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Are Albertans getting a fair royalty rate for the resources we own?

It’s a reasonable question and one that has dogged Ed Stelmach since 2007 when he “initiated a public review of the province’s royalty and tax regime to ensure Albertans are receiving a fair share from energy development through royalties, taxes and fees.”

An important reason why Ed seems to be hated by much of Calgary’s oil and gas sector is the conventional wisdom (a.k.a. convenient myth, for some opportunists) that this royalty review drove away investment from the province and is primarily responsible for our continued economic woes.  The real blow to Alberta’s “one sector economy” occurred not long after the review when the global market for oil became extremely volatile and the price fell from $142 to $34 abarrel as the global finance industry melted down in the fall of 2008. The price eventually stabilized around $65-75 after the stock market began to recover last March.

It was unlucky political timing for a new Premier having difficulty articulating a vision for Alberta’s future, but even worse for the thousands of Albertans that lost their jobs as a result.

Brent barrel petroleum spot prices, May 1987 – March 2009

Last year’s tough economic times affected Alberta’s entire economy and this year’s $4.7 billion deficit is strong evidence that these circumstances endure. But even with the price volatility ushered in by the greatest financial collapse in 70 years, the question of whether Albertans are getting their fair share for the resources we own remains a reasonable, albeit limiting, one. I would prefer to see us asking how our government can act as more responsible and effective steward of our natural resources, our climate and Alberta’s environment. We also need to look at how to reduce the province’s ridiculous over-reliance on variable resource revenues and make large strategic investments to our post-secondary education system to help diversify our economy, (the exact opposite approach of the 2.7 per cent cut we saw in budget 2010).

Bearing all this in mind, yesterday the Edmonton Journal reported that:

Alberta least competitive in oil and gas: U of C report

EDMONTON — Alberta is dead last in terms of competitiveness for oil and gas development and should drop its current royalty regime, says a University of Calgary professor.

Jack Mintz, director of the School for Public Policy, ranked five provinces plus Texas for the ability of their tax and royalty structures to attract investment, and found Alberta’s current royalty regime “creates a burden on investment that is twice as high on oil and gas” compared with other sectors in the economy.

Interesting findings. Here’s the PDF.

Although the comment is now removed from edmontonjournal.com website, the following was pasted from a Forbes.com database of board of directors’ compensation disclosed by publicly traded companies:

Director Imperial Oil

57 Years Old

Jack M. Mintz, Palmer Chair in Public Policy for the University of Calgary. President and chief executive officer, The C.D. Howe Institute (public policy institute) and professor, Joseph L. Rotman School of Management, University of Toronto.

Director Compensation (Imperial Oil) for 2008

Fees earned or paid in cash	$69,000.00
Stock awards	$138,200.00
Option awards (in $)	$0.00
Non-equity incentive plan compensation	$0.00
Change in pension value and nondisqualified compensation earnings	$0.00
All other compensation	$0.00
Total Compensation	$207,200.00

Serving on Imperial Oil’s board of directors, Mr. Mintz has a direct financial stake in the success of a subsidiary of the largest oil company in the world that just happens to have billions invested in projects in Alberta.

The introduction to Jack Mintz’s research states that:

it is crucial to know just how much government tax and royalty policies affect the investment decisions the oil and gas industry makes relative to those of other sectors of the economy.”

If the conflict of interest couldn’t be more glaringly obvious, look no further than imperialoil.ca where you find them crowing: Imperial Oil Foundation gives $1 million to the University of Calgary’s School of Public Policy.

Ridicule is the only appropriate response to this mockery of “public policy research. ”

For the record, I agree it is important to ask how much do “government tax and royalty policies affect the investment decisions the oil and gas industry?”

Without independently funded studies, free of direct financial conflicts of interest on the part of the researcher and the university department undertaking the study, I have little faith in our ability to get a straight answer to this important question… which is another compelling reason for the government to properly fund our post-secondary researchers.

The Journal took some flack on this in the comments for churning out a preliminary story on this naked and seemingly effective, attempt to grab headlines. There are 70 (AHHH!!!) related articles and it looks like most are  churnalism.

Ok. Deep breath.

Can we please all work together and put in a little more effort to ensure that we aren’t being spoon fed bullshit?

K thx.

Do LOLCats help fight censorship? The surprising answer is that yes they do.

