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Is Canada Putting Too Many Eggs In Its Oil Basket?
Submitted by Daniel J. Graeber via OilPrice.com,
Canadian Natural Resources Minister Joe Oliver said natural resources are the cornerstone of the federal and provincial economies. The U.S. economy, on the road to modest recovery, remains central to a Canadian oil market that relies heavily on exports. Oliver said at an investment conference in Quebec that the natural resources sector represents about 20 percent of the gross domestic product. The Canadian economy has suffered, however, because there aren't many new conduits to get oil exports to foreign markets. The potential to reach Asian could provide a relief valve for the Canadian economy, while the option still exists to ship oil through the United States for exports. With opposition mounting along the borders, however, Canada's export-driven economy may become landlocked.
"Our natural resources are one of the cornerstones of the economic development of Quebec and Canada," Oliver said.
Oliver said the natural resources sector accounts for about 1.6 million Canadian jobs and represents about one-fifth of the GDP. Canada is in the top tier in terms of oil production. Nearly all of its oil exists in so-called oil sands and the federal government now controls enough of that type of crude to put Canada behind Saudi Arabia and Venezuela globally. Most of the economy is structured around oil exports and almost all of those exports are directed toward U.S. refineries. Oliver said that could change, however, given growing demands from the Chinese and Indian economies, which could represent a new opportunity for Canada.
Pipeline company Enbridge is pressing for its Northern Gateway project to deliver oil from Alberta province west to ports in British Columbia. Kinder Morgan, meanwhile, is looking to double what it already sends through its Trans Mountain pipeline, meaning about 890,000 barrels of oil per day could be ready for Chinese and Indian economies at Vancouver ports. The provincial government in British Colombia, however, has balked at the idea that its pristine coastal vista could feature oil tankers along the horizon. Without those pipelines, at least a few of Oliver's cornerstones won't hold their load.
Prime Minister Stephen Harper said during a recent visit to the United States that the key talking point on oil was whether to ship it by rail or by pipelines. He was speaking in defense of the Keystone XL pipeline, a project that's been the source of controversy for at least four years running. Last week, the U.S. State Department published its first batch of the estimated 1.2 million comments received so far on its draft review of the project. That review said rail should be considered when weighing the project's national interests. Rail deliveries of crude oil in the United States are accelerating at a steady clip in order to keep up with the U.S. oil boom. Canada hasn't yet felt the impact of U.S. oil production gains, though U.S. crude oil production is expected to outpace imports later this year. By the end of next year, oil production in the United States will be at its highest level in more than 25 years.
Oliver said natural resources are the "key driver" to the Canadian economy, though that driver may be running out of energy. The government reported GDP expanded by 0.3 percent in February on the back of growth in the oil and natural gas industries. That growth is at risk, however, because suppressed oil prices are starving the provincial and federal economies. Last week marked the third straight week that the Canadian dollar weakened against the U.S. currency. Pipelines like Keystone XL and Northern Gateway could help Canada's cause in the long term. Opposition to those projects, and growing interest in renewables, leaves the Canadian economy vulnerable, however. The Canadian federal government has built an economy that depends on foreign markets. Without the means to access those markets, however, Canada may find itself landlocked and isolated from the changing global energy market.
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Yes.
thats because the other basket only has bacon
bacon.... and beaver.
If you could encapsulate everything wrong, it is this story
http://www.nypost.com/p/news/local/labor_big_real_heavy_sleeper_jl3C7gI7...
That's nasty.
I'll clear it all up right now. Enridge 'Gateway' will not be built.
Period. Bottomline. End of story. The people of BC have been offered a pittance, and saddled with all the risk. BC relies on forestry and tourism, and there is no way the people will risk an oil spill on the rocky coast here (for the record, it makes cleanup near impossible).
Sorry Enbridge! But you should see the marketing material they use to try convince people! If you need convincing, look up Kitimat in Google Maps, go to satellite view, and zoom out. Check out that 'clear path' to the deep blue sea, baby! Or... Not. Its not as if oil tankers have poor mobility or the waters are extremely rough, or the ocean bottom is uncharted (using modern tech)...
