There Has Not Been A Major Return From Oil And Gas Extraction In BC
Thursday, August 2, 2012 @ 3:45 AM
With a down turn looming in the gas extraction sector in North eastern BC, attention has now been turned to a more looming problem that is occurring in our resource industry in this province, and that is, while governments have been getting royalties , there hasn’t been a great deal of much more.
In Ft Nelson, the Chamber of Commerce says the downturn will affect more of the out of province workers than those at home who have not cashed in on the major development around them.
Suddenly after looking at the Enbridge Pipe Line, the province has come to the realization that there is little for the greater good in BC, other than the royalties from much of the gas and oil exploration in BC.
The president of the Ft Nelson Chamber says, the out of province workers arrive by plane, go to the camp, and then head home from the job in most cases without spending any money or contributing in any way to the BC economy in sales tax , income tax , or other spending .
While governments have looked the other way in order to cash in on the royalties that the mining and energy sector are bringing their way, the greater good for the province has not been addressed.
The Enbridge proposal put the whole matter on the table given that the workers, who to their credit have been trained in building pipe lines generally, come from Alberta, where the province has established a solid energy program. When the line is finished there is little in the way of long lasting benefits to BC. That is being shown in the gas sector in the north of BC. The gas industry until recently may have been booming, the communities around them have not.
It is a major problem that needs addressing , the province does not want to build a wall around itself, nor should it, while at the same time we need to establish a gas and oil sector that can tap into the work force of BC.
The mindset in BC as always has been a focus on the lower mainland with increased efforts to attract more tourists and people to move to that region.
In reality it is the balance of the province and in particular the central and northern part that is an engine for the economy. That engine has not been receiving its share of the gas.
I’m Meisner and that’s one man’s’ opinion.
Comments
In the northern oil and gas sector they say that they give the boys from BC some work smoothing out the roads so the boys from Alerta can get to and from work quicker.
Apparently some of the same multinationals which are involved in the Alberta tar sands are doing crude oil extraction in Norway as well. Amazingly enough they pay Norway roughly twice as much in royalties per barrel as they pay in Canada!
But that shouldn’t come as a surprise, Prince George, for the extraction process for tar sands oil is quite likely at least twice as costly as it is for Norwegian oil. And we still have that fetish with ‘jobs’ at any cost ~ believing that it’s some kind of sin for anyone to get an ‘income’ they haven’t ‘worked’ for. (Even though it seems that’s just what everyone’s trying to do when the 6/49 jackpot goes up to the level where it seems like your winning ticket might enable you to “eat your cake, and (still) have (some of) it too.”
In Ft.Nelson you can see a truck with Alberta plates with a BC Hydro sticker on it.
And we still have that fetish with ‘jobs’ at any cost ~ believing that it’s some kind of sin for anyone to get an ‘income’ they haven’t ‘worked’ for.
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Heres another biblical term since you mention “sin”,”thow shalt not covet thy neighbour”.
Actualy the profits that the oil companies are making frok our resources is sinfull.
Cheers
The problem is that people from BC are lazy. If you want a job, go up north and get a job. It really is that easy. But so few people do, companies understandably hire whomever they can. Many BC workers are hired but few ever complete their probationary period. Translation: they are useless.
Piece of advise – get off the internet message boards, stuff your communist attitudes where the sun don’t shine, wean yourself off the drugs, kiss your mom goodbye, print off a few resumes and get a Greyhound to FSJ or Nelson. If it “doesn’t work out” go back to mom’s basement, do the world a favour and suck on a shotgun barrel.
get a job.
Socredible:”But that shouldn’t come as a surprise, Prince George, for the extraction process for tar sands oil is quite likely at least twice as costly as it is for Norwegian oil.”
Is that OUR problem? I don’t think so!
Canada should still get the same royalties as Norway! Why should we accept lower royalties and thereby allow the companies to pass on the extra costs of extraction to us? Just leave it in the ground then!
