Reboot Alberta

Tuesday, October 02, 2007

Alvarez of CAPP Speaks to the Calgary Chamber on "Our Fair Share."

Today Pierre Alvarez the President of the Canadian Association of Petroleum Producers gave a speech to the Calgary Chamber of Commerce. His comments reflect the same issues as in the Tristone review of “Our Fair Share” but he does is so much more clearly…but not any more convincingly to my mind.

Again it is all about growth at any cost and the attitude seems to be that in the energy sector right now any cost can be absorbed - at $80 oil. There are concerns expressed about conventional oil and gas and again increased costs are stated to be the reasons Albertans can’t get a competitive rent for its resources.

These costs are not seen as something management has to make hard decisions about in the context of the marketplace doing its job. The attitude seems to be we don’t need to adjust our activity because of high costs. They are merely to be accommodated in the project and, in the case of oil sands, passed on to the citizens of Alberta under the current royalty regime.

If our conventional gas industry is uneconomic and uncompetitive because our costs are too high for the current market price of the commodity…adjustments should have to be made by management too. But again that is just the marketplace at work and doing its job. Why does nat mean all Albertans have to forego a competitive market rent for its non-renewable resource?

A unity trust operation is saying that because of the “uncertainty” of the royalty regime in Alberta it is moving its exploration activity into Saskatchewan. Is that a bad thing? Saskatchewan as a province needs to be a sustainable and reliable “have” province and that investment in its energy sector will help them get there.

You can watch the video or read the speech on the CAPP website. While I disagree with Pierre on many of his conclusions, consequences and he takes a few “shots” at the Panel, he is reflective and considered. He is one of the cooler heads from the industry. We all need that right now if we are to get this right.

2 comments:

  1. Anonymous8:37 am

    No talk about Dion's implosion - talk about skewing the topics!

    ReplyDelete
  2. Anon - I do not understand your comment - please expand

    ReplyDelete

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