The year is only a few weeks old. With more than 90% of 2019 yet to happen, it is not too late to predict what will occur. The following article contains only good news. After the disastrous end to 2018 from the Trans Mountain pipeline decision to the Canadian oil price collapse, no need to rehash what went wrong, or what could go wrong.
This year is my 40th of writing about the Canadian oilpatch. The only conclusion I have reached after four decades of being a non-impartial analyst and reporter of the affairs of our industry during multiple boom and bust cycles is oil people are better at extrapolating than forecasting. We assume that whatever happened yesterday will happen tomorrow and thereafter. If things are good they’ll always be good. If they are bad, they’ll remain awful.
Years ago, allegations emerged that the oil industry was heavily subsidized by governments, part of an opinion shaping strategy by activists convinced fossil fuels were accelerating climate change. As subsidy estimates grew larger, few questions were asked. Governments had to stop contributing to this planetary threat.
Except it wasn’t true.
While indeed some countries insulate consumers from the full cost of energy for political reasons, the definition of what constituted a subsidy was expanded beyond previous comprehension. In Canada the allegations of subsidies are complete rubbish. The oilpatch has a huge hill to climb to return sanity to the discussion.
It wasn’t an apology nor admission of wrongdoing. But it was certainly an about-face for Steve Williams, the CEO of Suncor Energy Inc. On May 3, Williams was very explicit about why Suncor would not be investing in any new projects in Canada.
“Big investment in the resource industry….is starting to move away from Canada. And that is partly because of taxation, partly to do with royalties, partly to do with the uncertainty – the length of time it takes to get through these regulatory hurdles – and the general belief in the investment community that Canada is not a great place to spend money”.