Alberta premier Rachel Notley decided that she will mandate an 8.7 percent production cut, starting on January 1st, in the hopes that it will help to finally drive the price of oil back up, seeing as this is a supply and demand problem and there is too much supply in the system. But as far as “immediate action” goes, waiting another three weeks doesn’t seem very immediate (though I’m not sure what is involved in scaling back production), and it’s not a solution that makes everyone in the market happy given that some players weren’t taking as big of a hit by the large price differential.
Reaction has been swift, and while Jason Kenney says he supports it, he and Andrew Scheer are quick to blame the federal government for the situation. Natural resources minister Amarjeet Sohi responded with a thread that basically said that they inherited most of these problems – and he’s right about that – but he laid out the supports they’ve given the industry. I’m not sure that in the race to pin blame that anyone is looking at the history of the industry – there was no push to sell oil to overseas markets before recently because America was always seen as an easy import market with an insatiable appetite, because nobody saw the shale revolution coming. That’s no one government’s fault, and it’s difficult to turn an industry around in a mere couple of years. And Kenney and Scheer keep insisting that if Trudeau hadn’t killed Northern Gateway or Energy East, things would be just fine – except of course that it’s just as likely that Gateway would still be tied up in interminable court injunctions because it was the more fraught project to begin with, and Energy East wasn’t economically viable once Keystone XL was back in the picture, but why spoil a narrative with facts?
Meanwhile, New Brunswick’s new premier is hoping to revive Energy East, under the belief that it was just regulatory problems that killed it rather than the economics, particularly because the proponent didn’t have enough supply contracts to fill both it and Keystone XL. Also, the proponents who think this will displace foreign oil know that unless they shell out to retool the existing refineries, it won’t actually serve their markets, and that they would also be demanding that Alberta swallow a $10/barrel discount, right?
Good reads:
- While at the G20 in Argentina, Justin Trudeau apparently talked to Mohammed bin Salman about human rights, and Vladimir Putin about the situation in Ukraine.
- Trudeau also confirmed that he only found out about Raj Grewal’s gambling problems within days of his decision to stand down. Grewal is now out of caucus.
- Senior officials are also “not surprised” that Donald Trump has said he’ll formally withdraw from NAFTA to pressure Congress to ratify the New NAFTA.
- The federal government is planning to announce a “whole of government” push to better protect our elections against foreign interference.
- As the push for oil-by-rail continues, the Transportation Safety Board warns about the lack of proper fatigue management by rail companies.
- More documents from the Mark Norman trial point to federal bureaucrats being cautious about the planned sole-source contract to Davie shipyard.
- The Chief of Defence Staff acknowledges the problems found in the Auditor General’s report when it comes to sexual assaults in the military.
- Not that it should surprise anyone, but most Canadian cities don’t have any kind of climate change adaptation planning in place.
- My weekend column looked at how the pile-up of bills on the Senate’s Order Paper has reached a crisis level, but nobody wants to the things needed to clear it.
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