KEEN: John Stone is Beefing about Oil

[Oscar]

John Stone is Beefing about Oil

by John Stone - May 2008

Some friends thought the Business Editor of the Leader Post was referring to me in his column of Saturday May 24th. Probably he was. I am really, really indignant about low resource revenues. For good reason. They are really, really low.

My information source on royalties is a rancher from the southeast. In oil country. John and Elsie Stone live south of Mythical, Sask. On the edge of the Illusory Hills. In a parallel Universe. We talk by Imagaphone.
I don't know why our world doesn't have a John Stone. We sure need one. I guess the simple answer is…parallel universes are not necessarily identical.

John Stone’s intense interest in the oil industry is prompted by the fact his family never obtained mineral rights to their place. His whole life has been tinged with bitterness by the fact the Gravy Train left him at the station. Recently the anger is intensified because the cattle business is in the pits and the oil business is booming.

Although the Stone family doesn’t benefit from mineral rights, they do share in oil revenue. Like all us other universe citizens. Their share of the oil comes to around 165 barrels of crude oil apiece. Like all us other citizens. For John, Elsie, and the four boys that’s almost 1000 barrels of crude a year.

Their province acts on their behalf, (as does ours on ours) administering the industry and collecting revenues. For the first 4 years of this century revenues were about $5on each barrel of $30 oil. On the John Stone family oil, the companies pumped $30,000 worth of oil and paid $5,000 to the province. Per year.

If our world had its own John Stone, with his own knowledge of the oil industry, both Johns reading the same news John read that day might have caused a necessary hooraw on both worlds. On same day both Regina Leader-Posts carried the news of $130 dollar plus oil, other news items said "Provincial oil revenues predicted to double."

"Only Double?" John said!!! "ONLY DOUBLE!!!" All those “F” words came to mind. “Fiscal” responsibility, "Fairness," “Fiduciary” responsibility.

John was already upset by high fuel prices and low beef prices. This news did not help his mood. He knew what it meant in real terms. His knew his family’s oil wouldn’t sell for $130. Too much Saskatchewan crude was low quality. But it might average $100. That meant, on every one of the Stone family’s 1000 barrels, the oil company that pumped the oil would get $100, instead of $30. And would give the province $10/12.50 instead of $5. And on the 1000 barrels, Big Oil would have close to $90,000 left, not $25.000.

In John Stone's parallel Saskatchewan he climbed into the 1/2 ton and headed for Regina. He did get to meet some people who explained there was little they could do. “Look” he said, “Let’s try this, we'll split the money? 1000 barrels @$100per is $100,000. $50,000 dollars to them, $50,000 to the province? The companies make twice as much, the province makes 10 times as much.” Once again it was explained, there was little that could be done.

John Stone drew himself up to his impressive 6’3” height (plus those high heeled boots and very large hat) and thundered, “You people are underpricing our product. I suggested you take $50, you maybe should take $60. Don’t you realize 160 million barrels of oil @ $60 a barrel is NINE BILLION, SIX HUNDRED MILLON DOLLARS? That would double our Provincial budget. And it would be more than fair. If the companies got mad and left, where would they go? Libya?, Venezuela?, Norway?, Saudi Arabia? Almost everybody in the world charges more than what I am suggesting. Just whose oil is it, and just who are you working for? Think about it!! Good bye!

John Keen CIR/SS
jkeen@sasktel.net