Quote:
Originally Posted by tkflames
Everything you say is correct anecdotally speaking. However, do you think that a company like BP which is bigger than most countries in the world and whose business it is to supply energy to the world would not model this? There will be new global O&G investment to supply oil for the next 100 years. The question is...given the current global glut and associated curtailment...does Alberta Oil still give you the best return on investment if you have access to places in the world where you can stick a pipe in the ground and have free flow? I dont know the answer...but I am not as confident as I was 5 years ago that the answer is yes.
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BP is one company, who is saying peak oil demand by 2030 - which I think is a stretch but for argument purposes I will accept. I think the more important point is however how demand behaves after peak - which I argue isn't going to be a drop off a cliff but a very slow decline due to the fact that all of these emerging economies are going to need fossil fuels to catapult them similar to the way Europe and North America catapulted themselves. There is simply no better alternative cost wise or consistency wise.
My point is there is still going to be a significant amount of production coming out of Canada and that isn't going to change. Prices will come back and when they do investment will come back as well. Do I think we are going to have a repeat of the boom days? Probably not. Do I think we are going to still have a strong industry for my life time? Yes. Am I concerned about consolidation and reduction of jobs overall? Yes, its inevitable and I don't think we ever fill the current office space we have in downtown Calgary.
As a side note, Alberta oil is not necessarily competing with a lot of the middle east oil. We mainly compete with the heavy guys like Venezuela and Mexico who have completely fallen off a cliff. This bodes well for Alberta WCS prices which could help make some smaller scale projects more economic.