British Columbia just had a provincial election a couple of weeks ago. The local kleptocrats handily won re-election.
To get a pipeline built now in B.C. is now only a matter of some money, and I don't mean money for the province as a whole--I mean money for the particular people who run the province, and their friends. As long as those people get their piece of the action, anything can get done.
So I think at least one of the proposed heavy crude pipelines is going to get built: either Northern Gateway or the twinning of the Kinder Morgan.
Since the Kinder Morgan proposal would mean lots of oil tankers in southern B.C. waters, where the kleptocrats happen to live, I predict that the northerners are going to get stuck with the pollution risk.
maple syrup and beaver.......mmmmmmm
2 staples of every man's diet
Bacon not being kosher or halal is problematic. Not that the Chinese give a shit.
Oh please. China is insatiable. http://www.zerohedge.com/news/2013-05-29/chinese-are-coming-and-they-wan...
If Canada keeps this up they will make themselves a target for the country invading resource stealing thugs of the world.
...USA?
Canada is already being run by collaborationist governments formed from a well-established compradore class. Canada's elite were born to kiss ass. They are among the most loyal subjects of the Empire to be found anywhere in the world.
No invasion necessary.
As a vp for a pipeline construction company i say you are100% right
Hi Mom....!
Half of Canadian GDP is exports... and 90% of that is to the US. When the US economic reality finally hits, it's gonna be ugly in Canada.
But still I think we should stop selling oil... let the price rise where it's profitable then sell it.
At this point, we're acting like a third world hell hole where natural ressources are sold for short term economic gain when it's gonna screw us long term.
The economic reality in the US has aleady hit. Wake up... Reality hasn't hit the US dollar though but that just means Canada will get more dollars for their oil.
Isn't gas demand at 1995 levels or something ?
Car accidents per year in the US is way down because nobody drives to work anymore.
>> "nobody drives to work anymore."
The roads are empty. It's so QUIET. No need to repair any of those rusty old bridges!
You complain about an intelligent policy of selling resources, which creates gain for the people living in the exporting country. Like Norway. Canada has an intelligent immigration policy as well, as they do not have chain migration and Canada is smart enough to keep waves of people from the third world OUT.
If you want to talk about Third World Hell Hole, look south of the 48th and the mass immigration of unproductive welfare recipients.
Just stay away from Vancouver and Toronto, Mag.
Do the wealthy and productive HK Chinese and Indians bother you? Or does Vancouver resemble the cesspool of Russian freeloaders and Somali do-nothings who are coming to USA in waves and waves thanks to Chain Migration policies?
What?
Over one third of all immigrants to Canada are admitted on the basis of family reunification. That is indeed chain migration.
Canada's elites are heavily involved in urban land speculation. They will support high immigration levels regardless of any other factors. Canada's property bubble in now relatively bigger than the one that burst in the USA a few years ago.
Moreover, in recent years, Canada's elite has been imitating the great European blunder of admitting large numbers of "guest workers." That's the worst immigration policy of them all. All the new entrants, all the inflation of housing costs, all the problems of immigration but without any citizen responsibilities or cultural assimilation.
Lol...wtf are you talking about. I went to montreal just yesterday, went to a public park, and some kindenrgarten classes went there at the same time....8 out of 10 kids were black or from north africa. There were literally only one or two white girls/boys lost in a sea of colored kids. Maybe it's just french canada that is importing the french speaking third world in canada, but i can tell you here in quebec they re reproducing exactly the same mistakes france , uk and north europeans countries made. Also selection of immigrants is a joke; basically anyone can be accepted in quebec simply because they consider they have to replace the millions of elders leaving the economy in the next decades with..."enriching refreshing youth" from ...the french speaking third world. Most government employees especially those working in immigration are socialo communist self hating unpatriotic and english/american hating hippies. They all live in the nicest neighborhoods but want the third world to flood the middle and lower white social classes.