If they find that it is too expensive why can’t they accept a lower over-all profit or just simply stay away? Nothing will happen to the stuff which has been in the ground for hundreds of millions of years! Why the rush to get it out and get rid of it getting ridiculously low royalties?
Canadians are being duped – that’s what happens when our politicians sell off the non-renewable resources to the lowest bidders instead of the highest!
Wonder who pockets the money.
Gamblor wrote: “Piece of advise – get off the internet message boards”
SO how old are you Gamblor? …. How old do you figure people are who are on this board? How well in shape do you think they are? In fact, how many of them are there who have worked hard in their life and destroyed their backs, hips, knees, lungs, etc. working on hard jobs and dangerous jobs and now are reaping the “benefits” of sitting in wheelchairs, or plain olde sitting because to move creates all sorts of aches in their bodies ….. and maybe even on some lowly disability insurance and fighting WCB for a reasonable claim settlement ……. and if that cannot be had, consider taking their own life …..
Not saying everyone is like that, but that profile is more likely to be found on sites like this than other sites ….. and it makes people bitter …. and it maes them eel that they have been dealt a blow they do not deserve ….. and it makes them lash out at people, just as you do Gamblor…….
Do you for one moment think that Alberta’s population and workforce has grown to the level it is at right now by natural means? Of course not! It has grwonbecase of migrants from next door, from the east, from the USA, and from other foreign countries ….. those people you are talking about, including from BC and from PG, have pulled up stakes to get jobs there. And, many have also come back because more money in a region where everything is more expensive does not buy more at all.
“Is that OUR problem? I don’t think so!”
Sort of something like is it our problem that the pine beetle killed most of our pine trees.
So let us forget about that, and pretend that the tree is not damaged or compromised in any way and still demand the same stumpage.
Economics do not work that way. If you have a 2005 car with 250,000 km on it and someone has the same car with only 100,000 km on it, you will not likely be able to demand the same money for it. The “condition” or “quality” of the prodcut is a factor which determines price. In the case of mineral extraction, the cost of removing and bringing it to the market as a saleable item is what goes into determining its value.
Norway also caps its development so that multinational companies can’t come in and go overboard with extraction, as is the case with the post lougheed alberta govt. Lougheed had a cap as to how much oil alberta would produce so as to keep its value up. They were paid more royalties in the 70s under lougheed with a lot less extraction that they are today. Go figure…now who do you think is making all the extra money? Albertans? Canadians? nope…try US and Chinese and every other foreign company that is there.
Lol @ Gamblor
Everywhere you go there are lazy people, yes even in Alberta. But to actually suggest that someone should suck on the end of a shotgun barrel is just plain wrong. Why would they do that when they can collect welfare and sit on their PC’s all day and drive you nuts!
By the way, why aren’t you at work! Maybe you should get a job yourself?
Yup Gamblor was off the job his post was at 9.42 am. Guess he knows all about unemployment. Wonder if he/she is considering te gun barral senario.
Cheers
Ben, go to Dawson Creek and tell me the local towns don’t prosper from the oil patch. As with many camp jobs in the patch or mining, many live elsewhere. So? BC takes on more money through the oil and gas industry than forestry. The service sector in FSJ has created much wealth beyond royalties. To say we aren’t getting our share is uninformed.
“but”, do you pull your numbers out of your ass? Alberta takes in vastly more royalties than the 70’s.
The misconceptions of the oil and gas sector in BC is amazing. Clearly most posters should stick to woodlot economics.
The ignorance is embarassing.
Prince George:-“Why the rush to get it out and get rid of it getting ridiculously low royalties?”
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“J-O-B-S”, Prince George.
Lets not forget that it has been the desire of governments, both of Alberta and Canada, that there be development of the oil sands. For decades before development actually started. This is not low cost oil.
And if some say, “Well, then maybe the government should develop the tar sands itself, and cut out all those greedy oil companies (who we all know are making such rapacious profits).”, just remember this.
