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Canada’s Senate Standing Committee on Transportation has voted to defeat the controversial Oil Tanker Moratorium Act that opponents of the bill view as damaging to Canada’s oil industry, according to a statement by the Canadian Association of Petroleum Producers (CAPP) released on Thursday.
The senate committee is recommending that the federal government discard the bill entirely.
CAPP’s statement reads in part, “This almost exclusively targets Canada’s energy sector and would block the possibility of export of Canadian petroleum production to international markets.”
Canada’s oil industry has been hit particularly hard since the 2014 oil price crash by and large due to the insufficient export capacity, recently receiving yet another blow when production cuts were enforced to shore up the expanding discount of WCS relative to WTI.
While the recent uptick in oil prices has softened the blow to Canada’s oil industry, the lack of export capacity has stifled growth as fewer industry players are willing to sink money into adding oil production capacity when it may have difficulty transporting it. According to CAPP, the total capital investment in Canada’s oil and natural gas sector is forecast to drop to $37 billion in 2019 compared to $81 billion in 2014.
The Oil Tanker Moratorium Act sought to ban tankers carrying more than 12,500 metric tons of oil from stopping or unloading along B.C.’s northern coast. Alberta has been a strong detractor of the bill that would stifle its oil industry by further restricting oil transportation in the country. The bill did not extend to LNG tankers. And while the bill looked to limit Canadian oil sailing through northern B.C., it would have allowed foreign tankers traveling through the area—a sticking point that has enraged Alberta.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.