Oil Companies hurling empty threats

This is from straightgoods. The AEC mentioned by Pratt did give the public (who could afford the ten dollar shares) a stake in the company but by now the ownership is diversified since it is combined with another company. I have no idea what stake the Alberta government still has if any.
As Pratt points out even if the threats are not empty it might very well be a good thing for the pace of economic growth to slow down in Alberta. The extra money from royalties can be used to update infrastructure that has not been keeping up with economic development. Ed Stelmach should look to Danny Williams. Williams stared down Big Oil and won Big Time.

Oil companies hurling empty threats

Many Albertans believe a slowdown wouldn't hurt the overheated provincial economy.

Dateline: Monday, October 08, 2007

by Sheila Pratt

Oil companies are threatening to leave, cancel projects, pull back billions of investment dollars — even move to Saskatchewan (though presumably the oil is still here, so how would that work?). These are the dire consequences if the Stelmach government takes the advice of its royalty review panel to raise royalties by 20 percent — though, notably, big oil companies didn't flee Britain or Norway when those countries raised the royalties in recent years.

Should Albertans be quaking in our boots that disaster is around the corner? Or is this predictable scaremongering tactics from an industry that's pretty much had its way here for the last decade?

Well, let's have a look at Calgary-based EnCana, Canada's biggest gas producer and first company to threaten to cut its investment in the oilsands by $1 billion. That was two weeks ago.

EnCana has threatened to delay the Foster Creek project — which many Albertans oppose anyway, because it would export raw bitumen to be processed in the US.



Just a week later, last Friday, the company filed documents seeking approval for a second, $1-billion oilsands project, Borealis, 35,000 barrels a day, north of Fort McMurray. That project will only go ahead if the royalty review recommendations are dropped, the company sternly warned.

Is this the sign of a company that thinks Alberta is about to become an economic wasteland if the royalty rates go up? They must think there's a future here somehow.

Meanwhile, EnCana's partner, Houston-based ConocoPhillips, has sent a private letter to the provincial government saying that the proposed new royalties for oilsands production "will lead to project cancellation or postponement. "

Presumably, that refers to their joint project, $5.4 billion at Foster Creek and Christina Lake, from which they plan to export 400,000 barrels a day of Alberta bitumen to the US.

Ask yourself: How bad would it be to delay that project a little? To slow down the export of 400,000 barrels of bitumen daily to Borger, Texas, along with hundreds of upgrading jobs, might not hurt. In some ways, Albertans get less from this project than others with royalties based on low-cost bitumen, not higher value-upgraded oil.

While Premier Ed Stelmach would never agree, a lot of Albertans wouldn't mind seeing this overheated economy slow down a little, including the consumer who can't afford a house or businesspeople constantly losing workers to the oilpatch, which can afford to pay more than any other sector of the economy.

EnCana's threats have a special sting. Encana grew out of the Alberta Energy Company set up by the Lougheed government to give the public a stake in the oil boom of the 1970s. The government gave AEC exclusive access to the natural gas fields in Suffield and heavy oil at the Cold Lake military range — just a bit of a competitive edge, you could say.

Now EnCana is out in front in the battle to keep Albertans from getting their fair share of this depleting resource....

Sheila Pratt started as a rookie reporter during Alberta's first boom in the late 1970s and has been analysing and commenting on the changing political and social landscape ever since, as a writer and editor. A graduate of Queen's University, Pratt covered the provincial legislature in the Lougheed and Getty years. Her work included national and provincial television and radio commentary. Pratt is also co-author of a book Running On Empty, Alberta After the Boom (that's the first boom). In 2001, Pratt won the Southam Journalism Fellowship at the University of Toronto. She is currently an editorial writer and Sunday columnist at the Edmonton Journal.