Oil Production Cuts

[msommers]

Saw this on LinkedIn:

[suntan]

Well yeah, if your company is large and just sells oil, then this is a good thing.

[killramos]

It’s much better for small producers actually.

[Buster]

I think we should cut it 50%. If they were smart, they'd cut it 100%....WCS price would be infinity!

[killramos]

Maybe we should form an Organization of Petroleum Exporting Provinces.

OPEP doesn’t quite have the same ring to it

[suntan]

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I think we should cut it 50%. If they were smart, they'd cut it 100%....WCS price would be infinity!

That's sorta the goal of the current Liberal gov't. Choke out production.

[JRSC00LUDE]

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Garbage... What happened to free markets?

Those died in this Country long before you were born.

[HiTempguy1]

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I think we should cut it 50%. If they were smart, they'd cut it 100%....WCS price would be infinity!

Oh come on The oil was piling up and there was no way to move it. From a financial perspective, this is the right move regardless of your political or ideological leanings because reality trumps theory.

Investment in Alberta is destroyed, it ain't coming back. Might as well make the most of what we have while we have it.

[kertejud2]

Supply management comes to the oil sector. O&G workers will get to drive fancy trucks like the dairy farmers again!

[phreezee]

Gwyn Morgan has a point, the market was already interfered with.

https://www.bnnbloomberg.ca/video/fo...l-cuts~1555228

[suntan]

Yes, he's right. But all this is by design. We have now voluntarily shuttered oil production. Who needs a carbon tax when you can legislate the amount of oil production?

[Buster]

It's a tactical victory for the oil patch and a strategic victory for the anti oil crusaders.

[Misterman]

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Man, it seems like some of you die hard conservatives will cut off your nose to spite your face. This seems like a rare case of a win for just about everybody. Even if it's objectively better, it can't be acceptable because government?

How is solving a real problem (for once) playing the "hero card"?

Again, the cuts are less than what UCP suggested, so "makes us run to a liberal government for help" doesn't make any sense. Also because no liberals were involved in the making of this.

There is no secret long term strategy or conspiracy with the feds. NDP are out, Notley is never getting elected again. She knows this. She also knows that she doesn't know what she's doing here, and asked for advice from industry and other experts. What more can you expect?

Ummm, virtually every conservative has said they support this shit. It's a necessary evil now. Conservatives seem to be pissy that we actually got to a place so dark that production cuts became the right move. It's ironic that you use the term "Cut your nose off to spite your face" which actually sums up the Liberals entire time in office. They're so focused on seeing Alberta fail, that they would put that above the prosper that comes to the east through Albertas success.

Nutley is way out of her depth here obviously, but this was a perfect storm of shit for her. She gets to do what she always wanted to, which is prevent oil coming out of the ground, and she actually gets to look like the good guy for doing it. It's a win win. Of course she will not be re-elected, but this is hands down the perfect storm to ensure best chance of re-election.

[Maxt]

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Supply management comes to the oil sector. O&G workers will get to drive fancy trucks like the dairy farmers again!

Well except we haven't restricted foreign product to the rest of the country, now that would be interesting.

[suntan]

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Well except we haven't restricted foreign product to the rest of the country, now that would be interesting.

You didn't actually expect the guy that gives Gestalt real competition for dumbest beyond buffoon to understand an issue, did you?

[HiTempguy1]

https://business.financialpost.com/c...en-pucks-plant

Why are we buying relatively niche tanker cars when hoppers are more useful and can haul 25% more oil? If we're going to be stupid and use government money to do private industry work, I'd much rather see it go towards expediting this plant being built.

[ExtraSlow]

This plant isn't small because of a lack of capital. It's a pilot project to prove and improve the technology and process. Making it bigger at this point would be madness.

[nzwasp]

I hope my company gets to work on the automation for that plant that would be pretty sweet.

[HiTempguy1]

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This plant isn't small because of a lack of capital. It's a pilot project to prove and improve the technology and process.

I didn't say anything about it being bigger?

...hope to break ground on a $50 million facility to turn 10,000 barrels of bitumen per day into CanaPux...that would take two years to build.

I clearly said expedite the construction process. If they were able to get this facility built in one year, and prove that it works well, then they could do an expansion very quickly. There are tons of hopper train cars available, the lease rates are staggeringly different between hopper and tanker cars, you would be killing multiple birds with one stone by supporting this being done quicker AND not flooding the market with useless cars that are only really in demand for one specific reason. The tanker car purchase will be a boondoggle of epic proportions once any pipelines are built. This plant on the other hand handily bypasses a lot of problems, whether the one singular pipeline we are resting our economic well being on even gets built.

Getting the tankers Notley wants to buy will take almost two years. If this plant was built in a year, and then proven out to work well, I think overall it's a better solution from what I am seeing.

[ExtraSlow]

OK, fair enough, I misread your post, although I'd argue that there's pretty limited returns from building it faster than the private industry partners choose to do. It's not like this plant is fully designed and all they are waiting on is someone to drive the piles and weld it together. I suspect the process engineering side of things is at a very early stage.

Not saying it couldn't be faster, but probably not one year vs two.