Calgary & Alberta Economy

[JonnyCanuck]

Feds formally oppose Michigan’s Line 5 pipeline shutdown demand | Globalnews.ca

Whitmer has given Calgary-based Enbridge Inc. until Wednesday to shut down Line 5 -- a demand the company says it has no plans to meet.

globalnews.ca

So it looks like the 'treaty' between the two countries has not got any airplay at least with U.S. authorities. It is all 'hands on deck' (federally, provincially, Enbridge & suppliers) to avoid even a temporary shutdown. Enbridge is going to ignore Gov. Whitmer's order and continue operation past the May 12 deadline while this 'court-ordered negotiation' plays itself out. There is a meeting scheduled for May 18 between the two sides.
What I don't understand is why there is even a dispute. Both countries had an agreement to build the pipeline decades ago and both countries benefited from the infrastructure. A treaty was signed in the 70's to protect such infrastructure.
It will be a U.S. court ruling on this since it is in U.S jurisdiction. The outcomes? A court order to shut the pipeline down or a court order to keep it operational with some assurances from Enbridge about preventing leakage. With a so-called treaty in place ... how did it ever get to this stage???

 

[darwink]

With a so-called treaty in place ... how did it ever get to this stage???

Because the rule of law and interjurisdictional issues are totally messed up in the USA compared to Canada (see the Trump years and trying to build Keystone XL).

 

[UrbanWarrior]

Not necessarily "economic" news, but I'm happy to report that I just got hired on the spot to my first full time job since the oil collapse. My second hiring in a week and a half, and it's going to work for me to keep both jobs, but will be 7 days a week. Can't waiiit to not be relying on student loans for the first time in ages! Happy times are afoot!! But possibly not as many construction updates…

 

[potatopizzafan]

Not necessarily "economic" news, but I'm happy to report that I just got hired on the spot to my first full time job since the oil collapse. My second hiring in a week and a half, and it's going to work for me to keep both jobs, but will be 7 days a week. Can't waiiit to not be relying on student loans for the first time in ages! Happy times are afoot!! But possibly not as many construction updates…

congrats! I landed an interview with the city this week. Looking forward to the opportunity to leave the private sector

 

[UrbanWarrior]

Hell yeah! Congrats to you too!

 

[MichaelS]

Not necessarily "economic" news, but I'm happy to report that I just got hired on the spot to my first full time job since the oil collapse. My second hiring in a week and a half, and it's going to work for me to keep both jobs, but will be 7 days a week. Can't waiiit to not be relying on student loans for the first time in ages! Happy times are afoot!! But possibly not as many construction updates…

Congratulations Chad! Your knowledge and enthusiasm will be major assets for your employer.

 

[UrbanWarrior]

Awe thanks man! That's very kind. I'm very excited.

 

[Surrealplaces]

Not necessarily "economic" news, but I'm happy to report that I just got hired on the spot to my first full time job since the oil collapse. My second hiring in a week and a half, and it's going to work for me to keep both jobs, but will be 7 days a week. Can't waiiit to not be relying on student loans for the first time in ages! Happy times are afoot!! But possibly not as many construction updates…

No worries on the photo updates. "Happy times are afoot" takes precedence

 

[JonnyCanuck]

Averting climate crisis means no new oil or gas fields, IEA says - BNN Bloomberg

The world has a choice -- stop developing new oil, gas and coal fields today or face a dangerous rise in global temperatures.

www.bnnbloomberg.ca

More discouragement of any further oil sands expansion. Our federal government is not encouraging any further investment and expansion. Private investment was already retreating. It looks like Alberta and existing companies like Suncor and CNRL are on their own. With this in mind, it is highly unlikely that we will see any new projects even with stable oil prices over the next few years. The investment and risk is too great. That means many of those lost jobs in the energy sector are permanent now.

 

[darwink]

^ They were permenant before. Who was going to finance it? Even LNG in Kitimat one of the partners are trying to bail.

