Good points, Piper. It seems to me that we’ve seen and heard environmentalists criticize PM Harper for not creating strong laws to regulate emissions in the oilpatch - by your explanation, that doesn’t fall under federal purview, so maybe environmentalists need to ease up on the dude. 
It doesn’t matter if they do fall under federal purview. The economics are essentially the same whether a given regulation is federal (and in fact some are) or provincial.
What’s material to this discussion, though, is this; such criticism as Harper (or Alison Redford) does or doesn’t deserve for environmental regulation isn’t relevant to the nationality of the person who owns stock in the oil company.
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The focus of our discussion has been on high foreign ownership in the oilsands - my understanding is that the “bitumen bubble” is caused by Alberta receiving lower prices for its oilsands bitumen than world prices because we ship our Western Canadian Select bitumen to the US to be processed to West Texas Intermediate crude oil standards. Alberta has gone from 40 to 19 refineries since 1989; it appears to me that American companies want to ship their product to the US to be refined, so that’s what happens.
What is your understanding of what the “bitumen bubble” is?
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This is part of it. West Texas standard is the world standard; Alberta’s oil is not necessarily priced the same.
The difference in price, however, is not consistent, and to a large extent the difference is not just a matter of the price of refinement, but the availability of transportation and the willingness of U.S. buyers to buy it. The problem with Alberta’s oil is that it’s in Alberta; to refine it (or, for that matter, sell it abroad at all, since Alberta is a province rather notably deficient in oceanside property) you have to move it. Presently most of it moves to refineries in the USA, like in Texas or Chicago. But the price is dependent upon the U.S. oil market - which, if it’s awash in oil, isn’t as interested in Alberta’s oil - and the ability to move it to willing buyers. As the market changes, the “bitumen bubble,” as Alison Redford called it just two months ago, expands or grows. This is why the Alberta, and Canadian, governments are so keen on increased pipeline building; it makes Canadian oil easier to sell to foreign buyers, and even an easier sell to American buyers, and will keep its price less prone to variance. Now, mind, you, Redford came up with the term as an excuse for a budget shortfall; this price volatility has been around forever, but she just invented the term in December when people started asking why the government came up short.
What it has absolutely nothing to do with, though, is the nationality of the company owning the oilpatch, contrary to Dread Pirate Jimbo’s claim that that’s why the Alberta government is getting shortchanged.
So far this year my ignorance has been slayed to death. Thanks you guys.
Seriously.
I hope this keeps up throughout the year.
Both the federal and provincial governments have environmental jurisdiction. I was just focusing on the situation of the Alberta government in my previous post - didn’t mean to suggest that the Feds lack any environmental jurisdiction.
I get all that, but if Alberta had the refineries to increase our bitumen up to West Texas Intermediate quality and were able to transport it to the BC coast to sell to anywhere in the world, would we not get West Texas Intermediate prices for it? Part of the reason we don’t do that is because we don’t have the refinery capabilities here, and part of that reason is the foreign ownership of companies involved in the oil industry who have no interest in investing in Alberta refineries.
From this article:
What topic should we wrassle to the ground next? 
Well. Harper, of course.
You know, Stephen Harper is the Antichrist, he is the One Who Does Not Understand Eastern Canada Because He’s From The West; he is the One Who Hates The East; he is The One Who Does Not Understand Quebec Because Anyone From Alberta Cannot Understand Quebec, and so on.
Let’s have at 'er!
Missed he edit window. We’re Canadians, not Americans. We don’t have “red” and “blue” provinces. We ought to be able to discuss these matters reasonably and rationally, and not make any enemies in the process.
Me, I feel that the Canadian confederation is so strong at this point, that it does not matter who is in power, or whose party is in control. Canada will continue, as a middle-power on the world stage, at the UN, and otherwise, in world affairs,
That’s a good one, since PM Harper was born and raised in Toronto.
I can’t, however, find any cites to refute him being the Antichrist (and being from Toronto doesn’t help). 
He’s not from Toronto, he’s from Etobicoke!! Even though we’re supposed to be all happily getting along since the amalgamation in 1998, there is a massive cultural difference between Toronto and Etobicoke!
Whatever happened to all the ado about the ozone layer? Remember when everyone was scared to death about the ozone layer? Before reading this post, when was the last time anyone heard mention of the ozone layer?
I also don’t hear the terror-inducing phrase global warming a whole lot anymore. It didn’t last very long, relatively, as a huge problem sure to bring about the demise of our children.
