Shows how stupid it is to base your economy on oil

[riders2010]

Should have dropped the domestic price long ago and promoted ourselves as a place to develop other industries using cheap oil. But since oil has been so high we were all giddy about those high prices and just those high paying jobs in oil when we should have focused on having an advantage business wise with oil as a cheap ingredient.
With Iran and Saudis pumping out more and more this could be a very long run. Shouldn't have had our country run by oil puppets.

[ColevilleH2S]

Replace the word oil, with wheat, then report back.

[Ache4Acres]

We can't out compete the rest of the world on the production of any commodity. We are burdened with regulation and environment constraints that the rest of the world doesn't have to bother with.

In the past it was the quality of Canadian grains that commanded value in the world trade, now the world is at record inventories of nearly all commodites due to overproduction and quality is An afterthought.

Low interest rates are the cause of low oil prices.

[riders2010]

Have to open up the mind and admit what he situation is. The reason people can't pay for our products off the farm is one the middlemen are screwing us and two because everyone paying so much for oil can't afford to pay for food. When oil
Prices went up a few cents every item went up, has it home down now? No and why not?

[cottonpicken]

It's the whole value chain. The welder needs a wage to pay for everything under him like insurance on a vehicle and the person selling the insurance needs a wage and so on and so on its not the proper term but I haven't found another it's cost push inflation-the bad kind

[hobbyfrmr]

My Dad had a grade 8 education. He was never judgemental about anyone, or anything really. It was either good or bad. The end.
His only insight about business, work, and farming was, "its not what you earn, its what you keep, and how you manage it".
I have seen commodity (grain/cattle hogs) prices absurdly low, long enough and often enough to induce lifestyle changes and/ abandonments. The fabric of western Canadian farms and towns have become threadbare as society has chosen to embrace all things oil, right down to the ****ing totally, totally useless plastic trinkets in a Happy Meal(TM). That small town fundamental raising is what made us who we are. That shit is "old school". There is going to be some discomfort.
Life is not supposed to be comfortable. Thats why we are all fat!
I am getting some general questions from laid off oilfield workers about doing some tractor work in the spring. i am conflicted. Keep the old guy who is on pension and provides exceptional value, or take on a younger person who needs the money but doesnt understand discomfort and lower wages?

[fjlip]

BNN stated Norway cost for producing a barrel of oil is $6 USD, Alberta $30USD. Currently heavy crude selling for $8 USD.

Industry going down the drain. Pus Iran will dump more oil soon. Never listen to anyone saying we are running out of any commodity!

The pain here ...http://www.victoriabuzz.com/2016/01/one-mans-letter-to-trudeau-strikes-a-chord-with-struggling-oilpatch-workers/

[furrowtickler]

Would be interesting to see how OH&S has influenced that $30 cost - my guess at least $10

[tmyrfield]

Pretty simplistic to think that anything can be done in
canada without oil. Economy is tough with expensive oil but horrible with cheap oil and expensive energy, somehow we have come to that. Historians will study this in future years. If you are under the belief that it would be good for the oil industry be nationalized and turned into a public utility when oil was $100 it should be a nobrainer at $30. Cheap energy for all. Venezuela tried that...not working so good. Show me 3 instances where government ran the economy and everyone prospered, just kidding show me one!

[FarmRanger]

Shows how stupid it is to base your economy on the whims of government.

[URL=http://victimsofcommunism.org/quiz/donate-pdf.php]This is what total government control leads to...[/URL]

Oil is just one of many things that can bring wealth to an economy, it just happens to be a valuable energy resource at this time in world history. Wanting to shut down the development of any area of the economy reeks of central planning. Taxing the crap out of oil prduction isn't much better. Throughout history, central planner's picking of winners has only ever led to misery to a nation's citizens.

[TOM4CWB]

Riders2010,

What virus has infected you... to write 'Shows how stupid it is to base your economy on oil'

We in western Canada [actually in all of Canada] have been blessed with enough energy to provide for our people... and many in the USA as well.

The people of Canada... are the Gov... not the reverse. Saying that we should have feathered your nest... with cheap energy.... has been tried globally... multiple times... including here with the Trudeau Energy debacle in the 70-80's. This made eastern Canada depend on Gov steroids... instead of productive output. Economic QE and money supply are important... but the lack of productive output of a nations economy... weather caused by war... or a lazy state of mind... drags down the civilization... into caos.

Your comment... is the latter... we must work for our daily needs... especially in a cold northern climate where added energy keeps us alive. Hence the infrastructure... to provide for the need to stay fed and warm.

Computers have not given us an edge in economic prosperity in the last 10-15 years... just the ability to see what is going on anywhere... any time.

Nothing has actually changed. Good will and a humble sharing attitude is required to provide for the needs of our community whether local or global.

Cheers, I hope you get over your virus soon!

[riders2010]

Need to get over the brain wash and look out for the good of everyone not just those that have oil wells on their land or drive a truck for 500 a day which drives up the cost for everything for all the rest of us.

When oil was high there was Zero benefit to my farm. The rest of the world doesn't want our oil and quite frankly doesn't need it. But because we re supplying this cheap oil to other countries those countries are going to develop industries based on this cheap oil. Yet here we re paying way too high price for a resource right here. So remember hat trade deal???? Well guess who is getting cheaper oil our own oil cheaper and therefore going to outcompete all industries here in canada
How stupid!!!!

[Hamloc]

Why did we end up with oil as our biggest export? Because of all the things Canada produced it was the most in demand. Ontario based it's wealth on manufacturing the high wages, high dollar, high taxes, and the raising price of electricity cut that almost in half.