 

[Rollerstud98]

^ They were permenant before. Who was going to finance it? Even LNG in Kitimat one of the partners are trying to bail.

Chevron has been trying to divest of it for a few years, the Australian firm is now also trying to get out. I think maybe there was a 3rd partner?

 

[DougB]

Averting climate crisis means no new oil or gas fields, IEA says - BNN Bloomberg

The world has a choice -- stop developing new oil, gas and coal fields today or face a dangerous rise in global temperatures.

www.bnnbloomberg.ca

More discouragement of any further oil sands expansion. Our federal government is not encouraging any further investment and expansion. Private investment was already retreating. It looks like Alberta and existing companies like Suncor and CNRL are on their own. With this in mind, it is highly unlikely that we will see any new projects even with stable oil prices over the next few years. The investment and risk is too great. That means many of those lost jobs in the energy sector are permanent now.

At current prices, oil sands producers generate enormous cash flow. Some observers think prices could hit $100 given underinvestment in new supply:

Peak demand? More like a supply crisis propelling oil to US$100

Eric Nuttall: OPEC will soon exhaust its spare capacity and U.S shale lacks the ability to significantly grow in the years ahead

financialpost.com

Normally, cash flow would attract new investment. If oil sands producers do expand, they would likely only do so with private capital (ex. Russian or Middle Eastern sovereign wealth funds) unencumbered by ESG activism, or by self financing. It will be interesting to see what happens to ESG if the global economy does encounter a supply crisis.

 

[JonnyCanuck]

^ They were permanent before. Who was going to finance it? Even LNG in Kitimat one of the partners are trying to bail.

I see that your great insight encourages you to make these 'know it all statements' about business and the economy from time to time.
Me ... I prefer to see how things develop before coming to final conclusions. I guess instead of saying the job losses are permanent, I should have said... 'the jobs are not coming back' ... meaning there was always a chance that many of those jobs would've come back if major projects like Frontier (Teck) and Aspen (Imperial Oil) had moved forward. Those are the higher profile projects. There are many other approved projects on the back burner that would have certainly created jobs in Calgary and elsewhere in the province.

Dozens of new oilsands projects have been approved, but don't expect them to be built anytime soon

There are dozens of approved oilsands projects that could be built in the wake of the shelving of the Frontier oilsands mine this week but analysts say they won't be built until more export pipeline capacity comes online.

www.ctvnews.ca

However my optimism in the last two years has waned particularly after Teck's decision. The opposition to the oilsands in our own country, and around the world is just too great. If the demand for oil increases over the next 10 years before peaking, as it is expected to do, our country seems to be quite content letting that supply come from anywhere but Canada. I guess we'll find other ways and means of paying down our debt .... won't we?

 

[darwink]

At Imperial's mine, a friend who was the mine planning mining engineer up until maybe 8 months ago had spent almost two years implementing an audacious plan: ignoring resource conservation; maximum extraction; and long mine life. The company changed its plan to make as much money as fast as possible, future profits and consequences be damned, by only going after the best resource it has access to. That in my mind was the end: the firm is not even investing a small amount to ensure the best utilization of its existing built assets.

This isn't about sensiment, it is 100% economics. The unending belief in the positive rate of return if just no one was complaining astounds me. We will see if demand goes up, but what we both know is a new development with FID today would get very few years in that constraint environment. And who is going to gamble that those few years wouldn't be ruined by shale oil? Even if 5 years was enough to repay your capital, it is rolling the dice big time.

The existing built facilities, and the mines they can support will play out, and that will likely be that (net new facilities unlikely). Insitu we will see if any facilities that need new steam generation can get sanctioned in a net zero path world, even just ones that are relacement of existing production.

 

[Chowda7]

Calgary killing it again on the venture capital front. $206 million raised by firms in Q1 2021 alone. That's almost 60% of the entire 2020 total!! Great momentum, hope we can keep it going.

Link: https://www.cvca.ca/research-insight/market-reports/q1-2021-vc-pe-canadian-market-overview/