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Old 10-10-2019, 09:59 PM   #1661
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Then please, provide details on WTI differential, pipeline capacities, market demand, and other facts. Please also provide sources for your facts. I invite you to set the record straight.
What is your specific question you would like to see answered?
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Old 10-10-2019, 10:31 PM   #1662
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The race to the bottom that the film industry in terrible. They shop jurisdictions until they find the one that gives them the best tax breaks playing Georgia off of Vancouver off of New Zealand off of Alberta. Any industry can make all the claims that they bring in dollars by existing.

There really needs to be a get together of all jurisdictions and tell the film industry to #### off and pay taxes.
Yeah, that's not going to work. Film employs thousands of Albertans, brings in a serious amount of revenue, and has quite a significant amount of potential to grow if the UCP takes it more seriously. In this economy, we should be encouraging industries like this that can make an immediate difference to jobs and growth in Alberta.
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Old 10-10-2019, 10:41 PM   #1663
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Yeah, that's not going to work. Film employs thousands of Albertans, brings in a serious amount of revenue, and has quite a significant amount of potential to grow if the UCP takes it more seriously. In this economy, we should be encouraging industries like this that can make an immediate difference to jobs and growth in Alberta.
By encourage you mean directly subsidize. If we treated all industry like the film industry the government would be losing a ton of money. Why is the film industry special? There is little evidence that participating in the race to the bottom that is the film industry then spending that money to subsidize other business.

Also are you arguing that the PCs did nothing to diversify while at the same time complaining the new CPC government is creating uncertainty by reviewing a subsidy to create diversity by the previous PC government?

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Old 10-10-2019, 10:55 PM   #1664
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By encourage you mean directly subsidize. If we treated all industry like the film industry the government would be losing a ton of money. Why is the film industry special? There is little evidence that participating in the race to the bottom that is the film industry then spending that money to subsidize other business.

Also are you arguing that the PCs did nothing to diversify while at the same time complaining the new CPC government is creating uncertainty by reviewing a subsidy to create diversity by the previous PC government?
If subsidizing the film industry through grants or credits translates to increased revenue and real jobs for Albertans, how is that a bad thing? You have to invest in order to make money. Also, calling the industry a 'race to the bottom' is quite the biased view on industry in which I doubt you're in or know people in... are you in the industry or are familiar with those that are? I know people in the industry, and I don't think they'd classify their livelihoods as that.

Also, I'm not saying the PC's did nothing, I asked if they had a diversification plan? Lord knows they had many years to form one. The NDP was more active in encouraging the growth of the film industry here in Alberta; read the articles I posted above. It doesn't seem to be a priority given the uncertainty that's now six months into a new regime. That's not good enough.
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Old 10-10-2019, 11:01 PM   #1665
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If subsidizing the film industry through grants or credits translates to increased revenue and real jobs for Albertans, how is that a bad thing? You have to invest in order to make money. Also, calling the industry a 'race to the bottom' is quite the biased view on industry in which I doubt you're in or know people in... are you in the industry or are familiar with those that are? I know people in the industry, and I don't think they'd classify their livelihoods as that.

Also, I'm not saying the PC's did nothing, I asked if they had a diversification plan? Lord knows they had many years to form one. The NDP was more active in encouraging the growth of the film industry here in Alberta; read the articles I posted above. It doesn't seem to be a priority given the uncertainty that's now six months into a new regime. That's not good enough.
Race to the bottom is describing the jurisdictional game playing by the film industry to keep on industry against another. Itís the same as the corporate tax race to the bottom and the entire corporate head quarters Amazon problem.

If an industry receives subsidies that directly increases taxes on others. So what is the evidence that the film industry has better returns per dollar of subsidy then other industry and what is to stop the next jurisdiction from offering more. Itís not a sustainable way to develop industry hence the race to the bottom.
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Old 10-10-2019, 11:18 PM   #1666
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Race to the bottom is describing the jurisdictional game playing by the film industry to keep on industry against another. It’s the same as the corporate tax race to the bottom and the entire corporate head quarters Amazon problem.

If an industry receives subsidies that directly increases taxes on others. So what is the evidence that the film industry has better returns per dollar of subsidy then other industry and what is to stop the next jurisdiction from offering more. It’s not a sustainable way to develop industry hence the race to the bottom.
Are you suggesting the film industry isn't worth incubating and growing in this province? The UCP's 'Canadian Energy Centre' is basically a subsidy for the O+G industry, given that they're spending money on industry PR initiatives to increase that industry's well being in this province. How is that any different?
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Old 10-10-2019, 11:29 PM   #1667
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What is your specific question you would like to see answered?
DiracSpike made the following statement:

Striving to allow us as the people of Alberta to receive full and fair value for our non-renewable resources is not "looking back to 2007".

If the market value of our product is not considered fair, then what is fair? By who's standards? And does it involve government intervention or the free hand of capitalism?

