https://www.bnnbloomberg.ca/oil-sands-threatened-with-prices-reaching-grim-milestone-1.1372269
This isn't a short-term aberration. It is part of a long-term trend
driven by world-wide market forces. More pipeline capacity won't solve
the problem, as putting more of this low-quality pseudo-crude on the
market will drive the price down. That's what Rachel Notley understood
when she implemented the production curtailments. It's a fundamental
economic truth (price is driven by supply and demand in a market system)
which Jason Kenney and his puppeteers seem unable to grasp.
When some kind of GHG fee with a significant impact takes effect, the
low quality, high-energy-input bitumen crude will be hit first and
hardest in terms of market demand.
The Alberta economy is already in trouble (rising insolvency rates, high
unemployment in the young male population). Note that oil production is
not the cause of that unemployment. Bitumen production has been
increasing significantly over the past few years. It's increasing
automation and a concerted effort by the oil industry to cut jobs which
is driving the rising unemployment. The Alberta economy is going to get
worse not just because of reduced oil prices, but more because the
current provincial government is putting all its chips on the losing bet
(e.g. taking its share of the Canada Pension Plan out so they can invest
future pensions for Albertans on the disappearing bitumen industry, and
thinking they can make low-cost plastics and petrochemical products
staring from high-cost inputs (measured on energy return on energy
invested rather than the taxpayer-subsidized price of bitumen oil).
Unfortunately, the Canadian economy is also going to take a hit as the
federal government is clearly committed to going along for the whole
Fortress Fossil Fuels ride (Trans-Mountain Expansion, continuing
subsidies, no credible strategy for shifting to low- and
non-GHG-emitting energy sources, leaving it to Canadian-based automotive
suppliers to come up with an EV strategy for Canada, supporting the
mythology that fossil natural gas is a viable long-term climate change
solution ...)
--
Darryl McMahon
Freelance Project Manager (sustainable systems)
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