Although I still have my office in Ontario I live in Alberta where you come to understand the feeling of western alienation.
Alberta’s oil sand resource is the second largest proven reserve of oil in the world. It has become a political football and everyone seems intent on kicking the hell out of them, and it doesn’t seem to matter whether their facts are correct or not.
From the politicians in Europe to environmental groups in both Canada and the United States, everyone wants to make a headline using the expansion of the oil sands as an example of increased global warming. The current hot potato in the US is the proposed Keystone pipeline expansion. The project is a $13 billion construction effort that will create hundreds of thousands of jobs, and will take additional crude to the USA for refining.
And President Obama is walking that political tightrope. A week ago the oil patch was encouraged when the President was quoted as saying that to meet the self-sufficient goals of the United States; “oil from our friends in Canada would play a significant role”.
Then the New York Times came out with a scathing attack on the oil sands stating that the pipeline expansion should not be approved. The New York Times and the Washington Post are two huge players in the media world in the USA and politicians in the states read these papers very carefully. The Times is against the project; the Post is for it.
Was Obama reading? Well, I guess so. He is, first and foremost, a politician. In a change of direction yesterday he was quoted as saying the “tar sands”, as he called them, (the environmentalists love that word) may be a “destructive” resource.
With all due respect, the President is talking out of both sides of his mouth. If the United States wants to reduce its reliance on oil from the volatile Middle East countries, it has absolutely no choice but to approve the Keystone pipeline and support environmentally sustainable expansion of the oil sands.
At home, Liberal leader Michael Ignatieff announced his cap-and-trade program, a direct cost and a hidden tax on the oil sands and the consumer. Meanwhile the Alberta government announced a new draft conservation plan that would see some leases returned to the crown. The oil patch has not had a good week.
But here is the week-ending reality. Our dollar is at $1.04 US, the highest level in three years; the cost of Brent Crude is at $123 per barrel, the highest in over two years; and the price of gold remains over $1,400 an ounce. The truth is that much is this is driven by the world’s ongoing demand for oil.
Alberta, we will do fine, notwithstanding the political messages out there.
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