Originally posted 12 July 2016

Energy drives politics in Alberta.  Since the early days of the twentieth century when natural gas (1911) and oil (1914) was discovered in the Turner Valley, the politics of Alberta have been influenced by the growing wealth of the oil and gas sector. Three pillars of the Calgary establishment- Sir James Lougheed, R.B. Bennett and W.H. McLaws – created the Calgary Stock Exchange in 1913.  Like so many Alberta financial stories, the stock exchange grew by leaps and bounds until its building was foreclosed upon. While Alberta’s premiers have not come directly from the oil patch, premiers ignore the oil patch at their peril.

The table below illustrates the growth of production over the past 31 years.  Production has grown significantly in the past decade as crude bitumen production has displaced light crude as the dominant form of oil extraction. Synthetic crude oil production is also rising, but without a further investment in upgraders, prices obtained for the resource will be substantially less than standard industry benchmarks like WTI.

Oil production_3898_image001

A key factor in pricing is the cost of transportation and the availability of transportation. With the failure by industry (and governments?) to gain approval for new pipelines, transportation bottlenecks are occurring. Rail transport of oil products is more expensive and dangerous than conventional pipelines, however industry has been unable to gain regulatory approval (and social license) for these endeavours.

Recent articles

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All that new shale oil may not be enough as big discoveries drop28-12-17 EJ

Oil surges past threshold for new shale drilling4-1-18 GM

CN moves forward with bitumen pellet project22-12-17 GM

Moody’s downgrades Enbridge debt depsite new financial plan22-12-17 GM

Work camps seek to sell luxury amid downturn20-12-17 GM

Energy’s weighting slips in 201719-12-17 GM

Growing output in oil sands weighs on price16-12-17 GM

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Oilsands discounts expected to rise as output exceeds export pipeline room16-12-17 EJ

Canadian crude tumbles amid pipeline bottlenecks14-12-17 GM

Cenovus sheds executives, staff in wake of oil sands deal15-12-17 GM

Too much oil, not enough pipelines, so Canadian prices take deep plunge13-12-17 EJ

Husky to boost spending on improved price outlook5-12-17 EJ

The cracks in the Enbridge dividend story4-12-17 GM

Pipeline deals break drought in energy2-12-17 GM

All eyes on the Gulf29-11-17 EJ

Another ride on Alberta’s oil price roller coaster29-11-17 EJ

Oilfield tech firm receives $10M grant4-11-17 EJ

Buying oilsands assets a big boost for Alberta companies3-11-17 EJ

Oil sands earrnings gaining momentum3-11-17 GM

Imperial Oil gears up for new growth2-11-17 EJ

TransCanada rule change raises ire of producers1-11-17 EJ

Imperial Oil misses profit estimates for third quarter28-10-17 GM

Imperial Oil reports $371M Q3 profit, down from a year ago28-10-17 EJ

Demand for fossil fuels will max out in two years, NEB says27-10-17 EJ

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Husky, MEG rebound to make gains in Q327-10-17 EJ

Suncor profit surges as oil demand edges higher27-10-17 GM

Suncor reports best results since days of $100 oil in 201427-10-17 EJ

Low gas prices weigh on energy sector ahead of earnings23-10-17 GM

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Cenovus sells Palliser assets in Alberta for $1.3 billion

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Fort Hills partners take suppliers to court16-10-17 GM

Era of oil supply certainty forcing strategy changes16-10-17 EJ

Oil sector stung by omission from supercluster program16-10-17 EJ

Natural gas prices fall into negative territory13-10-17 EJ

Sponsor contentSeeking solutions for oil patch problems10-10-17 GM

Oilpatch favours growth over dividends, despite pressure from investors10-10-17 EJ

