Canadian News Headlines – Danielle Smith: Pipeline protestors to cost Alberta treasury at least $2.5B in 2018


Anti-pipeline protesters are costing Albertans billions of dollars in lost revenue. You read that right — billions.

David Yager, an energy analyst with Yager Management Ltd., has been warning for years about how much of a hit we take when our government and our energy companies cannot get the world price for our oil. With new numbers out by Deloitte about what we can expect for oil prices in 2018, I asked Yager if he’d do a back-of-the-envelope calculation of just how much Alberta is losing because we cannot get the world price for our bitumen.

LISTEN: What does the future of oil prices look like?

View link »


READ MORE:
U.S. refining demand expected to spur need for Canadian heavy oil in 2018: report

Since the U.S. is our only customer, the price is set by supply and demand from refiners in the U.S. market. Without other customers, we’ve got no bargaining power. We have to take what they give us.

The result is the spread between what we are paid and what we should be paid is huge. Deloitte projects that West Texas Intermediate will average US$55 a barrel in 2018, but Western Canada Select (WCS) will only average US$36 a barrel.

It’s true there is additional cost in upgrading heavy crude, so some differential would be expected; a few dollars maybe, but not US$19.

What does it mean for the industry? Well, here’s the math. On 2.8 million barrels per day production, that WCS price would apply to about 1.82 million barrels per day or 664 million barrels per year.

At a loss of US$15 per barrel — and adjusting for value of the Canadian dollar — that “anti-pipeline protest premium” will cost the industry about C$12.5 billion in 2018.

If you assume the provincial royalty take is 20 per cent, that’s a $2.5 billion deadweight loss to the Alberta treasury because the NDP pals in the pipeline protest movement — activists like Naomi Klein and Tzeporah Berman — believe Alberta’s energy industry shouldn’t exist.

WATCH BELOW: Calgary energy analyst says don’t blame low oil prices for pipeline pullout






READ MORE:
Oil prices rise to ten-month highs as TSX continues at a record pace

As one of my listeners pointed out, that is actually a low estimate.

If the industry were able to earn $12.5 billion more, they would be plowing it back into the industry to create more production and hire more people, resulting in additional dollars in royalties, and corporate and personal income tax revenues.

Let’s not forget the federal government collects corporate and personal income tax revenues as well, a portion of which goes to pay equalization payments in the so-called have-not provinces, so the entire country is harmed when the protesters win.

Yager pointed out the absurdity of a handful of environmental extremists being permitted to control the fate of our economy. And yet, here were are still not knowing whether the three latest pipelines will even get built. Tragic.

© 2018 Global News, a division of Corus Entertainment Inc.



Source link

[Prosperity]

Top Canadian News – Danielle Smith: Pipeline protestors to cost Alberta treasury at least $2.5B in 2018 #News in #Canada

Headline News

[su_feed url=”http://rss.cbc.ca/lineup/topstories.xml” limit=”15″]

Canadian Headline News

[su_feed url=”http://rss.cbc.ca/lineup/canada.xml” limit=”20″]

British Columbia News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-britishcolumbia.xml” limit=”10″]

Kamloops News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-kamloops.xml” limit=”10″]

Calgary News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-calgary.xml” limit=”10″]

Edmonton News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-edmonton.xml” limit=”10″]

Saskatchewan News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-saskatchewan.xml” limit=”10″]

Saskatoon News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-saskatchewan.xml” limit=”10″]

Manitoba News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-manitoba.xml” limit=”10″]

Thunder Bay News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-thunderbay.xml” limit=”10″]

Sudbury News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-sudbury.xml” limit=”10″]

Windsor News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-windsor.xml” limit=”10″]

Kitchener-Waterloo News headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-kitchenerwaterloo.xml” limit=”10″]

Toronto News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-toronto.xml” limit=”10″]

Hamilton News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-hamiltonnews.xml” limit=”10″]

Ottawa News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-ottawa.xml” limit=”10″]

Montreal News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-montreal.xml” limit=”10″]

New Brunswick News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-newbrunswick.xml” limit=”10″]

Prince Edward Island News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-pei.xml” limit=”10″]

Nova Scotia News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-novascotia.xml” limit=”10″]

Newfoundland & Labrador News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-newfoundland.xml” limit=”10″]

North Canada News Headlines

[su_feed url=”http://rss.cbc.ca/lineup/canada-north.xml” limit=”10″]

Originally posted 2018-01-06 12:00:14. Republished by Blog Post Promoter

You May Also Like