(between friends, in Alberta, it’s just one of hundreds).
If you were Alberta’s oil industry, you would have hundreds of billions of dollars. Left over. The amazing amount of money for the oil corporations is explained in a great report called Misplaced Generosity (http://parklandinstitute.ca/research/summary/misplaced_generosity/) from the Parkland Institute. The report shows the oil industry has pumped itself hundreds of billions of dollars of excess profits over the last 10 to 14 years.
The report sums up: “Since the 1997 royalty changes, Alberta’s tar sands have produced between $97 billion and $167 billion in pre-tax profits for the largely foreign-owned companies operating there. And, because of the cost structure in the tar sands, approximately 80-90 per cent of those have been excess profits.”
“In all, between 1999 and 2008, Alberta’s traditional oil and natural gas industry enjoyed more than $121 billion in excess, unearned pre-tax profits-more than a quarter of which accrued in 2007 and 2008.”
Regan Boyd’s report does a great job of detailing how the province has failed to collect billions in excess rent from the oil industry over this time. But he doesn’t point out much about where the money goes, other than into corporate oil generally.
Some individual companies have rolled in absolutely windfall profits. This year Enbridge reports a 33% increase in revenue, to $5.3 billion. In 2010 Encana, the big natural gas company, had revenues of $8.8 billion, with $1.5 billion of that being profit. In 2006 when gas prices peaked, Encana made the Canadian corporate recording breaking profit of $6 billion (on revenue of about $18 billion!)
In 2010 Imperial Oil (Esso) made $3.88 billion in profits on revenues of $31 billion. (http://en.wikipedia.org/wiki/Imperial_Oil). Imperial operates with about 5,000 employees. I hoped they paid them well, because that’s about $776,000 profit per employee!
That makes Imperial Oil worth just about as much as the entire government of Alberta which recently has been spending about $30 billion a year. It also makes Imperial worth more than three Nova Scotias, which spends about $9 billion a year.
The problems with all these billions, and there are hundreds of them, is that it starts to feel kind of meaningless. What’s a billion dollars? It’s hard to figure, it certainly would buy a lot of Chevrolets, wouldn’t it? In fact, if you had a billion dollars, you could make 999 of your closest friends millionaires…. plus yourself of course. That’s right, a billion is one thousand million dollars.
If you were even more generous (although it’s hard to talk about generosity here, in the context of Alberta’s massive generosity to the oil business) you could get a lot of people employed. If it costs $125,000 to create a $75,000 a year job – that’s a pretty good paying job – you could create 8,000 full time jobs for a year.
You could pay for about one third of Alberta’s post-secondary students, the operating budget for all the province’s universities, colleges, technical institutes and adult learning is $2.8 billion (Alberta Budget 2011-12).
You could pay the full operating costs for the cities of Red Deer, Lethbridge and Medicine Hat (including all their employees) for a full year.
You could say, in a sense, that a billion is the new million. But it’s still a fantastically huge amount of money. Even on a national scale, the oil industry has grabbed on to a huge piece of wealth in Canada. How much? Well according to Regan Boyd’s numbers, it’s about $300 billion in the last dozen or so years. If we were to split that up between every one of us 30 million Canadians, it’s about $10,000 each. Unfortunately, that money is NOT being spread around like that. It’s going to the 1%, leaving little left for the other 99 per cent of us.