• About
    • Which Energy Mix is this?
  • Climate News Network Archive
  • Contact
Celebrating our 1,000th edition. The climate news you need
No Result
View All Result
The Energy Mix
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
No Result
View All Result
The Energy Mix
No Result
View All Result
  FEATURED
BREAKING: UN Nature Summit, the ‘Paris Conference for Biodiversity’, Moves to Montreal in December June 19, 2022
‘LET’S SUE BIG OIL’: Legal Team Launches Class Action Campaign for B.C. Municipalities June 17, 2022
‘It Could Have Been Any of Us’, Colleague Says, After Brazil Confirms Murders of Bruno Pereira, Dom Phillips June 17, 2022
Infrastructure Gap a ‘Life and Death’ Matter as Northern Canada Warms June 17, 2022
Ban Fossil Fuel Ads Like Tobacco Promos, Doctors Urge Ottawa June 10, 2022
Next
Prev
Home Jurisdictions Canada

Cenovus Urges Government-Imposed Production Cuts to Drive Up Tar Sands/Oil Sands Revenue

November 14, 2018
Reading time: 3 minutes

http://www.greenpeace.org/canada/en/campaigns/Energy/tarsands/

Greenpeace / Jiri Rezac

1
SHARES
 

One of the biggest fossils in the Canadian oilpatch, Cenovus Energy, is urging the Alberta government to impose temporary production cuts across the sector in a bid to “alleviate the wide differentials” between the world price for a barrel of oil and the deeply discounted amount that tar sands/oil sands producers can fetch.

“We think there is a strong case for the government to temporarily mandate reduced production for the industry,” Cenovus told CBC News in an email. “Our inability as a country to build critical new pipeline projects means we are now in a situation where we can’t get our growing oil production to market. This has resulted in a market failure.”

That situation, Cenovus added, “is the result of policy failures at the federal level that impacted pipeline projects, and in the short term it can only be fixed by the Government of Alberta through temporary mandatory industry-wide production cuts.” 

The company noted that Alberta has legal authority to mandate production cuts and actually took similar action in the 1980s, during Peter Lougheed’s term as provincial premier. “This is an extraordinary situation brought on by extraordinary circumstances,” the company said. “The government needs to take this immediate temporary action—which is completely within the law—to protect the interests of Albertans.”

Cenovus was one of a handful of fossils that cut production earlier this month and blamed the price differential solely on a lack of pipeline capacity to tidewater. At the time, Oil Change International Senior Campaigner Adam Scott acknowledged the pipeline issue as just one factor driving a discount that fossils consider ridiculously high.

“The oil price differential right now is absurd, and exactly why Premier Rachel Notley is fighting to build new pipelines and pushing Ottawa to step up and help fix the backlog in rail shipments,” Mike McKinnon, spokesperson for Alberta Energy Minister Margaret McCuaig-Boyd, told CBC.

Scott characterized the production cuts as “a small but concrete demonstration of the link between new transportation infrastructure like pipelines and climate pollution.” But he added that “tar sands oil has always been worth less than conventional crude as a result of its lower quality and the expense of shipping it to distant markets…the discount is now also being driven by refinery outages and an increasingly full export pipeline system.”

With that combination of factors bringing the discount on Western Canadian Select (WCS) crude to about US$50 per barrel compared to the North American benchmark price, West Texas Intermediate (WTI), “some tar sands producers are selling oil for less than $20 per barrel, losing large amounts of money at a time when global oil prices have been trending upwards,” Scott noted.

[Since then, the North American oil price has fallen as low as US$55.61 per barrel (as of today 6:47 AM ET)—presumably bringing Western Canadian Select down to a price of US$5.00 or a bit less. So today, at least, Cenovus has far bigger problems than pipeline capacity.—Ed.]

TriVest Wealth Counsel portfolio manager Martin Pelletier told CBC he would have preferred to see industry come up with its own solution to the pricing conundrum rather than turning to government for help, while conceding that “desperate times call for desperate measures”.

But Warren Mabee, director of the Queen’s Institute for Energy and Environmental Policy, questioned whether companies across the oilpatch would agree to the production cuts Cenovus was advocating—and at least one other oilpatch producer might agree. On a recent investors’ call, Canadian Natural Resources Limited (CNRL) President Tim McKay berated rival fossils for taking “windfall revenues” while interfering with efficient operation of the available pipeline space out of Alberta.



in Canada, Community Climate Finance, Energy / Carbon Pricing & Economics, Sub-National Governments, Tar Sands / Oil Sands

The latest climate news and analysis, direct to your inbox

Subscribe

Related Posts

Jason Woodhead/Flickr
Pipelines / Rail Transport

Trans Mountain Pipeline On Track to Lose $600 Million, Parliamentary Budget Officer Finds

June 24, 2022
312
Ben_Kerckx/Pixabay
Petrochemicals & Plastics

Plastics Cited as ‘Fossil Industry’s Plan B’ as Guilbeault Announces Partial Ban

June 24, 2022
193
TAFE SA TONSLEY/Flickr
International Agencies & Studies

Clean Energy Investment to Exceed $1.4T This Year, Still Falls Short of Climate Goals: IEA

June 24, 2022
93

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

Trending Stories

The federal government's Cliff Street Power Plant is at the centre of Ottawa's plans to reduce natural gas demand. Photo: PWGSC

EXCLUSIVE: Ontario Regulator Refuses New Pipeline, Tells Enbridge to Plan for Lower Gas Demand

May 30, 2022
5.1k
Jason Woodhead/Flickr

Trans Mountain Pipeline On Track to Lose $600 Million, Parliamentary Budget Officer Finds

June 24, 2022
312
Ben_Kerckx/Pixabay

Plastics Cited as ‘Fossil Industry’s Plan B’ as Guilbeault Announces Partial Ban

June 24, 2022
193
Bruce Reeve/Flickr

Opinion: Ontario’s New ‘Carbon Tax’ Looks Like the One Doug Ford Fought

June 7, 2022
1.6k
zephylwer0/pixabay

North American Steel, Aluminium Giants Lumber Toward Green Transition

June 24, 2022
164
Michael and Diane Weidner/Unsplash

Scientists, Politicians Debate Ethics of ‘Climate Tinkering’

June 7, 2022
72

Recent Posts

Erik Whalen/wikimedia commons

Yellowstone Park Reopens, But Flood Recovery Could Take Years, Cost Billions

June 24, 2022
73
TAFE SA TONSLEY/Flickr

Clean Energy Investment to Exceed $1.4T This Year, Still Falls Short of Climate Goals: IEA

June 24, 2022
93
Nemaska Lithium/Facebook

Critical Minerals, Hydrogen Lead Ottawa’s Low-Carbon Industry Strategy

June 24, 2022
79
Cjp24/Wikimedia Commons

UK Green Shift Won’t Repeat Job Destruction of Deindustrialization, Report Finds

June 24, 2022
36
/PxFul

Canadian Farmers Offer Ottawa a Roadmap to Cut Agriculture Emissions

June 24, 2022
92
Pavlofox/Pixabay

Millions Face Famine as Climate Disasters, Ukraine War Slash Food Supplies

June 24, 2022
48
Next Post
Bureau of Land Management California/Flickr

Utility Lines May Have Sparked Latest California Wildfires, as LA Fire Chief Points to Climate Conditions

The Energy Mix

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Navigate Site

  • About
  • Contact
  • Privacy Policy and Copyright
  • Cookie Policy

Follow Us

No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}