NDP's Revenge Tax Cause Hundreds Of Millions Of Dollars In Losses

[kimmy]

I think the real news here is that a single company had so much deferred income carried forward that a change in rate from 10% to 12% cost them $579 million dollars. That's astounding!

MSJ assures us that some of that would get recaptured later, except that of course there will be even bigger depreciation write-downs later on.

-k

[kimmy]

I have my doubts about the worthiness of all the corporate tax cuts which have taken place over the last some years, not only here but elsewhere in he world. However, I don't think the fastest, worst economic downturn in the oil industry in decades is really the proper time to throw a tax increase into the mix.

You might not understand this, but as a long-time Albertan, I can tell you that the right time to increase oil patch taxes is NEVER, and the right time to increase royalties is also NEVER.

Right now, it's "times are tough, the industry is fragile, making any changes right now could be devastating! This is NOT the time to adjust royalties or taxes!"

When times are good, it's "our economy is the envy of the nation, if not the world! Our budget is balanced! We are enjoying tremendous prosperity! Why on earth would we jeopardize our success by burdening industry with more taxes and royalties?? Why, it would be greedy of us to take more taxes from these companies when our budget is balanced! This is NOT the time to adjust royalties or taxes!"

It's never the right time to adjust royalties or taxes, according to the Calgary oilmen and their owned men in the Alberta Progressive Conservatives.

Also, isn't this really just the biggest industry downturn since 2008? The industry somehow survived that. I think they'll survive this too.

-k

[waldo]

in keeping with the "Rebel Commander's" repeated attempts to falsely portray policies or impacts related to the "5 month old NDP party in Alberta", Ezrant came out with another rancid effort in presuming to reference a report from the business orientated/lobbying focused Canadian Federation of Independent Businesses (CFIB): Shocking statistic: Alberta's small business confidence lowest of any province in 15 years

of course, Harper Conservative hyper-partisans played that up big time as a testament to the impact of the newly elected NDP government. Only when one actually looks at the CFIB report is an accurate depiction of that business confidence level presented... accepting that the results only represent a smallish number of business survey responses... notwithstanding what the NDP government has actually announced in terms of corporate tax increases (and how that might actually play into "small business", if at all). Apparently, a $15 dollar minimum wage (not even introduced all at once) has had an impact! Go figure. When one actually looks at the related CFIB report graphic, it's quite telling just how far Harper Conservative hyper-partisans... and the Rebel Ezrant... are willing to go in attempting to falsely project upon the newly elected Alberta NDP government: essentially an ~10-point dip in the ~5 month NDP government period versus an ~35 point dip associated with the prior Alberta Conservative party...

[socialist]

The NDP in Alberta has already hurt that province and the bleeding has just begun.

[waldo]

The NDP in Alberta has already hurt that province and the bleeding has just begun.

after just... 5 months? Upped the corporate tax level to the same point it was at during the Ralph Klein Conservative era... announced an 18-month moratorium on the Royalty review (in line with the precipitous falling price of oil)... announced that all oil associated revenue taken in would not go into general revenues; that it would instead be directed into the Heritage Fund for future generations... anything else you'd like to run with here? Why wouldn't you want Albertan's to receive a fair return from BigOil for their "oil advantage"?

[cybercoma]

Upped the corporate tax level to the same point it was at during the Ralph Klein Conservative era...

Didn't you know? Ralph Klein was a Communist bent on destroying the oil fields with his crippling taxes and income redistribution schemes!

[WIP]

And if the Conservatives were still running Alberta, the economic picture wouldn't look any better! Ultimately, the tarsands operations have to cut staff and even the big ones could be closing down and writing off billions in losses if oil prices don't go back up to $100 by the end of next year, and there's not a damn thing any politician or provincial government can do to stop this rolling disaster from taking its course!

I just hope Albertans are smart enough to realize this....I'm not getting that indication from federal polling data showing the usual sweep for the Fed-Cons, but the best Albertans can hope for is that their Government will look after the most vulnerable, and use whatever capital they have at their disposal to diversify the Alberta economy away from its exclusive oil dependence, that allowed the corruption, greed and avarice of the last 40 years. These tarsands projects are so environmentally destructive that they should have never been considered in the first place!

