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Old 11-19-2012, 04:11 PM   #16
Steve G. OP
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U.S will be self sufficient in oil.

Just isn't going to happen, and even if it did, the Chinese demand for oil is going through the roof, and they will buy everything we have to sell no matter the cost. Oil = GDP, you have no oil you have no growth.

Look at vehicle sales, in 2011 - N/A sold 14.2 million and China sold 17.5 million.

USA has 812 cars per 1000 people vs China 174 cars per 1000. Thats a lot of catch up, and every new car puts new demands on the current production of oil.

Peak Oil - if you don't believe in it, ask yourself why oil is at record $ levels when the worlds economy is in the tank. There is lots of oil, just no more cheap oil.



I'd be more worried about all the waste in Ottawa and every govt, libs or conservatives position at election time "offer more goodies for votes" instead of cutting back and facing the realities of life; you can't keep spending what you don't have. Well you can till you can't. Just wait till the bond vigilantes surface in the USA, then it hits the fan.

Canada is lucky, we have natural resources. If we didn't have that we would be fucked.

I'll agree with you, especially your last paragraph. No current govt. 'options' available federally and provincially can claim any degree of financial prudence or responsibility. They are all bad. This is by far the biggest problem to Canada continuing to enjoy social programs, the utter waste from all of them. Unfortunately, this will never change,,,,as human nature dictates, we are genetically wired to look after ourselves and our own, and have less careing ability when dealing with someone elses money.
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Old 11-19-2012, 04:19 PM   #17
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Canada is lucky, we have natural resources. If we didn't have that we would be fucked.
Canada does have natural resources but we OWN fewer and fewer of them. Owned by others and shipped out; then we buy back what they've been made into. We need to make products out of our natural resources not just sell the raw materials.

China mines rare earth elements. Export not allowed, but "what would you like us to make with them?".

So we might still be f'd.
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Old 11-19-2012, 06:35 PM   #18
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Canada does have natural resources but we OWN fewer and fewer of them. Owned by others and shipped out; then we buy back what they've been made into. We need to make products out of our natural resources not just sell the raw materials.

China mines rare earth elements. Export not allowed, but "what would you like us to make with them?".

So we might still be f'd.

Wrong. We do own them, and we get a 'royalty' from every 'unit' of resource that is 'captured'. After the company [Canadian, American, Chinese, French, Spanish, etc] pays the government the royalty, they are free to do with it what they want. Would you force these companies to make wood products in Canada using $25+/hr labour rather than $1/hr somewhere else??? If that would be the case, take a quick thought as to how many companies would bother coming here,,,,,,,,,,,NONE!!! And how many royalties would the Cdn govt. collect on our resourses,,,,,,,,NONE!

I understand your frustrations, and wish it were not so. But the fact is, our standard of living comes with certain certainties, one of those being collectively higher wages for good union jobs. We've priced ourselves out of the manufacturing market.
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Old 11-20-2012, 10:35 AM   #19
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Basic Economics

First, any country as rich in natural resources as Canada is will not be "fucked", to use your technical term, in any future where progress is driven by energy - nuclear, fossil fuel, biomass, hydroelectric, wind, even geothermal if we care to exploit it. While we can not set the price of energy, Canada's problem is deciding how much to exploit at any given price. The oil is not going anywhere, and the 'Muricans will buy as much electricity as we care to sell them. So to claim that an energy rich country is facing a bleak future is to severely misunderstand what drivers of future growth will be.

Second, Canada has tons of other natural resources, some renewable, some not, that can be exploited far into the future. As climate changes around the world, Canada looks to become one of the main beneficiaries of that change. Canada is likely to become a haven with increased immigration in the not too distant future (30-50 years).

Third, Canada has a productive workforce - not as productive as we could be, but not as bad as you make it out to be. That workforce is skilled and includes both manufacturing know-how and technology know-how. there is a very healthy high tech sector in Canada even as some high tech companies disappear, others spring up to take their place.

Fourth, Canada is not a banana republic, we are governed by the rule of law. Business will always want to do business here. It would help if Canada had an energy plan and industrial policy that was subject to review and comment, but even in the current environment, the OECD ranks Canada as one of the best places to do business in the world.

Finally, Canada is a big exporter of natural resources, not only to the south, but all over the world. If demand drops in the US, we can compete in other markets.

So you can say the sky is falling till you're blue in the face, but it doesn't make it so.
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Old 11-20-2012, 03:16 PM   #20
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The extraction

of our resources, regardless where the company's headquarted puts Canadians too work.