There were signs of conventional oil deposits in Alberta well before Imperial Oil’s well at Leduc blew in in 1947, and turned the only Province in Canada that defaulted on its debts in the Depression, and had been treated as a financial pariah for the previous decade as a result, into one that was soon rolling in the clover.
But prior to that happening there had been a total of over 350 MILES of ‘dusters’ drilled all over Alberta. 350 miles of DRY HOLES! Can you imagine how ANY government could justify spending taxpayers dollars that way, drilling that many miles of dry holes? When that Province could not only NOT meet its bonded indebtedness when it came due, but had to beg money from Ottawa to try to meet the Civil Service payroll, keep it schools open, and its other government services functional?
Retired 02, I think you make the all too common mistake of equating the Profits oil companies make, (or any other companies, for that matter, as being analogous to Cash. They are not. In business accounting operational Profit does NOT equate to Receipts minus Disbursements, but rather to Sales minus ‘Expense’. It may seem that this is the same thing, but it most definitely is NOT. Profit in business accounting is finalised as an increase in Assets over Liabilities. You’d have to take a look at the Balance Sheet of those oil companies involved in the oil sands to see whether their operations there are really as profitable as some people seem to think they are, and just how much of an increase in Assets over Liabilities they’re actually recording.
Don’t know who you’re addressing your ‘advice’ to, gamblor, but if it’s me, I have a job. Never been unemployed since I entered the world of the working at 18, some 47 years ago now.
I had my own business by the time I was 21, and I still have it, and work in it 6 days a week, and still find a little time to post on here.
There’s no doubt you’re correct, a lot of people in BC, (and elsewhere) are lazy. The question is, if you were an employer, would you want to have those type of people ‘working’ for you? I AM an employer, and I definitely would NOT.
I’ve had them, and I can tell you from past experience that any time I have to work harder trying to get work out of an employee than it would take me to do his job myself, it’s a losing proposition. And a detriment to the overall efficiency we should all be striving to improve. I want someone to work for me, (with me, actually), who’s interested in doing the job, who actually earns me money rather than just costing me some. Such people can indeed be hard to find sometimes. They are generally ‘in demand’.
The idea that some people have that EVERYONE should be ‘forced’ to work “before they will be allowed to eat” is more in tune with the tenets of Communism (and Fascism), and though it may be morally well intended, is completely out of date and sync with a modern, efficient, technologically advancing economy. One in which an ‘aristocracy’ of Producers serves a ‘democracy’ of Consumers, and regards such service as a privilege, (for the rewards it brings, both monetary and otherwise, through the ‘satisfaction’ of a job well done).
Why would northern workers want to relocate to BC from Alberta? They would have to pay higher personal income taxes, gas and diesel is more expensive…well virtually everything is more expensive with HST and Carbon Taxes…so why would they relocate?
socredible….so an increase in assets over liabilities is the true measure of profit? Your saying disbursements of earnings through the payment of dividends reduces actual “profits”?
No, Jim13135, disbursements of earnings through dividends comes AFTER profits have been booked, and reduces Assets (Cash on hand, or in the bank)on one side of the ledger, and Capital (retained earnings)on the opposite side. The Balance sheet equation is Assets = Liabilities + Capital.
In business accounting, which operates as double-entry accrual accounting using the Balance sheet principle, profit is NOT the difference between cash receipts and cash disbursements, but is rather (operationally, at least), the difference between Sales minus Expense.
Expense is the pushing forward in time of *today’s* spending (and investment) through the rules and conventions of accounting to relate it to *tommorrow’s* Sales, which are prospectively going to be greater than *today’s* Sales as a result of that spending (and investment).
It is why businesses have a Balance sheet, a Profit and Loss Statement (which is always closed, or finalised, to the Balance sheet), and a Statement of Cash Flow. Sometimes businesses can actually be spending more in a fiscal period on a cash flow basis than what they are taking in in Sales, yet they still are ‘booking’ a profit.
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