Canadian Federal Politics Thread v5

[Aarongavey]

Originally Posted by flamesfever

Well he's one of the greatest Climate Change fighters in the world. I just hope, if he ever gains power, he operates with a lot more common sense than the present Liberals.

That should work for you though, him being a climate change fighter, because you just said that you care about the environment.

[flamesfever]

Originally Posted by Aarongavey

That should work for you though, him being a climate change fighter, because you just said that you care about the environment.

I think it's a matter of priorities. Right now, I believe paying for healthcare and our share of military spending should take priority over fighting climate change, and if you can do both at the same time, as in the case of LNG, then go for it.

It is my belief that the "Net Zero" push, i.e. trying to force all the changes proposed by 2050, is much too short a time, both from a cost and practical standpoint. In the long run, I think it will take a much longer period of time.

[dammage79]

Canada should be using O&G income to build up the incoming infrastructure it needs to ween itself off of O&G.

They should me maximizing it's chief exports value to make these inroads towards their mandated goal. Instead it seems they've kneecapped themselves into a sort of paralyzed indecision and short sighted favor currying in the global environmental movement.

IMO, they could do all of these things (Military, Healthcare and net zero) in a short span of time if they maximized their primary export.

[Fuzz]

Originally Posted by flamesfever

Where is the money going to come from then, if not from selling our resources, which is the main reason we enjoy our standard of living today.

I'm saying that's a poor long term strategy, because relying on what is ultimately a dead end resource leaves us unprepared for that day. Nothing wrong with using that income and maximizing it to what is reasonable and balanced, but it shouldn't be what we depend on. If that's the strategy, it's a poor one.

[Mr.Coffee]

Originally Posted by Fuzz

I'm saying that's a poor long term strategy, because relying on what is ultimately a dead end resource leaves us unprepared for that day. Nothing wrong with using that income and maximizing it to what is reasonable and balanced, but it shouldn't be what we depend on. If that's the strategy, it's a poor one.

Not that I disagree we shouldn’t be diversifying big time (we absolutely should, and Alberta in particular- personally I think we should go full tilt into healthcare like Houston did) but I really don’t think oil and gas is “going anywhere”.

If you look into research of any energy forms over time they never really go away, we just end up using more and more and more energy. For example coal, we’ve never used more of it than right now. Forget where I saw that chart.

But maybe your argument is that the economic system that hinges on constant / continual growth is flawed, and I would agree with that. But, not sure what the right answer is to address that.

So yeah, all these people saying oil and gas is going away- there just isn’t much evidence to support that I don’t think. I could see demand dropping, but going away or being replaced? Nah.

Anyway more to the point / what you were saying- I just think you have two basic premises of what value you can offer the world. Harvest / sell your resources or make stuff. You don’t get to do neither.

Well- you can- but then you end up like Canada with a super sketchy economic future and extremely reduced standard of living. And I guess if that’s what you want, maybe you’re the one that should move to sub Saharan Africa or something instead of changing how everyone else who lives here wants to live. But then you might find when you get there that those places are in fact also trying to achieve our standard of living and the environment probably ranks around 300 on list of things to care about.

[OldDutch]

Originally Posted by Fuzz

I'm saying that's a poor long term strategy, because relying on what is ultimately a dead end resource leaves us unprepared for that day. Nothing wrong with using that income and maximizing it to what is reasonable and balanced, but it shouldn't be what we depend on. If that's the strategy, it's a poor one.

Just going to point out the transition is the long term strategy. Leaving by nature the funding mechanism as temporary.

Now if green energy along with “training and diversification” doesn’t leave the country with a similar standard of living, I can see the funding taking on a long term window. As is with all horrible projects.

[edslunch]

Originally Posted by flamesfever

The fact is we care about both the environment and our energy industry. A lot has been done to make our oil and gas some of the cleanest in the world. Have you never looked at the difference between flaring in the US vs Canada? In addition, we are aware that by not to capitalizing on our strengths i.e. selling our resources, and relying too heavily on the US as our trading partner, we have jeopardized our ability to adequately fund our military and healthcare.

I believe our regulations and practices are top tier but the oil sands require a massive energy input that other producers don’t. Are there any stats on end to end emissions intensity by country?