Quote:
Originally Posted by 250senuf View Post
Canada does have natural resources but we OWN fewer and fewer of them. Owned by others and shipped out; then we buy back what they've been made into. We need to make products out of our natural resources not just sell the raw materials.

China mines rare earth elements. Export not allowed, but "what would you like us to make with them?".

So we might still be f'd.
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Old 11-20-2012, 04:04 PM   #21
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Originally Posted by hewhohesit8s View Post
First, any country as rich in natural resources as Canada is will not be "fucked", to use your technical term, in any future where progress is driven by energy - nuclear, fossil fuel, biomass, hydroelectric, wind, even geothermal if we care to exploit it. While we can not set the price of energy, Canada's problem is deciding how much to exploit at any given price. The oil is not going anywhere, and the 'Muricans will buy as much electricity as we care to sell them. So to claim that an energy rich country is facing a bleak future is to severely misunderstand what drivers of future growth will be.

Second, Canada has tons of other natural resources, some renewable, some not, that can be exploited far into the future. As climate changes around the world, Canada looks to become one of the main beneficiaries of that change. Canada is likely to become a haven with increased immigration in the not too distant future (30-50 years).

Third, Canada has a productive workforce - not as productive as we could be, but not as bad as you make it out to be. That workforce is skilled and includes both manufacturing know-how and technology know-how. there is a very healthy high tech sector in Canada even as some high tech companies disappear, others spring up to take their place.

Fourth, Canada is not a banana republic, we are governed by the rule of law. Business will always want to do business here. It would help if Canada had an energy plan and industrial policy that was subject to review and comment, but even in the current environment, the OECD ranks Canada as one of the best places to do business in the world.

Finally, Canada is a big exporter of natural resources, not only to the south, but all over the world. If demand drops in the US, we can compete in other markets.

So you can say the sky is falling till you're blue in the face, but it doesn't make it so.

Sigh,,,,,,,
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Old 11-20-2012, 06:34 PM   #22
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I think Steve is close to the mark.

The Canadian oil industry is about to be stood on its ear the same way the natural gas industry was several years ago. It’s due to evolving technology – in this case it’s fracking (spell it how you want). Fracking enables gas producers to produce gas from shale deposits at a much lower cost than from conventional gas plays. That’s why gas is going for less than $4/mmBtu compared to $8-10 about 4 years ago.

The shale oil producers in the Bakken area (North Dakota, Montana) are bringing shale oil into production far faster than Albertans expected, and far faster than the oil sands are being developed. E.g. shale oil production increased by about 400,000 bbl/day last year – that’s huge. If the drilling rigs currently in use in the Bakken area continue drilling at the same rate (I believe there are about 200 drilling rigs currently doing their thing) the U.S. will be substantially oil self-sufficient by around 2020. The produced oil is light and easy to refine.

Compare this to Alberta’s oil sands. There is a discount of about $30/bbl “at the gate” for bitumen produced from the oil sands (based on West Texas Intermediate, WTI) due to the additional processing (and transportation costs) that is required to upgrade the bitumen into a synthetic crude which can then be refined in more-or-less the usual manner. If you assume $90/bbl WTI, that means the producer gets about $60/bbl (currently it is more like $50/bbl if you're lucky). Most producers have an at the gate cost of $30-50/bbl so they are marginally profitable. The lowest production cost is around $10-15/bbl. Last week it was announced in the Calgary Herald that a producer was being offered $38/bbl. I’m aware of a major producer that is being offered even less than that for bitumen delivered in 2013.

Why the low offers to purchase bitumen? Biggest reason is shale oil – it’s coming into production so fast that there is little incentive to buy bitumen when shale oil production is ramping up so fast.

Pipelines, especially to the south, will help Canada’s oil producers tremendously since it will enable bitumen to be shipped to the Gulf where there is less of a discount (about $10/bbl discount). However, transportation costs are currently outrageous – they are in the range of $30/bbl to get bitumen to a refinery in the Gulf states (e.g. Louisiana). The Gulf refineries are almost begging for Canadian heavy oil since they are geared up to process it due to their primary feedstocks typically being from Mexico an Venezuela. Production from both countries has declined over the past several years.

The amount of money spent on oil production in Canada is almost incomprehensible – the Calgary Herald stated it was $1B per week.

I think people are going to be stunned when they hear what’s happening in the oil patch in early 2013 when the spending taps are turned several turns toward “Closed”.

