So says a recent article in the National Post. Many points are worthwhile to read; fact is, Canada will benefit greatly from expensive oil. Furthermore, we have oil, and we are a stable country. Woot. Two points though in my opinion that are definite cons.
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*Updated July 26rd, 2008*
Here is a list of resources online that are in the midst of the discussion regarding the role of speculators in driving the price of oil sky high. Let us know if we've forgotten some important / useful articles. We'll be continually updating this post with new articles so check back frequently.
Oil prices soared at the end of the week amidst a report from Morgan Stanley that in a month's time oil will reach 150/barrel. The question everyone is asking, who gave Morgan Stanley the big money to spark the fear for more oil?
The price of a barrel of oil surged almost $11 Friday, hitting a new record high of US$139.12 before settling at US$138.47.
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Washington rejoice, hybrid technology will save you and America alike. Governor Chris Gregoire and other state and local officials are ringing praises for the new Messiah AFS Trinity Power from a cross country tour in which its XH-150 Plug-in Hybrid SUVs have been celebrated as the possible answer to record high fuel prices, U.S. oil dependence and motor vehicle greenhouse gas emissions,
We've all read the top 10 lists on how we can conserve our gasoline and drive a few extra stops before our tank runs empty. These stories are particularly popular given the consistent rising price at the pumps. But here's a question: how many of these 'gas saving tips' actually help reduce fuel consumption? With that in mind, here are the...
A couple of topics are being discussed over in the Oil & Energy forum. The first is why hasn't the high oil prices curtailed consumer demand for oil in relatively poor nations like China and India. The other question is do you think the world oil price (market) will collapse? Discuss your thoughts in the forum.
This is part three of a three part series exploring the impact Alberta oilsands projects can have on world market price as dictated by OPEC. Click here for Part 1 and part 2.
OPEC's Response to an Expanding Oilsands Market Share
If the parameters stated above hold true, what particular market reactions could one expect from OPEC? If Alberta displaces the exports of Venezuela and Saudi Arabia, this will account for just over 4% of total OPEC production. Therefore the new question is: will OPEC attempt to recover their lost market share? Or is it possible that emerging markets elsewhere such as India or China will substitute for the lost market. It is impossible to speculate what future market trends will be, whether developing markets will in fact meet expectations when it comes to crude oil demand. One thing, however, is certain: OPEC will attempt to recover any losses if the US market was the most profitable market for them, and if it was the most accessible. Venezuela may be concerned with their diminished share; 2002 US exports accounted for about 37% of total national production. This number reaches almost 50% with the increase in future US demand, however, diminishes to about 42% once the oilsands 'steals' their share. Finding alternate markets with ease may be difficult for Venezuela in comparison with Saudi Arabia due to geographic location. Despite ideas OPEC may be willing to forego production in 2012 for future production, the loss of the Venezuelan market share may be enough to elicit a response from OPEC.
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This article is a continuation part two of three. Read part 1 here:
With a viable world market within striking distance, I will argue that the only method for inducing a change in OPEC behaviour is to 'steal' import supply from the United States. It is unlikely that oilsands products will make it to any other world market due to logistic costs. Shipping oil to the nearest transport hub, likely in British Columbia, would be the only alternative for sending crude to the market abroad. It is more efficient to create and build upon the existing transportation system directly to the United States. As a result, there is potential for oilsands exports to replace OPEC exports to the US. However, the only method of achieving this is by increasing current output and reducing lifting costs. The question of whether US importers will increase their Alberta consumption for oil is dependent on the cost. Is it cheaper to construct a pipeline directly from oilsands projects in Alberta, or is it cheaper to import from the Middle East? Regardless of location, the consumer, or in this case the nation, will import the lowest cost product. This suggests Saudi Arabia will continue to export crude to the United States so long as they can maintain lower costs. The higher transportation costs are compensated by the lower marginal lifting costs. Thus, one of the major factors in determining the success of the oilsands export market will hinge upon the producer's ability to maintain an affordable product under market conditions. Presently this is the case, high market prices support the market for expensive bitumen exports.
