$50 oil, now what?

[Gestalt]

Oil was well above $50 a barrel when the slow down began, well before the provincial election.

In fact, a quick search of this site, shows the lay offs and lay off threads started well before anyone would have guessed a NDP victory.

The unexpected and rapid slow down is what scared people into punishing the Conservatives.

Curious how you can reconcile this discrepancy in timeline and events and your conclusion?

[Zhariak]

Originally posted by Gestalt
Oil was well above $50 a barrel when the slow down began, well before the provincial election.

In fact, a quick search of this site, shows the lay offs and lay off threads started well before anyone would have guessed a NDP victory.

The unexpected and rapid slow down is what scared people into punishing the Conservatives.

Curious how you can reconcile this discrepancy in timeline and events and your conclusion?

Investment started toning down long before the election actually took place because so many people were talking about voting NDP (there was a real credible threat of them getting in). Business/management started toning down investment ahead of time in the event that for some unforeseen reason, the NDP did get in to power.

Youth, and young stupid people voted them in. I know young petrochemical engineers who for some odd reason, thought that the NDP was going to build refineries in Alberta using a whole bunch of new technologies (bla bla bla). I can't remember what they said their sources were as I had arguments with them before the election, I told them the NDP would NOT do this.

I know older people in the Oil and Gas industry (non management roles), who voted for the NDP as they had this odd belief they were going to ease taxes on Energy companies, build pipelines, and make employees get better compensation.

For some reason lots and lots of people had weird beliefs that the NDP were going to do things that were against the NDP party's political beliefs... I would argue and argue with these people that they need to look up what the actual party stands for, and that this stuff WILL NOT happen, and that by voting NDP, they could serious screw up the province.

I have numerous other examples, but no matter how much I fought with these people, they still believed that the NDP were going to enforce policies of a conservative type nature. I just didn't get it where they were getting this from. Scared the shit out of me and there was no way to get them to even do valid research in to the party before they voted for them.

In each case above, the people I mentioned above were effected negatively, extremely negatively. Last I heard, one is having difficult keeping work as he keeps getting switched between projects with reduced hours, and the other has had their hours significantly reduced with paycut.


All this chatter in the 6-12 months before the election stopped investment. The folks that make management decisions as far as where investment goes, were well aware and educated in the NDP party and where their policies stand. There's no effin way they would take a chance signing term contracts on investments before an election, where the NDP had a chance of getting in.

[zhao]

Originally posted by Zhariak



Investment started toning down long before the election actually took place because so many people were talking about voting NDP (there was a real credible threat of them getting in). Business/management started toning down investment ahead of time in the event that for some unforeseen reason, the NDP did get in to power.

Youth, and young stupid people voted them in. I know young petrochemical engineers who for some odd reason, thought that the NDP was going to build refineries in Alberta using a whole bunch of new technologies (bla bla bla). I can't remember what they said their sources were as I had arguments with them before the election, I told them the NDP would NOT do this.

I know older people in the Oil and Gas industry (non management roles), who voted for the NDP as they had this odd belief they were going to ease taxes on Energy companies, build pipelines, and make employees get better compensation.

For some reason lots and lots of people had weird beliefs that the NDP were going to do things that were against the NDP party's political beliefs... I would argue and argue with these people that they need to look up what the actual party stands for, and that this stuff WILL NOT happen, and that by voting NDP, they could serious screw up the province.

I have numerous other examples, but no matter how much I fought with these people, they still believed that the NDP were going to enforce policies of a conservative type nature. I just didn't get it where they were getting this from. Scared the shit out of me and there was no way to get them to even do valid research in to the party before they voted for them.

In each case above, the people I mentioned above were effected negatively, extremely negatively. Last I heard, one is having difficult keeping work as he keeps getting switched between projects with reduced hours, and the other has had their hours significantly reduced with paycut.


All this chatter in the 6-12 months before the election stopped investment. The folks that make management decisions as far as where investment goes, were well aware and educated in the NDP party and where their policies stand. There's no effin way they would take a chance signing term contracts on investments before an election, where the NDP had a chance of getting in.

Are you saying the NDP is responsible for what happened with Oil and Gas in this province?

