It’s time for Alberta to curtail its oil production

Notley needs to mandate a cut, W. Brett Wilson writes

Anyone who has lived in Calgary for more than a decade knows we’re a resilient bunch. We’ve held on during the highs and lows — some caused by the market, others too often by our own governments. Through it all, we have never asked for anything more than the right to develop our own natural resources in the only way we know how — ethically and responsibly.

Today one of Canada’s biggest economic drivers is being pummeled. Every level of government has sat on its hands while we wait for the critical infrastructure needed to get our abundant resources to markets.

Too many planned pipeline projects have either been denied, abandoned, or put on the regulatory back burner. If the people who built the transcontinental railway in the late 1800s had operated with the same level of artifice and inaction as modern day politicians have shown on the pipeline file, the tracks would have stopped well short of Thunder Bay.

This is a dire situation. The worst part is we have done it to ourselves. Many have sat back and let it happen. Others have watched this fumbling and cheered. It’s a little like having a brother punch you in the face.

The impact of this political stalemate is farreaching and touches every province and territory. Many of our producers have been operating under licences that were approved years ago, on the legitimate expectation that new pipelines would also come online in a timely manner. Without these pipelines, we cannot get our oil to foreign or even domestic markets. We have accumulated an oversupply. And a dramatic oil price collapse.

Oil from Alberta is now priced lower than any other oil in the world. And not just by a little — by a lot. Oilsands crude is priced just over $10 a barrel — about what you would pay for beer at a Flames game. When you include the costs to produce and market that oil, even the most efficient producers cannot generate economic returns. Compare that to the North American benchmark West Texas Intermediate oil price of well over $50. This ridiculous differential is a made-in-Canada issue.

This enormous price differential isn’t only hurting the energy industry. It’s hurting those who benefit from it — which is all Canadians. If these price conditions are allowed to persist, we will collectively lose $8 billion each quarter. Those are dollars that help pay for schools and health care and support thousands of community agencies. And when you factor in industry spending cuts, lower tax contributions, job losses — and let’s not forget transfer payments, poof! — there go billions more.

Industry leaders are now stepping in to address this problem. Some are voluntarily moving toward a significant drop in production. But the effort won’t work unless it’s widespread. Companies can’t collaboratively fix prices. So, what shall we do?

First, Premier Rachel Notley needs to immediately mandate a temporary production cut. Former premier Peter Lougheed did it in the 1980s to address a similar crisis orchestrated by another demonic Prime Minister Trudeau.

At the same time, the federal government needs to unequivocally confirm its active support of Canada’s energy sector. We are looking to you, Mr. Trudeau Jr., to defend Alberta’s interests in Confederation by enabling us to develop our communal resources. And we need you to do what’s necessary to repair Canada’s weakened international reputation as a solid place to do business.

Finally, it’s time for all Canadians to pull together and vigorously champion Canada’s energy sector. Our oil is the cleanest, most ethically produced oil in the world. And we have a choice. We can continue to accept oil from regressive regimes — oil that flows daily into our ports — or we can choose to actively support Canada’s local, environmentally and socially responsible producers. Change will come when we demand it. It’s time to close our ports to foreign oil and instead be the most sought-after supplier of oil to every corner of this country and the world.

This giant price differential is a self-inflicted wound on the heart (and economic engine) of this great country. We need leadership. It’s time for the pain to stop.

Change will come when we demand it.