Back when Alberta had real oil in the ground, a few surface deposits were used for collecting tar for road-paving.....that's all this crap should have ever been used for!

[overthere]

the best Albertans can hope for is that their Government will look after the most vulnerable, and use whatever capital they have at their disposal to diversify the Alberta economy away from its exclusive oil dependence, that allowed the corruption, greed and avarice of the last 40 years.

You better hope something comes along nationally that can replace the money Alberta has been pumping into the national economy. You know, from the resource revenue that actually is only 20% of the AB economy, yet an important part of the National economy.

And lets cut all the bullshit about the NDP being some kind of saviour, and your ridiculous asinine statements like 'allowed the corruption, greed and avarice of the last 40 years'. Alberta has been funding Canada for a very long time, the health care system has the msot spent per capita of any province, the school system is good, the highways fine. The vulnerable ARE cared for, but not everybody lives forever. Big fail by the PCs, right?

Why do you think that hundreds of thousands + of people flocked to this place? Why has the population nearly doubled in 30 years? Quality of like, that is whty.

So cut the shit.

[socialist]

after just... 5 months? Upped the corporate tax level to the same point it was at during the Ralph Klein Conservative era... announced an 18-month moratorium on the Royalty review (in line with the precipitous falling price of oil)... announced that all oil associated revenue taken in would not go into general revenues; that it would instead be directed into the Heritage Fund for future generations... anything else you'd like to run with here? Why wouldn't you want Albertan's to receive a fair return from BigOil for their "oil advantage"?

I guess you have no clue what is going on there. I'm not surprised at that.

[waldo]

Big fail by the PCs, right?

So cut the shit.

the Alberta Heritage Savings fund is currently at $17.7 billion... that's it... that's all Alberta has to show for it's "oil advantage". Meanwhile, Norway's 'sovereign wealth fund' recently went over the $1 trillion dollar mark... and even then, Norway has been using it's oil revenue to help fund it's shift off fossil-fuels and help pay for it's alternative energy pursuits. So, as you say, "big fail by the Alberta PCs"... right?

[waldo]

I guess you have no clue what is going on there. I'm not surprised at that.

in spite of the most limited ~5 month governing time, I listed you 3 fairly high profile changes/notifications... I specifically asked you, "anything else you'd like to run with here?". Apparently, you have nothing to support your multiple posts and your most pointed statement that, as you said, "The NDP in Alberta has already hurt that province and the bleeding has just begun.". Thanks for playing, hey!

[msj]

You better hope something comes along nationally that can replace the money Alberta has been pumping into the national economy. You know, from the resource revenue that actually is only 20% of the AB economy, yet an important part of the National economy.

So what is the percentage for the nation?

[socialist]

in spite of the most limited ~5 month governing time, I listed you 3 fairly high profile changes/notifications... I specifically asked you, "anything else you'd like to run with here?". Apparently, you have nothing to support your multiple posts and your most pointed statement that, as you said, "The NDP in Alberta has already hurt that province and the bleeding has just begun.". Thanks for playing, hey!

MLW Member Waldo, if you continue to choose to stick your fingers in your ears while babbling incoherently, then by all, means continue to do so. But let me tell you, you are missing out on reality. Have a great day, champ!

Look MLW Member Waldo....A Squirrel!

Edited September 30, 2015 by socialist

[Hydraboss]

And if the Conservatives were still running Alberta, the economic picture wouldn't look any better! Ultimately, the tarsands operations have to cut staff and even the big ones could be closing down and writing off billions in losses if oil prices don't go back up to $100 by the end of next year, and there's not a damn thing any politician or provincial government can do to stop this rolling disaster from taking its course!

...These tarsands projects are so environmentally destructive that they should have never been considered in the first place!

Back when Alberta had real oil in the ground, a few surface deposits were used for collecting tar for road-paving.....that's all this crap should have ever been used for!

First of all, there isn't a single "big one" closing down. Once an oil sands project starts (beyond clear the site), it pretty much has to at least finish the phase. No real choice there.

Second, these "tarsands projects" aren't any more "environmentally destructive" than a bloody steel plant down east (likely less). In situ projects take up very little space and if they are hard on anything, it's water. But they're not allowed to run a heated pipeline down from the Arctic Ocean and through desalination units because....they might interrupt an iceworm migration or something. The natural gas they use to heat the injection water is the same gas they drill for and produce. They could either sell it on the market or use it for oil extraction.

