Wednesday, March 16, 2016

Open letter to 'Albertans First'

I've been observing your movement mature for some time now George Clark. I'm not writing for the purpose of focusing on the miss-spelling of coup d'etat, or to talk about your sign. I want to address your position, and reasoning, regarding Alberta's current issues as frankly I think you're putting the blame in the wrong place and are simply wasting the government's time, and depleting reserves, in your efforts. I deeply care about Alberta's future, I've been writing on the culmination of numerous issues for nearly 6 years many of which cross-over with your hasty, and incorrect, observations.

The movement you have created is contributing heavily to what is becoming an increasingly divisive, and toxic, political climate with few if any actual solutions to the real problems which as hard as it may be for you to hear have existed and have been building for quite some time. Not because of "the Liberals", or "the leftists", or whatever blanket label you want to throw around as though there are only two strict sets of rules for political ideologies to follow but because Alberta's perceived prosperity was always assuredly time limited and I intend to show you these issues exist across the political spectrum. While you may admit that the PCAA made many mistakes contributing to Alberta's situation your movement did not choose to exist while those mistakes were being made. I have been vocal for a long time, George, no one was listening.

To demonstrate what I mean by this here is a post I made prior to the election of the NDP. As you can see it discusses what I viewed as some of the upcoming problems Alberta would be facing (Canada too, really) such as abandoned oil& gas wells skyrocketing and an interesting quote from Jim Prentice, a Stephen Harper favourite where he called what we can see today is essentially an imploding labour market "an opportunity" for oil & gas companies to take advantage of favourable conditions.

I've been following this descent from grace for some time, George, for instance here is one of my favourite links few Albertans ever want to seem to acknowledge, or address, from 2012, discussing a memo about the soaring costs of oilsands development:
A confidential government memorandum obtained by CBC News warns that soaring costs of developing the Alberta oilsands could put the brakes on the massive project, stalling one of the main engines of the Canadian economy. 
The booming oilsands industry supports tens of thousands of Canadian jobs, and pumps billions of dollars a year into the national economy. 
The memo written by Mark Corey, one of the highest-ranking officials in the federal Department of Natural Resources, warns that if the current trend of spiralling labour and other costs continues, investors may start to turn off the tap on the massive amounts of money needed to develop the oilsands. 
"Although current crude prices promote oilsands development, ever-increasing capital and operating costs could make this price insufficient to support oilsands development at forecast levels," Corey writes. 
Cost increases are currently "the biggest risk to investment in the sector," and could jeopardize the viability of some projects, he says. 
Rising labour costs 
The memo estimates that operating and capital costs to extract a barrel of oil from the tar-like sands have both more than doubled over the past decade. 
It blames a chronic shortage of workers and resulting sky-high labour costs as the main cause of increased operating expenses. 
Corey's memo reflects a growing concern inside government over the future of the oilsands, and specifically the massive amount of capital investment that will be needed to fuel their continued development. 
Natural Resources Minister Joe Oliver recently estimated the oilsands would need $650 billion in capital investments in the next decade alone — almost five times what's been spent there over the past 50 years. 
The memo written in April this year was obtained under the Access to Information Act and appears to have been prepared for Natural Resources Minister Joe Oliver. 
The document pre-dates the Harper government's current review of foreign takeovers of two Canadian energy companies. 
It nonetheless bolsters the contention of many in industry and government that Canada can hardly afford to turn away foreign investment in the oilsands.
In the latter half of 2014 I caught this article from the Financial Post titled 'Cost-cutting fever grips oil sands players as economics called into question' and as you'll see in the article itself was published before the collapse in oil price:
Canadian oil companies are ruthlessly enforcing capital discipline as project costs creep up and shareholders pressure management to focus only on the most profitable ventures. 
Suncor Energy Inc. announced a billion-dollar cut for the rest of the year even though the company raised its oil price forecast. 
Others such as Athabasca Oil Corp., PennWest Exploration Ltd., Talisman Energy Inc. and Sunshine Oil Sands Ltd. are also cutting back due to a mix of internal corporate issues and project uncertainty. Cenovus Energy Inc. is also facing cost pressures at its Foster Creek oil sands facility. 
“Given that the low-bearing fruit have already been developed, the next wave of oil sands project are coming from areas where geology might not be as uniform,” said Dinara Millington, senior vice president at the Canadian Energy Research Institute.
The NDP government is not making the situation worse, George, you just didn't realize how bad the situation already was. With oil at $100 and a PC government the industry was still barely turning a profit. I've seen a lot of statements from you that say things like "we were doing fine when oil was $10 barrel", read those articles and you will understand why.

I don't disagree with every single one of your positions on specific issues particularly in regards to the Carbon Tax (from a certain point of view which can be found here). Nor do I disagree with some of your points on wind turbines (in fact I believe environmentalists have some hard truths to account for). But what I do disagree with is your whole movement sat on their hands when "times were good" while the prior governments gambled on the futures market and called that a budget or "action plan", whichever you prefer. Where were you then?

Your clear bias against the NDP government and the very disproportional amount of blame you've laid at their feet is irresponsible, uninformed, and regardless of the political football outcome will not solve Alberta's problems because it does not address them. Simply saying "no carbon tax" doesn't address the myriad of other issues actually creating the problems you're complaining about - the carbon tax not being one of them. If you're truly concerned about Albertans, their futures, their jobs, and their prosperity then you will be honest with yourself about our situation and put your political views aside. There is no easy way out of this situation, and we're in for many years of pain if we ever recover at all.

The industry and governments bought by the industry intentionally lied to Albertans George. They knew, and they didn't tell you. Increasingly they are looking at automation, and there will be no more 4000 man camps, did they tell you that? Is that because of the NDP too? No, it's because the oilsands are expensive to produce and the profits for foreign owners mean more than your job, your house, your future, George.

This is why people like me have been screaming for years for the PCAA government to do anything, raise royalties, enforce environmental regulations, anything, to protect our future and the prosperity of our children and you know what George? No one listened.

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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.