Your thoughts....

[JustMe]

So it appears that the price for Alberta oil (WCS) has stabilized at around $25 US/bbl. If, as anticipated, this price point carries forward for the foreseeable future, what do you see happening to the oil industry in Alberta? Will CAPEX money start flowing again? Will slowdowns and layoffs continue? Will the oil industry in Alberta slowly fade away? Or?

I don't want this to turn in to a speculation thread on what you think oil prices are going to do such as its going back up to $120/bbl by June or fall to $25 by September. Please stay on subject of the original question....

[58thecat]

Staying on subject things will stabilize, life goes on, unicorn money is over, oil patch will plug away at a slow steady pace...

[hal53]

So it appears that the price for Alberta oil (WCS) has stabilized at around $25 US/bbl. If, as anticipated, this price point carries forward for the foreseeable future, what do you see happening to the oil industry in Alberta? Will CAPEX money start flowing again? Will slowdowns and layoffs continue? Will the oil industry in Alberta slowly fade away? Or?

I don't want this to turn in to a speculation thread on what you think oil prices are going to do such as its going back up to $120/bbl by June or fall to $25 by September. Please stay on subject of the original question....
OPEC is widely expected to announce a production freeze in April..Good news
Demand for oil continues to rise daily-good news
Pipeline sorely needed to get oil sands product to tidewater, Gov't. not interested - bad news
Current Gov't. is seen far and wide as "anti business, anti fossil fuels- bad news
Even when WCS hits $50.00 investors will be reluctant to invest in Alberta.. some smaller ones will go for it, the big boys with mega bucks will have a tough time convincing their boards of directors that Alberta is a place to put their money until something changes in our leadership
Welcome to the change....

[stefk]

OPEC is widely expected to announce a production freeze in April..Good news
Demand for oil continues to rise daily-good news
Pipeline sorely needed to get oil sands product to tidewater, Gov't. not interested - bad news
Current Gov't. is seen far and wide as "anti business, anti fossil fuels- bad news
Even when WCS hits $50.00 investors will be reluctant to invest in Alberta.. some smaller ones will go for it, the big boys with mega bucks will have a tough time convincing their boards of directors that Alberta is a place to put their money until something changes in our leadership
Welcome to the change....

^^ This..What is even more frustrating is that the current Federal govn't seems content to put us into the stratosphere of a debt ceiling all the while denying roughly 3 large pipeline projects that would put a large number of people back to work…Its going to be a lonnnnng 3.5 years…... :mad0030:

[FishingMOM]

^^ This..What is even more frustrating is that the current Federal govn't seems content to put us into the stratosphere of a debt ceiling all the while denying roughly 3 large pipeline projects that would put a large number of people back to work…Its going to be a lonnnnng 3.5 years…... :mad0030:

With national stupidity it will be 8.5 years
I was reading the other day this rise will be short lived as the saudi's/ and others overseas aren't going to stick to the production freeze.
Next issue is we have 2 levels of government that are anti oil and gas.
So until we have a regime change there will be guys/gals praying for a boom that may or may not happen.

[raab]

I don't think Oil has normalized yet. I think it's hit bottom and will recover a bit more as high cost producers start going under. It's my understanding that the oil glut has seen a decline even with the OPEC countries producing at 100%. So when the oil glut is gone and with several high priced producers out of the market we should see a sharp rebound.

What this means to Alberta is anyone's guess at this time. Imo growth this year will be down, and unemployment up which we are seeing. In a year or two who knows?

One thing I will say that is probably holding investors back is the NDP policy on phasing out coal generating plants. The big plants and refineries draw a ton of power. So with the phase out of coal generation how much is that power going to cost new companies coming in? I'm sure a lot of companies will keep their building plans on hold until they know how much they'll be paying for electricity.

[raab]

^^ This..What is even more frustrating is that the current Federal govn't seems content to put us into the stratosphere of a debt ceiling all the while denying roughly 3 large pipeline projects that would put a large number of people back to work…Its going to be a lonnnnng 3.5 years…... :mad0030:

The federal government can't just tell the provinces this is happening with regards to pipelines. If they could then Harper would have had Northern Gateway built. For Trudeau's part he has met with all the premiers and brought them together. He's working on building the relationships between the provinces to hopefully get energy east built. I don't think it's any coincidence that Trudeau went to Montreal within a few days of the mayor saying he was against energy east. After the meeting we haven't heard anything from Montreal mayor in regards to the pipeline. I think we see it built.

[dmcbride]

I don't think Oil has normalized yet. I think it's hit bottom and will recover a bit more as high cost producers start going under. It's my understanding that the oil glut has seen a decline even with the OPEC countries producing at 100%. So when the oil glut is gone and with several high priced producers out of the market we should see a sharp rebound.

What this means to Alberta is anyone's guess at this time. Imo growth this year will be down, and unemployment up which were seeing. In a year or two who knows?

