There's not much Rachel Notley won't do, it seems, to try to fend off her near inevitable loss in next year's Alberta elections. The misery of the Athabasca Bitumen Pits has become Notley's obsession and she is indeed desperate.
Notley, who still parrots the nonsense about a lack of pipeline capacity undermining her province's bitumen bounty, now wants to encourage producers to cut production to raise the going price for Alberta heavy oil. That's "less = more" but "more = even more" or Alberta economics 101.
Notley's latest brain fart? A Bitumen Black Friday. A zero royalties holiday to encourage production cuts.
Alberta is weighing incentives and credits – including the prospect of a royalty holiday – to get producers to reduce output against a proposal from parts of the industry to impose across-the-board production cuts, said a person familiar with the deliberations. The Globe and Mail granted anonymity to the person because they are not authorized to speak publicly about the private discussions.
Alberta’s heavy crude prices have dropped faster and farther than falling U.S. and global oil prices in recent weeks, squeezing profits of some of the sector’s biggest players and forcing others to curtail production.
...Major producers such as Cenovus Energy Inc. and Canadian Natural Resources Ltd. have urged the government to step in to address what they insist is a market failure.
But big rivals such as Imperial Oil Ltd., Suncor Energy Inc. and Husky Energy Inc. oppose intervention because their refining operations benefit from cheap crude. They have warned that such a move could provoke a backlash from the United States.
This fall, the price gap between Alberta’s heavy oil and the U.S. benchmark oil price topped a record US$50 a barrel. Prices have improved somewhat, but the discount is still double levels typically seen by the industry, sapping revenue ahead of what is normally the busy winter drilling season. Oil sands barrels for future delivery fetched about US$17.81 in Tuesday trading, according to Calgary oil broker Net Energy Exchange.The Globe and Mail, so predictably blames the bitumen blunder on "acute pipeline constraints." Not a mention of the glut of cheap, vastly cleaner gas and oil in the United States. Of course not.