I get the sense that just because WCS isn't priced the way we would like to see it doesn't mean it's less "fair". The market dictates what its price should be. Since 2/3 of our product is shipped through Enbridge's Mainline and basically has one buyer (the U.S.), then what does that say about our ability to move a "fair" priced product?
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Old 10-11-2019, 12:46 AM   #1668
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I feel like posts like these just make the case for the "War Room" or whatever the PR campaign for energy is called. Clearly Albertans and Canadians in general do not have the facts, and are not informed as to the challenges faced by and benefits provided by Canada's energy sector.
Exactly, the film industry and any provincial subsidies for tech upstarts in Alberta was funded by credits and incentives made possible financially, by royalties.

You kill the revenue stream, you lose your shiny toys too, sorry!
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Old 10-11-2019, 12:59 AM   #1669
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Originally Posted by Ozy_Flame View Post
DiracSpike made the following statement:

Striving to allow us as the people of Alberta to receive full and fair value for our non-renewable resources is not "looking back to 2007".

If the market value of our product is not considered fair, then what is fair? By who's standards? And does it involve government intervention or the free hand of capitalism?

I get the sense that just because WCS isn't priced the way we would like to see it doesn't mean it's less "fair". The market dictates what its price should be. Since 2/3 of our product is shipped through Enbridge's Mainline and basically has one buyer (the U.S.), then what does that say about our ability to move a "fair" priced product?

You want to diversify our economy with new stuff that requires government subsidies, but dont see the value in diversification of the distribution of our primary resource?

As an Albertan, hell a Canadian, know how your ####ing bread is buttered.
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Old 10-11-2019, 01:02 AM   #1670
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You want to diversify our economy with new stuff that requires government subsidies, but dont see the value in diversification of the distribution of our primary resource?

As an Albertan, hell a Canadian, know how your ####ing bread is buttered.
That's hyperbole, not an answer.

So again, what is determined as "fair" if not market value?
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Old 10-13-2019, 10:42 AM   #1671
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Originally Posted by Ozy_Flame View Post
DiracSpike made the following statement:

Striving to allow us as the people of Alberta to receive full and fair value for our non-renewable resources is not "looking back to 2007".

If the market value of our product is not considered fair, then what is fair? By who's standards? And does it involve government intervention or the free hand of capitalism?

I get the sense that just because WCS isn't priced the way we would like to see it doesn't mean it's less "fair". The market dictates what its price should be. Since 2/3 of our product is shipped through Enbridge's Mainline and basically has one buyer (the U.S.), then what does that say about our ability to move a "fair" priced product?
It's not fair market value if the product is kept from accessing the potential consumers due to government (primarily the judiciary branch) suppressing the means to transport it.

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Old 10-13-2019, 11:35 AM   #1672
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Do you know what the market price would be if we flood the market with more oil?

Do not confuse fair market price with a price that doesn't seem fair to you.

Seems like the market has set the fairest price for our product given current conditions. Ergo, the fairest price.
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Old 10-13-2019, 11:41 AM   #1673
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Originally Posted by Ozy_Flame View Post
DiracSpike made the following statement:

Striving to allow us as the people of Alberta to receive full and fair value for our non-renewable resources is not "looking back to 2007".

If the market value of our product is not considered fair, then what is fair? By who's standards? And does it involve government intervention or the free hand of capitalism?

I get the sense that just because WCS isn't priced the way we would like to see it doesn't mean it's less "fair". The market dictates what its price should be. Since 2/3 of our product is shipped through Enbridge's Mainline and basically has one buyer (the U.S.), then what does that say about our ability to move a "fair" priced product?
WCS is bought and sold at Hardisty.

So the price differential is the value difference between WTI and WCS in terms of the ability/cost to refine plus the cost of transport. Pipeline is somewhere around $8-$10 US. Rail is somewhere around $20. In addition rail is hard to ramp up quickly due to car availability so once all rail and pipeline capacity is filled the price crashes to 0 (after considering diligent).

So given the free hand of capitalism in a world where keystone XL, Energy East, Northern Gateway, Line 3, and TMX were never delayed and all on line at this point the Spread would hover between $8-$10. Instead we have an $18 spread today which is the cost of rail.

Now the free hand of capitalism isnít quite true when it comes to pipelines as they are regulated rates based on target profits but the above is more or less correct. The other issue is that investment at the current pricing is profitable if you didnít have curtailment restraining the market to maintain price at the marginal cost of rail.


If you are actually interested in links to learn about the subject as opposed to arguing about the subject I can see what I can dig out.
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Old 10-13-2019, 11:46 AM   #1674
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Do you know what the market price would be if we flood the market with more oil?

Do not confuse fair market price with a price that doesn't seem fair to you.

Seems like the market has set the fairest price for our product given current conditions. Ergo, the fairest price.

Yes, I can assure you that the 2-300,000 barrels per day that would otherwise have transportation from Alberta if there were currently more pipelines in service would not 'flood' the world market with oil that consumes upwards of 100 million barrels per day. For tidewater transportation we would be receiving pretty much 100% of the world heavy oil price minus the cost of pipeline transportation for our oil which is significantly more than the Alberta price which has been allowed to move lower by blocking pipelines.

