Tuesday, July 15, 2008

Oil Profits

Here is an interesting article from the Brookings Institute about what the Middle East is doing and what they should be doing with their profits from oil, especially in our world where oil prices are rising so much.

This reminds me of what I have thought for the last number of years about my home province of Alberta, Canada and the oil revenues the provincial government receives from royalties from the Athabasca Oil Sands. While rising oil prices has made these reserves much more cost effective to exploit (even though it is non-conventional oil sources) it still costs much more money to extract the oil from the tar sands.

I have long thought that Alberta needs to do a better job of using this money to invest. Investing in both important "right now" projects, such as education and health care, as well long term projects is, in my opinion, the best option. Long term investments such as renewable energy projects could make Alberta another leader in energy, and could continue making money in this industry long after the oil is used up, or which I think is going to be much more likely, demand for oil goes way down.

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