Now the looming catastrophe for humanity and countless species of flora and fauna worldwide is climate change. Apparently. Y’know, because we have a ~100-year sample size to determine that a planet that has been spinning for 4,000,000,000 years-plus probably shouldn’t ever experience climate change, unless pollution!
During my 40+ years on Earth, I can honestly say I haven’t noticed the globe getting any warmer, or the climate changing one little bit. I’m recycling, and sorting my trash, not throwing garbage out my car window, composting, but I am not worried about the future of this rock in the least.
Carry on.
Massive cultural difference? Really? The two downtowns are within 20 Kms aren’t they?
If Toronto had more Etobicoke, and less Toronto, they might be able to support an OHL franchise. 
It’s not the planet we’re worried about; it’s the viability of humans being able to live on this planet that’s the problem. This old ball of rock will keep spinning just fine without humans on it.
Again, though, the economic realities don’t matter depending on where a company is headquartered. The largest oil company in Alberta is a Canadian oil company. If it makes sense to build new refinement capacity in Alberta, they will get built, and if it’s affected by a company’s nationality where are the new Suncor refineries? Why would you expect a Canadian company - like Suncor - to build a less profitable refinery in Alberta as opposed to a more profitable one in Texas?
And yet life expectancies worldwide keep rising.
I have complete faith that technology and research are keeping up just fine with the apparent needs of the global environment, and the needs of humans to continue to exist in it.
But I’m pretty relaxed about such things.
I think you’re mixing up two different things; life expectancies are rising because we have better healthcare and medicine that keeps old people alive a long time.
My big concern with global warming is the plants. Plants are very rigid organisms; they need a strict temperature range, strict light conditions, strict temperatures at a specific time. If we mess around too much with global weather and temperature conditions, we’ll see an inability in plants to flourish and feed all of humanity. For example, the prairies in Canada and the US feed hundreds of millions of people (possibly billions). If the weather changes so much that the crops don’t germinate, or the weather stays cold too long and the crops are planted late, or we have droughts and the plants die, or we have too much rain or hail and they can’t properly harvest the crops, people start to starve very quickly. Plants don’t like extreme weather, and that’s what global warming will produce.
Whoah, waitaminute. Is this cite suggesting that if Alberta bitumen were processed into WTI here in Alberta using Albertan refineries that we might be able to sell our product at WTI prices and avoid the bitumen bubble entirely? Except that more than half of all refineries in Alberta were shut down over the last three decades, leaving us beholden to the much larger American refineries who take our product at WCS prices? Which reduces our royalties and the amount of tax collected by both the provincial and the federal governments? And that there hasn’t been a new refinery built in Canada or the US since the 70s? And that the price of building a new refinery is so prohibitively expensive that even a large company, such as, I don’t know, Suncor, would rather stick with the status quo than invest billions into a project that might not break even for several years?
It’s almost as though the article is suggesting that because so much of the oil sands are owned by foreign interests, Alberta (and the Federal government) receive cents on the dollar for our product which directly impacts taxes and prosperity in our nation and that our current economic prosperity is directly tied to interests outside of our nation.
Jimbo, I think you’re confusing an upgrader with a refinery. Upgraders convert bitumen into artificial crude oil. Refineries then further refine the crude into other products.
Upgraders have been built recently, such as the Regina Upgrader. According to the wiki article on upgraders, they have also been built in … Alberta, near the Athabaska oil sands.
So the ownership of the oil companies doesn’t affect where upgraders are built, it appears - it’s driven by economics.
Additionally, I am not an economist, but I assume that if extensive processing of bitumen through an upgrader is required, that will increase the cost of the product - so even if the artificial crude is the equivalent of WTI, it would not be as competitive in price - the cost of processing it would increase its price, even if it is functionally equivalent to WTI. That presumably is taken into account in the pricing of heavy oils; if they need more processing to make them equivalent to natural light crude, their selling price out of the ground will be less than light crudes, to take the processing cost into account.
As well, to the best of my knowledge, royalties are based on the quality of the product as it comes out of the ground, not what it potentially could be turned into through processing. So even if bitumen can be upgraded, that doesn’t mean the royalty will be based on that upgraded product. Royalties are based on the value when first extracted.
Finally, I would really appreciate it if you could explain your repeated references to the feds getting “pennies on the dollar” for “our oil.” As mentioned earlier, the feds don’t get any royalties for oil extracted.
There is no such thing as a refining royalty. So, no, it doesn’t reduce royalties.