Re: Pipeline Delays Devastating To Canadian Economy-Reports

[Odinson]

I do own forest 30km from where I live and once there was activists there to stop the machinery from cutting down the woods.

Strapped to trees and they had chained themselves to the hydraulics of the harvester.



Nice set of bolt-cutters solved that problem.

It´s my woods and I do what the hell I want with it. Besides the harvesting is good for the forest otherwise it grows too thick.



Some lumberjack grabbed a tree with the harvester and swinged it at the activists few years back.

[Anonymous]

for that idiot EU

Pipe fitters and plumbers in the oil and gas industry in Western Canada can expect higher salary increases this year than retail and hospitality workers, says a new study.



The oil and gas sectors in Saskatchewan and Alberta are expected to have the highest average salary increase at 4.5 per cent, up from 4.2 per cent last fall, the Conference Board of Canada said Tuesday.

Engineers and project managers as well as electricians and welders are also in demand, said Ian Cullwick, the board's vice-president, leadership and human resources leadership.



"Alberta and Saskatchewan just have a huge demand for those skill sets," he said from Ottawa.



Non-unionized salary gains are projected at three per cent nationally for 2013, with salary gains in the heavily populated provinces of Ontario and Quebec expected under that average.



Workers in hospitality, tobacco and manufacturing industries can expect lower salary increases of 2.3 per cent and retail workers 2.2 per cent, down from 2.9 per cent and 2.6 per cent respectively.



"In hospitality and retail, they have more transient workforces. They've got part timers and contract workers. They've got part-time workers that are students as well," Cullwick said.



For unskilled and semi-skilled labour, he said, the implications are higher levels of unemployment and lower salary gains.



"You could argue it's almost two divides," he said, adding that there's a "misalignment" for producing specialized skills and trades versus general university programs that are "educating" but not necessarily developing skill sets.



For Quebec, the Conference Board projected salary gains to be below the national average at 2.7 per cent, while projections for Ontario and British Columbia are at 2.5 per cent.

[Romero]

I am a capitalist. I know how to count jobs and tax revenues and I understand exactly how good the oil sands have been for my country -- and specifically for me, as a "shareholder" in Canada. This beautiful windfall helped us weather the deepest global recession in our lifetime better than any other rich nation and helped us pay down a very significant chunk of our national debt over the past 15 years while also allowing us to reduce all sorts of taxes from coast to coast.



Canada has been riding this awesome wave for quite some time now -- and we've actually become really good at it: We learned how to make the most of our new-found prosperity; how to spread it and share it almost evenly across the land; how to retool and adjust our entire economy around our much stronger petro-dollar; and how to move our skilled workers to where all the action is, in order to maximize our productivity and our profits. We showed the world that we're a nation of nimble, sharp, hungry capitalists and we got a lot of respect (and envy) for that!



But while we're so good and efficient at squeezing every available drop of profit out of our opportunities, we seem to have missed the most important lesson they teach in the School of Capitalism: strategic planning. We focused all our energy on feeding and protecting and milking our beautiful cow but forgot to plan for the day when her milk might run out or the day when people may not like that kind of milk anymore. When friends and neighbours asked us questions about the future, we got very defensive and we told them we were confident nothing would ever change -- the world will always need and like our milk.



And suddenly, after so many fat cow years, our customers' tastes started to change -- and, in record fast time, we started look and behave like the world's least sophisticated capitalists.



Suddenly it's panic season in Ottawa and in Edmonton: Will Obama approve the pipeline? Will it take us too long to get the stuff to the Chinese? Will the Europeans label our oil "dirty"? Will the world start taxing carbon?



Our Finance Ministers started revising budgets, we started talking about (god forbid!) sales taxes even in our country's petro-province and, of course, the blame game is now in full swing. If those tree-huggers weren't so emboldened and so well-financed by our nation's enemies, we would have plowed our pipelines right through the Rockies by now and we would have started feeding China's endless thirst for oil, instead of praying for a miracle on Pennsylvania Avenue.



We may have been the envy of the world but we were actually amateurs all through the fat cow years and now we're starting to pay for it. We ignored every hint of a warning and became really good at only believing ourselves.



http://www.huffingtonpost.ca/andreas-souvaliotis/capitalism-canada_b_2711435.html">//http://www.huffingtonpost.ca/andreas-souvaliotis/capitalism-canada_b_2711435.html

Oil sands production has risen from 30,000 barrels per day in 1967 to over 1.6 million per day. Yet Alberta crude can now only be sold at discount and the Alberta government is facing a $3 billion deficit! 30,000 to 1.6 million barrels per day = billions of dollars in losses?



