- The oil sands are a $1.4-trillion bonanza, according
to a study that forecasts the economic impact generated by the world's
second-largest deposit of crude in the 2000-2020 period.
-
- And that conclusion is based on prices of just $40 (U.S.)
a barrel of synthetic crude, the type pumped out of northern Alberta, roughly
the same quality as West Texas intermediate, which traded at almost $67
Thursday.
-
- Some of the benefits will be spread outside of Alberta,
especially in the areas of government revenue and employment. the study
says.
-
- But based solely on gross domestic product generated
by oil sands activity and expansion, Canada's richest province is the jurisdiction
that will grab most of the riches springing from the gooey black mud surrounding
Fort McMurray, it says.
-
- The study, released Thursday, is the result of work conducted
by the Calgary-based Canadian Energy Research Institute, a 30-year-old
group that was formed to analyze energy economics and that describes itself
as independent and non-profit.
-
- While the figure of $1.4-trillion (Canadian) is a higher-end
estimate of GDP resulting from the oil sands, the institute focused its
report on an $885-billion GDP figure, based on a synthetic crude oil price
of $32 (U.S.) a barrel.
-
- Of the $885-billion (Canadian), about 70 per cent would
stay in Alberta, the study says. About 10 per cent of that would benefit
Ontario and about 10 per cent would trickle out to other countries.
-
- In sum, the oil sands could represent about 3 per cent
of Canada's GDP in 2020, up from about 1.5 per cent in 2000.
-
- All of this money stems from an estimated investment
of $100-billion over 20 years in building oil sands projects, such as the
$11-billion that Canadian Natural Resources Ltd. is putting into the construction
of what it calls Horizon.
-
- On other measures, Canadians in general will see some
dollars in their pockets, contrary to the prevailing view in the country
that the oil sands boom helps only three million or so Albertans and hurts
the other 27 million people outside the western province who must cope
with high oil prices.
-
- In terms of jobs, Alberta could have 3.6 million person
years or 56 per cent of the work that is predicted, compared with one million
person years or 16 per cent for Ontario. Outside Canada, there could be
another 1.1 million person years of labour.
-
- "The dollars are spent here in Alberta but the employment
benefits are spread across the country, primarily in Ontario, said Greg
Stringham, a vice-president at the Canadian Association of Petroleum Producers,
an energy industry lobbyist. "The benefits and expenditures are spread
all the way across the country.
-
- In terms of government revenue, it is in fact Ottawa
and not Edmonton that looks to rake in the most. Alberta's main cash flow
will be from royalties, as the underlying resource is owned by the province,
but looking at taxes, the federal government's coffers is the place that
could be pelted with a gusher of petrodollars.
-
- The report suggests that of $123-billion in expected
government revenue, Ottawa is set to reap the biggest share, $51-billion
or 41 per cent
-
- "The federal government is doing very well out of
this, Mr. Stringham said.
-
- However, Ottawa is followed closely by Alberta, at $44-billion
or 36 per cent, meaning a single province essentially stands side-by-side
with the federal government.
-
- The other nine provinces and three territories look to
pick up $12-billion from various taxes, or 9 per cent of the total revenue,
the study says. That's less what cities, mostly in Alberta, could expect
" a take estimated at $17-billion or 14 per cent of the total, generated
solely by property taxes.
-
- Most of the oil sands activity outside Alberta is represented
by manufacturing in Ontario. Suncor Energy Inc., for instance, has more
than 500 contractors in Eastern Canada, including General Motors of Canada
Ltd., which provides fleets of pickup trucks. GM Canada does the same for
Syncrude Canada Ltd.
-
- http://www.theglobeandmail.com/servlet/story/RT
GAM.20050929.wceri0929/BNStory/Business/
-
-
- Comment
- By Zuerrnnovahh-Starr Livingstone
- Educate Yourself.org
- 10-1-5
-
- This article reports the Province of Alberta gets 70%
of the money derived from oil revenues. It is true the provinces are the
beneficiaries of the natural resources under the Canadian Constitution,
formerly called the British North America Act (London 1867), but that 70%
includes the corporate share of revenues and how much leaves Alberta and
Canada for New York and London is not published.
-
- Calgary and Edmonton are sprawling cities each approaching
a million in population. They each appear to be just like any American
mid-western city. For a province which has been pumping oil to since 1914
it does not have the opulence of the Gulf of Arabia nations. Albertans
do not have the demonstrable wealth of individual Texans even though Alberta
has far more oil than Texas. Alberta has shipped enough oil to America
since WWII to build a mansion for every Albertan family. Albertans live
in comfortable spacious frame houses and for the most part are living from
paycheque to paycheque barely paying the mortgage. The billions of dollars
in oil revenues does go to the provincial government but it is but a fraction
of the wealth which has already been pumped out of the ground. Oil billionaires
do not live in Alberta. There are many millionaires but they are owners
of service industries. In 1981 when the artificial oil boom of the late
70s faded and many service industries went bankrupt in Texas and Louisiana...Alberta
was broke too. All the hotels went into receivership. Many of the smaller
drilling companies went bankrupt and their leases were grabbed by the larger
companies for pennies on the dollar even though there were good showings
on the drill holes.
-
- Even the Provincial Government soon had to go into debt
to meet its enacted obligations. The Alberta government has only recently
paid off its debts even though it has been pumping oil and gas to the USA
at Saudi Arabia levels. The Province of Alberta does not get the same share
of revenue the royal families of Saudi Arabia derive from their petroleum
exports.
-
- Alberta is not Venezuela. Venezuela has been shipping
oil to the USA since 1910 through Rockefeller owned companies. It is still
underdeveloped and impoverished for the most part. Under 10% of the value
of the petroleum shipped from the South American country has stayed in
the country. Hugo Chavez, the elected popular President of Venezuela insists
that his country should get more. Libya under Muammar Gaddafi is getting
at least half of its export value on petroleum. The states in the Gulf
of Arabia are getting about half. Iraq under Saddam Hussein was getting
about half. Alberta is getting between 10 and 20%. Revenue is in the service
industries. Capital and primary heavy industry does not stay in Alberta.
-
- This article was written for the Globe and Mail a newspaper
in Toronto which is supposedly Canada's national paper. Most people in
Ontario have no idea of what Alberta is. Most Torontonians have never been
to western Canada. The standards of living in Ontario and Alberta are nearly
identical. Gross family income is similar. Family debt is similar. If the
same status quo remains Albertans will not be fabulously wealthy in ten
years, up to eighty cents on every dollar will leave the province. It is
more likely that Ontario, the industrial center of Canada will see more
revenue from Alberta than Albertans will. The lion's share of capital leaves
Canada. Follow the money and you will find the usual list of suspects.
-
- Zuerrnnovahh-Starr Livingstone
-
- © Copyright 2005 Educate-Yourself.org All Rights
Reserved.
-
- http://educate-yourself.org/zsl/oilinalberta01oct05.shtml
|