Ian
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Old 11-21-2012, 01:15 AM   #23
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Originally Posted by Steve G. View Post
Wrong. We do own them, and we get a 'royalty' from every 'unit' of resource that is 'captured'. After the company [Canadian, American, Chinese, French, Spanish, etc] pays the government the royalty, they are free to do with it what they want. Would you force these companies to make wood products in Canada using $25+/hr labour rather than $1/hr somewhere else??? If that would be the case, take a quick thought as to how many companies would bother coming here,,,,,,,,,,,NONE!!! And how many royalties would the Cdn govt. collect on our resources,,,,,,,,NONE!

I understand your frustrations, and wish it were not so. But the fact is, our standard of living comes with certain certainties, one of those being collectively higher wages for good union jobs. We've priced ourselves out of the manufacturing market.
Prior to any lease sales , resources on crown land are the sole property of the Province where they are located , resources on or under private property belong to the land owner, any and all royalties are paid to these owners. The only resource royalties the feds receive is from those derived from offshore or the far north
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Old 11-21-2012, 07:04 AM   #24
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Resources under all property belongs to the Crown, including under private property. Real estate transactions make this very clear.

Oil companies purchase permission from the Crown to extract resources (lease sales). The lease sale gives the oil company permission to extract the resources but does not pass title of the resources to the oil company.

Another agreement must be made with the landowner to secure permission to occupy a portion of the landowner's land for locating surface equipment such as wells and processing equipment. The landowner does not receive royalties for resources that are extracted since he has no title to them - royalties flow to the Crown.

Leasing land to oil companies has become a good source of income for many farmers in Alberta and Saskatchewan. I believe the going rate is around $10,000 per year per lease. 50 years ago you could see a grain elevator on the horizon regardless where you were on the prairies. Now you see oil tanks.

Ian

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Prior to any lease sales , resources on crown land are the sole property of the Province where they are located , resources on or under private property belong to the land owner, any and all royalties are paid to these owners. The only resource royalties the feds receive is from those derived from offshore or the far north
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Old 11-21-2012, 09:54 AM   #25
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The writing has been on the wall for the last 5-6 years where gas is concerned, there is a glut in North America.
The only way to recapture the prices of the "good old days" is to send it overseas to areas were availability is not readily available.

Raw logs, raw metals/unrefined, unrefined petroleum products, should not be leaving our shores, but here is the kicker people to do these jobs are in short supply, and "most" do not usually want to move to areas were there are good jobs.

Besides the chines coal miners being brought in, there are job fairs in the US trying to get temporary construction workers up here for the bigger projects.

shuswap biker screwed with this post 11-21-2012 at 10:16 AM Reason: sp
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Old 11-21-2012, 10:56 AM   #26
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Resources under all property belongs to the Crown, including under private property. Real estate transactions make this very clear.
Gold and silver mineral rights always remain property of the Crown, however that is not the case with petroleum rights

Oil and Gas under privately owned land is the property of the land owner
... unless those petroleum rights have already been leased to a third party
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Old 11-21-2012, 11:31 AM   #27
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Not quite. About 8% of Alberta has "freehold rights" where the landowner owns the mineral rights (which includes oil and gas). Mineral rights in the remainder of Alberta are held by the Crown (the bulk of Alberta), the Federal government (such as National Parks), or by First Nations. You're correct about the gold and silver.

Ian

Quote:
Originally Posted by knight View Post
Gold and silver mineral rights always remain property of the Crown, however that is not the case with petroleum rights

Oil and Gas under privately owned land is the property of the land owner
... unless those petroleum rights have already been leased to a third party
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Old 11-21-2012, 08:36 PM   #28
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Originally Posted by IanInCalgary View Post
I think Steve is close to the mark.

The Canadian oil industry is about to be stood on its ear the same way the natural gas industry was several years ago. It’s due to evolving technology – in this case it’s fracking (spell it how you want). Fracking enables gas producers to produce gas from shale deposits at a much lower cost than from conventional gas plays. That’s why gas is going for less than $4/mmBtu compared to $8-10 about 4 years ago.

The shale oil producers in the Bakken area (North Dakota, Montana) are bringing shale oil into production far faster than Albertans expected, and far faster than the oil sands are being developed. E.g. shale oil production increased by about 400,000 bbl/day last year – that’s huge. If the drilling rigs currently in use in the Bakken area continue drilling at the same rate (I believe there are about 200 drilling rigs currently doing their thing) the U.S. will be substantially oil self-sufficient by around 2020. The produced oil is light and easy to refine.

