Wednesday , May 12 2021

Brass: Oil cuts the necessary evil for the province wounded by Ottawa



Alberta Prime Minister Rachel Notley speaks during a notice announcing a compulsory cut in oil production to deal with a price crisis that cost Canada around $ 80 million a day in Edmonton on Sunday, December 2, 2018.

JASON FRANCE / CANADIAN PRESS

The imposition of a reduction in oil production in Alberta is not only a sign of the province in trouble. It is evidence of a land in trouble.

The Notley government is doing this, as it is the only way to boost prices and start closing the extreme price of the gap between Alberta's oil and crude oil from West Texas.

No other authority in this nation – no province and, of course, the Trudo's government – is ready to help lost revenue losses of $ 80 million a day. Farmers call it a "crisis," but do nothing.

The Government of Notylis demands a reduction in production totaling 325,000 barrels per day, 8.7 per cent of the current production.

It will begin on January 1 and is expected to last until the end of 2019, easing as the recharge of the warehouse begins to be exhausted.

This action is by its nature clumsy and attacked. It is a necessary exercise in the absurd – ordering some of the world's most efficient oil producers not to produce oil.

Reductions are punish by industry players who are themselves victims of the price collapse. She rides a wedge between small and large companies. The smallest firms are not affected.

Reductions are like an ancient medical practice of drinking. If enough blood is removed, the patient can improve.

But such is the danger that almost everyone agrees that these cuts are necessary. Given this reality, the plan seems reasonable and well considered.

If it works, the government expects the price gap to close about $ 4 a barrel "in terms of where it would otherwise be."

It looks like little effect, given that the real world gap is up to $ 40. But even the $ 4 profit per barrel will make up $ 1.1 billion in government revenues over a year.

Over time, other factors, such as the purchase of rail cars and the completion of line 3, are expected to further close the price gap. Notebooks also focus on diversification through new refineries.

But, as most Alberts know, the long-term solution is the completion of the Trans-Expansion expansion, which Otava managed to buy for $ 4.5 billion, and then radically postpone it through incompetent consultations.

Only after that oil pipeline will open up for business – if it ever does – it will deliver a production capacity and will finally release western Canadian oil from the US market.

Jason Kenny, leader of the United Conservative Party.

Jeff Mackintosh /

CANADIAN PRESS

United Conservative Party of Jason Kenny firmly supports the outcome, while accusing Notty of most of the problems that led to this day. He fails to mention that some of his ministers and MPP are used for anti-corps activists.

This measure is already in line with Alberta's production and delivery constraints in the 1980s, when Ontario and the federal government tried to patch the industry from Alberta.

Oil and gas evasion was very effective in that fight. When former Prime Minister Don Getty refused to sign gas export licenses, Ontario Prime Minister Bill Davis was soon on the phone that prayed for mercy.

But in those days, the fight is over and it has received the money.

Today, it is about whether there will be even to be some money.

Trudo's Campaign Liberals for gradually suppressing Alberta's industry were very successful, much earlier than expected, effectively suppressing value and squeezing investment.

Prime Minister Justin Trujou delivered the keynote address to the Calgary Chamber of Commerce on Thursday, November 22, 2018 at the Imperial Board at Hyatt Regency in Calgary. Jim Wales / Postmedia

The nation's government secured all victories to go to power without oil. Even these cuts in production will look like a victory for them.

The history of this crisis is clear.

First, Harper Conservatives lost approval for the Northern Gate, and then the Liberals completely canceled the project.

The Liberals effectively killed the Energy East project by changing environmental rules during the approval process.

The federal court that stopped the Mountain on August 30 found a particular blame for the old federal consultations.

Now, B.C. you will benefit from a huge liquefied natural gas terminal at the proposed gateway Gateway, Kitimat.

Related

The Ottawa's favoritism towards B.C. is upset, especially because the government of Horgan is continuing its efforts to control all aspects of the province's bitumen transport.

As Alberta deals with her deepest crisis for almost 40 years, the one that is largely inflicted by federal power, Ottawa is obsessed with closing a car in Ontario.

This is the way the country works for Alberta these days. It's not good at all.

Don Braid's column regularly appears in the Herald

dbraid@postmedia.com

Twitter: @DonBraid

Facebook: Don Brad Politics


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