Alberta Soap Box 🇨🇦

Comments Effecting Canadian Events – Ken McGregor

Alberta Oil ,Windmills and Fishing boots

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oil12There’s no questions that Alberta’s going to take a beating with low oil prices. With oil sands trading as low as $13.75, close to a 50% discount from West Texas, the Alberta treasury is going to take a serious hit on synthetic crude oil and bitumen royalty. Crude oil and bitumen royalty accounted for about 55% of the  non-renewable resource revenue or roughly $4 billion. And to make matters worse there’s talk of the price of oil falling as low as $10US PB in 2017.

Oil sands investment has been Alberta’s backbone for years. From 1999 to 2013 there was $201 billion invested in the oil sands industry creating thousand of jobs not only in Alberta but throughout Canada. In 2013 alone the oil sands investment reached a record breaking $32.7 billion up from 27.2 billion in 2012. The mining, oil and gas extraction industry accounted for Alberta’s entire $2 billion R&D budget. What a difference a few years makes. In 2016 its estimated that investment in Alberta oil sands will drop billions putting in doubt at least 14 already approved  projects.

It’s no wonder that Alberta has plummeted to 38th most attractive place to invest out of 126 jurisdictions, down 22 points. Alberta Premier Rachel Notley’s can take some of the blame. Damaging fiscal plans like fiddling with oil royalties, hiking taxes and bad mouthing Albert oil by calling us the”embarrassing cousin” didn’t help. Notley is assisting in putting the final nails in the oil sands coffin for long payback projects in Alberta. All the while Saskatchewan is still flying high at number 8th most attractive jurisdiction to invest in even surpassing BC.

Even with all of todays doom and gloom there can be a silver lining if Notleys NDP government and Trudeau’s Liberals decide to get serious about Alberta’s oil resource and stop making it difficult for investors. This slowdown is a good time to get an Eastern pipeline to tidewater getting ready to supply foreign markets and to supply eastern Canadians.  The southern US refineries will also be under the gun as ever more Mexican ,Venezuela crude oil is diverted to China. Presently they supply the US with approximately 20% of their crude . This could be a great opportunity for Canada to fill the void if only we had a pipeline.

Petroleum is not just used for fuel. Every day I hear people and environmentalists say that the days of fossil fuel is over. Wind power and solar is in. The thing is ,oil haters are comparing power generating technologies to fishing boots and footballs. Petroleum creates a lot more than just power. Thousands of every day products that we depend on come from oil. Everything from artificial limbs, toilet seats, bandages, cameras, cell phones, even golf balls. This is why it’s very hard to understand why Premier Notley , PM Trudeau/Gerald Butts and some eastern Canadian mayors are anti Alberta oil. Wind and solar don’t create the personal products we need.

Personally I’m a booster of wind and solar power. I love new innovative technologist. If I could afford a shiny new electric TESLA car I would buy one. But if I need an artificial heart valve I’m going to turn to a petroleum product.


US Data – A major growing market for Canadian exports

All the signs are there suggesting Alberta could still have a bright future with oil. A large younger world population demographics (millennial)  demanding goods (made from petroleum) is growing. At the very least Alberta can replace the Saudi oil coming into eastern Canada, plus we can supply the US refineries growing future demand.  Another wild card in the short-term mix, is that oil could shoot up to $250 plus if conflict breaks out between Iran and Saudi Arabia. The fact is , demand for oil is not going to disappear.

The only thing holding Alberta back from taking continued advantage of expanding the oil sands and reaping the rewards of long-term jobs and wealth is a collection of dismissive ill-informed environmental groups and politicians like Montreal Mayor Dennis Coderre and friends.

Its time to tell these anti-oil creeps and bums to back off before they ruin Alberta and Canada.

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Written by Ken McGregor

January 25, 2016 at 4:45 pm

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