Oil export capacity to remain tight after project nixed-analyst7-10-17 EJ

Alberta gas producers step fight for share of Ontario market2-10-17 EJ

Innovation a constant in oilsands production30-9-17 EJ

Oilweek hit by double whammy30-9-17 GM

Lundin-backed energy firm takes over Cenovus asset26-9-17 GM

Alberta shale offers hope for future beyond oil sands-NEB26-9-17 GM

OIlsands By the Numbers25-9-17 EJ

Oilsands timeline25-9-17 EJ

Cenovus nears deal on natural gas assets to pay debt19-9-17 GM

Canada ranks second to U.S. in growth of oil output-report14-9-17 EJ

Oil sands megadeal gives boost to CNRL4-8-17 GM

Work begins on Enbridge Line 3 pipeline project4-8-17 EJ

Energy firms vulnerable to climate policies22-6-17 EJ

And then there was one….CEO who made a bad deal21-7-17 EJ

Cenovus CEO steps aside as woes persist21-6-17 GM

Oilsands production expected to dip-report16-6-127 EJ

Encana asset sale a boon in oil downturn10-6-17 GM

Encana, Centrica sell gas assets worth total of $1.7B10-6-17 EJ

Despite retreat from oil sands, Shell affirms commitment to Canada7-6-17 GM

How M and A action could crimp Canadian energy stock prices30-5-17 GM

Kinder Morgan Canada seeks $1.75B for its IPO25-5-17 EJ

Kinder Morgan prices IPO below range25-5-17 GM

Investors ready their bets on Trans Mountain pipeline project24-5-17 GM

Shell plans to sell $4.1 -billion stake in CNRL24-5-17 GM

Oil’s down, bottoms up- Calgary’s mood darkens again10-5-17 GM

Slumping crude price dents Canadian oil patch firms5-5-17 GM

Suncor eyes oil sands deals, but in no rush27-4-17 GM

Cenovus seeks to assuage debt concerns27-4-17 GM

Appeal court backs decision favouring Redwater creditors26-4-17 EJ

Cenovus earnings overshadowed by unpopular ConocoPhillips deal25-4-17 GM

Cenovus faces miffed investors, but it’s not alone26-4-17 GM

Cenovus megadeal comes under fire25-4-17 EJ

Investors balk at Cenovus’s megadeal26-4-17 GMPrecision Drilling sees drop in prices25-4-17 GM

In Alberta, a rush to renewables amid bet on new energy17-4-17 GM

B.C.-Alberta’s Montney gas play gains traction17-4-17 EJ

Investing in renewable energy in a coal and oil moment18-4-17 GM

Chevron mulls sale of Canadian oil assets-source14-4-17 GMSource Energy launches first major industry IPO since 201414-4-17 GMElectric cars a growing threat to oil4-4-17 EJ

Cenovus deal- RIght place, but wrong time31-3-17 GM

Cenovus piles on debt for ConocoPhillips deal31-3-17 GM

Market not sold on Cenovus move31-3-17 EJ

Cenovus pays ConocoPhillips $17.7B for assets30-3-17 EJ

Cenovus seals massive oil sands deal30-3-17 GM

Suncor expedites Syncrude upkeep after fire28-3-17 GM

Total Energy emerges as apparent victor in the battle for Savanna28-3-17 GM

Alberta First Nation to tap bond market for energy investment24-3-17 GM

Low prices lead to Painted Pony cuts7-3-17 GM












New drilliong incentives ‘step in right direction’12-7-16 EJ

CAPP predicts decline in long-term oil output24-6-16 EJOilsands could suffer pipeline bottleneck12-7-16 GMU.S. Production is taking a bite out of natural gas exports, study says6-7-16 EJ

This entry was posted in Energy on by .

About albertarecessionwatch

Former Director, Institute for Public Economics, University of Alberta and currently Fellow of the Institute. Former executive with Alberta Treasury Branches. Worked for the Alberta government for 12 years with Federal and Intergovernmental Affairs and Alberta Treasury. Areas of focus: financial institutions legislation and policy, government borrowing, and relations with credit rating agencies. Ph.D in Political Science (Uof A), Masters of Public Administration and BComm. (Carleton University). Author of Politics and Public Debt: The Dominion, the Banks and Alberta's Social Credit. Presently working on study of Alberta provincial agency board appointments.

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