And no one had a clue 12 months prior to that election that the NDP had a hope of getting in. The Wildrose was the only serious opposition 12 months prior and was sitting in a very strong position. Prentice was looking strong 6 months prior after he decimated the Wildrose party with Smith and friends crossing over. Prentice's party fell to shit shortly after with a campaign of arrogance and blaming Albertans for the economic issues on the horizon, as well as obviously calling an extremely short election while one party was in turmoil and no other obvious party was in contention. People did not like that he thought he was smarter than the public, and said fuck you to him the only way they could.

And who knew there was going to be an election 12 months prior to the actual election????

[Zhariak]

Originally posted by zhao


Are you saying the NDP is responsible for what happened with Oil and Gas in this province?

And no one had a clue 12 months prior to that election that the NDP had a hope of getting in. The Wildrose was the only serious opposition 12 months prior and was sitting in a very strong position. Prentice was looking strong 6 months prior after he decimated the Wildrose party with Smith and friends crossing over. Prentice's party fell to shit shortly after with a campaign of arrogance and blaming Albertans for the economic issues on the horizon, as well as obviously calling an extremely short election while one party was in turmoil and no other obvious party was in contention. People did not like that he thought he was smarter than the public, and said fuck you to him the only way they could.

And who knew there was going to be an election 12 months prior to the actual election????

I've mentioned this before on other threads, so I won't go in to too much detail here. The "situation" with the Oil and Gas industry has two components to it:

1) Price of Oil - This component is essentially almost all market related. Not much can be done about this (the exception being the discount on WCS which has federal politics behind it. Discount being caused by lack of access to markets).

2) Investment - Investment is affected by both market and political factors. Technically, if the price of oil is low, investment can still occur as some projects take years for completion. If Alberta was still business friendly, investment would still be occurring as oil and gas companies want to be prepared for when the price of oil comes back up and when there may be a political shift on the federal level.


If we didn't kill off investment, it would have saved a TON of jobs, and I'd bet a number of businesses wouldn't have closed their doors... Now I want to be very clear on this, I'm not saying it would "solve the problem", but it would have saved a lot of jobs, and we would have been in a better position both with the economy, and the government finances...

Technically, because of all the discounts in the industry right now, along with cheap labor, discounts on manufacturing, competitiveness: if investment WAS occurring, it would be cheap. Therefor the companies investing would be able to do more with less $$$, more projects, more jobs... But this isn't the case, since investment has decreased.

[rx7_turbo2]

At this point I can't go back in time. So the important questions are what is the NDP doing to encourage investment NOW? What are they doing to bring investment back? What are they doing to ensure investors this province is a stable place to invest? This is what we should all be concerned with, what happen to Prentice? Who cares.

[Gestalt]

Originally posted by zhao


Are you saying the NDP is responsible for what happened with Oil and Gas in this province?

And no one had a clue 12 months prior to that election that the NDP had a hope of getting in. The Wildrose was the only serious opposition 12 months prior and was sitting in a very strong position. Prentice was looking strong 6 months prior after he decimated the Wildrose party with Smith and friends crossing over. Prentice's party fell to shit shortly after with a campaign of arrogance and blaming Albertans for the economic issues on the horizon, as well as obviously calling an extremely short election while one party was in turmoil and no other obvious party was in contention. People did not like that he thought he was smarter than the public, and said fuck you to him the only way they could.

And who knew there was going to be an election 12 months prior to the actual election????

Correct. I laughed at anyone that remotely suggested the NDP had a chance. Between the slow down, layoffs, debt, and I think the suggestion of a PST, and the final blow were the wildrose floor crossings.

Hind sight is 20 20, no one saw it coming any real distance ahead of the election.

[Feruk]

Originally posted by Zhariak
1) Price of Oil - This component is essentially almost all market related. Not much can be done about this (the exception being the discount on WCS which has federal politics behind it. Discount being caused by lack of access to markets).

2) Investment - Investment is affected by both market and political factors. Technically, if the price of oil is low, investment can still occur as some projects take years for completion. If Alberta was still business friendly, investment would still be occurring as oil and gas companies want to be prepared for when the price of oil comes back up and when there may be a political shift on the federal level.

If we didn't kill off investment, it would have saved a TON of jobs, and I'd bet a number of businesses wouldn't have closed their doors... Now I want to be very clear on this, I'm not saying it would "solve the problem", but it would have saved a lot of jobs, and we would have been in a better position both with the economy, and the government finances...