Third, Alberta still has an absolute ton of "real oil" in the ground. Case in point - Lloydminster/Cold Lake/Swan Hills and pretty much every other place not in the center of Edmonton or Calgary. But it's cost-intensive to produce (so is the oil sands, but the volume is immensely different).

The only thing you're correct on is that the various governments cannot control the price of oil. Congrats.

[Hydraboss]

As far as I see, the biggest screw up on the part of the provincial NDP is the deferral of the royalty review. Because of the amount of time from licensing to pumping down a pipeline (roughly 18 months for conventional...hmmm....), none of the major players are going to start funding new projects until they know whether or not they can make more money in, say, Saskatchewan. They are waiting on two things in particular - the royalty review results and the federal election. If it's NDP federally, I think you'll see the US companies put their investment money in places like the Marcellus Shale play in the US rather than have to fight with a Canadian government that wants to basically destroy their business models.

[waldo]

MLW Member Waldo, if you continue to choose to stick your fingers in your ears while babbling incoherently, then by all, means continue to do so. But let me tell you, you are missing out on reality. Have a great day, champ!

no worries... champ! You were directly challenged twice to support your unsubstantiated statement. This post of yours is a clear and precise reflection of your inability to respond to the challenge.

[waldo]

Second, these "tarsands projects" aren't any more "environmentally destructive" than a bloody steel plant down east (likely less). In situ projects take up very little space and if they are hard on anything, it's water.

cause you don't care to include tailings ponds... or reclamation efforts on an actual representative scale? Is the prevailing "solution" for tailings ponds to still pump it all down abandoned mine shafts and fill them up with water... you know, the "instant lakes" solution? About that Athabasca River water: (as published in PNAS): Long-term reliability of the Athabasca River (Alberta, Canada) as the water source for oil sands mining

The obvious concern, says Luckman, is that the amount of water being taken from the Athabasca River is increasing almost exponentially and when this ever-increasing demand is combined with the new information on long-term variability of flows and the potential effects of climate change, the oil sands industry will face major problems with its future demands for water.

[socialist]

no worries... champ! You were directly challenged twice to support your unsubstantiated statement. This post of yours is a clear and precise reflection of your inability to respond to the challenge.

Your challenge was nonsense, MLW member waldo. Early NDP policies are hurting Albertans, but the cronies are doing well. I guess maybe that's why you turn a blind eye. You obviously don't understand Alberta.

[Hydraboss]

... Is the prevailing "solution" for tailings ponds to still pump it all down abandoned mine shafts and fill them up with water...

The obvious concern, says Luckman, is that the amount of water being taken from the Athabasca River is increasing almost exponentially and when this ever-increasing demand is combined with the new information on long-term variability of flows and the potential effects of climate change, the oil sands industry will face major problems with its future demands for water.

Actually, the best idea to date is what CCS and others are doing...drilling 2500-3000+ meters down into a formation that can be washed out like a cavern. Don't need to fill them with water - just set a retreivable plug above the cavern line. Dow Chemical, BP and a bunch of others have been doing it in Fort Saskatchewan for decades (of course, they use it for short term storage of base stock - natural gas, butane, etc). It does away with tailings ponds entirely. The only reason those ponds exist is the producers are hard pressed for fresh water to reinject so they try to use ponds for recovery.

Which brings me to your second point...

If producers were allowed to install a pipeline from the Arctic to the oil sands, the need to take water from local watercourses would end. Desalinate and pump what's left down the same disposal wells. Problem solved.

...except for those damn iceworms...

[waldo]

Your challenge was nonsense, MLW member waldo. Early NDP policies are hurting Albertans, but the cronies are doing well. I guess maybe that's why you turn a blind eye. You obviously don't understand Alberta.

after just 5 months of NDP governing Alberta... you've had 3 posts where you could have stepped up and actually given examples of your claimed hurtin'. For some inexplicable reason you sure have an extreme difficulty in offering anything to support your repeated claim... while at the same time consistently stating that "I don't understand Alberta". Learn me member socialist... learn me!

