rick orman joins alberta pc leadership contest.

It’s good to see such a diverse group of people running for PC leader. If this keeps up, they will scoop the entire agenda and the extremist and ideological Wildrose will be a distant memory. The biggest loser here is Danielle Smith.

Finally a worthy person has thrown his hat in the ring. Someone who realizes the real issues in Alberta, someone with experience in government. Someone with a back bone. Rick will bring Alberta pride back to the people of this province. I have to admit that I thought about Wild Rose until now. If Rick is elected the leader of the party he has my vote, and anyone else that I can influence. Way to go Rick!

Yippy skippy, someone worth voting for.

Back in the day I really thought this man was the sharpest crayon in the box… ‘course I know, there was little to compare to.

Still, he’s a talent we need now more than ever.

Why all this talk about “change”. Things are pretty good as they are.

We need a leader. We also need a leader who genuinely loves the Province of Alberta. Rick Orman is our man!

Rick ;I like you;my first vote;was for Lloyd Crouse;whom I new personaly.I would love to help win in Alberta

Poor Rick, did somebody tell that guy that the Titanic has already scraped its hull against the iceberg? Did somebody remind him that its not the 90’s? Did somebody tell him to catchup and read the news from the last 7 years?

Sorry, Rick, its too little too late. You should have been piping up for Albertans during your tenures, that is of course, unless you had no cajonas or stones to do so.

Mr. Orman;

Thanks for your willingness to run for the leadership of our province. I have a serious concern regarding why Alberta appears to be willing to export upwards of 2,400,000 barrels of raw bitumen (or 24 upgraders) resulting, by my calculation, a transfer of wealth of one trillion two hundred billion dollars ($1,200,000,000,000) outside Alberta/Canada.

What is your position re this transfer and and are you prepared to undertake the necesaary actions to stop such from occurring—or at the very least reverse the trend.

I have a short paper I’m prepared to share with you re how I arrived at these numbers–if you are interested in seeing such.

As well, I have previously shared correspondence with Minister Liepert and various of his colleagues and have enclosed such for your review.

Appreciate your views and feedback.

Terry Burton

Minister Liepert and those copied;

Thank-you for your letter dated May 2011 as the response to my concerns about the present practice in Alberta regarding the exporting of “Raw Bitumen”.

As you stated in your letter, Alberta is presently undertaking strategies that appear to encourage more upgrading in Alberta, however, it appears to me that we are losing the battle regarding making any substantial progress in this regard. Recent articles in the Calgary Herald suggest that we are now heading in a direction where only 52% of the bitumen produced in this province is going to be upgraded here. The previous calculations I had sent you and others was based on 60% being upgraded (a number which I believe should cause all Albertans and Canadians concern) and in this case the projected economic impact to Alberta and Canada was estimated at approximately one trillion ($1,000,000,000,000) dollars in today’s figures.

It would appear obvious to me that the one trillion ($1,000,000,000,000) dollars calculation is now in need of revision, as Alberta now appear to have accepted that instead of 2,000,000 barrels of raw bitumen leaving the province we will now have 2,400,000 heading outside our provincial and national boundaries. In essence, we should now revise the above cost to our economic wealth transfer by an additional twenty percent (20%) and the transfer is now roughly one trillion two hundred billion ($1,200,000,000,000).

I understand that our neighbours to the south are an integral trading partner and we cannot expect they would trade with us without something being in it for them. The argument I hear on a regular bases from many parties (labour, business, different levels of government) is that we are a secure, reliable, stable source of oil for the USA— I agree. That being said, the value added associated with upgrading oil and then sending to our southern neighbours or to Asian markets is readily apparent—we have a product that the world needs and am at a loss as to why we would not insist on substantially more upgrading being done in Alberta or Canada for that matter.