We export 3 million barrels a day and we import 600000 all into eastern Canada, interestingly 300000 of that comes from North and South Dakota now. Everybody wants more value added processing of oil in Canada, we obviously have the oil to do it. The problem as I see it is that at present it appears we are already a net exporter of refined fuels, is there the market for more? And if the enviros won't let us build a pipeline will they let us build a refinery? The greatest number of jobs in the oil industry is in exploration and building production facilities and pipelines.

Riders still haven't answered your question. I am not sure anyone can. Look at our governments, every time we have a downturn their solution is to build infrastructure and go in debt to do it. Let's be realistic by the time someone in government realizes a good business opportunity exists the opportunity has already passed, beauacracy moves to slow. And creating false economies with subsidies doesn't work either, look at green electricity in Ontario.


All I know is that with the constant growth and cost of government we need strong economic growth to pay for it and it is not happening. With an upcoming lowering of interest rates by the BOC I guess the Libs are hoping a lower dollar will stimulate foreign investment or more exports. No real answer, have a good day :-)

[TOM4CWB]

How stupid!!!!

Your own words Riders.

Domestic western CDN price is already 66 percent of world price... because only expensive transport is available... so $30us$ is $20...

[chuckChuck]

Beyond petroleum


Growth is shifting from the oil-producing west back to the traditional economic heartland. Political power could shift with it
Jan 31st 2015 | TORONTO | From the print edition

“THE oil industry isn’t remotely the entire Canadian economy,” declared the prime minister, Stephen Harper, on January 22nd. That is not a startling statement. Production of crude oil represents just 3% of Canada’s GDP. The surprise is that Mr Harper felt he has to state the obvious. In an economy dominated by services, Mr Harper and his Conservative Party have cast themselves as champions of the oil industry, which is centred in Alberta, his adopted home province.

He pulled Canada out of the Kyoto protocol on climate change and promoted the Keystone XL pipeline that would carry Alberta bitumen to refineries in the southern United States. He has likened the development of Alberta’s tar sands to building the Great Wall of China. Canada, the fifth-largest producer of crude oil (which makes up 14% of exports), is an “emerging energy superpower”, Mr Harper has proclaimed.
In this section
But the drop in oil prices—by more than half since last June—has checked that boastfulness. It has shifted the engines of economic growth from western Canada to the central provinces of Ontario and Quebec, which concentrate on services and manufacturing. The weakness in the energy sector prompted a surprise cut in interest rates by the Bank of Canada on January 21st. The federal government, which usually delivers its budget by the end of March, has put that off until April at the earliest. Volatile energy markets make it impossible to predict revenue accurately, says Joe Oliver, the finance minister. These wobbles are awkward for Mr Harper, who hopes to win this October’s general election by campaigning on the Conservatives’ record of economic competence.

Canada is hardly Venezuela, whose oil-dependent economy is expected to contract by 7% this year. The central bank predicts growth of 2.1% this year and 2.4% in 2016. That is modest, but it is no worse than the 2.1% average of the past two years. The unemployment rate, at 6.7%, is relatively low. While the energy slump will boost some parts of the country, it will depress others. Oil-rich Alberta, which has grown faster than the rest of Canada for the past 20 years, will enter recession this year, predicts one think-tank, the Conference Board of Canada.

Hence the central bank’s decision to reduce the target for its key interest rate by a quarter of a percentage point from 1%, its level since September 2010. This puzzled the financial markets. Core inflation is 2.2%, well within the bank’s target range. Lower rates could encourage consumers, who are already carrying record levels of debt, to take on even more. Stephen Poloz, the central bank’s governor, acknowledged the risk but argued that the recession in the oil industry made it worth taking. He fears that the loss of jobs, investment and export income from the energy sector will eventually spread to other parts of the economy. The rate cut, he said, was like taking out an insurance policy.

Ontario and Quebec, which account for more than half of Canada’s GDP, see less reason to worry. They are home to large manufacturing industries, such as cars and aerospace, which have long complained that the oil-fuelled rise in the Canadian dollar was damaging their competitiveness. The currency has fallen by 15% against the American dollar since June, giving exports a boost, and may weaken further because of lower interest rates. Strong growth in the United States, Canada’s biggest trading partner, bodes well for manufacturers. Ontario is set to replace Alberta this year as the growth leader.

This shift in economic bragging rights has given a lift to the Liberal Party, which governs some of the perkier provinces and holds a narrow lead over the Conservatives in national opinion polls. Kathleen Wynne, Ontario’s Liberal premier, has cheekily offered to help devise a national energy strategy, tramping into Alberta’s bailiwick. The finance minister of Liberal-led Quebec credits low oil prices with helping him balance the province’s budget (while Alberta faces a C$7 billion, or $5.6 billion, revenue drop).

This jauntiness, less than a year away from the next general election, is unlikely to please the petroleum-spattered prime minister. To counter it, Mr Harper will remind voters incessantly during the forthcoming campaign that Canada emerged faster than other members of the G7 club of big economies from the 2008 financial crisis, with its banking system intact.

There are two threats to his campaign plan. The first is that, as the central bank fears, the petro-plunge will pull down growth overall. The second is that the economy will continue to do relatively well but that the Conservatives will not get credit for it. The government’s contortions over the budget make that second prospect more likely. Mr Oliver promised a balanced budget as recently as January 26th, despite the expected drop in revenues from the energy industry. The government had pledged a raft of tax reductions once that was achieved, but imprudently enacted them late last year. The delay in presenting the budget adds to the impression of fiscal disarray. Justin Trudeau, the Liberals’ leader and a former teacher, mocked Mr Oliver’s excuse for delaying the budget as the political equivalent of “The dog ate my homework”.

Mr Harper is a skilled political scrapper; he may well find a way to turn the shift away from oil-led growth to his advantage. His proclamation that the economy is about more than energy is a beginning. Now he must persuade Canadians that is true of the Conservatives, too.