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Showing posts from December, 2016

Leave Canada's oil in the ground (for now)

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Recently, the Canadian federal government approved a pipeline expansion project that adds a second pipeline along an existing route from Edmonton, AB to Burnaby, BC. Here's the map:


The pipeline has its own marketing site, touting the benefits:


Helping us "keep up with the rising global demand for oil" and "increased tax benefits for all of Canada" sounds great, right?

Except that it's misleading. While technically true that demand is rising:

Demand is increasing much slower than previously projectedSupply is increasing as fast or faster than demand And when supply increases faster than demand, prices fall.
Most projections, including this recent one from oil-price.net, predict that oil prices will stagnate or even decrease over the next few years.
It's also important to note that Alberta oil sells at a significant discount to the "regular" oil price you hear quoted in the news. For instance, when WTI crude fell to $30, Canadian oil was selling…