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Alberta's energy patch versus Ontario's auto sector: Why there are no grounds for comparison

Alberta's energy patch versus Ontario's auto sector: Why there are no grounds for comparison

The Canadian Press recently released a memo prepared for the Federal Labour Minister attempting to explain why Ontario's auto sector deserved its $13.7 billion bailout in 2009 but the country's energy sector shouldn't get a penny.

The memo points out that:

  1. Access to cash was not available in 2009, which was hurting both auto manufacturers and those trying to purchase new cars. This is certainly not the case in the current oil crash.
  2. The whole auto sector was at risk of closing up shop in Canada, which the authors believe is unlikely to ever happen in the energy patch.

The Canadian Press reported that the memo was drafted in response to those who "have advocated a similar type of assistance be made available to support the oil and gas industry". However, it is unclear who those advocates are, since no oil company has ever asked the federal government for a bailout.

In fact, many elder statesmen in Alberta's energy patch remain highly allergic to government intervention after Pierre Trudeau's Liberals enacted the National Energy Program in the early 1980s which decimated Alberta's economy.

Aside from the provincial government, very few groups in the energy patch have asked the federal Liberals for a cash handout. What has been asked repeatedly is far more timely decision-making on energy infrastructure projects.

It seems almost unfathomable that billions in private-sector money sits on the sidelines awaiting a decision from the federal government while Canada's economy continues its downward spiral. 

About $20 billion worth of pipelines have already spent years in review and were deemed construction-worthy by the National Energy Board (including the Trans Mountain Expansion, Line 3 replacement and Northern Gateway). The lengthy $16 billion Energy East review process was dealt another delay by the Trudeau Liberals shortly after elected. The $36 billion Pacific Northwest LNG project in Kitimat risks being cancelled by its majority owner while awaiting a final blessing from Ottawa's Ministry of Environment and Climate Change, which may or may not happen in September.

That works out to $72 billion worth of projects in total, which would put thousands of Canadian back to work across Canada, improve the disposition price for Canadian oil & gas, increase royalty and tax revenues for all levels of government and reduce infrastructure bottlenecks for future phases of growth. Perhaps not all proposals are worthy of being approved. But it seems odd the Liberals have found an excuse for delaying each and every project. 

What is being asked of the federal government is very simple, and actually not that different than many other sectors of the economy: the right to sell Canadian energy products to international markets and the ability to compete on a global scale.

No bailouts, thanks very much.

Vancouver makes one last plea for Ottawa to squash the Trans Mountain Expansion

Vancouver makes one last plea for Ottawa to squash the Trans Mountain Expansion

How much oil is being stockpiled around the world? No one really knows, but here's our best guess

How much oil is being stockpiled around the world? No one really knows, but here's our best guess

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