Compare this to Alberta’s oil sands. There is a discount of about $30/bbl “at the gate” for bitumen produced from the oil sands (based on West Texas Intermediate, WTI) due to the additional processing (and transportation costs) that is required to upgrade the bitumen into a synthetic crude which can then be refined in more-or-less the usual manner. If you assume $90/bbl WTI, that means the producer gets about $60/bbl (currently it is more like $50/bbl if you're lucky). Most producers have an at the gate cost of $30-50/bbl so they are marginally profitable. The lowest production cost is around $10-15/bbl. Last week it was announced in the Calgary Herald that a producer was being offered $38/bbl. I’m aware of a major producer that is being offered even less than that for bitumen delivered in 2013.

Why the low offers to purchase bitumen? Biggest reason is shale oil – it’s coming into production so fast that there is little incentive to buy bitumen when shale oil production is ramping up so fast.

Pipelines, especially to the south, will help Canada’s oil producers tremendously since it will enable bitumen to be shipped to the Gulf where there is less of a discount (about $10/bbl discount). However, transportation costs are currently outrageous – they are in the range of $30/bbl to get bitumen to a refinery in the Gulf states (e.g. Louisiana). The Gulf refineries are almost begging for Canadian heavy oil since they are geared up to process it due to their primary feedstocks typically being from Mexico an Venezuela. Production from both countries has declined over the past several years.

The amount of money spent on oil production in Canada is almost incomprehensible – the Calgary Herald stated it was $1B per week.

I think people are going to be stunned when they hear what’s happening in the oil patch in early 2013 when the spending taps are turned several turns toward “Closed”.

Ian
Fracking is changing the face of hydrocarbon production, and eventually consumption in NA. but even there, Canada has huge reserves (http://www.reuters.com/article/2012/...85E15S20120615) So any production dislocation from tar sands will eventually be compensated by production of shale gas here in Canada. The basis point of the argument is that Canada is so rich in natural resources, especially energy resources, that there is no doubt in my mind that Canada will always enjoy a competitive advantage in either exploitation of those resources for export, or, if we get out industrial policy sorted out, transforming those resources into finished products for export. We have the resources, the richest market in the world on our doorstep, a qualified workforce, and access to capital. Even our politicians can't screw that up. Canada and Canadians will continue to enjoy a comparative advantage over other countries who would kill (and maybe go to war) to have our resources.

Maybe if I thought that the world was weaning itself off hydrocarbons, I might have worries about the Canadian oil and gas industry, but look at the lengths that Japan and Europe will go to in order to import energy in ANY form, (coal, LNG, crude, refined product). It is a sellers market, although a world market. All we need to do is pick a customer, build the delivery infrastructure (pipelines,refineries, LNG plants, ports, Electric transmission lines, or whatever else your energy plan calls for), and count the returns. You'd have to be pretty dense to not make money in that environment.
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Old 11-22-2012, 08:36 AM   #29
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Fracking is changing the face of hydrocarbon production, and eventually consumption in NA. but even there, Canada has huge reserves (http://www.reuters.com/article/2012/...85E15S20120615) So any production dislocation from tar sands will eventually be compensated by production of shale gas here in Canada. The basis point of the argument is that Canada is so rich in natural resources, especially energy resources, that there is no doubt in my mind that Canada will always enjoy a competitive advantage in either exploitation of those resources for export, or, if we get out industrial policy sorted out, transforming those resources into finished products for export. We have the resources, the richest market in the world on our doorstep, a qualified workforce, and access to capital. Even our politicians can't screw that up. Canada and Canadians will continue to enjoy a comparative advantage over other countries who would kill (and maybe go to war) to have our resources.

Maybe if I thought that the world was weaning itself off hydrocarbons, I might have worries about the Canadian oil and gas industry, but look at the lengths that Japan and Europe will go to in order to import energy in ANY form, (coal, LNG, crude, refined product). It is a sellers market, although a world market. All we need to do is pick a customer, build the delivery infrastructure (pipelines,refineries, LNG plants, ports, Electric transmission lines, or whatever else your energy plan calls for), and count the returns. You'd have to be pretty dense to not make money in that environment.

Agree on your points.
Given the current population environment in Canada, and the financial incompetance of graduating students out of pre and post secondary schools, coupled with certain strengthening political ideaologies which are against all manner of natural resource use,,,,,,I see a struggle coming up quickly. This resistance could very easily send companies going somewhere else. Look at Argentina right now, with their recent socialist government plying huge tarrifs on businesses doing work there,,,,they've all left.
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