Technically, because of all the discounts in the industry right now, along with cheap labor, discounts on manufacturing, competitiveness: if investment WAS occurring, it would be cheap. Therefor the companies investing would be able to do more with less $$$, more projects, more jobs... But this isn't the case, since investment has decreased.

Please elaborate on how the NDP's actions "killed investment" in the oil patch. Was it the increase of corporate taxes by 1%? Doubt it because lots of oil companies DON'T PAY TAXES. Was it the carbon tax that sets a cap on carbon that we are nowhere near? Unlikely. Was it the royalty regime changes? Considering there was no increase, it's unlikely. The NDP coming into power and layoffs in the oil patch are not cause and effect. Oil crashed, and (just as importantly for Alberta specifically) natural gas prices crashed. Blame the NDP for their shitty policies, but don't blame them for something that was never in their control.

[dirtsniffer]

I know of a specific large producer in the WCSB that is actively selling AB assets while developing assets in SK.

Coincidence? probably not.

[RealJimmyJames]

Probably not coincidence, but likely conspiracy. Scott Saxberg and Brad Wall are colluding to control our political discourse. Donald Trump should put them in jail.

[Darkane]

Originally posted by dirtsniffer
I know of a specific large producer in the WCSB that is actively selling AB assets while developing assets in SK.

Coincidence? probably not.

Husky?

[Darkane]

Also came in to say Putin raised oil by $1.50 today by supporting OPEC. All he said is he supports it, not that Russia is specifically cutting lol.

Waiting on the API report tomorrow, we could see $52-53!

[bjstare]

Originally posted by Feruk

Please elaborate on how the NDP's actions "killed investment" in the oil patch. Was it the increase of corporate taxes by 1%? Doubt it because lots of oil companies DON'T PAY TAXES. Was it the carbon tax that sets a cap on carbon that we are nowhere near? Unlikely. Was it the royalty regime changes? Considering there was no increase, it's unlikely. The NDP coming into power and layoffs in the oil patch are not cause and effect. Oil crashed, and (just as importantly for Alberta specifically) natural gas prices crashed. Blame the NDP for their shitty policies, but don't blame them for something that was never in their control.

You're pretty out of touch with reality eh?

lol @ "oil companies DON'T PAY TAXES". Very astute. Please elaborate, I'm interested.

[killramos]

^ To be fair a huge number of oil companies have pretty excessive tax pools from drilling incentive credits etc. and buying up defunct entities with huge tax pools that effectively allow them to not pay corporate taxes for the foreseeable future.

https://oilandgas-investments.com/20...ools-strategy/

2013 graph of various producers tax pools relative to their cash flow.

Same thing as Donald Trump "not paying taxes" just at a corporate level.

[Feruk]

Originally posted by dirtsniffer
I know of a specific large producer in the WCSB that is actively selling AB assets while developing assets in SK.

Coincidence? probably not.

Saskatchewan - light oil, great returns. Alberta - gas, crap returns. NDP has nothing to do with what's in the ground...

Originally posted by Darkane
Husky?

They just sold most of their Sask stuff.

Originally posted by cjblair


You're pretty out of touch with reality eh?

lol @ "oil companies DON'T PAY TAXES". Very astute. Please elaborate, I'm interested.

Must be. I looked at the two I own, Whitecap and Raging River. Whitecap paid -$9.3MM in the last quarter in income taxes (meaning they paid 0 and will get to carry that loss forward). Other one I own (Raging River) has paid $350K on taxes in the last 6 months, which is pennies to them. With the drop of oil prices, companies have been able to claim losses off reserve books, which allows them to show zero income, therefore having zero tax to pay.

That doesn't even mention tax pools.

[dirtsniffer]

well fuck

[pheoxs]

Any reason for the 10% drop?

[dirtsniffer]

from what i read in 1 second this morning, supply is at an all time high.

[Mitsu3000gt]

Supply still way too high and OPEC cuts weren't enough. If the Saudi's decide not to extend the cuts or we find out the partners haven't been cutting as much as they said they would, expect another sell-off.

[Disoblige]

Ya, that inventory report on Wednesday killed oil.

[revelations]

Id start to worry once BNO (brent crude) drops below the lows of November 2016 as its then likely to test the all time lows of January 2016.