Pipeline delays haven't caused this. If Keystone and Northern Gateway were being constructed right now there would still be these billions in losses. Production has already increased immensely over the years, so it's pretty clear that producing more isn't some magic pill.



Resources need to be utilized to their full extent, not treated like some boom and bust gold rush.

[Anonymous]

Oil sands production has risen from 30,000 barrels per day in 1967 to over 1.6 million per day. Yet Alberta crude can now only be sold at discount and the Alberta government is facing a $3 billion deficit! 30,000 to 1.6 million barrels per day = billions of dollars in losses?



Pipeline delays haven't caused this. If Keystone and Northern Gateway were being constructed right now there would still be these billions in losses. Production has already increased immensely over the years, so it's pretty clear that producing more isn't some magic pill.

Lack of pipeline capacity to the right markets is costing the Canadian economy a small fortune. The recent deep discounts are the result of bottlenecks in the US. The also means less revenue for Alberta and Ottawa.



I live in Ontario and we have foundries and machine shops that supply the energy industry in Western Canada. Getting international prices is good for Alberta, Ontario and Canada. How can we get international prices? More pipelines.

 

CALGARY — The inability to get oil sands crude to the right markets is costing the Canadian economy dearly, according to a new report paid for by the Saskatchewan government.

 

Each stalled pipeline project means a loss to the Canadian economy of between $30-million and $70-million every day, said the report penned by the Canada West Foundation, a Calgary-based think-tank.

 

Abandoning this industry to oil producing countries with lower standards is not leadership

.

"The loss to the Canadian economy will be devastating if we don't dramatically expand our pipeline capacity to multiple markets," said Canada West Foundation CEO Dylan Jones.

 

"Abandoning this industry to oil producing countries with lower standards is not leadership."



The report was commissioned by the Saskatchewan government, whose premier has been an outspoken supporter of new pipeline projects. Most recently, Brad Wall, along with 10 U.S. governors, signed a letter urging U.S. President Barack Obama to approve the Keystone XL pipeline.

 

In recent months, oil sands crude has been trading at a painfully steep discount to both U.S. and global light crude benchmarks. It's a trend that has both eroded oilpatch profits and caused the Alberta government to warn of a $6-billion budget shortfall.

 

At the heart of the problem is a lack of adequate pipeline capacity to get that crude to the markets that want it most. Proposals of eastbound, westbound and southbound pipelines are in varying stages of development, but environmental opposition and political wrangling makes their timelines uncertain.

 

There are currently seven pipelines that carry Alberta crude outside of that market, the majority of which go to the U.S. Midwest. A few also go to the U.S. Rocky Mountain states. One, Kinder Morgan's Trans Mountain, goes to the B.C. Lower Mainland and U.S. Pacific Northwest, but it's full.

 

The Canada West Foundation says the current pipeline infrastructure fails to connect crude to the right markets — Asia, the U.S. Gulf Coast and the East Coast.

 

A massive expansion to Trans Mountain and Enbridge's Northern Gateway proposal would enable crude to be transported to Asia via tanker, but they face stiff opposition within B.C.

 

TransCanada Corp. is awaiting final U.S. government approval for the northern leg of its Keystone XL pipeline, which would allow Canadian crude to flow to refineries on the Gulf Coast that are thirsty for heavy oil. Construction on the southern leg between Oklahoma and the Gulf is underway.

 

Refineries in eastern Canada and the U.S. Eastern Seaboard rely on pricey imported crude from overseas, which is hurting their economics. Both TransCanada and Enbridge have projects in the works to send western crude eastward through reconfigured pipes that are already in the ground. It's possible those pipes could extend all the way to New Brunswick, home to Canada's largest refinery.

 

"If pipeline project proposals such as Trans Mountain, Keystone XL and Northern Gateway don't move forward, Canada will be foregoing $1.3 trillion in economic output, 7.4 million person-years of employment and $281 billion in tax revenue between now and 2035," said Michael Holden, the foundation's senior economist and author of the report.

 

While most of the benefits would accrue to Alberta, Holden said those three projects would add a combined $84 billion to economies elsewhere in Canada.

