(ಠ_ಠ)
2014-10-20 22:25:08 UTC
The Alberta tarsands may have reached their end at expanding. From here on in,
let's hope that more and more companies start shutting down and pulling out of
Alberta.
If we can't have a Prime Minister that gives a damn about Canada's environment,
let's hope that corporate greed for bigger profit lines is what shuts down the
tarsands.
Don't forget the Keystone and Enbridge & Kinder Morgan pipleines, gods . . . .
________________________________________
CBC News Posted: Oct 20, 2014
Oilpatch faces project cancellations with crude at $82
As earnings season approaches, analysts weigh investment prospects for next year
The falling price of oil will likely result in a round of project cancellations
and disappointing results in the Canadian oilpatch, analysts say.
As oil companies bring in third quarter earnings, starting toward the end of
this week, they’re facing oil priced at just above $80, down about 20 per cent
since June of this year.
Falling oil prices spell trouble for Canada's oil sands and pipelines
Loonie oil prices could fall much further: Don Pittis
Today West Texas Intermediate oil contracts seem to have stabilized at $82.71
US a barrel, down four cents on the day. That’s up from the lows below $80 set
last week. Western Canada Select, the price received by many Canadian oil
producers, is at $69.10.
“When the price falls to where it is now, certainly a lot of crude oil
producers are having a second look at future projects for expanding the
oilsands until they see where things shake out,” says Michael Ervin, of
petroleum consultancy M.J. Ervin & Assoc.
“There is going to be some curtailment of some projects that were predicated on
a higher price. The fact is there is some projects in Alberta that are very
sustainable at a much lower crude oil price, but some that really do require
prices at or above $80,” he said in an interview with CBC News.
Oil firms planning for the year
Total S.A. has already postponed its Joslyn oilsands project, while Statoil put
the brakes on a Kai Kos Dehseh project.
Stephen Ewart, an energy columnist for the Calgary Herald, agrees lower prices
are a problem, but says the drop may be temporary.
'Obviously Stephen Harper's view of Canada becoming an energy superpower
is going up in smoke because these prices aren’t going to allow production to
increase'- economist Jeff Rubin
“In the coming week the third quarter results are coming out and we’ll hear
from the oil companies,” he said.
Husky Energy and Cenovus Energy Inc. are reporting Thursday, with Suncor and
Canadian Natural Resources to follow.
“They’re also making their capital budgets for 2015. This is coming at a time
when they’re planning spending for next year and it’s concerning some people,”
Ewart said.
He expects a pullback of about 10 per cent in capital spending next year.
“I’ve seen reports of capital spending in the oil patch of $66 to $67 billion a
year, I think that could come off by 10 per cent,” he told CBC News.
The markets have already responded to the expected slowdown, with the
capitalization of energy stocks down sharply.
Are pipelines still viable?
The problem of getting oil to market still hangs over the oilpatch. Canadian
producers get a lower price because of bottlenecks in shipping and refining
oil. The Keystone pipeline project to the U.S. is stalled and pipelines such
as Northern Gateway face multiple hurdles.
Oil at a low of $80 could raise a big question market about pipeline projects,
according to Jeff Rubin, former chief economist with CIBC World Markets and
author of The End of Growth.
Pipelines are only economic if the oilpatch steps up production, but at these
prices, it’s not likely to, Rubin said.
That’s because, while Saudi oil is cheap, both U.S. shale and Canadian oilsands
crude demand higher prices to be viable.
“Obviously Stephen Harper's view of Canada becoming an energy superpower is
going up in smoke because these prices aren’t going to allow production to
increase,” he said.
Rubin argues the world demand for oil is in long-term decline, both because of
increased efficiency and the price increases in crude we’ve seen in the past
decade.
Break the cycle
The world economy has slowed, in part, because of the fact that prices have
been high, Rubin said.
“Maybe it’s time to get out of this yo-yo and lessen our dependence on oil,” he
said.
Today's low prices are the result of a glut of oil, as U.S. producers ramp up
domestic production and OPEC refuses to scale back. Demand is down because of a
dip in economic growth.
But low oil prices are also a problem for both the Alberta treasury and the
Canadian economy.
“We all know that the oilsands is a major contributor to the Canadian economy
and going full throat a year ago, we saw a high Canadian dollar,” Ervin said.
“That of course created problems in the manufacturing regions of Canada, mainly
Ontario.”
