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Oil companies that backed Notley’s carbon taxes learning hard lesson

8 2 361
30.11.2018

A crisis in Alberta’s oilpatch has two industry heavyweights — Suncor Energy Inc. and Cenovus Energy Inc. — slugging it out over how best to fix Canada’s oil industry. Funny thing, just a few years ago they were in the same corner boasting how they’d just solved all their future problems together. What went wrong?

Due to Canada’s woefully inadequate pipeline capacity, the gap between the price fetched by Alberta and the world benchmark price has recently been hitting record highs, growing to nearly US$50 a barrel. Alberta Premier Rachel Notley claims the situation is costing the country $80-million per day.

Notley recently appointed a three-person panel to come up with short-term solutions to this long-term problem. Notable among them is a plan floated by Cenovus CEO Alex Pourbaix for a government-mandated province-wide production cut. Citing a “full-blown economic crisis,” Cenovus wants Notley to impose oil quotas on producers to eliminate the supply glut and give prices a boost.

Suncor doesn’t agree. “Our position is that government intervention in the market sends the wrong signal,” a spokesperson told the Financial Post

On the immediate question of which firm is right about how to handle the price gap, the evidence favours Suncor. Cenovus has already........

© Financial Post