Canada has the world’s third-greatest proven petroleum reserves, behind only Venezuela and Saudi Arabia.
Canada is currently both the fourth-largest producer and the fourth-largest exporter of petroleum in the world.
Ninety six per cent of Canada’s 168.5 billion barrels of oil is heavy oil.
Some experts believe Canada has heavy oil reserves in the trillions of barrels.
Canada, due to its political stability, has the world’s most secure source of heavy crude known as Western Canada Select.
What Canada currently requires are pipelines, which, in my opinion, will enable it to deliver its oil to market in the safest, most cost-effective manner.
Prior to pandemic
Prior to the onset of the COVID-19 pandemic, world oil production was slightly greater than the demand of 100 million barrels per day.
However, all of that changed with the onset of COVID-19, coupled with the flooding of the market by Saudi Arabia due to their conflict with Russia. We have now seen a dramatic drop in demand and it is unclear when demand will return to normal.
On April 20, 2020, the world experienced something that had never happened before. On that date the price of a barrel of West Texas Intermediate crude went from $17.73 to -$37.63 per barrel.
Futures Traders were caught off-guard and unable to trade out of their options for the May contract.
There were no buyers!
If you wanted to unload your contract, you had to pay someone to take your oil and as physical storage was scarce, in my opinion, the market had nowhere to go but down.
Efforts to get this valuable resource to market have been stymied …– Donald Benson
The carnage has impacted trading prices of our Canadian benchmark Western Canada Select.
However, fear not.
I believe that demand will rebound and Canada’s time will only continue to glow brighter as the century moves forward.
The world is evolving away from the internal combustion engine. It is light crude, notably Saudi Arabian Light and West Texas Intermediate, which will become out of favour, as the world shifts away from jet and internal combustion engines.
Light oil is the principal source of oil refined into gasoline and jet fuel. The market for light oil will continue to diminish as the increase of air and land vehicle traffic turns to electric.
But heavy oil, such as Western Canada Select, has a much wider market.
While it can be upgraded to allow for refinement into gasoline, due to the molecular makeup of heavy oil, with its greater numbers of long chain carbon molecules, it is the feedstock used for the manufacture of thousands of consumer products.
The following is a partial list of products that are derived from petroleum:
Because heavy oil is so utterly predictable and stable, and responds precisely the same way every time, companies are not looking to replace it as a feedstock.
What Canada needs now — and what will be required into the future — are pipelines.
Pipelines provide the ability for Canada to get its oil to market in a safe and sustainable manner. Canada is a unique country that has the capability of exporting its oil and gas to the north, south, east and west.
But efforts to get this valuable resource to market have been stymied — in my opinion — by political and environmental forces intent on keeping our country from being allowed to market its resources.
Quebeckers should embrace pipeline
Today, people have allowed the catastrophic 2013 train crash, which killed 47 people in the town of Lac-Mégantic, Que., to escape from their memory.
That terrible event would not have happened if we were shipping our oil to markets through the safe, dependable means of a pipeline.
Our eastern brothers and sisters in Quebec should be embracing the Energy East line of TransCanada Corp., now known as TC Energy Corp.
However, their application was withdrawn due to the impractical, unreasonable decision of Quebec’s leaders, who object to new pipelines in their province.
Instead the Quebec and New Brunswick refineries import their oil from Saudi Arabia, Venezuela and elsewhere.
In the West we are struggling to get pipelines built to tidewater.
What Canada must consider is a Manitoba pipeline …”– Donald Benson
The constant government interference, objections and (in my opinion) disobedience of others has to stop, if we Canadians are going to have the prosperity that our oil industry can provide.
The Trans Mountain and Coastal Gas pipelines must be built.
For far too long we have been held hostage by a minority of special interest groups, many of them from the U.S.A., which will go to whatever limits to destroy our country’s prosperity.
In this June 12, 2019, file photo, demonstrators walk to Andrew W. Bogue Federal Courthouse as they protest against the Keystone XL pipeline in Rapid City, S.D. (Adam Fondren/Rapid City Journal via Associated Press)
To the south, the never-ending interference from one group after another has again caused the Keystone XL Pipeline to be delayed.
On April 15, 2020, Montana Chief District Judge Brian Morris ruled more work needed to be done on permits required for two river crossings.
Now, news out of Washington that if elected in November, Democratic hopeful Joe Biden vows that he will cancel Keystone XL pipeline.
This $8-billion project has been needlessly held up for more than a decade.
Revenge for TC Energy will come, once the pipeline is completed and recourse from the provisions of the now-replaced NAFTA free trade agreement will be relied upon for the damages that TC Energy has endured.
Northern pipeline
What Canada must consider is a Manitoba pipeline to the northern Port of Churchill and a Northwest Passage route from Alberta, north to the Beaufort Sea.
Pipelines in the northern hemisphere are not new, neither is the task insurmountable. Russia has been transporting oil and gas through above-ground pipelines in the Arctic Circle for decades.
The Alaska pipeline, which is constructed above ground, was completed in 1977. Engineers faced a wide range of difficulties stemming mainly from extreme cold and difficult terrain. Special construction techniques had to be developed due to the difficulties caused by permafrost.
Today, the COVID-19 financial crisis is now unfolding and to what extent we can only imagine.
It will cause Canada to endure a deficit like never before.
How will we overcome that debt, which must be repaid?
It will take decades and Alberta oil once again will be one of the economic engines driving the recovery, and all of the have-not provinces, Quebec included, will be eagerly looking for Alberta’s continuation of transfer payments.
Canadians need to disregard the unfounded ranting from the likes of Elizabeth May, with all her negativity toward the oil industry.
Canadians need to come together and bend a little where necessary to see the common good achieved, through the construction of pipelines north, south, east and west.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