It's going to be france/europe all over again, but 5 to 10 years later.
You just described Canada's political and business leadership to a T.
Are you kidding me? This article is full of crap. The Canadian federal gov't DOES NOT control oil; mineral rights are the custody of the provinces, not the feds. It's the provinces that set royalty rates, grant leases, etc., not the feds. According to StatsCan, ALL oil, gas, and mineral extraction (i.e. gold, silver, iron, potash, uranium, etc.) together account for about 5% of GDP, not 20%.
Sure, the current Tory gov't wants to see oil & gas production increased because it means more jobs, more tax revenue, and will help balance the budget. They want new pipelines to the West Coast to ensure that we're not captive to the US market. Already Cdn oil sells at a discount because US buyers know that we've got nowhere else to ship it to. In our somewhat dysfunctional federal system, the feds are necessary brokers to ensure that one province doesn't hose another when the latter wants to ship its resources through the former. (We've got a 50 year old precedent, where power plants in Labrador have a contract to sell electricity at ridiculously low rates ($0.01 kWh!!!) to Hydro Quebec, which completely surrounds Labrador. HQ then turns around and sells it at a huge profit to NY state. No one - except possibly the leftwing loonies in BC - wants to see a repeat of this rapacious deal.)
The original article is a joke, and totally unfounded in reality.
I thought that earlier EIA data indicated the gas and oil demand are at levels not seen since the 70's. The Alberta government was spanked for generating a deficit due to what we thought was the spread between Alberta oil and WTIC. But, this, as it turns out, was patently false. The price of oil has been decent for the last couple of years and that spread has always been there. According to Premier Redford, she wasn't getting the right price. Bullshit. More like she simply isn't selling the volume that she used to. It don't matta the price if nobody is buying.
Can't say much for the rest of Canada, though I understand there are places in BC, Ontario and Quebec that are hurting. We are just not hearing about it. However, Alberta and Saskatchewan are and have been in a perpetual period of ramping up since 2011. Personally, I don't trust it. I don't think its durable. But fuck. I've been saying that for a while. We have had incredible migration into Alberta - from everywhere (including our friends to the south - Nebraska, Wyoming, Idaho, Texas and Arizona) and I find it almost impossibnle to beleive that the oil market is going to sustain it, especially as somebody else above pointed out, there is no manufacturing or higher end processing.
But there is no doubt about it, housing prices have gone batshit crazy again. In fact, they never really retreated. 2700 sq ft boxes going for $6 - 700K. Fucking insane. People are buying them up as fast as they are putting them up. Also, I can't help but think that people are forgetting that for 6 months out of the year up here (if you're lucky), its absolutely fucking cold! Yet, the city of Edmonton has expanded on every compass point. It feels like a bubble. Gas is back up to $1.30/litre or better (in Alberta - its worse in other parts of the country), or about $6 bucks a gallon. Premium unleaded and you have to take out a second mortgage to drive. Yeah its getting goofy again.
Seems like '08. Feels like '08. But everybody's telling me its different this time. fuck. Who knows. Maybe it is.
My house keeps going up in value. We're rich, bitchez.
Its because 'owning is better than renting', even without doing any financial analysis 80% of sheep 'know' this to be true!
I'll tell you the truth about Alberta's weather. Its no different than the Arctic. None. The winters last 7 months in the Arctic, and only about 5 to 5.5 in Edmonton. But in terms of temperature, its just as cold, for (almost) just as long. No thanks!
So it's a little brisk.
Sounds like an advantage to me. Keeps the riff-raff out.
Very hard for illiterate, useless, worthless eaters to show up, looking for care & feeding.
MUCH easier for them in sunny, warm, southern Kalifornia.
70% or so to the USA. Canada as diversified over the last 20 years, aided by a previously weak currency.
No. Canada's national sports are hockey and house flipping. Canada appears to be the only western country that has NOT seen a housing crash. But, when it does come, the banks will be bailed out and the Looney will crash as a result.
United Oil Emirates of Canada. Has a certain ring.
... of Canuckistan.
