The bitumen bubble is: “the discounted price Alberta was getting for its oilsands crude compared with the North American benchmark West Texas Intermediate.”
“Redford’s so-called bitumen bubble is a familiar phenomenon more commonly known as the price differential. Alberta’s sludgy crude requires extra processing. So it sells at a discount to the benchmark West Texas Intermediate price. The situation is aggravated by swelling U.S. production and plugged pipelines. As a result, the differential has widened to $30-$40 a barrel, more than twice the province’s expectation.”
Ways to burst the bitumen bubble:
• Build pipelines
o Enbridge – northern gateway (525,000 bpd)
• Provide access to new markets on the pacific rim.
o Keystone XL
• Get access to more refineries in the states
• Refine the shit in Canada – it can’t be discounted if we make the final product ourselves.
• Reduce Taxes to make up for the discount
o Like the carbon tax (I am sure schoen thinks that this silly carbon tax is just outrageous)
• Find new technology to make the heavy bitumen easier to refine
Another route to take: instead of trying to eliminate the bubble, the government could have done what Norway did (make an oil savings fund when economic times are good worth about 685 billion dollars). Essentially, save for a rainy day (with the metaphorical rainy day being times when the us refineries are saturated in their own oil).
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