[waldo]

Actually, the best idea to date is what CCS and others are doing...drilling 2500-3000+ meters down into a formation that can be washed out like a cavern. Don't need to fill them with water - just set a retreivable plug above the cavern line. Dow Chemical, BP and a bunch of others have been doing it in Fort Saskatchewan for decades (of course, they use it for short term storage of base stock - natural gas, butane, etc). It does away with tailings ponds entirely. The only reason those ponds exist is the producers are hard pressed for fresh water to reinject so they try to use ponds for recovery.

the prevailing strategy still appears to be to cap those "end pit mines" with fresh water, creating End Pit Lakes (EPL) ... what could possibly go wrong? Some ~30 lakes are proposed by industry:

Relying on end pit lakes for tailings “reclamation” is reckless

Ambitious plans for oil sands would create lakes from waste

Oilsands study confirms tailings found in groundwater, river

Millions of litres leak each day from oilsands tailings ponds: report[/b]

[Hydraboss]

Yup, it is. And it's pretty stupid. Why the hell they don't wash out the limestone into caverns is beyond me.

[WIP]

MLW Member Waldo, if you continue to choose to stick your fingers in your ears while babbling incoherently, then by all, means continue to do so. But let me tell you, you are missing out on reality. Have a great day, champ!

Look MLW Member Waldo....A Squirrel!

So, all you're capable of, is reading off the latest Conservative Party talkingpoints, and when you get slammed by hard facts that cannot be denied...like the squandering of billions of dollars in oil revenue by the Provincial Conservative Governments in Alberta over the decades, you got nothing! You think a childish personal attack is going to impress anyone?

[WIP]

First of all, there isn't a single "big one" closing down. Once an oil sands project starts (beyond clear the site), it pretty much has to at least finish the phase. No real choice there.

Not yet! But, they are all hemorrhaging money with oil below $50per barrel, and slowing down operations to cut costs, in the hope that prices will be higher next year. I made the point earlier that the tarsands operations were big money and had billions of dollars in capital lined up behind them, so they may not be in as much trouble as the ventures in the Bakken Shales in North Dakota and Wyoming, or Eagleford in Oklahoma/North Texas, where some of the smaller, independent riggers are already going bankrupt, and at least one large venture capitalist (KKR) is writing off more than a billion dollar investment in the recent bankruptcy of Samson Resources. According to the Bloomberg News article, KKR has a total equity of over 100 billion dollars, so the bad bet on Samson isn't enough in itself to bring down the Wall Street firm, but they will obviously lose investor confidence over this huge looming writedown of assets....and what about the other, smaller operations? How long will they be able to keep drilling before investors pull all of their money out of this decrepit business?

So, now that costly shale oil development has reached the point where it can no longer be done profitably, do you expect anything different from tarsands? They are larger, and have more capital at their disposal, which in these times just means that it will take longer for them to fall!

Second, these "tarsands projects" aren't any more "environmentally destructive" than a bloody steel plant down east (likely less). In situ projects take up very little space and if they are hard on anything, it's water. But they're not allowed to run a heated pipeline down from the Arctic Ocean and through desalination units because....they might interrupt an iceworm migration or something. The natural gas they use to heat the injection water is the same gas they drill for and produce. They could either sell it on the market or use it for oil extraction.

If allowed to follow its course, northern Alberta would be covered with tailing ponds. But, too many Albertans in the south don't give a shit because they don't have to deal with it! Sure, improvements can be made in efficiency to reduce extraction and development costs, but world oil prices are too low to make it profitable, and as tarsands keeps drilling and pumping into lower and lower sediments, the energy costs inevitably rise.

As for steel manufacturing....I've lived most of my life near the City of Hamilton, and steel production has become much cleaner and more efficient over the last 40 years than it was when I was young, and you could smell them even when you were riding in a car going over the Burlington Skyway! One difference between tarsands and steelmaking is steel is an obvious essential for maintaining any modern civilization....extracting bitumen from tarsands is not! I have mentioned numerous times that I wish it was more than a few hippies and radical economists back in the 70's, who understood the simple fact that all of our extractions and developments of nature have to be scale back and consumer-driven capitalism has to end. In the longer term future, even some of the things we consider essential today - like having our own cars, has to be phased out, because providing everyone with a car and roads and highways to drive them on is the greatest part of the average person's resource and carbon footprints today.

