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Lethbridge Herald Newspaper Archives

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Lethbridge Herald, The (Newspaper) - October 4, 1973, Lethbridge, Alberta Still no settlement reached In Alberta-Ottawa oil tax feud DONALD MACDOMALD Herald Legislature Bureau EDMONTON Any hopes for a quick end to the feud between Alberta and Ottawa over the new federal export tax on crude oil were dashed here Wednesday. Donald Macdoriald. federal energy minister, emerged from a three-hour meeting with Premier Peter Lougheed to make it clear neither side has changed its position. "We left the meeting after very frank discussions, not persuaded of the other's view." he told a news con- ference attended by both Western and Eastern Cana- dian reporters. The federal government made no offers to the province concerning the portion of the million-a-iuonth tax that would he returned to Alberta collers. Mr. Macdonald said. The parties agreed to dis- agree, he said, describing the meeting us a stalemate. "II is fair to say there is a disagreement in principle on jurisdiction." He said there is still dis- agreement" between Ottawa and Alberta. It had been hoped by some that the governments were going into this meeting ready to bargain. But apparently all that happened was a repeat by Mr. Macdonald and Mr. Lougheed of their positions. The premier has called the lax the most discriminatory action against a province in the hislorv of Confederation. The energy minister has in- sisted the Canadian consumer must be protected from high oil prices in the United States raising Canadian prices. The purpose of the tax is to return the profits to the taxpayer in- stead of the oil companies, he has said. The minister also remains unconvinced that the huge Sync-rude development of the Athabasca Tar Sands would not go ahead because of federal "interference." He said he has not heard from the consortium working on the billion-dollar development about exempting the synthetic product from the tax but expects to soon. He also expects to meet provincial officials again within two weeks on various aspc-is of the oil situation but Wednesday's tense meeting dul not improve-chances lor an agreement. The at- mosphere ol confrontation was alluded to by the energy minister when he said he un- derstood the shooting season would be over by the time of the next meeting. Mr. Macdonald also repeated earlier statements that the tax on crude oil ex- ports to the U.S. will not be removed in the near future as the government expects American prices to remain high. He said the premier leels the control of oil prices through a tax should fall under Alberta's jurisdiction as the oil-producing province. The federal argument. Mr. Macdonald said, was that it is a federal matter falling under international trade. One aspect of the tax dis- cussed was the possibility of sharing proceeds between the federal and Alberta governments, but Mr. Mac- donald said Ottawa did not present a specific proposal to the province. Mr. Macdonald said the federal government did not present a specific proposal to Premier Lougheed on how the lederal and Alberta governments might share revenue from the export tax. "Premier Lougheed took the viewpoint that he was op- posed in principle to the tax. but that he would be looking forward to a more specific proposal from us." The federal government has suggested giving Alberta its normal royalty on oil produc- tion and federal assistance to research and. development in the Alberta oil sands. Mr. Macdonald said federal government price projections, even if Canadian prices are below those in the U.S.. suggest an exemption may not be necessary to make the oil sands complex profitable. The Syncrude plant is scheduled to begin production in late 1978. The federal linance depart- ment now is considering the Syncrude-Alberta government agreement PKTKH LOLGHEEI) VOL. LXVI No. 249 The LetKbridqe Herald LETHBRIDGE, ALBERTA, THURSDAY, OCTOBER 4, 1973 10 Cents 32 Pages Jail demands to be granted REGINA (CP) Seven In- dian and Metis prisoners re- leased early today ihe guard they had been holding as a hostage and gave themselves up after the warden at the cor- rectional centre agreed to their 11 demands. The guard. Tom McKinnon. a jail officer for 14 years, was unharmed. Prison officials said the seven, all from the centre's remand unit and awaiting trial on charges ranging from armed robbery to non-capital murder, were trying to escape when the trouble started. Officials said the prisoners hit one guard on the head and then overpowered McKinnon. took keys, and opened the door to a recreation yard. They attempted to scale a 16-foot wall in the yard but were unsuccessful, police said They continued to hold McKinnon hostage and issued the demands. The first officer was taken to hospital and later released. The prisoners demanded that list be publicized through a Regina Leader-Post reporter and representatives of the Metis Society of Saskatchewan and Native Project, a prisoner rehabilita- tion group; prisoner who broke his ankle in the incident receive medical treatment, seven receive the same treatment as the others in the remand unit in terms of recreation privileges and freedom in corridors: and other police officers leave the general area ol the correctional centre immediately. Food and blankets he brought. seven men be put into the same cell block: be no reprisals as a result of the incident: charges be laid against the seven involved. demands be met in the presence of the Leader-Post Seen and heard About town NE W police padres Captain Ron Butcher and Father Frank McCarty A'ondering if they will