While the usual suspects - Kenney, Scheer, the Calgary Petroleum Club and Canada's petro-cheerleader, Post Media - will be blaming it all on Justin Trudeau, the jig is up and JT doesn't wear this one.
There's just way too much lower-carbon oil on the market, a glut. That's always bad news for high-cost/high-carbon/low-value bitumen, the oil market's red-headed step child. Good oil, cheap; crap oil, cheaper. Can't be helped.
Now, Trudeau isn't off the hook entirely. He did get a lot of hopes up when he made his pilgrimage to Houston to assure the oil posse that no country would find 173-billion barrels of oil in the ground "and just leave it there." No, no, no - he told those hombres that Athabasca was in Mardi Gras mode and they could count on us.
I wonder if Justin would repeat that same boast today? I'm thinking not so much.
As for Teck, I guess they didn't want to commit seppuku - ritual suicide, Japanese style. Only a few months earlier Teck had to take a $900 million write down on its one-fifth share of the flailing Fort Hill mine. They knew that financial markets were turning their backs on bitumen and coal. Even Captain Austerity, Jason Kenney himself, was musing about his all-but-broke government becoming a last resort/life support lender to the Tar Sands operators. That's almost as dumb as Trudeau buying that pipeline.
And just how bad is it? It's bad enough that the Post Media gang stubbornly insist that the West Texas Intermediate price is somehow valid for Athabasca bitumen. No mention whatsoever of Western Canadian Select which is the price for prairie bitumen. So how's that going? Brace yourselves. Dave Climenhaga of AlbertaPolitics.ca offers this:
Last night when I last looked on my handy-dandy cell phone app, West Texas Intermediate was down to $27.69 US, and Western Canadian Select, our tarsands special, was trading at $14.43.Hardly makes a man eager to dig that 173-billion barrels of tarry sludge out of the ground, does it?
It's enough to make a grown man weep or, in the case of the Calgary Herald's Chris Nelson, wonder if Jason Kenney's policies were lifted from The Wizard of Oz.
Heck, we’ve seen more five-year plans than Joseph Stalin. It’s more of the same, rosy, budget-balancing revenue projections: another $8 billion in revenue, 55,000 more jobs, 2.8 per cent GDP growth and a $700-million surplus in the 2022-23 financial year?
What an absolute crock. Look, if politicians are going to do the heavy lifting that balancing this budgetary mess entails, they’ll do so in the first 18 months of their mandate. They aren’t going to do the nasty stuff close to another election.
Yet in the year ahead, we’ll be borrowing almost $7 billion. Of course, after that, the money will pour in and save us all. Really? Are we Munchkins here?
Kenney placed his own head on the platter when bragging the budget would be balanced without affecting front-line services in key areas.
That promise is like one of those tattoos you get in Vegas. Never forgotten but always regretted.
Sure, well-paid consultants can browse the provincial books before pointing out the bleedin’ obvious: that we pay more per head for public services, yet this doesn’t translate into better outcomes. That’s simple number-crunching.
...Humans don’t like change. We’re lazy critters. The way we currently do things is the way we like ‘em. Therefore, if funding cuts are imposed to reduce the billions we now borrow, don’t expect any re-evaluation of how services are delivered.
Not a chance. Instead, those cuts will be borne by front-line services. It’s the simple way, because it leaves the system itself intact. Plus it annoys the public, which helps pressure the politicians to back off.A final word on Teck Resources. There was a time, not that long ago, when the Teck controversy might be a thing for a couple or three weeks at least with accusations and recriminations and finger-pointing aplenty. It seems that time is over, prematurely consigned to our "past."
There are other things to grab our attention, bigger things, and they're coming on hot and heavy. Teck, who cares?