[Mr.Coffee]

I’m sure the oil sands don’t have a great emissions profile but then again if we stopped producing that type of heavy oil I really do think the USA would invade us lol

[Fuzz]

I guess I mean practically. It's not going to take a huge drop in demand to re-balance the entire industry. When demand does start dropping, the cheapest barrel to produce will be the one sold, and when we are talking about oilsands, long pipelines, and tankers I don't see our barrels standing up too well for cost. So once prices drop, any idea for big growth that ultimately requires massive spends and long timescales starts to look less likely.

Now, it's fair enough to argue demand will only ever increase, and my own assumption is it won't. Coal is easy energy. Dig it, move it, burn it. Oilsands is not that. As energy becomes more fungible(electrical sources can be anything) it becomes more likely the large variety and new innovations will displace oil, if only for the simplicity of other sources. Aircraft and shipping will be a long time before real noticeable changes take place but there aren't that many O&G uses that can't be replaced with electrical sources in time.

Sometimes I wonder if people really understand just how much goes into all the steps from finding oil to burning it. There are a lot, and a lot of people and expenses, even ignoring the environmental part.

[flamesfever]

Originally Posted by Fuzz

I'm saying that's a poor long term strategy, because relying on what is ultimately a dead end resource leaves us unprepared for that day. Nothing wrong with using that income and maximizing it to what is reasonable and balanced, but it shouldn't be what we depend on. If that's the strategy, it's a poor one.

In spite of the world's attempt to transition away from oil and gas, I believe it will always be part of the world energy mix in the foreseeable future. As you are aware, it has many more uses than for simply heating and cooling.

It was only a short time ago when we were seriously concerned with running out of oil and gas i.e. peak oil. Then along came technological advances that allowed us to recover the oil and gas from lower quality tighter formations, and to do so economically. Canada was one of the pioneers in developing that technology. In fact, Canada has one of the most technically excellent oil and gas workforces in the world.

As far as oil and gas production is concerned, it is important to understand two things. One, that oil and gas has no value unless it can be produced economically. And two, that drilling must be done on a continuous basis to maintain enough supply to satisfy demand. This is because the wells have a very steep decline, particularly those drilled in tight formations...which is mostly the case in NA. If we don't provide enough investment to make that happen, then the price for oil and gas will increase dramatically, along with inflation.

Speaking long term, as oil and gas is a finite resource, eventually the world will run out of the oil and gas that can be produced economically. However, I believe that is a long time off, and until that day arrives, I believe Canada will play a significant part in providing what the world needs in the way of oil and gas, as it is blessed with an inordinate supply of same.

[GGG]

Originally Posted by Fuzz

I guess I mean practically. It's not going to take a huge drop in demand to re-balance the entire industry. When demand does start dropping, the cheapest barrel to produce will be the one sold, and when we are talking about oilsands, long pipelines, and tankers I don't see our barrels standing up too well for cost. So once prices drop, any idea for big growth that ultimately requires massive spends and long timescales starts to look less likely.

Now, it's fair enough to argue demand will only ever increase, and my own assumption is it won't. Coal is easy energy. Dig it, move it, burn it. Oilsands is not that. As energy becomes more fungible(electrical sources can be anything) it becomes more likely the large variety and new innovations will displace oil, if only for the simplicity of other sources. Aircraft and shipping will be a long time before real noticeable changes take place but there aren't that many O&G uses that can't be replaced with electrical sources in time.

Sometimes I wonder if people really understand just how much goes into all the steps from finding oil to burning it. There are a lot, and a lot of people and expenses, even ignoring the environmental part.

Our barrels are actually pretty cheap to produce. They are very capitally intensive to expand production but sustaining existing production is relatively low cost.

We have long reserve life relatively low capital intensity sustaining production compared to something like Shale oils. The pipelines also already exist so depending on what they do with the capital recovery portion of the fee it would be interesting to see the opex shipping cost.

So while no investment in a declining price environment would avoid Canada CNRL will continue pumping out production to the last barrel.

Canada is well positioned to produce the worlds latest life barrels.

[Mr.Coffee]

Anyway all that being said Canada should still diversify. We need a little bit of everything kinda thing. Harvest all kinds of resources and sell them. If any country is going to do it environmentally responsible it’s Canada.

