Canadian Oil Punished While Tanker Loads Of Saudi Crude Arrive At Canadian Ports Daily

[Anonymous]

I'm sure they are.  Canadians are much easier to bend over the barrel and lube up than Saudis are.  If it's built, it will have to be used to pay back the financing costs and that is a great opportunity to leverage for the Irvings.  They are masters at screwing Canadian taxpayers, suppliers, employees, you name it.  It's pretty much their whole business model.  I wouldn't bet against them.  So the question stands.  Can you undersell the Saudis?  Because if you can't, you're going to have a really expensive pipeline to pay for, but you won't be seeing the benefit.

Are you suggesting that producers in Western Canada would be better off using CN as they do now because you seem to be all over the place without making a cogent statement? Irvings are not paying for Energy East.

I am not following him either. The refineries are third parties in this.

[reel]

Are you suggesting that producers in Western Canada would be better off using CN as they do now because you seem to be all over the place without making a cogent statement?

I'm saying if the Irvings want it, make sure you have other options, because they wouldn't be pushing for it if it wasn't a trap.  



I don't know how much a pipeline lowers delivery costs (particularly short term, while the construction is being financed), but you won't change the fundamental fact that oil prices are shit worldwide just by building a pipeline.  It should be built, but even if it was already built, I don't see that it would make that big a difference to the situation right now.

[Anonymous]

Are you suggesting that producers in Western Canada would be better off using CN as they do now because you seem to be all over the place without making a cogent statement?

I'm saying if the Irvings want it, make sure you have other options, because they wouldn't be pushing for it if it wasn't a trap.  



I don't know how much a pipeline lowers delivery costs (particularly short term, while the construction is being financed), but you won't change the fundamental fact that oil prices are shit worldwide just by building a pipeline.  It should be built, but even if it was already built, I don't see that it would make that big a difference to the situation right now.

About 2/3 of the pipeline is already in the ground. We used to deliver crude to Central Canadian refineries until Trudeau senior made it uneconomical to do so. Irvings will not be the only  company receiving feedstock. Western Canadian crude from shale in SE Saskatchewan to heavier Wabasca grades to bitumen are all discounted. They're the victims of bottlenecks. Access to new markets will reduce that mark down as it did in the past and as it has done for Colorado crude. You will never get labour and material cheaper than they are now. What a shot in the arm for a sluggish Canadian economy.



Look, I'll make it real easy for you. About half the oil will go to refineries and the other half overseas. The refineries in Central Eastern Canada get feedstock cheaper than North Sea Brent they are buying now. The Western producers make higher profit because opening up the bottleneck will reduce the discounting. The crude that makes it to tidewater will get that discount even  lower again. Not to mention that it is cheaper than rail. The Irvings have nothing to do with it's construction. It will add $55 billion to the Canadian economy over 20 years.