Last week as everyone knows, I divulged one of my deepest and darkest secrets, namely that I am hopelessly addicted to cheeseball Hallmark Movie Channel Christmas movies, most of which seem to star Lacey Chabert. It was a soul-cleansing moment for me and I certainly appreciate the support of the blog community that I have received.
Little did I know however that upon revealing myself so openly to everyone that I was soon to take part in a real-life Christmas movie of my own.
It happened while I was doing a little Christmas shopping of my own. There I was at an antique book store picking up a first edition of the Hobbit for my wife when I noticed a binder sitting on the bookshelf that seemed oddly out of place – mainly because some fat guy in a red suit and white beard had put it down to pour himself a cup of tea. Anyway, while this guy’s attention was not on his property, I quickly gathered up the binder and dashed off to my car, so I could see what was in the binder.
To my great surprise (not really, I’ve seen enough Christmas movies to know exactly what it was I had stolen), inside the binder was a whole bunch of names and stuff – all separated into, you guessed it, two categories. Naughty and Nice.
Ouch. I’d stolen the actual naughty list from Santa Claus. Fairly sure I will never live this down with my kids and I probably have a permanent spot on it, but I ask you, how many of you could have resisted that temptation?
Related: The Drastic Drop Off In U.S. Oil Imports
Anyway, back to the binder. In addition to category, each name on the list had a really informative narrative which I guess is the big guy’s way of rationalizing why someone is on one side of the ledger or the other one and what gifts are associated with it either way, which was an unexpected wrinkle. As an aside, it was interesting to see so many subscribers on the list as well – don’t worry, all the naughties were changed to nice before I was done with the binder.
Anyway, I thought it would be interesting to share some of the names that were on the list – a few were surprising.
Donald Trump – Naughty.
This is the 23rd year in a row on the naughty list for young Donald. While gifting him the Presidency last year was part of our plan to get him onto the Nice list, it clearly hasn’t worked. This year Donald will get a modified tax plan, so he can at least say some of his agenda has been implemented and a Made in Canada Blackberry (now with Apps!) so that he can continue Tweeting his followers and a new TV for the White House that gets more than one channel. Finally, in a special dose of irony, Donald gets a great big lump of coal, which is good because Donald loves coal. Bigly.
Justin Trudeau – Naughty
There was a lot of debate on this one. Where does he fit? Great socks, fabulous selfies, a glowing profile in Rolling Stone magazine, recently selected as the second leading global influencer by Linked In (really? How?) but… a giant mess when it comes to policy implementation, no pipelines under construction, an energy sector wondering which way is up with carbon taxes and renewables, military procurement gone totally sideways, free trade negotiations with China, the rest of Asia and the U.S. completely off the rails and the most ineptly handled changes to how small business are taxed that has been seen in recent memory. Yeesh! This year Justin gets an economics textbook to help him figure out how the world works and a back brace to stiffen his spine for dealing with BC and the TransMountain Pipeline. And we are for sure taking away that smartphone we gave him last year. Enough with the preening.
Rachel Notley – Naughty and Nice
It’s been a tough year for Rachel. On the one hand, she has been relentless in her defence of the TransMountain Pipeline and at least part of her seems to want to see the energy sector in the province to succeed – which is nice. On the other hand, the carbon tax is going to double, provincial finances are a mess and this constant demonizing of the opposition so far in advance of the election (May 2019!) is a bit unseemly and, I feel, a bit out of character and naughty. So, Rachel gets two types of gifts this year. For good behaviour an “I love Alberta Oil” hard hat and a micro wind farm in her back yard. For bad behaviour a mini-coal plant to provide back-up power to her micro wind farm and a copy of Stephen Harper’s hockey book.
Jason Kenney – Naughty
I know a lot of people won’t be happy with this, but it was debated pretty intensely. As the now duly-elected to the legislature leader of the United Conservative Party, the Leader of the Opposition and the presumptive next Premier of Alberta, Jason has a lot of responsibility. He has accomplished a tremendous amount in a very short time to reposition the right side of Alberta’s political spectrum in a manner where defeating the NDP seems a very real possibility. If elected, I’m sure he will make a fine premier. But the path there has been littered with not so nice shenanigans and so much of what is going on seems so mean-spirited and tone-deaf. The gifts this year for Jason and his party will try to address that. First is a Tickle-Me Elmo to cheer everyone up and, maybe, a “platform” so the NDP can stop defining one for him. A little humility might help too. As to the angry Twitter-trolls Kenney army, each one is going to get a fidget spinner – if they’re playing with those, they cannot tweet. This can only help his campaign.
