You completely missed the point. Its not that 2% is life or death for a company, its about making sound business decisions. If you invest, you would know that 2% can be a huge amount of money over a number of years. That's why I buy ETF's and index funds over mutual funds, to save 2+% on the bloated management fees that we pay for mutual funds in Canada. 2% can make a big difference, especially over a long period of time.
Oil companies also have very small profit margins and take on huge risks compared to other industries. In 2010, large oil companies had average profit margins of 6.5%, a year with good prices ($70-$90/bbl). That same year pharmaceuticals averaged 16% profits. Oil companies make make 7 cents for every gallon sold, while the government makes 48 cents.
If that gives you heartburn, I don't suggest looking at how much apple profits off of each on of their devices you buy, you might just have a heart attack.
The sky isn't falling in Alberta, but in a time of instability such as this, oil companies need to do what makes the most business sense. Companies aren't successful by making poor business decisions, as you all know. Right now its all speculation on what's going to happen with the NDP in power, and unfortunately speculation can be worse than reality. I for one am going to see what actually happens before I say anything further.
It's already happening. It's not that projects are getting cancelled, investors are just sitting on their wallets waiting for 6 months to a year to see what the royalty review brings. Except now, in her infinite wisdom, rather than rip off the band-aide, she has decided to be a real dumb one and just let it hang out there that eventually she'll get to it in this term.
This won't have a huge effect on the large organizations. They've laid off their 20-40 000 people, they're way good now. The vast majority of exploration, however, is done by juniors. The small publicly traded (TSX.V) and privately traded organizations are the ones who can react to business climates quick enough and take the biggest risks on plays. These guys depend on venture capital to fund their businesses, and until Notely straightens her shit up and and project with certainty what the new tax structure will be, the venture capital and investment banks are clamping their funding. This means that slowly, bit by bit, companies will wither away into CCAA because they don't have the funding required to continue growth and drill out declines. Since they haven't had a chance to prove their fields, they won't sell, and their business models remain incomplete, affecting hundreds of thousands of jobs.
It's a slow roll, but it's already started, and she can stop it by getting the royalty review over with in a hurry, or assuring industry that she won't do one until prices hit XX.XX, whatever the best number happens to be.