorial service being held at the same time. We all know how the media loves to fill its time with the glorification dead politicians whenever the opportunity presents itself. This week, they’ve got Thatcher.

Besides, Ron Paul’s ideas make Canadians uncomfortable. Most people don’t want to talk about such things.

Ron Paul’s speech was basically what you would expect if you’ve been following him for the last few years. I’ve been watching Ron Paul’s political career since 1998, so I was very familiar with all the themes: personal responsibility, free markets, small government, anti-war, and anti-central banking. Still, it was great to pay respects to someone who is more than just an honorable statesman (a contradiction in terms when applied to anyone else), but a man whose efforts have done more for the liberty movement than anyone else in the modern era.

Having retired from politics, this was Ron Paul without any filter that might have previously been imposed by the realities of being in political office. Yet since his message has always been fundamentally radical, there was no difference with post-politics Ron Paul. The message is just as unfavorable to economic, social, and imperial intervention as ever.

At various points throughout the speech, I would look around to gauge the response to certain statements. How delightful to see various attending neocons squirm uneasily when Paul declared there should be no income tax. Some folks scowled at the suggestion to replace government welfare entirely with private charity. Otherwise, the ideas of less spending, less tax, less regulation, and more civil liberties were received favorably. Paul age and manner makes is a kind, wise grandfatherly figure — part of his great success is due to his ability to convey radical arguments in favor of liberty while making them seem completely non-controversial.

The biggest opportunity that was missed in Dr Paul’s speech was HEALTHCARE. If there is a sacred cow in Canadian politics, it’s definitely government healthcare. Without a doubt, government healthcare is a disaster, and Canadians need to learn why it will always be awful regardless of the huge piles of money thrown at it. Unfortunately, healthcare was not covered at all in Dr Paul’s remarks. Too bad. Huge missed opportunity, I think.

He is a medical doctor and an economist who can speak with authority on the failings of public healthcare. He is also old enough to speak about American healthcare system before the government became heavily involved. Before Medicaid, Medicare, the HMO Act of ’73, and so on, there was relatively little government intervention with the provision of healthcare. Basic medical services were cheap and plentiful, and a greater portion of the population had health insurance compared with now. The audience would have greatly benefited from hearing his insights on this subject. He has effectively explained the necessity of free markets in medical care — it is a message Canadians desperately need to hear from somewhere. Virtually no one will touch the issue of public healthcare in this country. We will all be worse off as long as this condition persists.

I would have also liked to hear more war-related remarks. Essentially, anything that applies to the US wasting lives and money on Afghanistan applies to Canada as well. Paul spoke about Iraq more than Afghanistan — which is fine in and of itself, but Canada was not seriously involved in Iraq. Our participation in Afghanistan is another story. Sadly, Afghanistan is an issue that people barely seem to care much about. If they do, it’s because they are dumb enough to think we have Canadian forces there “fighting for our freedom.” Yuck. The lack of interest is even more critical now, because Obama has declared he is “bringing the troops home” in 2014. This is typical government strategy: declare “victory!” and suddenly no one cares anymore. Just like Iraq, where there was never any “victory”, and as I write this the country continues tearing itself apart.

Ron Paul’s speech included a few “fanservice” parts for the Calgarian audience:

He said, “Ralph Klein sounds like a guy I might have liked.” Fair enough, given the memorial was that day, and Klein actually did cut spending at one point.  So that’s cool, whether or not Klein was a principled friend of liberty.

He also gave his support to the Keystone XL — with the important qualification that one can get the permission of property owners, the government should not stand in the way of pipeline construction. This is an rather critical proviso, because in reality pipeline construction does involve government takings/expropriations. Remember: in Canada, the Crown owns all the land as a matter of law.

Anyone who attended this event specifically for Ron Paul could be described as “cutting-edge.” Canadians are not generally ready for the radical Paulian message. For many Americans, there is the emotional connection to ideas of independence, revolution and decentralization, even these are not embraced in practice. The Paulian message can get its hooks in that. For Canadians, the state is endlessly glorified in subtle and not-so-subtle ways. There is no element within our culture that reinforces skepticism about state power. The closest thing to this is Albertans’ memories of the NEP, but that is a regional sentiment and it is being gradually overwhelmed with the pleas for more government.

I hope that the mere fact that Ron Paul has visited Canada to give pro-capitalism speeches indicates that there is a growing audience for the message of liberty in this country. Just as the 20th century demonstrated communism was a lie, the 21st century will show us that democracy is a lie. Democracy’s death throes will be earth-shattering. Liberty’s natural elite must spread and shine the light through dark times, so that a better age may yet emerge.

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