How $40 oil would impact Canada’s provinces
What does Canada’s economy look like with oil prices at $40 a barrel? Certainly it won’t be the energy superpower envisioned by Prime Minister Stephen Harper.
If $40 a barrel still seems a ways off, consider that the benchmark price for oil sands crude is already trading in that price range. What’s more, if production from high cost sources isn’t withdrawn from an oversupplied market, oil prices may soon be trading even lower.
The first thing Canadians should recognize about the new world order for oil prices is that—contrary to what we’re being told by our federal government—the economy is no longer in dire need of any new pipelines. For that matter, it can live without the new rail terminals being built to move oil as well. Yesterday’s transportation bottlenecks aren’t relevant in today’s marketplace.
At current prices there won’t be any massive expansion of oil sands production because those projects, which would produce some of the world’s most expensive crude, no longer make economic sense.
…click on the above link to read the rest of the article…
