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Canada is living an energy nightmare. Its major oil producers have been expanding capacity for years under the assumption they are operating in a sophisticated country equipped with the regulatory framework and political maturity required to build a major export pipeline of great national interest in under, say, two decades. But that assumption has proven invalid, and so now there’s a glut of crude in Alberta that is selling at a discount of more than US$30 per barrel compared to the price for U.S. crude, which has easy access to markets. At times the discount has hit US$50, a previously unheard of gap between Canadian and North American prices. The Western Canada Select benchmark price slumped below US$13 this month, the lowest in a decade, while the U.S. benchmark remained above US$50. Artificially low prices for Canadian crude are costing producers as much as $100-million a day in lost revenue, according to one frustrated oil company CEO. That figure might be high, but the damage is no less real for being estimated more conservatively. Alberta Premier Rachel Notley says the loss to the Canadian economy stands at $80-million a day. Choose your poison. The main reason for this disastrous […]