The dollar has fallen as oil prices fell and that could help boost exports and
help Canadian manufacturing, he said. But government revenues from oil are
going to take a hit.
let's hope that more and more companies start shutting down and pulling out of
Alberta.
If we can't have a Prime Minister that gives a damn about Canada's environment,
let's hope that corporate greed for bigger profit lines is what shuts down the
tarsands.
Don't forget the Keystone and Enbridge & Kinder Morgan pipleines, gods . . . .
________________________________________
CBC News Posted: Oct 20, 2014
Oilpatch faces project cancellations with crude at $82
As earnings season approaches, analysts weigh investment prospects for next year
The falling price of oil will likely result in a round of project cancellations
and disappointing results in the Canadian oilpatch, analysts say.
As oil companies bring in third quarter earnings, starting toward the end of
this week, they’re facing oil priced at just above $80, down about 20 per cent
since June of this year.
Falling oil prices spell trouble for Canada's oil sands and pipelines
Loonie oil prices could fall much further: Don Pittis
Today West Texas Intermediate oil contracts seem to have stabilized at $82.71
US a barrel, down four cents on the day. That’s up from the lows below $80 set
last week. Western Canada Select, the price received by many Canadian oil
producers, is at $69.10.
“When the price falls to where it is now, certainly a lot of crude oil
producers are having a second look at future projects for expanding the
oilsands until they see where things shake out,” says Michael Ervin, of
petroleum consultancy M.J. Ervin & Assoc.
“There is going to be some curtailment of some projects that were predicated on
a higher price. The fact is there is some projects in Alberta that are very
sustainable at a much lower crude oil price, but some that really do require
prices at or above $80,” he said in an interview with CBC News.
Oil firms planning for the year
Total S.A. has already postponed its Joslyn oilsands project, while Statoil put
the brakes on a Kai Kos Dehseh project.
Stephen Ewart, an energy columnist for the Calgary Herald, agrees lower prices
are a problem, but says the drop may be temporary.
'Obviously Stephen Harper's view of Canada becoming an energy superpower
is going up in smoke because these prices aren’t going to allow production to
increase'- economist Jeff Rubin
“In the coming week the third quarter results are coming out and we’ll hear
from the oil companies,” he said.
Husky Energy and Cenovus Energy Inc. are reporting Thursday, with Suncor and
Canadian Natural Resources to follow.
“They’re also making their capital budgets for 2015. This is coming at a time
when they’re planning spending for next year and it’s concerning some people,”
Ewart said.
He expects a pullback of about 10 per cent in capital spending next year.
“I’ve seen reports of capital spending in the oil patch of $66 to $67 billion a
year, I think that could come off by 10 per cent,” he told CBC News.
The markets have already responded to the expected slowdown, with the
capitalization of energy stocks down sharply.
Are pipelines still viable?
The problem of getting oil to market still hangs over the oilpatch. Canadian
producers get a lower price because of bottlenecks in shipping and refining
oil. The Keystone pipeline project to the U.S. is stalled and pipelines such
as Northern Gateway face multiple hurdles.
Oil at a low of $80 could raise a big question market about pipeline projects,
according to Jeff Rubin, former chief economist with CIBC World Markets and
author of The End of Growth.
Pipelines are only economic if the oilpatch steps up production, but at these
prices, it’s not likely to, Rubin said.
That’s because, while Saudi oil is cheap, both U.S. shale and Canadian oilsands
crude demand higher prices to be viable.
“Obviously Stephen Harper's view of Canada becoming an energy superpower is
going up in smoke because these prices aren’t going to allow production to
increase,” he said.
Rubin argues the world demand for oil is in long-term decline, both because of
increased efficiency and the price increases in crude we’ve seen in the past
decade.
Break the cycle
The world economy has slowed, in part, because of the fact that prices have
been high, Rubin said.
“Maybe it’s time to get out of this yo-yo and lessen our dependence on oil,” he
said.
Today's low prices are the result of a glut of oil, as U.S. producers ramp up
domestic production and OPEC refuses to scale back. Demand is down because of a
dip in economic growth.
But low oil prices are also a problem for both the Alberta treasury and the
Canadian economy.
“We all know that the oilsands is a major contributor to the Canadian economy
and going full throat a year ago, we saw a high Canadian dollar,” Ervin said.
“That of course created problems in the manufacturing regions of Canada, mainly
Ontario.”
The dollar has fallen as oil prices fell and that could help boost exports and
help Canadian manufacturing, he said. But government revenues from oil are
going to take a hit.