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Friday, June 26, 2009

we're number 92!*

*The Fraser Institute has released a survey showing that many petroleum industry executives see Manitoba as a better place to invest than Alberta (the horror!). The survey ranks Alberta as 92nd, placing the landlocked western Canadian province of 3 million people "behind China, the Philippines, and Brazil as an attractive place to invest in upstream oil and gas development."

The results of the survey are a bit misleading as they list investment jurisdictions in North America by individual province and state, while all other jurisdictions are listed by country. While the survey results are likely reflective of the oil industry's well-known dislike of Premier Ed Stelmach's changes to Alberta's resource royalty framework, the report may have shown different results had it also included actual financial investment numbers.

The survey has given Wild Rose Alliance leadership contender Danielle Smith a lot of 140-character content to work with this week.

(h/t Brian Dell)


Anonymous said...

It's because the Manitoba NDP don't want to stop all production of the tarsands.

Scott said...

The survey in no way measures which jurisdiction is "better" to invest in. It attempts to answer the question of evaluating jurisdictions with regard to each other on the level of perceived investment barriers.

Note that no part of the survey considered a lack of oil to be an investment barrier.

Anonymous said...

Daveberta, who pays for the Fraser institute? Is it credible? Who are the big money donors?

Tyler said...

So an NDP government has created a better business environment than the PCs in Alberta?

I like it.

Chrystal Ocean said...

That's bad news for Manitoba, methinks.

Anonymous said...

Wow. And yet your former leader said that the Royalty Review didn't go far enough. And didn't your current leader agree. I can't wait for the sucking and blowing to start from the ALP. I think your post is fair, though.

SNicol raises a great point and very humourously. I would guess that the vast majority of respondents don't have a clue what the royalty regimes in all these jurisidictions are like, they just know they are pissed at Ed.

Finally, is it so bad to be less attractive than China, Brazil and the Phillipines, none of whom (I am making an assumption here), have accepted GHG reduction targets under the UNFCCC?

Let's be honest here. Big energy does not have our best interests at the top of their agenda, therefore, it behooves us to strike a balance between what keeps our people working and what keeps our province from being Louisiana in 30 years.

daveberta said...

Anonymous 11:02am: Don't know why Kevin Taft's position on something two years ago would preclude me from mentioning the royalty review.

I haven't really had any involvement with any political party for over a year and I feel good about it.

As for the China, Brazil, and Phillipines issue, it's basically like comparing Apples, Passion Fruit, and Potatos.

Anonymous said...

"We're number 92!"

When I read the title I though this post was going to be about the Liberals and NDP.

Anonymous said...

You're being too sensitive Dave. I'm aware you aren't involved. Sorry that I referred to them as "your" Leaders.

Derrick Jacobson said...

If you talk to Dr.Swann he is the first to admit that the libs took a stance too quickly without looking at the whole picture. Taft like to hear himself talk. Brian Mason won't leave it to discuss because we can always take more from business and Ed is just too proud to say he screwed up. The incentives announced mean nothing in todays gas prices and wuld be more curious about what the actual number given back is since they claim it is 1.5 billion per year. I don't know if you can measure investment or just do land sale comparisons since that is what will dictate the activity

Robert G. Harvie, Q.C. said...

Isn't it funny..

And Dave - even though you're no longer flying the Liberal flag, the point is extremely well put that when the royalty review game under scrutiny, the Liberals were screaming about how it didn't go far enough.. and all the Liberal MLA's were screaming along with their leader on that front.

Not to mention the loud leftist minority generally in Alberta.

So - now, oil prices go down, and investment slows down, and the barking dogs are at it again.. except now they want to slurp from the other side of the trough.

It is what it is. Deal with it. Real conservatives take the good with the bad, and blame themselves first, and others later.

Anonymous said...

Is Roblaw challenged? Why would anyone reading a progressive blog care what he thinks "real conservatives" do.

Also, I don't see the Liberals or the NDP having moved to "the other side of the trough". Show us where either party is now arguing for lower royalties?


Anonymous said...

Er, Manitoba is a great place to put oil dollars the same way Alberta is a great place for hydro development. Anyone up for my IPO on damming the Battle River at Wainwright? No? How about drilling for oil at Churchill? Anyone? Where the hell is Enron when you need them?

Party of One said...

One of the interesting points raised about this survey is that it's not the royalty rates in and of themselves that raise concerns, it's the total lack of predictability that gives investors pause.

Given the government's sensitivity to oil industry lobbying, why would someone invest now when there's a good chance that the royalty regime would be changed even more favourably in the future?

Businesses generally want stability and predictability. The oil industry still works in Alaska and Norway, even though the royalty "take" is significantly higher than in Alberta.

Set a royalty regime, and commit to sticking to it for at least 10 years. The oil and gas isn't going anywhere. And while you're at it, work seriously at diversifying both your markets and the overall economy.

Anonymous said...

I can compare Apples, Passion fruit and potatoes.....which do I like best? Apples.

Good analogy Dave.