have to .vail until clermly before iomconc installs a clock in the courtroom Keith Rob- >ins und Dean Cooper wagcr- ng a lavish steak dinner for ho man to lose Ihe most veight on their respective liets. reporter and the represen- tatives of the native groups; demands be announc- ed over radio and television, and negotiations recorded on tape. The seven also mentioned dirty conditions in a section of the remand unit, but did not include this in their demands. The centre has 260 prisoners, about 60 per cent of them Indian or Metis. Arabs dash hopes for new unity UNITED NATIONS (API- Arab delegates have thrown cold water on an Israeli pro- posal that the Jews and Arabs lollow Western Europe's ex- ample and join in a new Mid- dle- East community Israeli Foreign Minister Abba Eban made the proposal Wednesday during the general debate in the United Nations General Assembly. Socreds were the best' MONTREAL (CP) The former Social Credit governments in British Columbia and Alberta produc- ed the best administrations ever seen in Canada, says Yvon Dupuis, Parti Creditisle leader. In an interview with CFCF- TV. Mr. Dupuis said Quebec has the resources to take ad- vantage of a similar ad- ministration if his party takes power in the Oct. 29 provincial general election. Election of the Parti Creditiste with its social credit philosophy is necessary to combat socialism which he said has led in Quebec to "ad- ministration by poets instead of by businessmen." Mr. Dupuis said that a socialist government "puts its nose into everything." The consequences of electing New Democratic governments in Ihe West had not been fully lelt. Mr. Dupuis predicted his parly will win at least 55 of ihe 110 seats in the Quebec national assembly. It now holds 11 seals in the present 108 seat assembly. Inside Classified Comics Comment 24-28 8 4, 5 19 Family Local News Markets ___ Sports Theatres TV Weather 23. 31 17. 18 20 12-14 7 6 3 Youth 9 Town crier Alfie Howard, official town crier for the borough of Lambath, displays his awesome volume. Mr. Howard was sent to Vancouver to promote British Forte- night. He has travelled to 28 countries encouraging British trade and tourism. Villagers return home as deadly well capped NEW NORWAY. Alta. (CP) Residents of central Alberta chased from their homes Tuesday by a cloud of deadly hydrogen sulphide gas returning Wpdnpsrlay afternoon on roads newly reopened by the RCMP. About 1.000 evacuees from the villages ol New Norway and Bittern Lake and the hamlet of Gwynne were given permission to return to their homes after the blown-out Sun Oil Co well was capped about 5p.m. Brisk winds had carried the gas cloud, which observers said looked like a blue fog. high into the atmosphere and Pete c a r n e hough o f Camrose. Albcrla Emergency Measures Organization co- ordinator, said tests found no indication of pockets left in the area about 50 miles southeast of Edmonton. There were no serious effects evident from the gas although 11 persons were treated and released from hospital for nausea and chest pains, symptoms of gas poisoning. There were no reports of any livestock harmed or killed by the gas. Cattle were sighted grazing a half mile from the well Wednesday morning, The gas-oil well blowout oc- curred about 4 p.m. Tuesday as it was being serviced to in- crease production. Gordon Fredericks of Ga- machc Well Servicing Ltd. said a violent blast blew about 90 Copt nf nine morp than feel in the air while pipe was being pulled from the bottom of the 5.600-foot well for replacement. The well spewed out oil. wa- ter and sour natural gas which contains lethal hydrogen sul- phide. The hydrogen sulphide was estimated to be five per cent of the gas flow. Oil royalties will be raised By AL SCARTH Herald Legislature Bureau EDMONTON The Alberta government moved today to increase royalties on oil and natural gas in an angry reaction to Ottawa's recently- imposed tax on crude oil ex- ports. "We are forced in effect have no choice but to res- pond with major revisions in Alberta's oil and gas policies, legislation and royalty arrangements which, in our judgment, will protect the Alberta and Canadian public- interests." Mr. Lougheed said. The premier said the province will take the lid off the royalties it can collect on petroleum and natural gas. The Legislature sitting this fall may have to be recessed and then recalled again in December to facilitate the legislation. Mr. Lougheed said. These are the revisions an- nounced by the premier- Elimination of all provisions in leases under the Packing plant may be moving By WARREN CARAGATA Herald Staff Writer If necessary approval is given, and the city co- operates. City Packers may be moving. Merlin Adams, president of the firm now located across from the Exhibition Grounds and t'eedlot operation is con- sidering a 250-acre site three miles north of the city as a location for its rendering plant and feedlot. But. he said, no options have been taken on the parcel, now owned by M. L. Vaselenak. Before City Packers could buy the land, it will have to get public reaction to the new site, approval from the department of environment, the Oldman River Regional Planning Commission and the County of Lethbridge. Even is approval is given. Mr "Adams said, financial assistance from the city will be necessary before the com- pany leaves its existing plant. Taking all costs into con- sideration, the move could total as much as S3 million. "We may find it is financial- ly impossible to move without assistance from the city.'1 Mr. Adams said. The move has been contemplated because of com- plaints of odors from the plant. The company is under no obligation to move the department of