Yesterday was an interesting day in that both the NDP and the UCP came out with speaking points as it relates to the current differential crisis in Alberta. Premier Notley announced that Alberta will buy rail cars to move oil, albeit the effect won’t be until a year from now, and Jason Kenney came out and saying that the government needs to implement a temporary, mandatory production curtailment in response to the current differential environment. There has been a mixed response to the various comments, to which I say the following. The issue is the here and now, and the consequences are significant. Though I am supportive of having longer term solutions to the egress issues that we are currently experiencing, the problem is being felt now and the damages are mounting. With no real fix in place, and assuming the differentials stay where they are, Peters & Co. estimates that the government of Alberta could see a $5 billion reduction in royalty revenues over the next year, just as it pertains to the oil sands, let alone from conventional production, reduced tax revenue, lower employment and reduced general spending in the economy. To put it another way, from […]