Third, Alberta still has an absolute ton of "real oil" in the ground. Case in point - Lloydminster/Cold Lake/Swan Hills and pretty much every other place not in the center of Edmonton or Calgary. But it's cost-intensive to produce (so is the oil sands, but the volume is immensely different).

I took a quick look, since when I was last in that area in the early 80's, I was led to believe that the oil was running out and there wouldn't be much worth keeping the rigs out there in another 10 years.

The 2013 Alberta quarterly report on oil and gas (latest I could find) mentions the oil you're talking about, PLUS the part you left out: it requires hydraulic fracturing and horizontal drilling to get the oil and gas out of the ground! In other words, it's the same damn thing being used in socalled "Saudi America" to get their oil and gas. It's a dirty, expensive and energy-intensive extraction process every bit as much as tarsands extraction! So, back to Square One!

[Hydraboss]

Not yet! But, they are all hemorrhaging money with oil below $50per barrel, and slowing down operations to cut costs, in the hope that prices will be higher next year. I made the point earlier that the tarsands operations were big money and had billions of dollars in capital lined up behind them, so they may not be in as much trouble as the ventures in the Bakken Shales in North Dakota and Wyoming, or Eagleford in Oklahoma/North Texas, where some of the smaller, independent riggers are already going bankrupt, and at least one large venture capitalist (KKR) is writing off more than a billion dollar investment in the recent bankruptcy of Samson Resources. According to the Bloomberg News article, KKR has a total equity of over 100 billion dollars, so the bad bet on Samson isn't enough in itself to bring down the Wall Street firm, but they will obviously lose investor confidence over this huge looming writedown of assets....and what about the other, smaller operations? How long will they be able to keep drilling before investors pull all of their money out of this decrepit business?

Samson has basically nothing to do with the oilsands. There are four major players and a whole bunch of smaller, non-managing"partners" - Shell, Suncor, Syncrude and CNRL. Not one of them is in any trouble up there and they certainly aren't "hemoraging money". Also, there is absolutely no comparison between an oilsands project (not just a well pad) and anything in the shale plays. That's like comparing a 7-11 store to a Superstore.

If allowed to follow its course, northern Alberta would be covered with tailing ponds. But, too many Albertans in the south don't give a shit because they don't have to deal with it! Sure, improvements can be made in efficiency to reduce extraction and development costs, but world oil prices are too low to make it profitable, and as tarsands keeps drilling and pumping into lower and lower sediments, the energy costs inevitably rise.

They need to just pump that crap down disposal wells and be done with it. Or find a way to safely purify it and reuse it for steam injection. By the way, a lot of the majors are loving this downturn because, in spite of falling revenues on the oil side, they are also putting the boots to suppliers and dropping project costs by as much as 40+% (believe me, I know!). Calculate that savings over the next few phases of Christina Lake or Albian II or Firebag 5&6....

I took a quick look, since when I was last in that area in the early 80's, I was led to believe that the oil was running out and there wouldn't be much worth keeping the rigs out there in another 10 years.

Not even close. There's more oil than they can pump out here. Before the drop in prices, pump jacks were being shut down and wells shut in because they didn't need the excess. I can head west of my house and in 7-8 minutes, it looks like west Texas with all the jacks going, and those wells were drilled in the 70's and just had a little water injected to liven them back up. There's also a ton of producing wells that were re-entered to a higher zone when natural gas was "the thing". Those holes produce both.

...it requires hydraulic fracturing and horizontal drilling to get the oil and gas out of the ground! In other words, it's the same damn thing being used in socalled "Saudi America" to get their oil and gas. It's a dirty, expensive and energy-intensive extraction process every bit as much as tarsands extraction! So, back to Square One!

Wrong again. The wells up here don't "need" fracking or to be drilled horizontally. The reason you go horizontal is reduction of cost - you drill one vertical well, and then punch out the side to get to the zone your "next well" would have been over without the costs of a new lease or moving the rig and services. One location - as many horizontal legs as you can fit (and some of those wells are over 4500m deep in the foothills and you can fit a LOT of horizontal legs off of that). Horizontal drilling is about efficiency, not need.