This year’s Dalton Camp Lecture in Journalism was a feast for media nerds like me. Former CBC reporter and producer Sue Gardner, now executive director of the Wikimedia Foundation, made more insightful comments about the future of media, journalism and the way the web is changing our relationship with information than I can recount here. But one comment on the resiliency of the web in adressing would be censors of widely adopted social media platforms really stuck out for me.

Reflecting on the usefulness of Twitter to the Iranian election protests last June, Sue Gardner said (with my added emphasis and links):

Things like Twitter are really hard to censor because they are tools that lots of people use for lots of different reasons. There’s a guy named Ethan Zuckerman, who is a fellow at the Berkman Institute at MIT and he calls this the “cute cat theory.”

So the theory is that if millions of ordinary people use a tool like Flickr, or YouTube, or Twitter, or Facebook, or whatever – and they use it to share cute pictures of cats, or their grandchildren, or party invitations, or snapshots, or whatever – and meanwhile a few activists also use that same tool for other purposes, to share “information that wants to be free,” that people want to suppress: that makes censorship really difficult.

What happens is that if you try and shut down the tool that people are using to share cute pictures of cats they will freak out, right?  Because they want to share the pictures of the cats.

So what that means is that the pictures of the cat lovers provide cover for tools that are also used for, frankly, more important purposes such as for sharing information that would otherwise be suppressed. So the utility, the sort of general broad utility, of something like twitter makes it much much harder to censor.

Unsurprisingly, I’d recommend that you listen to the entire hour long 2009 Dalton Camp Lecture in Journalism, and while you’re at it, subscribe to the CBC Ideas podcast where I found this gem among many others. Lastly, a hat tip to the I can has cheezburger network, including the infamous FAIL Blog, for their enormous lack of FAIL.

The difference between science and ideology is that science tries to explain all known observations, whereas ideology selects only those observations that support a preconceived notion. As world leaders negotiate this week in Copenhagen, let’s hope science, not ideology, guides their discussions.

Thomas Homer-Dixon and Andrew Weaver in today’s Globe and Mail debunking four common nonsensical statements about climate change.

The “come for the crossword, stay for the war crimes” theory of newspaper reading I think doesn’t actually work, by and large, with the one exception being the front page.

Clay Shirky doing his thing in a talk on “accountability journalism.” [MP3]

(link h/t niemanlab.org)

In a prematurely administered autopsy of the ‘death of conservatism’, Bill Moyers’ Friday interview with Sam Tanenhaus, (the Editor of the New York Times Book Review and the Week in Review section) dissected the motivations and ideology of the “revanchist” anti-Obama birther/teabaggers and the movement against health care reform.

It should come as little surprise that a protest movement attempting to paint Obama as “a basic pastiche of right-wing hobgoblins” is fraught with internal contradiction. Reports of anti-government, anti-tax protesters complaining about the ineffectiveness of public transit service aside,  anti-government protesters demanding that government not touch the effective government program they depend on, Medicare, tend to elicit the most laughter.

(via lookatthisfuckingteabagger)

In a interesting interpretation of the thought (or lack there of) behind these strange messages, Tanenhaus conjures up an articulation of the deep-seeded, nearly unconscious visceral distrust of the dependency created by the patron/client relationship  between the citizens and the state, unleashed by by the  Johnson Administration’s “Great Society” legislative agenda (where, it should be noted, Bill Moyers served in a variety of roles including LBJ’s White House Press Secretary):

BILL MOYERS: There’s a paradox there, right? I mean, they say they’re against government and yet the majority of Americans, according to all the polls, don’t want their government touched. You know, there were people at these town hall meetings this summer, saying “Don’t touch my Medicare.” You know, keep the government out of my Social Security.

SAM TANENHAUS: Yes. This is an interesting argument. Because it’s very easy to mock, and we see this a lot. “Oh, these fools. These old codgers say the government won’t take my Medicare away. Don’t know Medicare is a government program?” That’s not really what’s going on, I think. I think there’s something different. A sense about how both the left and the right grew skeptical of Great Society programs under Lyndon Johnson, and the argument was everyone was becoming a kind of client or ward of the state. That we’ve become a nation of patron/client relationships. And a colleague of yours, Richard Goodwin, very brilliant political thinker, in 1967 warned, “We all expect too much from government.” We expect it to create all the jobs. We expect it to rescue the economy. To fight the wars. To give us a good life”. So, when people say, “Don’t take my Medicare away,” what they really mean is, “We’re entirely dependent on this government and we’re afraid they’ll take one thing away that we’ve gotten used to and replace it with something that won’t be so good. And there’s nothing we can do about it. We’re powerless before the very guardian that protects us.“

Certainly this revelation does not explain the totality of the situation in the United States, but I think it does offer a nuance often missed in similar attempts to delineate conservative ideology.