[Fuzz]

Originally Posted by GGG

Our barrels are actually pretty cheap to produce. They are very capitally intensive to expand production but sustaining existing production is relatively low cost.

We have long reserve life relatively low capital intensity sustaining production compared to something like Shale oils. The pipelines also already exist so depending on what they do with the capital recovery portion of the fee it would be interesting to see the opex shipping cost.

So while no investment in a declining price environment would avoid Canada CNRL will continue pumping out production to the last barrel.

Canada is well positioned to produce the worlds latest life barrels.

It's not just production, though. There's the pipeline thing, along with needing condensate, then long distance shipping. If demand drops something like 20%, our oil looks a lot less attractive globally because the nearest resource will make more sense, and we will be competing against new energy sources for cost as well.

[edslunch]

Originally Posted by Mr.Coffee

I’m sure the oil sands don’t have a great emissions profile but then again if we stopped producing that type of heavy oil I really do think the USA would invade us lol

We produce what we have and IIRC pretty cheaply once everything is paid off. We’re not going to stop producing it anytime soon, but maybe we can tone down the greenest cleanest oil line that some boosters roll out.

I’m on team gas.

[GGG]

Originally Posted by Fuzz

It's not just production, though. There's the pipeline thing, along with needing condensate, then long distance shipping. If demand drops something like 20%, our oil looks a lot less attractive globally because the nearest resource will make more sense, and we will be competing against new energy sources for cost as well.

I don’t have a good handle on the opex vs capex of a pipeline system so can’t say the absolute lowest cost you could ship barrels for if the other option was no production.

But if you compare us to Shale we will produce longer and at lower costs. I’m thinking in a world with 30-40 million worth of demand once cars are all electric.

[Goriders]

Originally Posted by Mr.Coffee

Anyway all that being said Canada should still diversify. We need a little bit of everything kinda thing. Harvest all kinds of resources and sell them. If any country is going to do it environmentally responsible it’s Canada.

If you look at the actual energy mix in canada other than transpotation we are highly diversified. Hydro in Quebec, BC and Manitoba and Nuclear in Ontario are the primary power generators.

Not sure if that’s what you meant. In terms of export trade we need to open more access to other markets for our resources. Indirectly in the long term Trump might be helping with that part.

[Fuzz]

Originally Posted by GGG

I don’t have a good handle on the opex vs capex of a pipeline system so can’t say the absolute lowest cost you could ship barrels for if the other option was no production.

But if you compare us to Shale we will produce longer and at lower costs. I’m thinking in a world with 30-40 million worth of demand once cars are all electric.

Looks like it is $3.50-$4.50 CAD depending on grade for TMX from Edmonton to Westridge terminal. Tankers are $1-$5, depending on a lot of factors. This recent article shows US to Asia being $5. With this interesting quote:

"The hike on freight rates came as a shock," said a Singapore-based trader with a North Asian refinery. "The direct outcome is that the U.S. crude is no longer competitive in Asia."

https://www.reuters.com/markets/comm...ia-2024-01-10/

Which really gets to my point. Markets will find the cheapest closest barrel. Will that be us as prices dip from lower demand? You propose a 30% drop in demand, and I just can't see that as leaving us as the cheapest closest barrel for a lot of markets. Particularly when you add in the condensate cost. Perhaps we should be investing on more synthetic crude production if this is our long term plan.

[puckedoff]

Originally Posted by Fuzz

Sometimes I wonder if people really understand just how much goes into all the steps from finding oil to burning it. There are a lot, and a lot of people and expenses, even ignoring the environmental part.

This is where the Oil Sands have a huge advantage, as the oil is already found. Compared to shale oil for example, when prices drop the oil sands producers can cut costs and production stays relatively flat. Shale producers need to continually spend money to find new barrels, or their production drops off (ultimately leading to higher prices).

[Azure]

Hey have the Liberals put out a plan yet? About anything? I thought Carney is the smartest person alive.

[GGG]

Originally Posted by Azure

Hey have the Liberals put out a plan yet? About anything? I thought Carney is the smartest person alive.

Carney released his expanded carbon tax so far.