Its been an arduous road since the 2015 provincial election's conservative vote schism, which, of the roughly 1.5 million votes cast, saw over half go to conservative parties but gave us an NDP government. Since then souls were searched, ego's tested and careers wagered; all under a banner of uniting a group with more in common than not, and in defeat of a party crazy enough to weigh intangibles like 'social licence' over fundamentals like Alberta's bleeding red balance sheet. But alas, he we [Read more]
Filling the Venezuelan gap: A brief analysis of North America’s heavy crude market
Inflation is soaring above 1100%, the GDP growth rate is projected to be -32% by year end, protesters are being murdered on the streets as government offices are plundered and looted, all atop a nearly two decade long exodus of the affluent and the educated. No, I am not describing the setting of a new Mad Max movie, but the current state of Venezuela. An OPEC nation sitting on a $20 marginal production cost, tying it with Ecuador, and winning out only to Angola's offshore reserves at $40, [Read more]
Book Review: Century of War: Anglo-American Oil Politics and the New World Order
William Engdahl, journalist, historian and economist, accounts the formation and operation of the global power structure since 1850 in his book A Century of War: Anglo-American Oil Politics and the New World Order. Gripping in its prose, Engdahl provides provocative evidence of our political, economic and ideological structures, colluding in an imperialistic attitude to secure rights to crude oil. For those frustrated by the lack of a consistent narrative in current events may find this [Read more]
The problem with a nation wide carbon price
Canadian Prime Minister Justin Trudeau embraced a top-down governance style this past Monday morning as he imposed a one size fits all federal carbon pricing scheme. Starting in two years, Canadians will see the price of carbon go from $10 to $50 in 2022. While Trudeau appeared justified imposing this constraint under the guises of the Paris Accord and climate change, such a move runs counter to the census reached on how Canada best responds to climate change. Since 2007, Canada's Premiers have [Read more]
Canada’s largest oil and gas firms are avoiding the ‘disaster in waiting’ production growth incentive plans
Recently, BOE Report contributor Terry Etam wrote an insightful article discussing the role financial incentives have in the outcomes of energy companies. As part of his article, he responded to a Bloomberg article sourcing a Moody's study on executive pay structure among the fifteen biggest North American oil companies. The researchers stressed that executive bonuses heavily influence executive strategy, and that they are being incentivized to increase production to increase revenues. While in [Read more]
Pipelines are of a Sir John A. Macdonald proportion of nation building
With Federal Parliament resuming today, events have been unfolding from protests over hearings of TransCanada's long-standing Energy East plans. The pipeline is so strongly now in the public eye that it has garnered attention from past and present Prime Ministers. Brian Mulroney for example, defends the projects' potential to be a nation-building endeavour of NAFTA proportions, while the current Prime Minister Justin Trudeau seeks to strengthen environmental standards and build confidence in new [Read more]
Prudent hedging strategies help multiple stakeholders address oil price volatility
Understanding crude oil future contracts is critical to having a clear view of oil business economics. Discussion involving NYMEX contracts or European ICE futures is found not only indaily media reports, but also the most pragmatic of economic analysis. Understanding what futures contracts are, how they work, and why they are used yields profound insight into one of the world's most important commodities. This article will begin with a look at the mechanics of the futures contract, followed by [Read more]
If Alberta’s NDP are so concerned about the environment, where are they on the abandoned well issue?
It has been a shocking surprise to me. In Alberta, our environmentally obsessed and economically negligent NDP government; the same one imposing a carbon tax too high for business to be globally competitive and too low to have an impact on consumer behaviour; the same one willing to cost Alberta billions of dollars through an oil sands emission cap, which will fail to meaningfully impact CO2 output; has been virtually silent on Alberta's most pressing environmental concern: Abandoned oil [Read more]
Why inventory levels influence the price of oil
Every week, the EIA publishes an update to the United States' crude oil storage count. This data point is highly regarded and is trusted upon by many different market participants. Company divisions tasked with allocating crude supplies for its various activities, for example, frequently make use of inventory levels to optimize their decision-making. Two weeks ago aggregate U.S inventory levels increased by 0.23%, only to fall by 0.50% the following week to rest at 521.10 million [Read more]
The obstacle inhibiting Canada’s greatest potential for economic growth is politics
While Canada continues to struggle to get its crude oil to market, United States producers are seeing the value of its crude appreciate through the lifting of crude export restrictions in December of 2015. In April, following a 175,000 barrel shipment of light-sweet crude from North Dakota to the Netherlands, the President of the North Dakota petroleum council stated "once you get a barrel to sea, it will fetch a better price." The shipment was one of many as producers continue to take advantage [Read more]