One thing I will say that is probably holding investors back is the NDP policy on phasing out coal generating plants. The big plants and refineries draw a ton of power. So with the phase out of coal generation how much is that power going to cost new companies coming in? I'm sure a lot of companies will keep their building plans on hold until they know how much they'll be paying for electricity.

I agree with your last paragraph, same with the Carbon tax. Effectively making our oil even more costly to produce, add in no pipeline approvals and it is a investors nightmare.

[hal53]

The federal government can't just tell the provinces this is happening with regards to pipelines. If they could then Harper would have had Northern Gateway built. For Trudeau's part he has met with all the premiers and brought them together. He's working on building the relationships between the provinces to hopefully get energy east built. I don't think it's any coincidence that Trudeau went to Montreal within a few days of the mayor saying he was against energy east. After the meeting we haven't heard anything from Montreal mayor in regards to the pipeline. I think we see it built.
Wrong... the Federal Gov't. can over ride the provinces decision to deny it if they declare the line to be in "the nations interest", but we all know that politicians aren't in it for anybody's interest other than their own and it would be political suicide to enforce that on Quebec.... and if Trudeau "helping" by upping the ante on the regulatory review process and banning tankers on the west coast and reviewing the impact of the upstream effect on emissions(?) is your idea of good thing...??

[JustMe]

I don't think Oil has normalized yet. I think it's hit bottom and will recover a bit more as high cost producers start going under. It's my understanding that the oil glut has seen a decline even with the OPEC countries producing at 100%. So when the oil glut is gone and with several high priced producers out of the market we should see a sharp rebound.

What this means to Alberta is anyone's guess at this time. Imo growth this year will be down, and unemployment up which are seeing. In a year or two who knows?

One thing I will say that is probably holding investors back is the NDP policy on phasing out coal generating plants. The big plants and refineries draw a ton of power. So with the phase out of coal generation how much is that power going to cost new companies coming in? I'm sure a lot of companies will keep their building plans on hold until they know how much they'll be paying for electricity.
So, sorta derailing my own thread but what about nuclear as an alternative source of power. I know this will spark a whole other debate, but we need to do something the way this generation is looking to go green.....

[hal53]

So, sorta derailing my own thread but what about nuclear as an alternative source of power. I know this will spark a whole other debate, but we need to do something the way this generation is looking to go green.....
We all know that oil and gas are a finite resource, as much as this generation wants to go green, Nuclear will be a no go due to the Nimby attitude, solar and wind have potential, but at this point it is just that.. potential. Throwing business crippling taxes around to speed up the process is doing nothing but killing the nations economy. Research and developing viable alternative energy will be the key to building an alternative system for when we need it to be economically feasible. Forcing the issue at this point when the green alternatives are obviously not able to supply the demand is ludicrous. Shutting down Alberta clean coal operations and then investigating the costs of buying power from B. C. is NOT the way to go at this point. The oil and gas industry has already reduced emissions by 25% over the last number of years ...but that's not good enough I guess...other jurisdictions are dismantling wind farms because they don't provide what is needed, yet our regime is bound and determined, once again, to prove that their idea is right and everybody else is wrong

[raab]

I agree with your last paragraph, same with the Carbon tax. Effectively making our oil even more costly to produce, add in no pipeline approvals and it is a investors nightmare.

Yes very frustrating that they bring in this carbon tax and shut down our coal plants at this time. Those coal plants employ quite a few people. I think upgrading them to utilize clean coal technology would be a better solution and less costly for tax payers while keeping Albertans employed.

The carbon tax is basically the pst in another form IMO. We've seen close to a 9 cent hike on gas within the last year because of the stupid carbon tax. Can't wait until they bring in emission testing and we all have to go get new vehicles.

[raab]

Wrong... the Federal Gov't. can over ride the provinces decision to deny it if they declare the line to be in "the nations interest", but we all know that politicians aren't in it for anybody's interest other than their own and it would be political suicide to enforce that on Quebec.... and if Trudeau "helping" by upping the ante on the regulatory review process and banning tankers on the west coast and reviewing the impact of the upstream effect on emissions(?) is your idea of good thing...??

I think so, we have to get rid of the dirty oil sands idea that's out there. Harper cutting the regulatory review actually did more harm then good in respect to how Canada's oil is seen on the world stage. And the banning of tankers was around Prince Rupert IIRC. I believe this was another attempt to say look were environmentally friendly. We're going to preserve this delicate eco system in the North. Can you imagine how bad it would look if there was a tanker spill off the coast of Prince Rupert and it took over 24 hours for responders to get to the cleanup? I mean it took 12 hours for them to get everything set up in Vancouver with tons of resources.

[rugatika]

Yes very frustrating that they bring in this carbon tax and shut down our coal plants at this time. Those coal plants employ quite a few people. I think upgrading them to utilize clean coal technology would be a better solution and less costly for tax payers while keeping Albertans employed.