I have to say if your posts in this thread are actually genuine and not being intentionally obtuse or arguing for the sake of being devil's advocate then you are living evidence of the rationale for the energy war room. If you are a representative of a significant amount of Albertans then there's a lot of education that needs to take place for Canadians to understand the issues as well.

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Old 10-13-2019, 12:24 PM   #1675
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I am curious to learn more from CP folks closer to the situation as long as its a polite and open-minded discussion.
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Old 10-13-2019, 12:31 PM   #1676
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I am curious to learn more from CP folks closer to the situation as long as its a polite and open-minded discussion.
What, you mean the aggressive, preachy and condescending tone in this thread from certain posters in here isn't doing it for you?
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Old 10-13-2019, 10:14 PM   #1677
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I am curious to learn more from CP folks closer to the situation as long as its a polite and open-minded discussion.
It's plain fact that our pipeline situation is killing us. It's exactly how supply and demand behaves.

You're thinking global supply and demand, but our problems are far more local. If the entire world flooded world supply with oil, of course oil would drop in price - Saudi Arabia, for example, has unlimited access to tidewater (the proxy for "global" markets), meaning that if they open the taps, they would definitely flood the world markets.

Alberta, on the other hand, doesn't have that luxury. We have the current TM pipeline, which is approximately 350,000 barrels a day to tidewater. We also have several million barrels a day through Keystone and the Enbridge mainline that goes to the US (I think it's about 2.5M?). The rest of our production (~500,000 barrels) is refined and used in the local area.

So, based on what I said, we have 350,000 barrels that actually access global markets, and 2.5 million barrels that are completely locked to the US customer. We actually don't have any more capacity, so we can't even sell more if we wanted to (as an example of the flaw in your previous global supply and demand assumptions, just because Alberta oil has low supply doesn't mean we get higher prices).

So what TMX will do is add another 600,000 barrels that we can access tidewater with. This isn't going to solve the entire problem, but it gives us a bit of leverage to get better prices with the US. Line 3 and KXL both feed the US, which won't help the differential, but will help the number of barrels moving - which contributes to revenue through the formula:

(Global oil price - WTI/WCS differential) * # of barrels = revenue

KXL and Line 3 will help # of barrels, while TMX helps both the WTI/WCS differential and the # of barrels in the current constrained situation.

Note that I completely agree that the pipelines won't affect global oil prices. So the factors that we (as in Canada) control, is the differential and the # of barrels - both of which are constrained by pipelines, and both can be resolved on a Canadian level.

I hope that helps you understand the pipeline market at the moment.
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Old 10-13-2019, 10:57 PM   #1678
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This link https://oilprice.com/oil-price-charts will show the world prices of oil grades. Couple interesting points on there

Mexican maya (heavy oil) sells for 49.34 around 5 dollar discount to WTI
Iran heavy ( heavy oil) sells for 51.64 around 3 dollar discount to WTI
Basrah heavy sells for 59 dollars around 5 dollar premium
Arab heavy sells for 60 dollars around 6 dollar premium

What do those blends have in common? They’re produced in countries that have free and unfettered access to world markets (except Iran I guess, not sure how they have a quotes price given the sanctions but whatever). What does heavy oil sell for in Canada, the country with essentially no tidewater diversification selling captively to one market?

WCS (heavy) 37.60, 15 dollar discount, and of course last winter we saw that blow out to 50 dollar (!!!!) discounts which necessitated curtailment. Why should Iraq and Mexico get full value for their heavy oil while we get the shaft. It makes no sense, it’s moronic, and if we don’t get tidewater access for our resources it will result in the permanent long term decline of our province no matter how many Ghostbusters sequels film here.
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Old 10-14-2019, 12:19 AM   #1679
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It makes me cringe to hear the Cons blame everyone but themselves for alberta’s Pipeline problem. The Cons were in power in Alberta for all of the most recent boom 1995 to 2015 and federally as well 2007 to 2015. Asleep at the switch or too busy chomping in the trough to have the foresight to govern and regulate properly.
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Old 10-14-2019, 12:42 AM   #1680
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It makes me cringe to hear the Cons blame everyone but themselves for alberta’s Pipeline problem. The Cons were in power in Alberta for all of the most recent boom 1995 to 2015 and federally as well 2007 to 2015. Asleep at the switch or too busy chomping in the trough to have the foresight to govern and regulate properly.
Alberta is not the bottleneck for the pipeline problem. Both the provincial Cons and the provincial NDP pushed projects forward.

Federally, the Conservatives had multiple pipelines completed and operational during their tenure - Line 9 reversal, Keystone phase 1, Alberta Clipper are just ones off the top of my head.

It was only the 2014ish projects like Energy East, TMX and Northern Gateway that is running into these issues, and the Harper government basically said "let the process work because it's worked for decades." Of course we know now that the process is completely broken, but Harper's decision was definitely a reasonable one at the time.

Trudeau is also trying to "let the process work", but with the additional information over the past few years that the process is completely broken, and stalling whenever politically convenient. That's the major difference and where the animosity comes from.
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