How is that even possible? I'm not questioning the veracity of the statement, I'm just wondering.
I've read that Canadian crude needs extra refining steps and that because pipeline capacity isn't sufficient, the oil has to be transported by truck and rail, which are more expensive. Is the $38 price differential historically high? Has some kind of policy change caused the differential to increase? Just wondering.
https://oilprice.com/Energy/Energy-G...ng-For-20.htmlWhy Is Canadian Crude Selling For $20?
Oil prices in Canada plunged late last month, with the losses continuing throughout much of October. Canadian oil producers exposed to the low prices are now fetching around $40 to 50 per barrel less than their counterparts in the United States.
Western Canada Select (WCS), which tracks heavy oil from Canada, typically trades at a discount relative to WTI. The lower price reflects quality issues, as well as the cost of transport from Alberta to refineries in the U.S.
In early 2018, the discount started to grow significantly, the result of Canadian pipelines filled to the brim. The inability of the Canadian oil industry to build a major pipeline from Alberta to either the U.S. or the Pacific Ocean is increasingly dragging down WCS. Keystone XL, Northern Gateway, Energy East, Trans Mountain Expansion – all of these pipeline projects have run into years of delays, and in the case of Northern Gateway and Energy East, scrapped all together.
Okay, so maybe what's happened is that production capacity has increased without a corresponding increase in transportation capacity. So there are more sellers than willing-and-able buyers.
This would explain Alberta's plan to reduce production:
Premier Rachel Notley said Alberta will reduce oil production in the province by 8.7 per cent as a way to address the oil differential crisis plaguing the government.
“We will never back down in our fight to protect our jobs, our resources and our province,” said Notley in a live broadcast address Sunday night.
The temporary move is allowed under the Responsible Energy Development Act and the government will have the Alberta Energy Regulator introduce the curtailments in January.
The move is being put to cabinet through an order in council on Monday and then will be implemented through a ministerial order.
Raw crude and bitumen will be curtailed by about 325,000 barrels per day and the government hopes the move will help shore up the storage backlog of about 35 million barrels. Currently, Alberta produces about 190,000 barrels per day more than can be shipped out.
https://www.thestar.com/edmonton/201...ferential.html
There are plenty of buyers, there is just not an economical way to ship the oil. Trudeau is holding up pipeline construction which could bring the oil to market. I'm sure he has good reasons, misogynist pipe line workers and of course fossil fuels are evil. Like France, I'm sure a lot of that feel good rhetoric sounded good to the people, probably put Trudeau in office until they had to pay for it, now, not so much. Macron sold his virtuous plans as well, now, France burns, the people don't want to actually pay for do-goodism.
Yes, that. Thanks a John.
My husband has worked in the oil patch for over 40 years. The last time it was THIS bad was the 80s and I’m not sure it was quite this bad.
We have paid protesters protesting against pipelines.
We have celebrities calling the tar sands dirty oil. If you do proper research, it’s some of the most environmentally friendly oil available.
We have the mayor of Montreal blocking oil pipelines and then dumping millions of gallons of raw sewage into the St Lawrence ...
And of course, Trudeau is trying to get some kind of recognition in the UN to get a seat. Can’t look it up right now, but his Eyes are there. The one world govt.
...and ANNND.... Eastern Canada buying MILLIONS of barrels of oil from the Middle East.
Ya. That makes sense.
Shut down Alberta, with some of the highest regulations for clean production in the WORLD to buy From Saudi Arabia.
*scream*
A.J. (12-04-2018)
AJ: Just a question; sorry I'm not more familiar with what's going on in Canada.
The existing pipelines remain operational, and they were sufficient to accommodate
the existing production as of a little while ago; is that right? But I understand that
there are protests against new pipelines which are blocking them from being completed.
Can the situation be resolved, at least temporarily, by agreeing to cut back production
to what it was a little while ago? Is that what Alberta's "governor" (i don't know the
Canadian term) is trying to do?