- Joined
- Sep 25, 2007
- Messages
- 201
Hi all,
An article from today`s edition of The Globe and Mail. Besides the royalty cuts issue, this article says that Alberta is now the home to Canada`s fastest-rising rates of mortgage arrears, employment insurance and insolvency. Excerpts:
The Alberta government needs to quickly slash its royalty rates, or risk seeing its natural gas production - and provincial revenues - continue to freefall, says an influential industry leader.
Alberta`s natural gas is in the midst of an extraordinary tumble, with year-over-year production declines higher than 7 per cent, and a stunning 18-per-cent drop in U.S. exports. If the province cannot rapidly halt that slide, it risks entering a period where revenue shortfalls will hurt employment and provincial budgets, said Murray Edwards, one of Alberta`s most successful businessmen and vice-chairman of Canadian Natural Resources Ltd., which has substantial Alberta natural gas holdings.
Without cuts to royalties, which were raised early this year, capital will continue to flow into Saskatchewan oil properties and British Columbia gas assets - but not to Alberta, he said.
Though it has dropped in the past 12 months, natural gas has filled nearly three-quarters of Alberta`s petroleum coffers in recent years. But gas prices have been clobbered this year, by the financial crisis and by technological advances that have suddenly provided the industry cheap access to massive shale gas reservoirs in the United States, triggering supply glut concerns.
Alberta has been hit particularly hard, because the majority of the province`s gas wells tap conventional reservoirs, which are both much smaller than shale pools and much more expensive to extract. Some new shale plays can turn a profit with gas prices at $4 (U.S.) per thousand cubic feet. Most of Alberta`s gas loses money below $7 or $8.
With gas now just over $5, the province has gone from multibillion-dollar surpluses to a $4.3-billion deficit this year, and promises of more red ink in years to come.
http://www.theglobeandmail.com/report-on-b...article1381331/
Keith
An article from today`s edition of The Globe and Mail. Besides the royalty cuts issue, this article says that Alberta is now the home to Canada`s fastest-rising rates of mortgage arrears, employment insurance and insolvency. Excerpts:
The Alberta government needs to quickly slash its royalty rates, or risk seeing its natural gas production - and provincial revenues - continue to freefall, says an influential industry leader.
Alberta`s natural gas is in the midst of an extraordinary tumble, with year-over-year production declines higher than 7 per cent, and a stunning 18-per-cent drop in U.S. exports. If the province cannot rapidly halt that slide, it risks entering a period where revenue shortfalls will hurt employment and provincial budgets, said Murray Edwards, one of Alberta`s most successful businessmen and vice-chairman of Canadian Natural Resources Ltd., which has substantial Alberta natural gas holdings.
Without cuts to royalties, which were raised early this year, capital will continue to flow into Saskatchewan oil properties and British Columbia gas assets - but not to Alberta, he said.
Though it has dropped in the past 12 months, natural gas has filled nearly three-quarters of Alberta`s petroleum coffers in recent years. But gas prices have been clobbered this year, by the financial crisis and by technological advances that have suddenly provided the industry cheap access to massive shale gas reservoirs in the United States, triggering supply glut concerns.
Alberta has been hit particularly hard, because the majority of the province`s gas wells tap conventional reservoirs, which are both much smaller than shale pools and much more expensive to extract. Some new shale plays can turn a profit with gas prices at $4 (U.S.) per thousand cubic feet. Most of Alberta`s gas loses money below $7 or $8.
With gas now just over $5, the province has gone from multibillion-dollar surpluses to a $4.3-billion deficit this year, and promises of more red ink in years to come.
http://www.theglobeandmail.com/report-on-b...article1381331/
Keith