Official (Alberta) Oil Discussion Thread

[Kavvy]

Originally Posted by polak

The best cure for low prices are low prices

I wonder if this is a true as we thought a year ago - for at least the next year.

I remember reading how low oil prices are forcing organizations and nations to pump more oil out as a lot of these producers have paid their capital costs, and still make money at a low oil prices. Since they are making a lot less, but still profitable, they are now forced to try to ramp up production to sell more to pay off their debts.

Of course this means they may run through their supply quicker, and many will go under, which may help the price in the long term.

[Frequitude]

Exactly, Kavvy. Low prices don't really impact sustaining production. It's new investment they take their toll on which leads to long run supply drops and therefore price recovery.

[Weitz]

How do low prices not impact sustaining production? Who is drilling wells these days?

[Locke]

Originally Posted by Weitz

How do low prices not impact sustaining production? Who is drilling wells these days?

The Saudis?

[Slava]

Originally Posted by Weitz

How do low prices not impact sustaining production? Who is drilling wells these days?

I think what he means is that producers already rolling and producing are going to keep going. Its the new projects that are halted and won't see the light of day for a while.

[Bend it like Bourgeois]

From the herald, a pretty good summary.

http://www.calgaryherald.com/stresse...046/story.html

[Weitz]

Originally Posted by Slava

I think what he means is that producers already rolling and producing are going to keep going. Its the new projects that are halted and won't see the light of day for a while.

Yes but to keep production up or even constant you need to drill and bring on new wells. Which most companies have cut significantly. Re-completions only get you so far.

[bizaro86]

Originally Posted by Weitz

Yes but to keep production up or even constant you need to drill and bring on new wells. Which most companies have cut significantly. Re-completions only get you so far.

I think GGG was looking at it from an oilsands point of view. New SAGD wells are marginally economic at current prices, but at $40-$50 oil almost every project would keep drilling to keep the plant full, which would provide employment in various ways, it might stop the bleeding but probably no employment recovery. New oilsands projects are a different story, and that is what it would take for employment growth from the current levels.

[Weitz]

Originally Posted by bizaro86

I think GGG was looking at it from an oilsands point of view. New SAGD wells are marginally economic at current prices, but at $40-$50 oil almost every project would keep drilling to keep the plant full, which would provide employment in various ways, it might stop the bleeding but probably no employment recovery. New oilsands projects are a different story, and that is what it would take for employment growth from the current levels.

Yah fair enough. I suppose I was focusing on on non-oilsands haha.

[Frequitude]

Gary Lamphier: How much money has flowed out of Alberta to Ottawa? A lot

If you’re still wondering why oil-rich Alberta doesn’t have a massive sovereign wealth fund like Norway, consider this. Alberta is a province, not a country. Ergo, we don’t get to keep all the wealth we generate in this province. Not even close.

...

So just how much money has flowed out of Alberta to Ottawa? A lot. Between 2000 and 2014, on a net basis, Alberta’s individual and corporate taxpayers shipped an estimated $200 billion-plus to the federal government. That’s what left the province, less what the feds reinvested here.

To put that lofty figure in perspective, it’s nearly 12 times the value of the $17.4 billion Alberta Heritage Savings Trust Fund. No other province — including Ontario, with three times Alberta’s population — even comes close to matching this province’s contribution to the federation.

...

McDougall was also motivated by the fact that other provinces, which have benefited immensely from Alberta’s energy wealth, are now explicitly or implicitly opposing new oil export pipelines, thus jeopardizing Canada’s economic future.

“Other provinces have basically been trying to extort benefits out of pipelines going through their province. To a certain degree I can understand that, but when it gets to the point where they are as bellicose as (Montreal mayor) Denis Coderre has been, I just find it sickening,” he says.

“I’m really disappointed as a Canadian that we’ve got a federation that tolerates this kind of thing. I mean we’re talking about staggering amounts of money here, so maybe other provinces have to share a bit of inconvenience and a bit of environmental risk. But they’ve been directly benefiting from Alberta’s economy for years.”

[polak]

Any articles from the other provinces points of view?

[Dan02]

and people say colonialism is dead.

[Frequitude]

Originally Posted by polak

Any articles from the other provinces points of view?

What does that even mean? The point of the article was to report on an accounting exercise to validate the amount of wealth transferred from Alberta to our fellow provinces. What opposing point of view is there to an accounting exercise, that the numbers are wrong?!?

Or are you referring to the opinion piece at the end where the author suggests our fellow provinces should accept some risk in return for their gravy train? If you actually read the article you'd see that the author researched into looked and couldn't find anything.

Nothing would make me happier than to see the other provinces announce a detailed accounting of the wealth transfer from Alberta to them and then get into why they aren't prepared to accept the risk of new pipelines. Then it would at least be a balanced and well-informed conversation.

I urge you to go look for one and report back.

[polak]

I was referring to the opinion at the end. I'm just curious how the other provinces could possibly justify this.

[Locke]

Originally Posted by polak

I was referring to the opinion at the end. I'm just curious how the other provinces could possibly justify this.

Has anyone ever given you free money? Were you in any particular hurry to explain why you deserved it or did you just take it and run?

[polak]

Originally Posted by Locke

Has anyone ever given you free money? Were you in any particular hurry to explain why you deserved it or did you just take it and run?

I sure as hell wouldn't bitch when the free money provider needs to build a pipe for the source of said free money through my backyard.

[GGG]

Originally Posted by Weitz

Yah fair enough. I suppose I was focusing on on non-oilsands haha.

This is funny because I am the opposite and wrongly assume everybody is oilsands

[Red]

Originally Posted by Frequitude

Gary Lamphier: How much money has flowed out of Alberta to Ottawa? A lot

He specifically refers to business so maybe it's correct, but otherwise the general contribution of Alberta is trumped by Ontario and is smaller than Quebec. Slightly ahead of the "socialist" BC...

Or is this just hogwash?

http://thoughtundermined.com/2012/07...s-by-province/

[para transit fellow]

Originally Posted by Locke

Has anyone ever given you free money? Were you in any particular hurry to explain why you deserved it or did you just take it and run?

Memories of Ralphbucks....

[accord1999]

Originally Posted by Red

He specifically refers to business so maybe it's correct, but otherwise the general contribution of Alberta is trumped by Ontario and is smaller than Quebec. Slightly ahead of the "socialist" BC...

Or is this just hogwash?

http://thoughtundermined.com/2012/07...s-by-province/

Even for that though, the last table shows that whatever contribution Ontario makes to the Federal government, it gets it all back (and a bit more) in Federal spending and transfers within Ontario. On the other hand, for every $1 in Federal revenue collected from Albertans, the Feds essentially only spend 52c of it in Alberta.

Imagine if Alberta was a separate country where Albertans pay the exact same taxes. Even accounting for the extra expenses of running federal responsibilities, the Alberta government would have many billions more to spend. Meanwhile, the rest of Canada would have 16-17% less revenue to spend but where costs have only gone down ~10%. And this is in 2009, Alberta's economy is 40% larger now and grown more than 2.5x as fast the rest of Canada.