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How to get Canada's oil to export markets?

Admiral Beez

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#1
This week Canada's oil exports to the USA reached their highest levels ever, http://business.financialpost.com/n...ver-as-shale-production-falls?__lsa=dc58-a433

However, it's becoming increasingly clear that the USA will become Canada's largest competitor, not customer for North American oil exports. And thus, we must have other customers for the oil. With BC refusing pipelines from Alberta, and now Quebec mayors trying to stop pipelines to New Brunswick, how can we export the oil? Railways seem a poor alternative to pipelines, IMO.

Here are the current pipelines, AIUI.



One option that seems reasonable to me is a pipeline (or rail) to Churchill, Manitoba, and then ice-strengthened tankers take it to global markets.



Of course we have to agree that Canada wants to be an oil exporter, wants to manage the environmental and land ownership concerns, spills, foreign ownership, etc. I imagine this thread will quickly be threadjacked into a discussion of why we shouldn't as opposed to how we can get our oil to market.

It's a big asset of the Canadian economy, and represents 11% of known global oil reserves.

 

Admiral Beez

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#5
I'm all for leaving the tar in the tar sands and not moving it anywhere.
Then we'd better find something else to drive the Alberta economy, and something else for all the economic migrants from Atlantic Canada and Quebec to do for a living. However, there's a predicted global shortfall and price spike coming, apparently, so I don't think we'll need to deal with those questions. Now's the time to be buying Canadian oil stocks.
 

Admiral Beez

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#6
When I started this thread I’d never had thought we’d have a NDP premier of Alberta acting as champion of the oil sands, willing to kneecap the BC wine industry and cut off automotive gas to BC in defence of her province's economy. I wish our premier was like Notley, if she were we’d have Trudeau on the ropes to demand our share of federal funding.
 

pman

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#7
I'm all for leaving the tar in the tar sands and not moving it anywhere.
I think a lot of Canadians share your sentiment. Of course, nobody seems to want to leave the dollars in Alberta, so it’s a mystery to me how the money pipeline to the rest of the country is supposed to continue operating if we virtue signal the province’s economic future out of existence.
 

MTown

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#8
I think a lot of Canadians share your sentiment. Of course, nobody seems to want to leave the dollars in Alberta, so it’s a mystery to me how the money pipeline to the rest of the country is supposed to continue operating if we virtue signal the province’s economic future out of existence.
Adapt your economy. Edmonton is already on the up as a centre for AI research. Future, meet past. Relying heavily on the extraction (not even refinement and value addition) of a single resource is, to put it simply, stupid. It's as if I at my job concentrated on doing a very specific type of work. Yeah, I'd have work here and there but it wouldn't be reliable and I'd be selling myself short given that my talents are a lot more expansive than that. A diverse economy is a healthy economy.
Change is good else one just stagnates. This particular change is especially good because it not only keeps one from stagnating but is of benefit to future generations.
 
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#9
Adapt your economy. Edmonton is already on the up as a centre for AI research. Future, meet past. Relying heavily on the extraction (not even refinement and value addition) of a single resource is, to put it simply, stupid. It's as if I at my job concentrated on doing a very specific type of work. Yeah, I'd have work here and there but it wouldn't be reliable and I'd be selling myself short given that my talents are a lot more expansive than that. A diverse economy is a healthy economy.
Change is good else one just stagnates. This particular change is especially good because it not only keeps one from stagnating but is of benefit to future generations.
Well said.

There is room for resource extraction in an economy. But Alberta has handled theirs quite poorly.

Good resource extraction should look like this:

1)Extract at a consistent, moderate pace, over the long term, minimizing the need for massive infrastructure outlays that will one day be out-moded and cost money to downsize or remove. This also has the effect of reducing your economy's exposure to the ups and downs of commodity pricing, and ensure essential supply as needed in the future.

2)Do not ramp up sales into a peak or glut market. Selling at a loss is a lousy business strategy.

3)Have a strategic reserve, not only is this good for emergencies, it allows the state and/or oil companies to buy their own product when oil is cheap, and reduce supply on the open market
forcing the price back up. When the price rises, you sell-through, instead of into the reserve. While during extreme shortages/price spikes, you sell a portion of the reserve.

