Quote:
Originally Posted by Wolven
Back in the '70s and '80s everyone thought we were going to run out of oil. It was all about when we would hit "peak oil supply" and then run out of reserves.
Now the conversation is about "peak oil demand", which implies that the supply will still be there but the market will be displaced by alternative technologies. As demand peaks and starts to decline, the profits will start to decline and the prices will drop as the cheapest suppliers will try to squeeze value out of the remaining market and essentially kill off the more expensive producers.
If the Oil Sands production stays profitable at $20/barrel, then things will get tighter and tighter as the prices go down but the market here will not crash. The moment that the Saudis or whoever pushes the price down to $15/barrel or $10/barrel then that is game over for Alberta.
Also, if you look at those developing countries, a lot of them are looking to leapfrog into electrification. With the new technology advancements and lowering cost of green technology it is becoming more and more reasonable for them to go green immediately and skip having to invest a bunch of money into legacy combustion technology just to have to invest a bunch more money to replace it all. A lot of the developing countries are in good locations for solar and wind which also makes it easier for them to go straight to those options instead of trying to stand up a coal plant or whatever. So while they might not care about the climate, they definitely care about effective spending of their money.
(In short, they are not stupid)
Fumbling the ball with oil and gas won't matter if the industry dies, but if we double and triple down on oil and gas and then the O&G industry crashes then the province would quickly become a "have not" province relying on equalization payments to come our way just to survive. Our priority should be diversification above all else.
|
My prediction - neither extreme view plays out. I don’t think a massive shift to electrification is going to completely displace oil and gas, but it will significantly blunt potential growth in consumption that may have occurred as the developing world catches up. I think you see usage stay pretty flat, oil and gas is pretty sticky as a fuel source, and there’s still no substitute for it in many, many situations and use cases.
I think there’s a case for another pipeline, it was a much better case 15 years ago, but still doable today. That said, it’s a still a slim chance, the producers don’t trust the government enough to push their chips in, no pipeline company around can do this in spec. I actually think the approach of having a government led, industry backed/staffed attempt to get this to feasibility isn’t half bad. It’s not a big dollar figure and if this gets legs you will see a consortium come together.
Now, how she’s going about it is of course completely wrong. She’s picking fights, being divisive and stirring up opposition as opposed to trying to win people over. Completely unsurprising from her, it’s all she knows but it’s gonna help kill this thing and it’s tricky enough as it is.