Oil isn't going to get any better!

A news item on the CBC  tells of 100 million barrels of oil presently in storage in ships around the world.  Today the Financial posts quotes 300 billion barrels in storage and its getting worse!

I say that is light!  When we were in a simple recession, there was 300 million barrels in ships.  This stayed in ships until the USA decided the prices were low enough they could top off their nation's reserves.  Alberta should have 80 million barrels in storage in not too long a time!  Banks don't pay for oil in storage.

This time around there is no giant hole in the US waiting to be filled.

Iran is pumping out about 300,000  barrels a day of crude adding to the world's glut.  I don't trust the US  in any  part of their dealings with Iran!  My guess is Iran's oil is heading for Cushing GA. and is behind the luckless Keystone.

Look now at the market place, you have seen where the glut is firmly in place.

Consider the market place.
China, the big dream account for oil marketers is building 16 new nuclear plants!  They will replace much of their oil needs and China has the most advanced electrical distribution system in the world!  Looking into the Chinese Nuclear  a bit closer it appears these new additions are 1000 MW units. That would be I think, the Chinese version of the mini reactors which were introduced by the US with 500 MW outputs.  Genesee 3 puts out 176 MW for a comparison.   China is at 21,000 MW plus.

Japan, blackmailed into paying 17.00 per mcf of LNG got a new Government who said NO!  They immediately opened their 3 remaining Nuclear plants and promised to build 6 more in the next year or two!   That is the end of the LNG dream market.

India was running a Nuclear plant that could recover and reshape its uranium rods.  The US put pressure on them to shut it down because these plants can also produce fissionable material!
So, for a spate of time India was interested in any oil, any place; even Alberta.

Now they have completed their new nuclear facility or are close to it.

Talks between the Saudi and the Russians went no-place. In a glut like this people will be giving oil away so they don't have to pay for storage!

I will say further; we will  never, ever recover our oil industry.  The world has changed!  Nuclear is out front as the best green alternative.

No government can invent jobs overnight to fill the blanks!  People have to start thinking for themselves.

Conservatives are so deep in trouble Ruters News Service will not put up Critical posts.

The prices of oil are no less than great!  They can sell every drop they can produce.  We have pipelines to handle everything we are producing.  What we don't have is sufficient west coast connection to keep India happy thereby attracting their investment.  Redford isn't over there for the fishing!

China is in the same boat but have committed to a great extent.

The point is, Alberta collects zero for royalty.  The next lowest royalty is Montana stuck at 17% by the Republicans as they were leaving office.
Post not allowed by Ruters:
Ruters Story :
Zacks stock news reports that it costs 5 times more to ship rail than  it does pipeline. Let's follow that.
Zacks tell us Alberta is paying between 2.50 and 2.00 per bbl of oil to ship rail That means Alberta is paying .40 or .50 cents a barrel to ship by pipeline. They allowed Kinder Morgan to rip off the industry with higher pipeline charges on their new line.

The point is Alberta's revenue is looking hundreds of billions of dollars a year simply because Albertans are stuck on a Conservative vote which has done nothing but rob them blind  (Over 700 billion ripped from the heritage Trust fund and plopped into General Revenue to be spent in place of tax money; hence the 10% flat tax of which the general public pay 40% of the total!   There are some real eye openers here.  Get rid of the oil companies personal politics that is  Wild Rose and Conservatives.   Oil put up the cash to pull the Liberals out of debt.  That means they are oil friendly.   Take a look at Sherman's ideas as they roll out.

The Eastern Pipeline Yes? Probably Not!

Consider first the Conservative Majority across Canada that see problems in getting elected again! Now, onto the phantom eastern pipeline and the hoopla surrounding it.  The last time they were in so much trouble they promised a royalty overhaul giving Albertans big profits.  It was a pie in the sky document on the eve of the election that was on analysis; impossible.  Royalty dropped from 16% to 6% and the funds were changed from USD to Can$ a to taxpayers of 18% at that time.

This brings me to the dog and pony show they are now pushing with hopes of winning another election. At Election time they will run out their fear and anxiety card; vote for us or loose a major pipeline.  If you do put them back in; it's my bet and, I'm seldom wrong; there will be no pipeline.  The excuse given; Quebec hold out killed possibilities.

India was obliged by the US to shut down a major Nuclear Generation facility because it could produce Weapons Grade Plutonium. This left India massively short on electrical power. India with lots of cash on hand, directed its Energy Department to scour the world for secure oil supplies to make up this shortfall.

One of the items India settled on was the Alberta Tar Sands and purchased a gigantic lease on which to build a new plant. Conditional; there is a pipeline to tide water to export the product to India. Hence the fumbled mismanaged northern pipeline fiasco that could have been done by now.  Since the original opportunity presented itself, much has changed.   In addition Australia, close to India has discovered huge deposits of shale oil.  One draw back for them Water to flood.

Trans-Canada's  gas exports to Eastern Canada have fallen drastically as has the natural gas reserves in Alberta for which we have received nothing for the provincial coffer. They (Trans-Alta) have been trying for more than 3 years to interest industry  into utilizing that line to ship East and for that same time it has been refused because there is no profit in doing so.

Now, in the latest oil theater a Conservative pipeline agreement has been released and construction of the Eastern pipeline is being seriously considered. It is not a done deal; only news speculation at this point.  It's time line takes it past the next election is the key point and I say again; a toss up as to whether it is done or not.

Alberta collects nothing for oil royalty so that is 30% of taxpayer revenue in the pot to help pay for everything. But; that has been the case for years so, where is the new money coming from?  

We are dealing with a Conservative Government and as Ed Stelmach said; "We are Conservatives; not like those other guys". 

Dig deep folks; you are going to pay for an eastern pipeline out of your household budget one way or another!