Alberta Petro-Patch Return on Investment

So Alberta gave up $1.5B in royalties to get action going in its petro-patch as reported in today's Calgary Herald.

http://www.calgaryherald.com/news/Alberta+gives+royalties+rolling+industry+incentives/3080017/story.html

The new policy comes in the context of an interesting series of news stories in the last few weeks capped by the announcement of the Alberta government's changes to the royalty scheme.

Some thoughts arise.

Let's see. It seems to me there were recent stories about the fund-raising achieved by the Alberta Progressive Conservatives and the Wild Rose Alliance Party.

There was also a recent story about population trends in Alberta with the current population at about 3.5 million.

If we add up all the funds raised by all four leading political parties in Alberta, if memory serves me correctly, it works out to about $4.4 million last year.

That total included a shift of corporate donations, mostly petro-patch dollars, of about $700k from the Alberta PC's to the WRAP.

Also, the headline's story reads that Alberta gave up $1.5B in future royalties.

Put another way, each and every Albertan invested ($1.5B divided by 3.5 million people), about $430 into the petro-patch in the expectation of earning some benefit or return on that investment. The headline could easily have read that Albertans gave up $1.5B in royalties.

The petro-patch invested $700k to persuade the government to change the royalty scheme from the one that got the Premier the party leadership and eventually won him the general election. That $700k was what the PC's lost and the WRAP gained.

Now that $700k will probably have to go back to the PC's each year over the next three years, the time frame for the given up royalties, so the total 3 year incremental investment in the form of political donations will probably come to $2.1M.

$2.1M returns $1.5B in reduced royalty costs. Don't try to make a meaningful percentage return out of that, it's astronomically high. (about 71400% or $714 dollars of return for every dollar invested. Bill Gates, Steven Jobs, Warren Buffet - eat your hearts out!)

In any case, each Albertan invested $430 spread out over three years. Let's think about the return for a few example cases. What return can each of the following people expect to see?
Bob the police officer?
Stan the retiree?
Andrew the financial adviser?
Joanne the teacher?
Jody the writer?
Doug the coffee shop owner?
Laura the welder?
Wayne the construction supervisor?
Jan the nurse?
Lexi the high-school student?
Cam the university student?
Phil the college instructor?
Paul the farmer?
Adam the petro-executive?
Joe the gardener?
Kiersten the designer?
Kevin the mechanic?

The point is that it gets trickier to see the possible return as one moves away from petro-enterprise. Dave Yeager suggests it's even unlikely the petro-sector's production service companies and employees are going to see any direct benefit.

How can that amount of donated cash have so much influence in the presence of ballot boxes? After all, it wasn't some artificial being, the Province of Alberta, that gave up the $1.5B, it was Albertans - Alberta people - Alberta individuals - who gave up $1.5B or $430 each.

The return on that $1.5B of foregone royalties better make economic sense and it better be clearly explained in terms each Albertan can understand within her or his own context.
Mike