4)Save the royalties and invest them wisely; do not use them to fund current projects/government budgets. The latter choice results in either huge deficits during price downturns, or massive tax spikes.
The former can result in billions, or even hundreds of billions in accumulated savings, over decades.

5)Sell for the maximum price, generating the maximum domestic employment. Refine your own product. Self-explanatory, good for the bottom line and the state.

Alberta has mussed all of these up.

In the current circumstance, in reference to Kinder-Morgan or Energy East, alot of the concerns raised have been because the commodity is unrefined bitumen.

This presents an add-on win/win for Alberta if the product were refined in province, and then met w/much less opposition in terms of exporting.

I'm not a huge fan of the Tar Sands project. But if one were to pursue it, clearly refining the product in Alberta is the key to overall economic success, and to social license on exports.

The related move would be create a clear formula for a modest 'pipeline royalty' structure that pays to the provinces through which the pipe pass.

The resulting cash smooths over some ruffled feathers.

That doesn't make the project ecologically neutral.

But with a carefully mitigated risk, it might be a worthwhile trade in this case.
 
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kEiThZ

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#10
Compare Alberta and Norway. And you'll know how badly the Albertans have screwed up. And I'm not sure they can recover.

I think the end of oil is coming, much faster than most people think. Just look at the bans on gas and diesel cars sprouting everywhere. And since companies will start to adapt well in advance, we could start seeing declining oil sales in the 2030s.
 
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Admiral Beez

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#11
Compare Alberta and Norway. And you'll know how badly the Albertans have screwed up. And I'm not sure they can recover.

I think the end of oil is coming, much faster than most people think. Just look at the bans on gas and diesel cars sprouting everywhere. And since companies will start to adapt well in advance, we could start seeing declining oil sales in the 2030s.
Is that a fair comparison? One is a sovereign country in full control over its regulations, extraction, transportation and currency valuation ( reason Norway eschewed the Euro), with total, consistent and long term petroleum industry support of the national government, where every Alberta is a provincial government in a federally neglected region of the country, and has none of the above.

Why We’re Not Like Norway
https://www.albertaoilmagazine.com/2015/03/alberta-is-not-norway/
 
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MTown

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#12
It's blindingly obvious that the resource should be more developed here and not just pumped away in its most basic form. What a waste of economic opportunity.
It's one of the most (if not the single most) expensive sources of oil in the world, it doesn't make any sense to not refine it "in-house", especially with lower prices.
 

MTown

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#13
Is that a fair comparison? One is a sovereign country in full control over its regulations, extraction, transportation and currency valuation ( reason Norway eschewed the Euro), with total, consistent and long term petroleum industry support of the national government, where every Alberta is a provincial government in a federally neglected region of the country, and has none of the above.

Why We’re Not Like Norway
https://www.albertaoilmagazine.com/2015/03/alberta-is-not-norway/
I'm not sure albertaoilmagazine.com is an objective source.
I'm off to the match in ten minutes so I don't have time right now to fully read the article but I did skim through it and got the idea that they're comparing the fact that taxes are lower in Alberta than in Norway.

Well, fucking duh, they had to pay for their low taxes somehow. The fact is that squandering your resource royalties on services just to keep taxes low does you no favour. If that's the gist of their argument for why comparisons with Norway are inappropriate then they're as biased as they should be (albertaoilmagazine.com).

Anyway, I'll give it another go later......the football beckons!
 

pman

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#14
I’m not sure resource extraction is such a bad idea. Australia aggressively develops new resources and transports them to market without all our Canadian angst and endless litigation and total lack of accomplishment. They just get on with building. Their per capita GDP is 30% higher than Canada’s, and believe me it shows. So an economy based on resources can deliver a high standard of living.

For that matter, Alberta’s economy does deliver, not just for Albertans but through their role as a federal government tax farm in support of the rest of the country. Of course, they could always separate and would probably be admitted as a state by the US if they wanted. If I were an Albertan I’d certainly entertain the prospect.