Article content continued

Light barrels are on one end and in situ bitumen is on the other. Then there is the downstream consumer that actually burns the stuff and emits between four-and-ten times more carbon into the atmosphere.

The new business of carbon is becoming much more complex than the one-tax-fits-all policy planks put forth by the various political parties. Amidst this, the uneconomic subject of refining and “value-add” has been resurrected. Doesn’t Alberta have enough carbon emissions to deal with already?

So far this year, the near-term reality is that oil and gas revenue is down by 45 per cent; royalties are down by half; and cash flow has evaporated to levels not seen since the early 2000s. Assuming prices stay near the levels recorded in the first quarter, the upstream industry as a whole won’t make any money this year, the first time since 1998. No income means no big tax cheques will be paid provincially or federally.

This faint fiscal pulse should beat a bit stronger in 2016, but in the B-NAU world of volatile commodity prices there will be fleeting value in a barrel of oil, and little value to be had in a thousand cubic feet of natural gas.

Canada’s oil and gas industry is bifurcating into two camps: progressive companies that are able adapt to lower oil and gas prices, and those that can’t

Contrary to popular belief, few geese are laying golden eggs in the business, so there aren’t many eggs to pass around. Debates about raising taxes and reviewing royalties are worthy of discussion, but are mostly moot if the target is the oil and gas industry.

Investment is where the real future prosperity of the province lies. In Alberta, royalties and taxes paid by oil and gas companies add up to between $5 billion and $10 billion a year, depending mostly on commodity prices.