Canada Oil Sands
Worth $1.4 Trillion

By Dave Ebner
The Globe and Mail
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.
By Zuerrnnovahh-Starr Livingstone
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
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