 

The report calls on provinces to work together to tackle the problem, the way Alberta Premier Alison Redford and New Brunswick Premier David Alward did earlier this week in touting an eastbound oil pipeline.

http://business.financialpost.com/2013/02/07/each-stalled-pipeline-project-costing-canada-30m-70m-a-day/?__lsa=543d-dc22">http://business.financialpost.com/2013/ ... =543d-dc22">http://business.financialpost.com/2013/02/07/each-stalled-pipeline-project-costing-canada-30m-70m-a-day/?__lsa=543d-dc22

[Anonymous]

CALGARY — If Canada doesn't secure oil pipelines to the Pacific coast quickly, the in-aptly named "bitumen bubble" currently eating away at the province of Alberta's budget could quickly become a more permanent phenomenon, according report released Wednesday by the University of Calgary's School of Public Policy.

 

Several proposals are currently being considered that would take Alberta's crude to the Pacific coast and then off to Asia. However, plans to build the Northern Gateway pipeline, which would ship bitumen between Alberta and Kitimat, B.C., and to expand the Trans Mountain line, which runs into Vancouver, have faced serious political and environmental backlash, raising doubts these projects will gain regulatory approval and move forward.

 

The equivalent of being late is that you've got to take a bigger and bigger discount on your product.



Rapidly growing Asian economies are likely to need more oil in the coming years, but Alberta's product is competing with a panoply of other crudes, many of which are less viscous and contain less sulphur and are, thus, much easier and cheaper to refine, said Michal Moore, one of the authors of the report and a professor with the school.

 

Refineries require expensive technical improvements to handle the West's bitumen — upgrades that Asian countries may be less willing to consider if Canada fails to sort out its transportation and access woes, and quickly.

 

"If you wait or if you get caught without enough capacity, the market will respond by saying 'Look, we've got a more attractive product, we've got a cheaper product. We're happy to take your product, but we're going to discount it more and more," Mr. Moore said. "The equivalent of waiting, the equivalent of being late is that you've got to take a bigger and bigger discount on your product."



The proposed Northern Gateway line and Trans Mountain expansion are predicted to deliver between 500,000 and 1.1 million barrels of Alberta crude per day to the West Coast.

 

The report said refineries on the Pacific Basin have the capacity to meet this increased supply, although some will need to be modified. Further, any additional increase in the supply of oil would need to be met with more refineries or upgrades — investments Asian countries may become increasingly unwilling to make if Canada drags its feet, denies the new pipelines or fails to act in a transparent way.

 

"Canadians will have to show first, and quickly, that we are committed to building pipelines that will bring sufficient volumes of oil to the Pacific coast necessary to give the refiners the certainty that they need to invest in infrastructure for refining Canadian oil," the report read. "If Canada does not approve of the Pacific coast pipeline expansions, or takes too long in doing so, it could find its crude unable to effectively penetrate the world's most promising oil export market."

 

Alberta is facing a $6-billion shortfall in revenue in the coming fiscal year due to a dramatic decline in royalties collected from its bitumen. Alberta premier Alison Redford has termed the phenomena a "bitumen bubble."

 

Tied to refineries in the U.S. that are capable of handling its crude, Alberta's product is largely landlocked.

 

Although it usually sells at a discount to other oils, the spread between bitumen-based oil and the lighter West Texas Intermediate has increased dramatically in the past year thanks to a shortage of pipeline capacity and an increase in oil production from the Bakken plays in North Dakota and Montana.http://business.financialpost.com/2013/02/06/time-running-out-for-canadian-oil-producers-to-access-asian-markets-report/?__lsa=b0f2-1183">http://business.financialpost.com/2013/ ... =b0f2-1183">http://business.financialpost.com/2013/02/06/time-running-out-for-canadian-oil-producers-to-access-asian-markets-report/?__lsa=b0f2-1183



It would appear that Canada has a short window of opportunity or the bitumen bubble could become permanent,

[Romero]

Lack of pipeline capacity to the right markets is costing the Canadian economy a small fortune.

But pipeline capacity and oil exports have already increased dramatically and it's only bringing in less money. Expanding pipeline capacity isn't going to eliminate any discount. Alberta crude is more expensive than world crude because it costs a lot more to produce and ship.

[Anonymous]

Lack of pipeline capacity to the right markets is costing the Canadian economy a small fortune.

But pipeline capacity and oil exports have already increased dramatically and it's only bringing in less money. Expanding pipeline capacity isn't going to eliminate any discount. Alberta crude is more expensive than world crude because it costs a lot more to produce and ship.

