• 4 minutes Ten Years of Plunging Solar Prices
  • 7 minutes Hydrogen Capable Natural Gas Turbines
  • 10 minutes World looks on in horror as Trump flails over pandemic despite claims US leads way
  • 13 minutes Large gas belt discovered in China
  • 3 hours Chicago Threatens To Condemn - Possibly Demolish - Churches Defying Lockdown
  • 10 mins Let’s Try This....
  • 59 mins COVID 19 May Be Less Deadly Than Flu Study Finds
  • 1 hour Would bashing China solve all the problems of the United States
  • 10 hours New Aussie "big batteries"
  • 5 hours 60 mph electric mopeds
  • 14 hours The CDC confirms remarkably low coronavirus death rate. Where is the media?
  • 6 hours China to Impose Dictatorship on Hong Kong
  • 2 mins Pompeo's Hong Kong
  • 11 hours Monetary and Fiscal Policies in Times of Large Debt:
  • 2 days Nothing can shake AMLO’s fossil-fuel fixation
  • 10 hours Backlash Against Chinese
  • 1 day Iran's first oil tanker has arrived near Venezuela

Canada’s Output Cuts Are A Positive Thing

First, they said the production curtailments will remain in place until some 35 million barrels of excessive inventories are cleared. Then they said producers only need to wait until Enbridge’s Line 3 is commissioned at the end of 2019, creating a new conduit for ever-increasing Canadian production. This was all in December 2018 when then-Alberta premier Rachel Notley introduced mandatory output constraints for all major producers. In September 2019, the new Alberta Premier Jason Kenney and his government declare that the production quotas will be extended for another year, on the back of Alberta’s lifeline, the Line 3 pipeline, being delayed by legal proceedings in the United States. Is it really worth it?

It is important to remember that the Alberta dilemma – choosing between a market-driven yet very depreciation-prone pricing regime or boosting prices by mandating curtailments that punish the big and spare the small – is not a struggle between politicians and business. Both major political parties present in Alberta supported the production quotas because they brought in additional money for the regional budget. But companies were in it, too. Cenovus Energy, Canada’s fourth-largest producer, was one of the most vocal proponents of such production cuts, whilst the second and third-largest producers in Suncor and Imperial Oil opposed the move and still express reservations to its prolongation.

Cognizant of the reputational risks inherent…




Oilprice - The No. 1 Source for Oil & Energy News