Beauty eh!
tHE END OF TH EAGE OF OIL IS NIGH.
If the global war machine ground to a halt, oil would be selling at 20 dollars a barrell again.
The global armed forces are the largest consumers (Pentagram being the largest, by an obscene margin of course).... perverse, they burn millions of barrels of oil annually to "secure" millions of barrels anually...
A farce. Canada should stick to Maple syrup....
Sustainability, + no one would attack you for your maple syrup...
ori
Well we do have maple syrup strategic reserves...
those were stolen in an early morning warehouse heist and they had to restock<LOL
well frankly the maple syrup from Vermont is better tasting but yeah Canada has a lot of that syrup :)
On top of all-natural gluten-free waffle-stamped circles of compressed sawdust thawed and heated in a coal-fired electric toaster, either works.
No worries, we can fall back on our massive 3.4 ton hoard of gold.
Has anyone proved that the US military is the biggest user of oil ? I don't believe it. Their big shit runs on nuclear.
i didn't know their tanks were nuclear
Yeah, well, the hangers smell like fries for a reason.
Okay, maybe I should have said it smells like moonshine.
Maybe it's the motor pool diesel that smells like fries.
http://www.reuters.com/article/2012/07/15/us-usa-military-biofuels-idUSB...
They have a lot of things that are not nuclear powered carriers and subs.
http://www.bloomberg.com/news/2012-02-08/pentagon-oil-spending-may-snarl-efforts-to-trim-490b.html
Thanks for that link solon, says it all really.
Gulp gulp...
http://aadivaahan.wordpress.com/2011/02/14/oil-crisis-in-a-thousand-words/
ORI, I have to say I agree with you on most things, but your belief in Yamashita's gold just left me.... Utterly bewildered.
@ORI
"sustainability" comments, from an Indian?
A farce. India should stick to curry...
So sayeth big in japan....ironic. The most wasteful nation on earth, perhaps even more so than the ussa.
Get your head out of your stinking natto and smell the plastic flowers...
your free ride is now almost at end...
http://aadivaahan.wordpress.com/2010/09/03/the-curse-of-free-energy/
ori
@Ori
I'm Canadian, and I'm out of here in 8 weeks.
Next.
Well Canada has excellent beer, timber, the freshest water resource which is basically unlimited, and those of us in the know are highly impressed with Alberta Girls. Long live Canada.
sweet fly fishing on the Bow, too
Cruising and Fishing on the West Coast is pretty spectacular too. Even better with Alberta girls, beer and lots of maple syrup on board. Hmmmmmm syrrrruuup. Moooaaarrrrrrrr!!!!
and a dying population that's getting replaced by the third world immigrants thanks to cynical, hypocritical politicians. Just like the american elites are attempting to replace the historically white middle and lower social classes with mexicans.
can't speak for the oil side as there is so much in the way of state support for the goo...and the high price to go with it...but clearly the rest of this commodity trade is really starting to roll over. still struggling with real estate and equities here...they've come awfully far awfully fast and now mREITs are getting crushed...and the recovery in general still stinks. the dollar has been strengthening for some time...sounds to me like a good time for a correction. http://en.wikipedia.org/wiki/Surplus_value
a Dutch disease and the largest housing bubble on the planet, Canadians are doomed and they don't know it.
Very true, and a sincere good luck to our good friends up there.
Fuck them! I mean us. We desreve what we get for being so damn stupid. You see what happens Larry.
Housing... Yeah. Thats bad. But the prospect of not being able to export resources? More beef, wheat, oil, basic and precious metals for Canada.
We know it...and we hate the Dutch
Dutch disease, housing bubble. You nailed it, alright.
I can't even be sure our marijuana exports will prove sustainable.
It is highly improbable that the US will ever be able to produce enough oil domestically to completely eliminate the need for imports from foreign countries. Therefore, Canadian oil will always have decent demand. Besides, anything we can't export can be used in Canada to support a higher quality lifestyle.
