The Oil Drum: Canada

Income trust imbroglio

On April 9, The Globe and Mail reported that Flaherty's tax changes, which were supposed to have brought Ottawa more revenue, are having the opposite effect. Not only is revenue lost instead of gained, Canada is losing ownership of its resources in the process, and investment in the energy sector is decreasing. "It would only take slightly more than 15 per cent of the trust sector to be bought out by foreign private equity, and non-Canadian firms, before Ottawa was losing annual tax revenue equivalent to what it said eluded its grasp before the trust tax."

In other words, Ottawa could lose $5- to $6-billion annually. The article quotes Sandy McIntyre of Sentry Select Capital Corporation: "If so-called tax fairness was intended to accelerate the sale of Canadian companies to foreign entities, then it is a success. If it was intended to increase Canadian tax revenues, it is a failure."

No easy fix on emissions: Conoco

Reducing greenhouse gas emissions in the oil sands will not happen quickly, said Kevin Meyers, president of ConocoPhillips Canada, one of the country's largest energy companies.

"We need to allow the time for technology to be developed so we can implement this without major economic upheavals," Mr. Meyers said in an interview at the company's Calgary headquarters yesterday.

Earlier this week, ConocoPhillips Co., the third-largest energy company in the United States, became the first oil firm to call on Congress and the President to pass legislation to either tax carbon dioxide emissions or impose a cap on those emissions, which are the leading cause of global warming.

The company's production, after royalties, was 1.96 million barrels of oil and natural gas a day in 2006, with about 40 per cent of that in the U.S. and 12 per cent in Canada. The Alberta oil sands is a major growth area, with the eventual potential of more than 400,000 barrels a day from several projects, up from about 30,000 a barrels a day now from its 9-per-cent stake in miner Syncrude Canada Ltd.