It’s all about the discount, and it’s crushing the industry by stealth.
There’s no doubt that Justin Trudeau’s true feelings about the Canadian oil industry are totally negative.
He views it as a bad thing, as a ‘polluter,’ and as something to be crushed.
Remember, he once said the oil sands should be ‘phased out.’
However, Trudeau also knows that he can’t be seen as actively trying to destroy the Canadian oil industry, so he and his government often make enough ambiguous statements to give the impression of tepid support.
They try to muddy the waters just enough so they claim to ‘support Canadian energy,’ without actually supporting it.
Yet, we can see past the deception.
We can see exactly how Justin Trudeau is wrecking the Canadian oil industry:
It’s all about restricting pipeline capacity by blocking some pipelines, moving incredibly slow on others, and then imposing regulations that make new pipelines almost impossible and pushes investment out of the country.
The result of this is that the discount (AKA price difference) between Canadian oil and oil from our competitors has reached absolutely absurd levels, costing Canada billions of dollars. We sell our oil at such a low price that it’s having a devastating impact on the industry, and hollowing it out from the inside.
Here’s what was recently reported by the Calgary Herald:
“We are operating right on the knife’s edge on egress out of Alberta,” said Scotiabank commodity economist Rory Johnston.
“It’s not just about heavy (oil), it’s about all Canadian oil that is getting punished here by the lack of pipeline capacity.”
If it doesn’t shrink soon, the discount will have consequences for petroleum producers, future industry capital spending, and revenue for governments.
Every $1 increase in the price discount for Western Canadian heavy oil over the course of a year will cost the Alberta treasury about $210 million.Whitecap Resources CEO Grant Fagerheim estimates the price differential will cost all producers up to $100 million a day in lost revenues at current levels.
Fagerheim added, “Heavy oil producers are getting 40 per cent of what they normally would be paid if we had access to markets. It’s crazy, crazy, crazy.”
Trudeau’s decision to cancel pipelines and block/delay others while destroying the investment climate is making the discount worse and worse and worse.
This is the destruction of the Canadian oil industry by stealth, and it’s not happening by accident.
Justin Trudeau and the Liberals are purposely wrecking our Canadian oil industry, while attempting to do it in such a way that they avoid blame for it.
The cost to Alberta, and all of Canada is reaching into the billions, and it’s deepening the already severe political divisions in Canada.
It is an economic and national crisis, it’s a betrayal of Albertans, and it’s weakening our entire country.
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