Squandered Opportunity in Alberta

INEPTNESS

Here is a link to the Keep Canada Working website.

disaster-recovery-plan-ts-100662705-primary.idge.jpg

Scroll down a bit and watch the dramatic visual on how much the  ineptness, negligence and stupidity of past government is costing us now.  This on-going calculation of opportunity loss is just from August 30, 2018.  This disaster has been going on for decades as a result of bargain-basement selling of Alberta’s oil to the American market, as our only customer.  We are an energy colony to the American market because we don’t have cost-effective infrastructure access to domestic tidewater and other markets.

Here is an explanatory excerpt from the Keep Canada Working website that states the problem in a nutshell.

Why we’re expanding Trans Mountain

Reaching global markets

The Trans Mountain Pipeline expansion project is our chance to foster new relationships in the global market and get a higher price for our oil. All Canadians will benefit from opening up new markets for our energy resources.

FAILURE

The failures of past Alberta governments to serve the best interests of our province and its people when it comes to responsible and sustainable natural resource development is staggering.  This is especially true when comes to lost revenues through manipulated lower commodity prices for Alberta oil sold into the US market, our only customer.

The Differential Price is what we get for the bitumen exports and is a disaster and a mystery.  Who sets that price based on what factors and why is it required in the first place?  I don’t have answers but part of it is we have a single customer the American market.  They used to have a law that they couldn’t export their domestic oil supply.  That was set back in the day when the powers that be believed we were running out of oil on a world scale.  Denying domestic exports made sense to support American supply needs.

BAMBOOZLED

What happened, in part, was the American refiners tool Alberta oil as a raw product, turned it into value-added products that THEY sold at higher prices.  At the same time they convinced our governments that Canadian refinery investment was ill-advised.  Go figure.

What is more it was evident that the Americans took our unrefined deeply discounted oil and sold it as such to foreign markets at the higher Brent Price, which is used everywhere outside North America.

COWARDICE

Then we have the 2007 Royalty Review that made an evidence based case for a fairer rate of rents through royalties for Alberta’s oil resources.  That was soundly rejected by the Conservative government of the day.  The new Notley government did a 2015 updated Royalty review that changed nothing.

WASTE

Some sources note that Norway gets over $46/barrel in Royalties and has a $1.1 Trillion trust fund for future generations and investment as a result.  Alberta on the other hand is said to get $9/barrel in Royalties, has a Heritage Trust Fund of $17 Billion, that we use the interest on it for current government services to keep taxes low, stealing the birthright of future generations.  And we have amassed a provincial debt of about $45 Billion and growing due to the “downturn” in commodity prices, which are actually pretty good for others, just not Albertans due to the Discount Price.

What is more we have past and current federal governments that can’t get a pipeline project approved appropriately, according to the laws they passed.

TIME TO ACT LIKE OWNERS

It’s time for Albertans to start acting like the owners we are of our natural resources.  It’s time we elected people to office who will get us better value and returns on these collectively owned assets.  It’s time we had governments that didn’t politically interfere in independent administrative agency review processes.  Its time we honoured our Treaty obligations and did meaningful and good-faith consultations with impacted
Aboriginal Peoples.

It’s time we used our creativity and innovation capacity clean up our hydrocarbon development as a global business opportunity.  It’s time we started on insisting serious reclamation action now and again turned that into a serious global business opportunity.

Imagine all the good that could be done if this money was available.  Remind yourself next time you think about who to vote for about what that political party has done, are doing, based on what evidence – not just promising rhetoric – to deal with this disaster.

 

One thought on “Squandered Opportunity in Alberta

  1. existing upgraders and refineries in alberta have remained highly profitable during the oil slump and raw bitumen producers have suffered. for companies that upgrade and refine close to the source the low price of bitumen is a bonus, as it decreases their input cost while their value added product still get a fairly good price (usually a bit more that WTI) it makes a great deal of economic sense to support the value added sector and building the trans mountain pipeline does nothing to help those companies, who may mothball their upgraders if bitumen becomes unavailable in the quantities the require as it is sold overseas.

    Like

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