Tenenhaus’ comments on the dominance of theater and show in American politics are also worth the look: download the podcast of Friday’s Bill Moyers Journal interview with Sam Tanenhaus.

While the prospect of a federal election this Fall threatens to derail the entire process, the government’s copyright reform consultations are picking up speed and starting to capture some attention. I’ve followed the consultations closely. I read the crowd-aggregated news stories, Op-Eds and blog posts on twitter (at the hashtag #copycon), observed the Calgary roundtable and even watched the webcast of the Montreal townhall.

As noted in previous posts on this topic, I’ve been personally interested in copyright and internet law (and certainly copyright enforcement) since I downloaded my first MP3 thirteen years ago.  Recently, I’ve been fortunate to have the issue intersect with my professional life as well. At the PSE Partners conference last week, Dr. Meera Nair had a very interesting response to a question I asked her about how digital locks – software that blocks users’ ability to copy files including Technonological Protection Measures, TPMs, and Digital Rights Management, DRM – reconcile with the fair dealing provision afforded by Canadian legislation and case law.  Dr. Nair explains on her blog “Fair Duty”

Simply put, once a work is locked, it’s game over. Fair dealing is meaningless if you cannot access the material. Many individuals are anxious that IF Canadian law were to prohibit the circumvention of TPMs, such a prohibition should only apply to circumvention for infringing purposes. Meaning, if you circumvent a TPM for a noninfringing use, such as fair dealing, you will not run afoul of the law. Yet, there is a question of why permit the use of TPMs at all? TPMs take away existing rights available to Canadians. To limit access to published work is to deny fair dealing. Said another way, TPMs violate a structure of law that has been in place since the creation of copyright itself (nearly300 years) and present in Canadian law since its inception in 1924.

In other words, the very idea of companies or industry consortiums using digital locks to prevent people from making copies of works they’ve legally purchased runs counter to the notion of limitation in copyright law – which limits both creators and consumers -  as well as the existing provisions afforded by fair dealing under Canadian law.

Sadly, in reading and listening to many of the remarks of industry stakeholders at the formal roundtables and the townhall, this unwarranted trampling of Canadian’ rights through the imposition of digital locks is being touted as the only way these industries can save themselves from the unwashed masses of file sharers. At least in the realm of music, this position is convieniently ignoring UK music industry economists’ admission that the music industry is growing.

In today’s Toronto Star, Michael Geist addresses the issue of creating longevity in any forthcoming adjustments to Canadian copyright law, and in doing so, establishes four principles to employ in the evaluation of proposed changes. Dr. Geist’s second point implicitly addresses the issue of digital locks by acknowledging the short comings of proprietary technological constraints.

First, copyright law should strive for balance between creator rights and users’ rights. If the law tilts too far in one direction, the other side is virtually guaranteed to put the issue of reform back on the table and the changes do not last.

Second, the law must be technologically neutral. Copyright has proven remarkably resilient over the decades in large measure because it states broad principles about the scope and limits of protection. If copyright veers too far toward specific technologies by mandating new protection for specific business models or technological innovations, those rules risk being overtaken as the technologies and marketplace evolve.

Third, the law should strive for simplification and clarity. Copyright may once have been a niche issue understood by a small number of experts, yet today it affects the daily lives of millions. If Canadians are to respect the law, they must first understand it. When Bill C-61 proposed a 12-part test to determine whether recording a television program was legal, it rendered the law far too complex for the average person.

Fourth, the law should embrace flexibility, which has allowed many copyright provisions to adapt to continually changing economic and technology environments. Flexibility requires a general-purpose law and ensures that it works for stakeholders across the spectrum, whether documentary filmmakers, musicians, teachers, researchers, businesses or consumers.

I’m hopeful that something reasonable will come out of these consultations but I also worry that the government is going to miss the mark and embrace the imposition of a copyright clampdown that either restricts established legal protections or turns regular Canadians into criminals.  You can do your part to make sure that doesn’t happen by making your voice heard.

Make your written submission right here: http://copyright.econsultation.ca/topics-sujets/show-montrer/18