environment has said with pollution control equipment, the plant location is acceptable. However, the department will provide funds to help City Packers relocate. Under a provincial government for- mula, the firm would receive money equal to 25 to 50 per cent of the depreciated assessed value of the existing plant. Mr. Adams said the com- pany can make more profit at its existing plant than it could at a new location because of debt charges it would be carrying on a new plant. "After all. we have to live with out neighbors, and we've been listening to these com- plaints for a number of vears." he said. Nixon holds endorsement WASHINGTON (AP) President Nixon says he will not endorse anyone for the 1976 Republican presidential nomination "uniii liiey have been in the field of battle" in the primary elections that year. N i x o n told a news conference Wednesday that history teaches that some aspiring senators and gover- nors "can't hit the bigleague pitching" they'll face in a presidential campaign. Oil companies decline comment 'LOUGHEED GOT POOR DEAL9 7 told you this was the wrong LOW TONIGHT 30-35; HIGH FRI. 60 SUNNY. Judge gives top powers BALTIMORE (AP) Spiro Agnew's lawyers have been given unprecedented sub- poena power to search for news leaks in the federal grand jury investigation of the vice-president, .Judge Walter Hoffman of U.S. district court Wednesday granted the Agnew lawyers broad authority to question anyone in the United Stales "thev deem appropriate and necessary." providing they give the justice department at least hours notice. Herald Legislature Bureau EDMONTON The Alberta govern- ment is using a federal import tax as an excuse to renegotiate a poor deal it made with the oil companies. Social Credit House Leader Bob Clark said teday. "They arc going to blame Ottawa for their being poor negotiators over he said in reaction to revisions in royalties announced today by Premier Peter Lougheed. "If he is going to break the agreements with the companies, he should at least have consulted them." he said. The government recognized it didn't get as good a deal on royalties as it could at the 1972 royalty hearings." Mr. Clark claims. Ho said the Socred opposition agrees with the government's stand on the export tax on crude oil to the U.S. Bui not with its reaction on royalties. "The government is petting involved in the tar sands and Suffield and now wants to set the well head price in effect. How- can you be an independent arbiter when you arc dabbling, more than dabbling, in the industry Mr. Clark said the province could have moved in and imposed the 40-cent per barrel tax itself, "but the feds saw it before Alberta did." In Toronto, a spokesman for Imperial Oil Ltd. said: "In the past Premier Lougheed has dis- cussed proposed changes in petroleum regulations with the industry. We assume he will wish to do the same with this proposal. "Until we know the details of Iris plan we are not in a position to make a com- ment." Other petroleum companies declined comment until the details of the Alberta proposal are made known BOIICI.AKK Mines and Minerals Act hav- ing a maximum limit of the royalty payable for petroleum and natural gas. The new royalty schedule will be based upon a formula whereby the effective rate of gross royalty on oil production will increase as the price at the wellhead increases or is deemed by the provincial government to have increased The Alberta cabinet will determine the price upon which the royalty will be paid based on a world commodity price in a free international market. Legislation for the taxation of freehold minerals will be enacted. Mr. Lougheed said the new policies will have an adverse effect on the petroleum in- dustry. To counter-act that effect, and encourage oil com- panies to reinvest their profits in Alberta, "the extent and magnitude" of royalty credits will be increased. He said the export tax on crude shipped south would not only siphon millions of dollars from the provincial economy but is a clear invasion ol the province's jurisdiction over its natural resources. What the new r o y a 11 y policies will enable Alberta to do is get as high a price for its oil before that oil leaves the province. The premier said he does not believe the policies would price Alberta oil out of the American market. Nearly identical policies will be instituted for natural gas royalties, lie said, coming into effect simultaneously with the oil policies, probably early in 1974. "It should be made clear that in this rapidly evolving international and national energy scene, the government ol Alberta must continue to be in a position lo make further adjustments and alterations in its oil and pas policies if conditions so warrant in the Alberta public interest." the The actions may be only a "first stage" of retaliation against the export tax in an attempt to return "some semblance" of control of resources to the province, Mr. Lougheed said. Albcrtans have offered support" lor his stand, the premier said, and are even more upset by me lederal action he is Energy Minister Donald Macdonald was informed of the revisions. Mr Lougheed said Despite the announce- ment by the premier, which would reduce the impact of the export tax. Mr. Lougheed said there are still many issues on which the province can negotiate with the federal government. No Herald Thanksgiving The Herald will not publish Monday. Oct. 8. Thanksgiving Day. Display advertisers ,ire reminded thai copy lor .ids lo appear Wednesday. Oct. 10, must be received by noon Friday, and for Thursday. Oct. 11. by a.m. Satur- day Classified advertisements received by 11 30 a m. Satur- day will appear in the Tuesday edition ;