Bill Morneau – Naughty
This one is fairly obvious but needs to be said. Super rich guy introduces changes to how small businesses are taxed that will disproportionately punish the very middle class he pretends to support, all while sitting on an ethical time bomb regarding how he addressed his own tax-sheltered assets upon being elected to Parliament and assuming the most powerful cabinet seat in the country. Gift for Bill? A book – “everything I need to know I learned in kindergarten”. Specific themes he will be encouraged to study? “Play fair” and “Say you’re sorry when you hurt somebody”.
Mohammed Bin Salman – Nice
Ordinarily I don’t spend a lot of time giving gifts to people who don’t celebrate my holiday, but MBS (as he is popularly known) has had a pretty good year (well, aside from that whole Yemen thing) with some (by Saudi standards – it’s all relative right?) progressive moves for the population and the overt championing of the OPEC cuts which have helped stabilize the oil supply. To MBS, the gift is a successful IPO of Saudi Aramco, if only because that means the oil price is doing great!
Shale Oil – Naughty
Can we talk about this whole shale oil thing? I mean it’s getting out of hand. The amount of money – good after bad – that gets thrown into tight oil is ridiculous. And it keeps coming. Don’t get me wrong, there are some great tight oil prospects and the Permian is going to be rocking for years to come. But the alternate reality is that. Shale’s gift? A little capital discipline, some humility and a smidgeon of free cash flow – that stuff you get when you make money.
Oil and Gas Financiers – Naughty
Seriously, some of these people need to calm down. Find something else to invest in. I hear Bitcoin is doing OK.
Environmental Movement – Naughty
I think the environmental movement does a lot of valuable work in drawing attention to wanton degradation of the world, pollution, climate change, wildlife and the preservation of our encroached upon natural spaces. But when they engage in the spurious spreading of false narratives, allow themselves to be coopted by financial and commercial special interests and allow the movement to become bigger than the job there is a problem. For single-minded opposition to a pipeline shipping Canadian oil to the seeming exclusion of all else while accepting documented funding from American special interests, you get coal, lots of it. Plus, your heat is cut off.
The Media – Naughty
I don’t think we need to over-analyze this one, but here in the North we think the media needs to really just take a deep breath and get perspective. Not everything is “the most important thing ever” and sometimes we can live with more facts and less hype. The gift for media this year? Perspective, sober second thought and a reprieve from fake news accusations from the Tweeter in Chief (see above, he got a Blackberry so it’s sure to slow things down).
OPEC – Nice
OPEC did a fine job this year being respectful of the so-called “cuts” they made to oil production in their largely self-serving goal of raising prices by stopping shooting themselves in the foot via over-production. Because their actions have nice spill-over effects in the rest of the world (including North America) OPEC must be included on the nice list. An appropriate gift in return? Decades of high oil prices, 10 gold-plated Ferrari’s and a six-month reprieve from civil unrest and popular uprisings.
Venezuela – Naughty
Has anyone been more deserving of the naughty list this year than the leadership in Venezuela? A once great South American success story reduced to a debt defaulting failed state puppet of both Russia and China. These guys don’t even deserve a lump of coal because that has at least some intrinsic value they could benefit from. They deserve to be marched out of power. To the long-suffering people of Venezuela, unfortunately we can’t give anything more than hope. But we do send that.
Men in General – Naughty
Seriously. This is a bit of a side-track, but with all the news these days, it needs to be said. What is with men these days? Guys, it’s pretty simple – respect, no means no, just because you’re famous or powerful doesn’t mean the rules you were taught don’t apply to you and if you weren’t taught the rules why aren’t you self-educated? And what’s with all the exposure? No one wants to see that. Like seriously – no one. A great big lump of coal. A pictorial guidebook on how to interact with women. And if that doesn’t work, some saltpeter – that will solve the problem pretty darn quick.
Pipelines – Naughty
Generally, here in the North Pole we are OK with pipelines, after all there is a secret one that gathers, processes and delivers all the Christmas spirit we need to the North Pole. But, for the love of Rudolph, can we just stop with all the marginal spills that seem to inevitably pop up just before some new project is about to pass some regulatory milestone? All that does is provide a gift to the opposition (see how I did that?). So, this year, if you are a natural gas or oil pipeline, you will be receiving some free cathodic protection, a smart pig and the latest coating and sleeving technology to make sure that these nasty accidents stop – think of it as a pipeline diaper.
Pipeline Projects – Nice
Unlike the misbehaving brother, pipeline projects in general have been nice this year, especially if you measure niceness as a function of patience. I don’t know how you can file an application for a project, spend a billion dollars, get denied for political reasons, spend another billion, become a political football, get denigrated, demonized, misrepresented and otherwise vilified for years and still be at the table with a smile on your face, ready to spend your own capital to create jobs, opportunity and prosperity for the biggest set of ingrates I’ve ever seen. Your present this year? Simple. A shovel.
