It seems the Oil Gods have looked down on Alberta’s tar sands bitumen and damned it to further discounting. It would seem that at a time when the world needs cheaper oil, Alberta just cannot catch a break.
And, for once, we cannot blame the problem on hard-luck, departing premier Jason Kenney. He brought Alberta bad luck. And that cloud continues over his head.
And if the province did not need those farm silos for increased grain production, because of the conflict in Ukraine, they might be converting silos to hold bitumen.
The American refineries that can handle the highly polluting Alberta product have found lately that they can get lots of easier-to-process ‘heavy oil’ from Mexican and off-shore sources. The Alberta gunk ends up low-man on the totem pole.
And to make a sour outlook bleaker for Alberta, is the news from Washington. It seems President Joe Biden plans to undercut the profiteering by the American oil companies. In the peak holiday time of this July, he is releasing 40 million barrels of reserve crude oil into the American market. This reserve is intended for emergencies and I guess a cost of over US$4 per U.S. gallon of regular gasoline, across the United States, would be considered an emergency.
With that much crude flooding the American market, Alberta would have to start giving away bitumen to stay in full production. With only limited capacity for bitumen in the present Trans Mountain pipeline, only a trickle of bitumen can be shipped to the Far East markets or south to California.
To add insult to the costs of the Trans Mountain, it has now been confirmed that total costs for the planned dual pipeline now exceed $21 billion. With the federal government unable to remain credible in funding the project, the pipeline managers are out beating the bushes for private capital to continue the expansion.
The only problem is that the Canadian taxpayers will no longer be first in line to recover the billions already wasted on this project. It would probably take another fifty years to be paid back.
But with another fifty years of bitumen processing and pollution, there would not likely be much of our population left to spend the profits.
Copyright 2022 © Peter Lowry
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