Canada At A Tipping Point -- June 27, 2018 -- Portal, ND, In The News -- Bloomberg

Over at "the big stories," I have a section on the US Energy Revolution. This page was begun back in early 2013, and I continue to add to it, but not consistently. There's just too much going on to keep up.

I also have a section called "Europe at a tipping point." The page begins with this short commentary and links:

European Energy became a big story on May 18, 2013, when the EU Council President predicted that  Europe might become the only continent in the world to depend on imported energy.

Within that story:

• The European renewable energy has been a disaster. 
• The future of fracking in Europe and Great Britain is "on hold."
• Europe is running out of fossil fuel. Great Britain will run out of natural gas in three years.
• The Crimean debacle, spring, 2014: Russia inks huge natural gas deal with China in response.

It looks like we may have to add Canada to this list. Talk about a dismal report regarding Canada. This article from oilprice needs to be read slowly. Trudeau seems to be taking Canada down the same road as Venezuela and Australia but doing it slightly differently. The countries may be doing things differently and for different reasons, but the outcome could certain by the same.

The more I read about global energy and the decisions some foreign leaders are making, it appears more and more there are only three countries that are really serious about growing their energy sector: Russia, Saudi Arabia, and the United States.

The linked oilprice story takes you to a Bloomberg story. Read them both.

The oilprice story begins:

Canada has the world’s third-largest crude oil reserves, but the country seems determined to pretty literally keep these in the ground. This determination becomes strikingly obvious when Canada is compared with its southern neighbor.

In the United States, they write, the number of oil and gas rigs are increasing—currently at its highest level since 2015, the height of the oil price crisis. In Canada, on the other hand, there has been an exodus of oil majors including Shell, ConocoPhillips, and Equinor, among others.

In the United States, capex in the oil industry is forecast by an Oil and Gas Journal poll to rise by 9.1 percent to US$132.5 billion this year alone. In Canada, total oil investment is seen falling by 2 percent to US$30.11 billion (C$40.1 billion).

Of course, there is a clear difference between the energy policies that the two neighbors’ governments are pursuing. Washington is all about energy independence, even energy dominance. Trump’s administration has been working consistently towards ensuring the best possible investment climate for oil and gas producers, much to the chagrin of environmentalists and the renewable energy industry.

Ottawa, conversely, has been clearly in favor of what might very loosely be called the green lobby. This has proven a challenge recently, as the federal government had to step in and buy the Trans Mountain pipeline expansion project from Kinder Morgan after the company refused to move forward with it in the face of strong provincial government opposition from British Columbia. Despite this move, caused as much by desperation as by any desire to have the pipeline built, Ottawa has on the whole been playing against oil.

And much, much more.

The Canadian dollar is worth US 75 cents.

Now the original Bloomberg article. It begins:

In a rural patch of prairie along the U.S.-Canadian border, the towns of Portal, North Dakota, and North Portal, Saskatchewan, couldn’t be closer. They share a fire department, and the first eight holes of the local golf course are in Canada, while the ninth and the club house are in the U.S.

But here in the Bakken shale patch, one of North America’s most-prolific oil fields, the U.S.-Canada border represents a drillers’ divide.

Spurred by a surge in crude prices, North Dakota’s production is rising more than three times faster than its counterpart in the Bakken region of Saskatchewan. The output difference between the two countries runs deeper than the shared field.

While U.S. drillers deploy more rigs than any time since 2015 amid a fracking surge in the Permian Basin, companies including ConocoPhillips, Royal Dutch Shell Plc and Equinor ASA have sold operations or pulled out of Canada’s oil sands, the world’s third largest source of crude reserves.

And more:

A shortage of pipelines and a regulatory environment that’s often slower and less certain than in the U.S. has helped spark the flight of capital southward, said Tom Whalen, chief executive officer of the Petroleum Services Association of Canada, a trade association representing oil servicing companies.

“We [Canadians] are kind of dying by our own sword,” Whalen said in a phone interview. “We are making it very difficult to do business.”

And more:

A new tax law in the U.S. has helped oil companies by reducing the corporate rate and allowing companies to write off some assets sooner than in the past.

Routine licensing for a well in Alberta takes 79 to 119 days versus 30 to 60 days in Texas, according to a report last year by the Canadian Association of Petroleum Producers.

Enerplus Corp. Chief Executive Officer Ian Dundas estimates that 10 years ago, his company allocated 90 percent of its capital spending to properties in Canada and 10 percent to its U.S. holdings. Those percentages have been reversed, he said in an interview.

NDIC reported today that Enerplus has permits for a 10-well pad in Antelope oil field.

Much, much more at the article.