My 4,659.4 barrels of oil
According to Natural Resources Canada, "Canada has the third-largest proven oil reserve in the world, most of which is in the oil sands."
"Proven oil reserves are estimated at 171.0 billion barrels."
Canada's current population is about 36.7 million.
So, one could perhaps argue that my current share of Canadian oil is about 4,659.4 barrels.
Since Brent Crude is priced at about $70/barrel today, that's about $326,158 USD or, even better: $420,662 CAD!
Hurray, I'm rich! 💵💰
But wait just a second, you say. That oil is still in the ground. It costs money to extract it and transport it to a buyer.
Well, crap. Maybe I'm not that rich after all.
So how do I turn this black gold stuck in the ground into big dollar signs?
More bad news: Our infrastructure has evolved over the years to export most of our oil to the United States.
That worked great when oil was scarce and prices were high. People raked in the cash.
But now the United States is fracking like crazy and has actually become an oil exporter themselves!
This supply glut has made Canadian crude even less valuable.
My dreams of riches continue to be crushed.
Two potential solutions have been proposed:
- Use pipelines to move the crude to tidewater* where it can reach more diverse markets and possibly fetch a better price
- Build refineries near the source to upgrade the crude into usable products
*By the way, who the heck started calling the ocean "tidewater"? Am I the only one who thinks that's weird?
Now, the way I see it, Pipelines benefit big multinational corporations that make money not from the oil itself, but by moving it around. There's big money in shipping and transport logistics.
Refineries, on the other hand, seems to directly benefit Canadians. We might expect lower gas prices, reduced crude imports from overseas, and higher profits per barrel extracted.
So, if I have any say about "my" 4,659.4 barrels, I'd much prefer we use option #2, and refine that crude in Canada for maximum value and benefit to all Canadians.
Which option would you prefer for "your" barrels?