Thursday, March 7, 2013


Hooollly crap! That was epic! Did I not say it would be epic? I totally did.

Where to even begin? The fact there is less than a billion left in Alberta's sustainability fund after this budget? The over $4 billion in borrowing to complete infrastructure that should have been in place 20 years ago to accommodate current growth, nevermind future growth? The whole "leveraging our triple A status to blah blah blah". Classic! Because that's working for others right?

So to sum up Alberta's budget: There will be insufficient spending for the requirements of the population growth we've experienced and are going to experience and also need to operate the industry which isn't providing sufficient returns. We're going to put some money aside for "contingencies" (of course this should be interesting considering the future is going to be one big fucking "contingency"), and of course into the heritage fund (so our children will hopefully have enough money to clean up this crap), of course the children will need the money to clean up this crap because funding has been cut for their energy future and Alberta's environmental programs. Oh, did I mention that on top of basically draining the "sustainability fund", and cutting services, we're going to borrow more too to complete the infrastructure projects like Highway 63 which is apparently "building for the future" (because it's been like 20 deaths too many or something) and isn't actually "cataching up to the present due to neglect in the past" and again all so that we can handle the volume of traffic needed to service the oilsands which are not providing a sufficient return.

Now I know there's a lot of talk about royalties, and the fact they should go up. They should, but on this one I will give the government credit: It will drive the oil companies away. Why? Because it's not just the government operating on thin margins. What's extremely interesting about extreme energy exploration is that the exploration portion can be extremely costly, much more costly than conventional oil and a miss can be devastating. Most companies operating in the oilsands have assets elsewhere, take Nexen for example. The oilsands in a perfect world only have a 3:1 energy returned on energy invested ratio to begin with, that's before the cost of finding it in the first place.

The oilsands are not cost effective to run what-so-ever. The Redford government knows this (they were sent a memo). All of this deflection on to the U.S. shale boom (which isn't what it's promised to be either, but that's another topic) is simply meant to confuse you and prevent you from asking the question: are they viable in the first place? There is so much focus on "new markets" that people are not questioning the fact that there is all of this demand for people to come here and no return on them being here. Is that not strange to any of you? If we're truly expecting a city the size of Calgary due to "growth" to show up here, would revenue not increase from said growth? Of course it would! But our spending requirements and infrastructure costs will go up more.

As I said.. epic.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for CenturyLink

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

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