The carbon tax is basically the pst in another form IMO. We've seen close to a 9 cent hike on gas within the last year because of the stupid carbon tax. Can't wait until they bring in emission testing and we all have to go get new vehicles.

I would be more interested in seeing them converted to natural gas. Not sure what all would be involved. Dick284 might have a better idea how easy/hard that would be.

One thing with nat gas is that you have gas transmission instead of power transmission so you could build your power plants close to where you need the power instead of at coal mines. Although you might have to build some hyper dangerous, planet killing, extra capacity pipelines then. :thinking-006:

Back to the original post though...I think at that price, the majority of oil development would slowly peter out and die in Alberta. There might be a few fields in Alberta that would be profitable enough to justify continued capital investment, but for the most part it would be a slow death for oil in Alberta.

[fishtank]

its the political climate in Alberta is the problem, these big oil companys are going to make money and profits no matter the price of oil, its a matter of where they will invest it .

[JustMe]

its the political climate in Alberta is the problem, these big oil companys are going to make money and profits no matter the price of oil, its a matter of where they will invest it .



Really, I'm not sure about that. Do some research on our neighbor to the east and other oil producing entities such as Texas etc. Everything I read indicates they are feeling the pinch too. Texas is about as right wing as you can go.... I haven't heard any other provincial party give an realistic suggestions on how to make the oil companies ramp up again. Lots of rhetoric but nothing concrete that I've heard.

[avb3]

I would be more interested in seeing them converted to natural gas. Not sure what all would be involved. Dick284 might have a better idea how easy/hard that would be.

One thing with nat gas is that you have gas transmission instead of power transmission so you could build your power plants close to where you need the power instead of at coal mines. Although you might have to build some hyper dangerous, planet killing, extra capacity pipelines then. :thinking-006:

Back to the original post though...I think at that price, the majority of oil development would slowly peter out and die in Alberta. There might be a few fields in Alberta that would be profitable enough to justify continued capital investment, but for the most part it would be a slow death for oil in Alberta.

I agree, I don't understand why it is so impractical to convert the coal fired generating plants to natural gas. After all, it is just a heat source, the rest of the equipment should be the same, unless I really don't understand things.

As far as the oil industry in Alberta, I think your second paragraph probably reflects reality. It will go the same as the coal industry did before export markets opened up. In the long run, that is not a bad prospect, however, the bad thing is that we are not prepared for it, and hitting the wall so hard and so fast is going to cause a world of hurt to many people.

Never mind throwing money at it, what government needs to do is set a stable set of regulations that allow for transition. Right now we have a provincial and federal government, as Andrew Coyne so ably put it, is operating on a 1980's mentality in a 2016 world.

[mich]

I agree, I don't understand why it is so impractical to convert the coal fired generating plants to natural gas. After all, it is just a heat source, the rest of the equipment should be the same, unless I really don't understand things.

As far as the oil industry in Alberta, I think your second paragraph probably reflects reality. It will go the same as the coal industry did before export markets opened up. In the long run, that is not a bad prospect, however, the bad thing is that we are not prepared for it, and hitting the wall so hard and so fast is going to cause a world of hurt to many people.

Never mind throwing money at it, what government needs to do is set a stable set of regulations that allow for transition. Right now we have a provincial and federal government, as Andrew Coyne so ably put it, is operating on a 1980's mentality in a 2016 world.

The last time a business changed from coal to nat gas the gas rates were cranked up to the point that it was not financially feasible to continue using gas and they went back to coal. Coal when compared BTU to BTU isn't as bad as the leaf lickers lie, and when we are sitting on 1000 years of coal reserves.... why would we use gas. The tech for clean coal works and can be improved upon as technology improves

[Andy44]

If oil stays at today's price for the foreseeable future I wouldn't imagine that oil companies are going to be in a big rush to invest and expand exponentially as they have in the past. So as you said, I believe it'll be a slow fading out for Albertan oil if prices never recover.

I hope I'm not going too off topic with this, but what really interests me is the belief many people have that big oil companies in Alberta are our friends and want to help us. Oil has seen boom and bust cycles for decades and despite tax breaks, pro oil political climates, high oil prices, little to no resistance to expansion and RIDICULOUS profits, these big companies still act surprised when oil drops and still lay off thousands of workers and rip us off at the pumps.

If oil prices never recover and renewable energy is the only economical solution for consumers, do people really think big oil is going to suddenly turn a new leaf and start building alternative energy plants?? Start selling us cheaper fuel?? :snapoutofit: I don't know about most people, but I would bet my money on them packing their bags and setting up camp elsewhere. Pipelines, no pipelines... high oil prices, low oil prices... big oil companies don't care about us, they care about $$$$$.

And before anyone jumps the gun about my views, I think it's fair to let you all know that I worked in the oil industry and lost my job in February. I know what it's like in the industry and I still can't wrap my head around it.