The pipelines we have are effectively full. RBC Dominion Securities Inc. warned that as much as a third of oil sands growth – 450,000 barrels a day – could be put on hold between 2015 and 2017 if the TransCanada Corp. Keystone XL pipeline is not approved by U.S. President Barack Obama.

[Romero]

Alberta crude is already getting to markets that want it most. What you're calling for has already happened. Every single year production has increased, capacity has increased, exports have increased...

The Alberta government's bottom line continues to bleed red ink and the province is planning job cuts and a wage freeze for civil-service managers to try to stem the flow. Alberta is now forecasting a deficit of between $3.5 and $4 billion — at least four times what was originally predicted in the last budget.



http://www.huffingtonpost.ca/2013/02/19/alberta-budget-deficit-four-billion_n_2719315.html">//http://www.huffingtonpost.ca/2013/02/19/alberta-budget-deficit-four-billion_n_2719315.html



The BC deficit is on track to be $500 million more than originally planned and may now even reach $1.5 billion.



http://www.huffingtonpost.ca/charles-lammam/bc-budget-2013-deficit_b_2707638.html">//http://www.huffingtonpost.ca/charles-lammam/bc-budget-2013-deficit_b_2707638.html

Wow. The Alberta deficit has grown by nearly the entire BC deficit - overnight!

[Romero]

oops double post!

[Obvious Li]

I've decided Homy is a troll.......... :ugeek:

[Romero]

Alberta's Strange Sinking Sensation



Alison Redford, the premier of Canada's wealthiest province, has encountered a $6 billion "bitumen bubble". To most Canadians this curious disclosure seems confounding if not paradoxical. How can "the economic engine" of Canada run five government deficits in a row yet promise prosperity for the nation? Is no one in charge?



Like any plantation economy, petro states operate pretty much like irrational monocultures: they know how pump oil, sell oil, talk oil and spend oil. But they don't know how to save or diversify its slippery wealth.



Truth in short supply



Alberta's string of deficits have nothing to do with lack of bitumen pipelines but everything to do with the shale gas revolution which has dropped the price of natural gas to record lows.



Prior to the shale gale, natural gas earned more than $5-billion in annual royalties for the government: today the cash cow pours little milk ($1 billion) for Alberta's one party state. Yet Redford never mentioned "the shale bubble."



But there's another important omission. The gap between bitumen pricing and West Texas Intermediate is not new. Bitumen is a junk crude and signature of peak oil that requires costly upgrading and complex refining. The heavy gunk won't even move through a pipeline unless diluted with costly condensate.



As a result a 2007 Bitumen Price Review warned Alberta's government about dramatic price drops in bitumen markets. "Essentially there is a lack of adequate market access due to increasing production levels." By failing to upgrade and refine bitumen into higher value goods such as gasoline the government would absorb "a high share of price risk" that goes with pouring raw bitumen into the marketplace.



But Alberta's petro state and its petro media ignored the report as well as the idea of adding value at home. So the growing price disparity is really a function of dedicated overproduction as well as a lack of smart planning. (Premier Ralph Klein didn't believe in such things and preferred to run government on "auto pilot.")



Between 1998 and 2008 Alberta regulators rubber stamped more than 100 tar sands projects raising bitumen production from 600,000 barrels a day to nearly two million. This policy predictably flooded the U.S. Midwest market with raw bitumen and drove down prices.



Binge spending, then hangovers



Oil also engenders a "spending effect." On this matter Alberta has become something of a petro state poster child. During booms Alberta vomits cash and expands government, and during busts, it hacks off government services like some crazed surgeon jacked on cocaine.



To facilitate the recent bitumen gold rush it has invested billions in roads, hospitals and water treatment that industry, the boom's chief beneficiary, should have paid for in full.



Spending isn't the only disease. Alberta has a serious revenue collection crisis too. It still gives away its hydrocarbons at bargain basement prices and saves nothing. (In contrast Norway has stored away $600 billion for the day its wells run dry.)



Moreover the government has only collected its minimum target (a 50 per cent share of oil and gas profits) twice in the last decade. (When Fred Dunn, the former auditor general, repeatedly pointed out the scale of this neglect in 2007, 2008, 2009 and 2011, he was accused of overstepping his mandate.)



But if Big Oil took the same cavalier attitude toward meeting its fiscal targets as the Alberta government, their shareholders would have had their heads in buckets years ago.



