Alberta Premier Rachel Notley talks during the announcement of a mandatory cut in oil production to deal with a price crisis that costs around $ 80 million a day in Canada, in Edmonton on Sunday, December 2, 2018.
Installing oil production cuts in Alberta is not just a sign of provincial province. A proof of a country in trouble.
Notley's government does this because it's the only way to force prices and start closing the extreme price gap between Alberta oil and West Texas raw.
There is no other authority in this nation – no state and certainly not Trudeau government – ready to help lose real revenue of $ 80 million a day. The feds call it an "emergency," but do nothing.
The Notley government orders production breaks a total of 325,000 barrels a day, 8.7 per cent of the total production volume.
That will start in January 1 and is expected to continue until the end of 2019, erasing as a stuffed store starts to disappear.
This act by its nature is stimulating and intrusive. Unfortunately, there is a necessary exercise – ordering some of the world's most efficient oil producers not to produce oil.
The cuts punish industry players who themselves suffer from the fall of price. It's a wedge drive between small and large companies. The smallest companies will not be affected.
The cuts are like the ancient medical practice of leeching. If enough blood is removed, the patient may recover.
But such is the danger almost everyone agrees that these cuts are necessary. Given that reality, the scheme seems reasonable and well considered.
If it works, the government expects to close the price gap to around $ 4 per cent "compared to when it would otherwise have been."
That seems to be a small effect, given that the real world gap has run as high as $ 40. But even a $ 4 per cent win would recover $ 1.1 billion in government revenue over a year.
Over time, other factors such as the purchase of rail cars and the completion of Line 3 are expected to close the price gap further. Notley also focuses on diversification using new refineries.
But as most Albertans say, the long-term solution is to complete the expansion of the Trans Mountain, which Ottawa has managed to buy for $ 4.5 billion, and then radical delays through ineligible consultation.
Only after that pipeline opens for business – if it ever happens – successfully ensures production completely, and finally releases West Canada oil from the US market.
United States Conservative Party Jason Kenney supports the output cut firmly, while Notley blamed for much of the trouble that led to this day. It does not mention that some of the ministers and MLAs used to be anti-pipeline operators.
This measure is already compared to the production and shipping restrictions of Alberta in the 1980s, when Ontario and the federal government were trying to push the industry out of Alberta.
The prevention of oil and gas was very effective in that fight. When the former capital city, Don Getty, refused to sign gas export licenses, the headmaster, Bill Davis, was soon on the phone and asked for mercy.
But In those days, the battle was over who had the money.
Today it's even about it bod any money.
The Trudeau Liberals campaign to stop the gradual industry in Alberta has been extremely successful, much earlier than they expect, effectively preventing value and squeezing investment.
The nation's government has ensured that all victories go to no-oil forces. Even these production cuts will be similar to winning them.
The history of this crisis is clear.
First, the Conservatives of Harper approve the approval of North Gate, and then the Liberals have completely canceled the project.
Liberals kill effectively the Energy East project by changing the environmental rules during the approval process.
The federal court stopped by Trans Mountain on August 30 placing a specific fault on a fake federal consultation.
Now, B.C. benefit from a massive liquid natural gas terminal at the proposed Porth port, Kitimat.
Ottawa's preference is towards B.C. has been ill, especially as the Horgan government continues to strive to control all aspects of binum transport in the province.
As Alberta deals with a deep crisis in almost 40 years, one that is mainly caused by federal power, Ottawa is an obsession for the closure of one car plant in Ontario.
This is how the country works for Alberta these days. Not good at all.
Don Braid's column appears regularly in the Herald
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