Oil bust could mean skyrocketing property taxes, Some Alberta municipalities are being hit hard as oil companies stop paying by Jennifer Blair, February 8, 2016, albertafarmexpress.ca
With oil prices bottoming out around $30 a barrel, oil companies are scrambling to save money — sometimes at the expense of farmers.
“Some companies are just deciding not to pay the annual rentals,” said Daryl Bennett, who represents the Action Surface Rights Association in southern Alberta.
Last year, the Surface Rights Board had more than 750 new applications and gave landowners over $1.5 million to repay defaulted rents, said Bennett, who spoke at the recent Alberta Federation of Agriculture annual general meeting.
“That’s just the tip of the iceberg. There should have been thousands and thousands of new applications.”
But while lost rents are a short-term frustration for farmers, the long-term effect this will have on rural municipalities is much bigger.
“If you as a landowner don’t get paid by a company, it’s not that big of a deal. The minister of finance will ensure that you get your money,” [Really? Hasn’t the Alberta government/Surface Rights Board used legal trickery to made sure that farmers who get shafted by oil and gas industry bankruptcies or refusals to pay leases and or damages are screwed and get no help from the Alberta government?] he said. “The implication to counties and municipalities is what you should be concerned about.”
Right now, counties in Alberta get two streams of oil and gas revenues. The first is through linear property assessments.
“That’s generally all the pipelines, power lines, that type of stuff. Currently, there’s $845 million being assessed to the operators in the province that goes to counties,” said Bennett.
“A lot of these companies that are going bankrupt are not paying their linear assessments to their counties and municipal districts.”
And 25 per cent of the linear tax assessment goes toward education — money that has to be paid by the county “whether they collect it or not from the oil and gas operators.”
… In some municipalities, between 60 to 90 per cent of their total budget depends on oil and gas tax revenues. For instance, oil and gas tax revenues make up 68 per cent of the budget for the County of Taber. [Oil boom/busts are always the same, repeating themselves like clock water. Haven’t Alberta counties and landowners learned by now that they are lowest on the totem pole when it comes to the oil and gas industry, regulators, Alberta Surface Rights Board and Alberta governmentt?]
“The County of Taber has estimated that if it was to lose its linear assessments paid by oil and gas, it would have to increase its property taxes by 350 per cent on everybody else to make up that loss,” said Bennett. [Are these scare tactics to make landowners and counties bow down even further to the oil and gas industry?] “They’re going to have their budgets drastically cut in some cases. Then what do they do? Do they raise taxes or do they lay off people?”
Reduced oil and gas tax revenues will create a “snowball effect” in these counties — “they lay off more people, those people don’t pay taxes, real estate prices go down, property assessments go down, and it just continues on and on.”
And counties are starting to get worried, he added.
“Some of these companies that have gone bankrupt owe $15 million to $20 million to various counties.”
Until the oil market corrects itself, Alberta’s farmers will need to tighten their belts, regardless of whether they rent land to oil companies, said Bennett. [Why is Bennett making like landowners have a choice? In Alberta, they don’t. If a company wants on, landowners can say no but can’t keep companies off their land,]
“As landowners, you can get your revenues back, [Why repeat the lie?] but I think you need to be concerned about what’s happening in the industry and how this may impact your property taxes and the abilities of your counties and municipalities to function as they have in the past.” [Emphasis added]
[What about the fast vanishing drinking water intentional contaminated by frac companies and injected to frac, most of which is permanently lost from the hydrogeological cycle? Are farmers & residents to pay for that too?
And who pays for the endless contaminated drinking water supplies?
Who pays for blown up water wells and community water towers caused by industry’s illegal fracing and gas migration?
Why no quotes about the billions in liabilities from environmental harms?
[Refer also to:
A devil’s bargain: Rural environmental injustices and hydraulic fracturing on Pennsylvania’s farms by Stephanie A. Malin and Kathryn Teigen DeMaster, online 19 January 2016, Journal of Rural Studies [requires purchase]
Rural Pennsylvania, the epicenter of the Marcellus Shale region, hosts the most prolific unconventional natural gas extraction and production activity in the US. Farmers of small and midsized operations in Marcellus counties depend increasingly on incomes from booming natural gas operations, while the industry needs their land to access energy resources. These farmers thus bridge two economic sectors—unconventional natural gas production and agriculture. Related dynamics rapidly transform the social, economic, and environmental landscapes for Pennsylvania’s rural communities.
We ask: What, if any, are the environmental justice implications of the unconventional natural gas industry’s presence in rural agricultural spaces, particularly for farmers with small and midsized operations? Presenting findings from 42 in-depth interviews, participant observation, and archival analysis, we show how farmers benefit from natural gas leases to support their agricultural livelihoods. However, they face a devil’s bargain. Farmers risk entrenchment in a long-term web of natural resource dependence, increasingly unable to determine their livelihoods or land use on their own terms. Our study demonstrates how farmers’ intersectoral dependence conditions procedural inequities and greater environmental risk.
We show how farmers of small and midsized operations experience rural environmental injustices as they endure corporate bullying; face procedural inequities negotiating and enforcing lease terms; and increasingly contend with environmental risks associated with unconventional natural gas production. [Emphasis added]