Oil between the ears



Petromania makes governments grossly incompetent. Easy wealth seems to discourage hard thinking, the same way scarcity stimulates innovation.



Alberta's idea of governance consists either of throwing money at a problem or making the problem bigger so more petro dollars can drown in ever larger pools of stupidity.



Oil has dumbed Alberta down. The bitumen republic now gives away its resources. It doesn't save any money. It neglects ground water protection. It has no responsible tax regime. And its calcified one party state represents hydrocarbons instead of citizens because that's what petro states do.



http://thetyee.ca/Opinion/2013/02/21/Why-Cant-Alberta-Break-Even/">//http://thetyee.ca/Opinion/2013/02/21/Why-Cant-Alberta-Break-Even/

[Romero]

How do you figure pipelines to new markets will fetch "international prices"? New pipelines won't make Alberta crude less expensive to produce. It's not going to make world crude more expensive.



You're not understanding the basic economics. Tar sands production has already gone from 600,000 barrels a day in 1998 to nearly two million barrels a day. So how can it be losing billions upon billions? Because it can't compete with world crude and must be heavily discounted. Without the discount, it wouldn't be sold at all.



The Alberta government and taxpayers are subsidizing the tar sands. So much for the free market!



There was a time when Alberta crude could make money. Conventional oil was entering its peak and the tar sands could compete. But now with new technology opening up new sources of cheaper oil, that time is over.

[Anonymous]

1 Oily Bonanza

 

Oil production from U.S. reservoirs like the Bakken is forecast to grow by 600,000 barrels per year through 2016. At the same time, Canadian tight oil and oil sands production is surging. That, combined with severe export (i.e. pipeline) constraints, "makes for a massive wave of oil supply in a large but stagnant market," CIBC says.

 

2 Repair Jobs

 

CIBC notes there are major maintenance projects planned for U.S. refineries in Petroleum Administration for Defense District (PADD) 2, where the bulk of western Canadian crude goes. CIBC counts 225,000 barrels per day coming offline for the rest of 2012 at PADD 2 refineries, exacerbating a tight supply situation and leaving Canadian producers vulnerable to steeper price discounts.

 



3 Slate of Hand

 

Refineries in PADD 2 are retooling their operations to handle more heavy crude slates from Western Canada. But U.S. refiners can still move back to refining light crude if pricing warrants it. "There is little doubt they will use this to create "crude-on-crude" competition and drive down prices for light streams, such as Western Canadian Select," CIBC says.

 



4 Conduit Concerns

 

Building new pipelines or expanding existing ones is seen as a cure to crude price discounts. But five key export projects, which include the Keystone XL and Northern Gateway pipelines, are fraught with risk. If even one of the five projects is cancelled or is delayed long-term, CIBC says it will constrain production growth in Western Canada and dampen prices.

 



5 Maya Makeover

 

PADD 3 refiners covet WCS because it's close to the Maya blend they run. But CIBC says Maya is currently trading at US$5-$9 below its traditional US$9 differential to Brent. "Once Canadian producers get access to the PADD 3 market, they will get the Maya price link – but unfortunately Maya will not be as high priced as it has been historically due to the big discounting of light oil in PADD 3."



From a Google search I learned most of Alberta's eggs are being placed in a Central US basket. Bakken oil competes with it and with maintenance issues it becomes a buyer's market. The way to alleviate that problem is diversify Alberta's markets along the Gulf Coast, Eastern Canada and especially to Asia.



First Energy analysts don't see the wide price gap lasting. They attribute the divergence to a series of short-term issues including refinery outages, and a resulting logjam of crude built up in the U.S. Midwest region. The commissioning of the highly anticipated Seaway pipeline reversal has also been pushed back from April to June.



Barrel-on-barrel competition in the U.S. Midwest will subside they believe, once refinery upgrades are completed, new rail takeaway capacity materializes and the Seaway reversal comes online. Just like flying," the analysts write, this bumpy turbulence will also pass.



I would like to see real substitutes to oil, but lets face it that is many decades away. For now, oil and LPG produced in Canada is better for Canadians than from our competitors. Let's get those pipelines built so we can diversify away from the American Mid-West and keep Ontario machine shop orders full.

[Romero]

When you have only one customer they can dictate your pricing.

That's not how it works! Customers don't dictate the price of commodities. The market does.

[Anonymous]

It is making it more difficult for Obama to reject it.