Another Day. Another cancelled project in Alberta's embattled oil patch.
This time, it was Encana putting their gas plant in the Duvernay Region on hold. The company says it's because they are unsure about the outcome of the Notley government’s climate change and royalty review panels. Encana CEO Doug Suttles said, “We need to know the rules of the game before we start to play.”
Encana, on Thursday reported a loss of 1.2 billion in the last 3 month reporting period. Encana has also laid off 40 percent of its staff since 2012 including about 400 employees this year.
Encana is withholding investment in Alberta. And if you think it’s about the price of oil or natural gas alone, you’d be wrong.
Encana is refocusing its business interests in Texas, spending about 2.2 billion dollars there this year. That’s no surprise. Texas has a stable business environment with low taxation of businesses. Texas doesn’t have a carbon tax and Texas has a flat rate reliable royalty total rate of 25.3 percent, with 12.5 percent to the landowner and 12.85 percent to the state. Texas offers stability.
It’s easy to build a business plan around stability but Alberta doesn’t offer stability anymore.
If I was going to sabotage the oil patch, I'd do exactly what Rachel Notley is doing.
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