Author Topic: No llores por mí Alberta  (Read 34756 times)

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Offline waldo

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Re: No llores por mí Alberta
« Reply #15 on: October 31, 2019, 12:15:56 am »
Alberta has to sell its oil at a $20 discount from world price, largely because it can't access world markets. Would any other industry in the country stand for that? Yes we pay world prices for most commodities but Alberta is supposed to sell its resources for less.

no - as I stated previously:

I'd suggest you're speaking incorrectly of (or only partially to) the price of WCS being subject to, at present, effectively "only one customer (the U.S.)". Many people are under the incorrect impression that simply getting tarsludge/dilbit to tidewater will reap "world prices". Of course, the most significant difference between WCS & WTI pricing is the "heavy unrefined" factor - that factor won't be eliminated with additional market penetrations. I wasn't successful in finding something that estimates price gains for selling WCS into both U.S. & "Asian markets"...

there are no (perhaps a minimum, if any) Asian refineries presently capable of refining tarsludge/dilbit... upgrading a refinery with this capability is a most expensive undertaking (one costing billions of dollars). The actual problem is really one of lacking capacity - but with respect to U.S. markets, not Asian markets. Presently, all heavy crude leaving Canada is being shipped to those California refineries that have the ability to refine it. In regards the Asian market, it's the proverbial "build it and they will (might) come"... provide a source and Asian refineries might be inclined to upgrade refineries; on the other hand, why bother when there is no supply shortage of preferred light crude to satisfy the existing Asian refineries/market.

which brings the focus right back to those calls to invest in refining within Canada/Alberta - if you can secure customers, and export their preferred/required crude of choice! But in today's shifting reliance on fossil-fuels, what companies are willing to invest in building a new refinery - one that may only have a few decades life span - even if new pipeline capacity is built? Point in fact: since the 1970s, in Western Canada, only 1 refinery has been built (in Alberta - the NWR Sturgeon Refinery in Strathcona County, a short north-east distance from Edmonton)... and that NWR refinery was only realized because of significant government investment; notwithstanding cost overruns that eventually doubled the project cost (to ~ $10 Billion). And: Report finds Alberta’s North West Redwater Sturgeon Refinery’s prospects of making money are bleak

waldo, wtf! Who bought that pipeline... anyway? Well, as I've written and quoted now a few times, there was a rationale:

=> Harper Conservatives 2014 Canada-China FIPA includes a Canadian commitment to build a tidewater pipeline in exchange for the mega tarsands investments that China made/pledged to make
=> {former} Alberta Premier Rachel Notley openly stated the TMX pipeline approval was integral to allowing Alberta to accept a tarsands emissions cap in the form of passed legislation... law... the Oil Sands Emissions Limit Act
=> the tarsands emissions cap became a key element of both Alberta Premier Notley and PM Trudeau’s respective strategies to cut overall carbon emissions
=> without the Liberal government purchase of the TMX pipeline, Kinder Morgan was quite willing to shutter the expansion plan and walk away from the millions of investment dollars it had already spent - that purchase kept the pipeline expansion viable.