Vladimir Putin – Nice
OK, I get it, his Vladness is a despot, but has he really done anything this year to merit a spot on the naughty list? Not really. In fact, it’s arguable that his ability to control Russian oil production has been a crucial shot in the arm for the energy industry. Look, the naughty list is all about redemption – every year is a fresh start. So, for Christmas this year Vlad gets to be President of Russia for another 6 years, a couple more billion dollars in his non-existent secret bank account, a World Cup and an Olympic Ban. Plus, a lifetime supply of tear-away t-shirts and a horse so he can do the bare-chest/bare-back thing on a moment’s notice.
People in Calgary and the Energy Sector in Western Canada in general – Nice
It’s been a long three years. We can’t give you another boom, but I think it’s fair to day we can give you a bit of a recovery. Seriously, cautious optimism folks! Things are looking up!
Stormont Guy – NAUGHTY!!!!!
Can’t believe that guy took my binder! If I ever catch up to him there’s gonna be….
Umm, oops. Well there you have it, the naughty and nice list excerpt, now if you’ll just excuse me, I have a thing I need to return before, you know, umm now…
Related: Nigeria Reforms Oil Sector To Draw New Investment
NAUGHTY OR NICE?
Prices as at December 15, 2017 (December 8, 2017)
- The price of oil was flat during the week on as investors got all wound up about shale, mixed signals from the EIA and, quite frankly, a little bit of fatigue
- Storage posted big decrease
- Production was up marginally
- The rig count in the U.S. was up by a rounding error
- Natural gas cratered during the week – primarily on weather – c’mon gas, you’ll be on the naughty list for sure!
- WTI Crude: $57.32 ($57.34)
- Nymex Gas: $2.620 ($2.776)
- US/Canadian Dollar: $0.7765 ($ 0.7762)
Highlights
- As at December 8, 2017, US crude oil supplies were at 443.0 million barrels, a decrease of 5.1 million barrels from the previous week and 40.2 million barrels below last year.
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- The number of days oil supply in storage was 26.1 behind last year’s 29.5.
- Production was up for the week by 73,000 barrels a day at 9.780 million barrels per day. Production last year at the same time was 8.796 million barrels per day. The change in production this week came from an increase in Alaska deliveries and a rise in Lower 48 production.
- Imports rose from 7.202 million barrels a day to 7.363 compared to 7.360 million barrels per day last year.
- Exports from the US fell to 1.086 million barrels a day from 1.358 and 0.485 a year ago
- Canadian exports to the US were 3.302 million barrels a day, up from 2.870
- Refinery inputs were down during the week at 16.952 million barrels a day
- As at December 8, 2017, US natural gas in storage was 3.626 billion cubic feet (Bcf), which is 1% lower than the 5-year average and about 5% less than last year’s level, following an implied net withdrawal of 69 Bcf during the report week.
- Overall U.S. natural gas consumption was up 27% during the week, influenced by increases across all sectors
- Production for the week was flat. Imports from Canada were up 8% compared to the week before. Exports to Mexico were up 4%.
- LNG exports totalled 14.8 Bcf.
- As of December 5, the Canadian rig count was 235 – 167 Alberta, 20 BC, 43 Saskatchewan, 5 Manitoba. Rig count for the same period last year was about 185.
- U.S. Onshore Oil rig count at December 8 was at 747, 4 down from the week prior.
- Peak rig count was October 10, 2014 at 1,609
- Natural gas rigs drilling in the United States was up 3 at 183.
- Peak rig count before the downturn was November 11, 2014 at 356 (note the actual peak gas rig count was 1,606 on August 29, 2008)
- Offshore rig count was down 1 at 19
- Offshore rig count at January 1, 2015 was 55
- US split of Oil vs Gas rigs is 80%/20%, in Canada the split is 56%/44%
Drillbits
- The Alberta government announced the results of its renewable energy auction and the results were positive with 600 MW of mixed wind and solar bid at $37/MW. Implementation will be long and there are questions about the level of subsidies, but this is a good result
- Cenovus announced upcoming layoffs of 15% of its workforce as it pursues streamlining and cost cuts to manage its high leverage.
- The “Forties” pipeline in the North Sea was shut down for maintenance taking some 450k bpd off line for an undetermined amount of time. Good for prices!
- Trump Watch: Trump’s candidate for the Senate was defeated in Alabama. While the margin was small, the victory was crushing since no Democrat had been elected to the Senate in Alabama in 25 years.
By Stormont Energy
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