I realize the mix of petroleum based products (gas, bitumen, oil, etc.) is a diversification strategy that requires constant attention by government and others, however, as Premier Stelmach so aptly put it, “exporting raw bitumen is like selling and or removing the topsoil on one`s farm“. Not a wise strategy and not in the short-term nor long-term interest of Albertans and Canadians.

It has been stated by many in the business community that building upgraders in Alberta is expensive and the return on investment (ROI) is not attractive. This in my view is a red herring for the following reasons:

An upgrader being built in the province will cost between $8-10 billion dollars to build. Many of us who have been in the industry suggest that these are unfair costs projections for the following reasons:

1. Late, out of sequence, incorrect, rework, design changes re the engineering process can easily add 10% plus to a project. This is an owner and engineering opportunity to change and could save $800,000,000-$1,000,000,000 on an upgrader;

2. The above noted engineering problems can easily add a minimum of 5%- in the procurement phase to an upgrader project—another potential savings of upwards of $400-500,000,000;

3. There has not been a major Alberta upgrader project or any other major project for that matter that has not been at least 10% over-manned. The “all-in-cost“ cost of labour on a typical upgrader is in the vicinity of $4,000,000,000–another potential savings of $400,000,000;

4. The proper employment and training of apprentices on a major project should be in the 25-35% range (something that is not occurring as we speak (maybe 10% is closer to the figure that is employed on mega projects) would result in approximately $100-150,000,000 dollars in savings with the additional benefit of training the professional craft workforce of the future.

5. There are numerous other areas for savings on these large mega upgrader projects and I can assure there there is not shortage of opportunity (a proper management of absenteeism (by contractors and labour providers) on Edmonton based projects can help reduce the present cost by of $300-400,000,000).

6. Turnover cost can also be reduced substantially and presently cost most mega upgrader projects approximately $100,000,000.

As you will note, in an ideal scenario the cost of an upgrader could be reduced by:

1. $800,000,000-$1,000,000,000
2. $400-500,000,000
3. $400,000,000
4. $100-150,000,000
5. $300-400,000,000
6. $100,000,000

Total potential savings above ranges from $2,100,000,000 to $2,550,000,000. In essence, upwards of a 25% savings on a $10,000,000,000 upgrader project.

I`m not naive enough to espouse that these savings are easy pickings but I`m suggesting by way of this correspondence that the cost of building upgraders in Alberta is, in the vast majority of cases, a management “opportunity“ that has gotten away from those who can most positively impact the costs on a project—that is owner, EPCM and contractor management.

I would also suggest that labour is complicit and wears the cost overrun mantle as well, however, it is small compared to where the “initial`cost overruns have been sown.

My point in this correspondence is:

1. I`m very, very concern regarding the tremendous transfer of wealth that the province of Alberta appears to be willing to export to other countries as a result of the “raw Bitumen“ strategy;

2. The cost of building in upgraders in Alberta is in no small measure affected and will always be affected by the “original“ parameters established by the owner and EPCM as it relates to construction execution. Owners continue to complain regarding cost overruns but appear unwilling or unable to change strategies that have been used for decades and have always resulted in unacceptable cost increases. There are many who attempt to lay the “blame” at the feet of labour—whether CLAC, non-union or Building Trades. In my view that is somewhat unfair, labour has been provided a boat that is full of holes re engineering, procurement, poor leadership, poor logistics, etc. etc. and have the least amount of authority to change anything on a large mega project—they certainly are not blameless but on a proportional basis they are way down the food chain re degree of blame). It appears that to expect a different outcome from using the same strategies, practices, etc. that have produced unacceptable results in the past is fraught with frustration and will inevitably lead to achieving unacceptable results.

My request to you, your cabinet colleagues, your fellow MLAs of all stripes is to work together and change Alberta’s raw bitumem upgrading percentage—I say 100% upgrading in the province is ideal and know this is not realistic as we already have bitumen leaving the province as we speak. However, we can and should in my mind be looking at a target of at least 80% plus.

All of which is respectfully sumitted to you and you colleagues.

Terry Burton