Quote:
Originally Posted by freeweed
Stelmach was a mistake from day one, and anyone with any shred of sense knew it. The PCs wrote their own obit with that choice (and why the sweet hell did they just RE-AFFIRM this decision???).
Luckily, we managed to find some lovely social conservatives to reverse 20 years of progress in Alberta.
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^ ahh the popular "lets blame Stelmach for the current economic problems in Alberta" refrain, not the overall global energy slump nor the Alberta natural gas bust! An easy finger to point...somebody must pay.
Well, instead blame the Americans and their damn Shale gas for much of your current problems
How is the current Government supposed to deal with a sudden $4 Billion + fall in natural gas royalties in one year alone? Try to restructure Oilsands royalties? Pull promised funding for infrastructure projects? Institute Provincial sales tax? Cut spending from each department? Now add to that the drop in corporate and personal taxes paid into provincial coffers; a bit of a problem that would cause any Government to stumble.
A 'shale gale' slams into Alberta
How the U.S. natural gas revolution is squeezing this province's economy
BY LISA SCHMIDT, CALGARY HERALD; CANWEST NEWS SERVICE (link)
In the good times, Peter Pleskie would look at his empty industrial yard as a sign of success for his oilpatch company.
These days, neat rows of excavators, trucks and other heavy construction equipment fill the CerPro Energy Services compound west of Medicine Hat, reminders of his sudden reversal in fortune.
CerPro was once a rising business star, rapidly expanding to a workforce of more than 300 people in less than four years as Canada's oilpatch flourished.
An explosion of natural gas drilling earlier this decade drove demand for his construction business at well sites, gas plants and pipelines throughout southern Alberta and southeast Saskatchewan.
"It seemed like there was going to be no end to the boom," says Pleskie, a welder by trade.
In early December, nearly $20 million worth of new CerPro equipment rolled off the lot for the last time, put on the auction block after the company was pushed into bankruptcy in late June.
The equipment sold for just $8.2 million.
"We powered through as hard as we could," he says.
Pleskie's troubles stem from a dramatic slowdown in Alberta's natural gas business, driven largely by an emerging new resource: shale gas.
This "shale gale," as renowned oilpatch author Daniel Yergin has termed it, is moving relentlessly across North America, driven by new technology that has unlocked major stores of the fuel.
And all Albertans, whether they know it or not, are caught in a downdraft, from out-of-work rig hands and rural hotel operators to white-collar executives in downtown office towers and ailing patients lined up in hospital emergency wards.
The natural gas industry -- long the bedrock of Alberta's economy -- faces major threats amid a fundamental shift south of the border. Massive stores of shale gas, once beyond the reach of engineers, are now successfully being squeezed out from under Texas and other U.S. states.
Now Medicine Hat, the unofficial heart of Alberta's natural gas industry for more than a century, is being battered by this shale storm, along with dozens of other Alberta communities. The abrupt slowdown in gas exploration is swelling unemployment rolls and bankruptcies, while choking off corporate profits and money flowing into government coffers.
Lower production and weak prices have slashed the provincial government's take from natural gas to $1.9 billion this year, compared to more than $6 billion a year ago.
The Stelmach government now faces nearly a $9-billion shortfall over the next three years due to the sharp drop in royalty revenues, led downward by natural gas.
The change underscores the fact that Alberta's oilpatch is really about natural gas, which traditionally pumps more than two-thirds of the province's resource revenues.
But the gas windfall is evaporating faster than anyone could have imagined.
"How quickly that geological advantage has turned into a disadvantage," says Derek Burleton, chief economist with TD Bank, who authored a study this fall on pressures facing Alberta's gas industry.
"The concern, and rightly so, is that this could persist. This isn't just a one-or two-year thing."
The stakes are high for Alberta's 3.6 million residents. The province's natural gas fuels nearly $40 billion in annual production -- more than one-10th of the entire economy.
The threat that Alberta's key export could be quickly displaced by cheaper gas closer to U.S. markets is high on the minds of provincial politicians.
"Seventy per cent of our royalties are in natural gas, so we're exceptionally vulnerable when that's down," says Finance Minister Iris Evans.
full article -
http://www.edmontonjournal.com/busin...940/story.html