What is Fair???

What is Fair???

Postby Oscar » Tue May 27, 2008 7:27 pm

May 27, 2008

What is Fair???

by John Keen

Some friends thought the Business Editor of the Leader Post was referring to me in his column of Saturday May 24th. Probably he was. I am indignant about low resource revenues. For good reason. They are low.

My information source is a rancher from southeast of here. In the oil country. John and Elsie Stone live south of Mythical, Sask. On the edge of the Illusory Hills. John Stone's interest in the oil industry is prompted by the fact his family never obtained mineral rights to their place. His whole life has been tinged with bitterness by the fact the Gravy Train left him at the station. Recently the anger is intensified because the cattle business is in the pits and the oil business is booming.

Although the Stone family doesn't benefit from mineral rights, they do share in oil revenue like other citizens. Their share of oil comes to around 165 barrels of crude oil apiece. For John, Elsie, and the four boys that's 1000 barrels of crude a year.

The province acts on their behalf, (and ours) administering the industry and collecting revenues. For the first 4 years of this century revenues were about $5on each barrel of $30 oil. On the John Stone family oil, the companies got $30,000 worth of oil and paid $5,000 to the province.

It was my imaginary John Stones knowledge of the real oil industry that caused a confrontation in the real world. On same the day the Regina Leader-Post carried the news of $130 dollar plus oil, provincial oil revenues were predicted to double. Only Double? He said!!! ONLY DOUBLE!!! All those "F" words came to mind. "Fiscal" responsibility, "Fiduciary" responsibility.

John was already upset by high fuel prices and low beef prices. The news infuriated him; he knew what it meant in real terms. His knew his family's oil wouldn't sell for $130. Too much Saskatchewan crude was low quality. But it might sell for $100. That meant, on the Stone family's 1000 barrels, instead of $30,000 the oil companies would get $100,000 and would give the province $10,000 instead of $5000. And Big Oil would have $90,000 left, not $25.000.

John headed for Regina. He did get to meet some people who explained there was little they could do. "Look" he said, "Let's split the money?" 1000 barrels @$100, $50,000 dollars to them, $50,000 to the province? The companies make twice as much, the province makes 10 times as much." Once again it was explained, there was little that could be done.

John Stone drew himself up to his impressive 6'3" height (plus those high heeled boots) and thundered, "You people are underpricing our product. I suggested you take $50, you maybe should take $60. Don't you realize 150 million barrels of oil @ $60 a barrel is NINE BILLION DOLLARS? Just whose oil is it, and just who are you working for? Good bye.

John Keen CIR/SS
Riceton, SK
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