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RE: The Truth About The TransCanada - Keystone Pipeline and why it is a make work project at best.
Hi. I haven't spent a whole lot of time studying the economic viability of the Canadian oil sands but being Canadian I do hear an awful lot about it over the years. The oil sands in Alberta have been producing oil for decades already, and not an insignificant amount. I was under the impression that the general break even point was somewhere between 30 - 50 USD per barrel.
They simply would not have been producing for so many years if the value was $110 / barrel
Currently tar sands oil is shipped across Canada and throughout the US via rail mostly and often to sea ports. I don't think the industry is going to go away with this oil pipeline anytime soon. It's already a huge money maker for Alberta and the oil companies.
I did a bit more thinking about your article and on second thought It became apparent that your article is written more from an activist perspective. Your conclusions are completely unsubstantiated (like the $110 / bbl oil break even and relative importance of Canadian oil to the USA).
According the US Energy Information Administration (http://www.eia.gov/tools/faqs/faq.cfm?id=727&t=6) more than 40% of oil imports come from Canada. That's USA's #1 supply for foreign oil. All of OPEC combined is a distant 2nd at 31%.
That's significant.
So why not plan to get it to US market in a more cheap and safe manner? Pipelines are safer and way more enviro friendly than rail tanker cars. Also Canada is geographically closer and far more stable politically and economically than most other sources of oil. Sounds like a no brainer to me.
Hi @freeinthought The first link states The most severe revenue shortfalls in the oilsands are expected to be short-lived. WTI is forecast by RBC Capital Markets to average $40 in 2016 and $57 in 2017. At $40, the annual “cash flow burn” is estimated by Peters & Co. to average about $2 billion to $3 billion.
If all the oil sands had to do was get oil to 57 dollars to be viable again we would have no worries for those jobs as we are at 53 dollars a barrel now.
My thoughts are that they should leave it in the ground and wait for everyone else to burn up there oil supply and then when the price is $300 a barrel we should nationalize it and pay the oil company's the $4.38 they were giving the gov when oil was $100 a barrel to pull it out of the ground and use the other 95% profit to pay for government programs. Right now we get $4.38 a barrel and let the company keep the majority of the profit. The oil is a national natural resource and it belongs to the people of Canada not Suncor. Even when the Alta gov was given a small portion of the oil to put into a rainy day fund, when they went to use it to help the out of work oil workers there was no money in there and now you as a tax payer has to bail out the oil companies workers and the gov. These companies are taking our oil, exporting the money and then walking away when things start to take a down turn.
I am not an activist, I am pro Canadians using our natural resources that belong to all Canadians going to benefit the Canadian people. Not multi-national corporations that will cut and run at the slightest downturn. As a Canadian I would expect you would want the same. The oil workers should be paid a percentage of what is pulled out. The excess profit should be used to bring your and my tax rates down and pay for our Olympic athletes and social programs. Did you know that in 2015 our national ski team was almost unable to finish there season due to lack of funding. They are ranked #1 in the world and we could not pay for these 20 people to make it to compete on the world stage. This is not the behavior of a country that is ranked the second richest in the world.
http://www.cbc.ca/news/canada/montreal/canadian-freestyle-ski-team-nabs-2m-investment-on-dragons-den-1.2936102
http://www.theglobeandmail.com/report-on-business/international-business/european-business/norways-sovereign-wealth-fund/article25973060/
https://www.desmog.ca/2013/02/28/if-canada-oil-rich-why-are-we-so-debt
http://ipolitics.ca/2015/05/05/escaping-the-politics-of-fear-lessons-from-alberta/
https://www.thestar.com/opinion/commentary/2015/02/23/alberta-zeros-in-on-public-services-as-oil-price-crashes.html
http://business.financialpost.com/news/majority-of-oil-sands-ownership-and-profits-are-foreign-says-analysis
Yes I can agree with you on these points. I do support your ideology at a fundamental level as it pertains to sharing this wealth with the population at large. Yes the resource belongs to all Canadians.
Perhaps there is a better formula out there somewhere, but I do think strongly that there is place for private enterprise which is profit motivated. Leaving it all in the hands of government will lead us nowhere. We need only to look to Venezuela as an example of socialization of resources. The temptation for government corruption and incompetence does not go away by socializing the industry.
I support you 100% in protecting the assets to benefit all Canadians. However private enterprise is the engine which will actually get the oil out and to market in the most efficient way. Their rewards should be fair, but not criminally excessive; we agree.
Thank you for the awesome intellectual stimulation. All the best!
You are welcome, I enjoyed it my self. Norway has a working model that we could at the very least take a look at.
http://www.theglobeandmail.com/report-on-business/international-business/european-business/norways-sovereign-wealth-fund/article25973060/