Canadian Politics

[ironphoenix]

In (faint?) hopes of getting a bit of discussion...

What's up with the Canadian non-Conservatives? Is there any hope of the parties putting their differences aside enough to work together in any significant way, or will they spend next election taking potshots at and stealing votes from each other? If they were to work together, how could they do so?

Comments

[dagibbs.livejournal.com]

The tar sands are, actually, probably uneconomical to run right now, with the current price of oil. So, that opens discussion back up a lot.

[ironphoenix.livejournal.com]

Not what I've heard from other sources... I think the person I heard from put the break-even point somewhere under $20/barrel.

[dagibbs.livejournal.com]

Hm... yeah, looks complicated.

The lowest estimate I've seen is $25/barrel, ranging up to $100/barrel. With current oil prices just over $50/barrel, that suggests that new development will likely be put on hold, but that work to increase efficiency at current extraction sites/processes may be done, and even that some existing extraction processes may be also put on hold. Of course, how much of the cost-of-extraction is amortized capital costs will affect those decisions... and may affect those figures, too. If the $25/barrel is operating costs -- but the higher estimates are operating costs + amortized capital costs, it suggests continued operations, since it isn't worth shutting down, but also not worth spending on new development.

[ironphoenix.livejournal.com]

It is complicated, yes. They may be stockpiling in anticipation of a future price rise. Also, there is a significant cost to shutting down, and there may be political repercussions.

[dagibbs.livejournal.com]

But, I do think that it is no longer the case that there is a "strong market for the Alberta tar goo". It is, at $50/barrel, a marginal or weak market.