The rest of the economy is primed for growth once the housing speculation is finally done with. Bank shareholders are gonna get awfully filthy rich shorting that bubble.
Canada's penchant for selling crude bitumen is selling off its grandchildren's future. Toxic sulfur laden bitumen coming out of the oil sands should be upgraded onsite to synthetic crude with nuclear. Wouldn't have to have a turbine in a nuclear reactor. Simply use the heat directly. Instead of crude pipelines to tankers at Kitimat, British Columbia and Texas refineries, should be planning to build finished product pipelines, and packing motor oil into quart sized cans and packing that into cardboard cartons to send off for folks to use.
I agree. How many countries rely on the selling of natural resources and how may rely on those resources?
Can you imagine whats going to happen when one ore more crucial resources turn up short.
the richest will be safe, and will reduce the population of poorer people.
That is what i was thinking for the last few years but i think they still need a turbine for lighting, pumps, conveyor belts and the like. They must be stalled by environmentalists resisting all nukes. The idea is so logical that only politics could kill it.
Who cares about that slop...we have the water and that's all that matters...all you can drink for 4 bucks a bottle
Yup. Lotsa water.
You'll never sell it, though. Can't. Too many eco-nazis in the great white north.
In the lower 48, you should check out some of the decades-long, losing battles for small municipalities near (but not in the drainage are of) the Great Lakes trying to get drinking water from them.
Imagine the battles to export it.
Plus, due to recent technological breakthroughs in reverse osmosis filtration, desalination of sewater is about to become orders of magnatude cheaper.
Your nice water has matured worthless, I'm afraid.
" He was speaking in defense of the Keystone XL pipeline, a project that's been the source of controversy for at least four years running. "
Keystone has been operational since 2011 from the tarsands down to Kushing, Oklahoma - the WTI hub for those who don't know.
The endpoint is Houston to which many lines already exist. The XL line is yet to be completed.
Obama is teamed with Soros and Petrobras (Brazil) to go deep sea drilling and bring that into the US - kickbacks for Obama are greater in Brazil than Alberta. Gulf was risky, but deep sea drilling in Brazil - well hey fuck it - the kickbacks take care of that.
Getting oil to BC's coast from Alberta is a piece of cake, but the Saudis have thrown so much kickback at the BC government that this will not happen - Saudis need China as their customer. BC's excuse is that the ports will be used for LNG - lines already run from tarsands to Vancouver - more governments fucking around. LNG is priced in the tank - another fucking government lie in economics, but they can't announce that LNG plus kickbacks are almost the same as a barrel of tarsands oil.
Canada has land locked itself and is fucking itself with internal squabbling. Funny to watch.
***Getting oil to BC's coast from Alberta is a piece of cake***
Actually it's not. The Aboriginals (Indians) have a the shakedown perfected and will block pipelines until hell freezes over. Getting anything accomplished is almost impossible.
Its the Enbridge Northern Gateway thats controversial, and won't go forward. Not Keystone XL.
And natives, Saudis, blah blah blah, its the people of BC, in general, who don't want to see oil tankers trying to navigate the waterways to Kitimat!
Canada has what we must have at any cost: water. No worries up north.
Keep your hands off our freakin' water you Yankee dog!
Not sure Canada would have this easy if they decided about changing their policy toward their preferred trade partner...
poutine, mullets, hockey, horny women...what's not to like about Canada. lots of ganga smokers too...the most ruggedly beautiful country in the world... but just don't get sick there. US chemo treatment centers are filled with cash on the barrellhead Canadian paying customers....Obamacare in action
I find it quite amazing that so much misinformation about Canadas universal healthcare system can eminate from the only G-20 country that doesn't have its own free universal system.
Free Healthcare! That is precious. We know healthcare is not free. It is a tax
I was at a trade show in Vegas this winter and had the same conversation with my cab driver. He didn't get it. Our health care IS NOT FREE. Doctors, nurses and hospital staff do NOT work for lap dances and peanuts. My pay check says so.
Canada is a corrupt financialized economy where prominent figures in conservative politics are hosers who smoke crack.