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Fri Mar 20, 2020, 09:55 AM

Game Over For Kenney In Alberta, "As The Carbon Window Closes On A Dying Industry"

EDIT

Simply put, the province has a lot of a resource that no one wants, and fewer institutions are willing to invest in as the carbon window closes on a dying industry. There is a reason that so many companies have simply sold their interests in the tar sands: Koch Industries, Royal Dutch Shell, Norway’s Statoil, and Marathon Oil. They can’t make money. Not making money doesn’t fit into anyone’s strategic plans.

There is also a reason that other companies like Imperial, ConocoPhillips, and ExxonMobil admit that billions of barrels of oil within their tar sands holdings will likely be left in the ground. These are the stranded assets that the former governor of the Bank of England, Mark Carney, made headlines with a few years ago. He told the insurers of Lloyd’s of London that if humankind wanted to keep rising temperatures to two degrees Celsius, (reaping the whirlwind is the alternative), the vast majority of known oil reserves were “unburnable.” New reserves were simply superfluous.

Kenney must have missed that speech. He remains king of a carbon bubble he stubbornly refuses to see. There never will be a return to Happy Days, oil patch style, and the big boys know it. How could it be otherwise with oil prices that energy consultant Andreas de Vries recently wrote could fall to $10 a barrel in 2020? It just hit $22 a barrel for West Texas Intermediate in the wake of President Trump telling Americans to stay home to avoid spreading COVID-19. No one burns much gas when they are sheltering in place.

Conservative estimates predict that the fallout from the pandemic will include a 10 per cent drop in the demand for oil. There is already a huge glut on the market that is driving prices downward. With borders closed and travel restrictions slapped on by governments worldwide to fight the pandemic, demand for gasoline, diesel, and jet fuel, will crater. Under the circumstances, it is simply laughable to premise the province’s financial plans on an average price for oil of $54 U.S. a barrel. Hans Christian Anderson must have written Alberta’s last budget.

EDIT

https://thetyee.ca/Analysis/2020/03/20/Game-Over-For-Kenney/

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