OTTAWA – The price of a barrel of oil is in free-fall and, while some COVID-19 related issues may be involved, the overwhelming reason is the global glut of cheaper oil caused by the Saudi-Russia price war.
Green Party caucus trade critic Paul Manly (MP, Nanaimo-Ladysmith) points out that Saudi Arabia has the ability to keep prices at levels so low that the barrel itself is worth more than the oil sands bitumen it contains.
“The Saudi strategy is to put U.S. Bakken shale producers out of business,” said Manly. “Like oil from Alberta’s oil sands, Bakken shale oil is very polluting and expensive to produce. As long as the Saudis keep the taps open, both will be squeezed out of the market. Saudi Arabia can afford to keep prices so low for so long it makes no sense to continue oil sands production.”
“It is critical that policy makers differentiate between supporting businesses that are suffering in this pandemic, and bailing out businesses that are going through market shifts that industry observers have long predicted.
Mr. Manly points to Western Canada Select (WCS), a mix of bitumen and light crude that is currently selling for less than $5 a barrel. “Light crude is worth far more than bitumen so WCS is close to giving bitumen away at this point. West Texas Intermediate is light crude and is selling at $25 per barrel. There should be no bailing out bitumen’s sinking boat. It is expensive to produce so its breakeven point is closer to $35 to $45 a barrel and as high as $60 per barrel for some mines. We need to acknowledge this and invest in the future, which is in renewable energy.”
The Green Party’s 2019 Platform outlines a clear and comprehensive strategy to transition towards a zero-carbon economy through the creation of new industries and well-paid jobs. Mission Possible is a just and fair transition plan that demonstrates the path to a stable and prosperous green economy.
“We support helping the people of Alberta, the workers and the businesses we will need in the recovery period and beyond,” said Green parliamentary leader Elizabeth May (MP, Saanich-Gulf Islands). “The whole services sector for oil and gas has transferable skills in a post-carbon economy. We should provide funding for the remediation of the toxic legacy of the oil sands and the clean up of the 100,000 orphaned and abandoned wells in the province. We should support a cross-Canada economic stimulus in retrofitting every building to become carbon negative- producing more energy than it uses. Greens want to support transition jobs for fossil fuel workers, in economic activity that has a chance of building for the future.”
The Green Party underscores the importance of substantial investments in renewable energy in Alberta, including converting orphaned wells, where viable, to generate geothermal electricity. Now is the time to begin the transition.
"We should be investing now to not only put money in people's pockets today but to also give them hope for the future,” said Interim Leader Jo-Ann Roberts. “Support is also needed for Alberta’s farmers, the forestry sector, small businesses and the tourism sector, to ensure that the transition to a new high-tech economy is in place when COVID-19 recedes. Investing in workers and green jobs now means energy workers in every province will thrive in the future in a healthy Canada."
“To avoid a global climate emergency, which is a far greater threat to humanity than COVID-19, we need to pivot away from fossil fuels, begin a significant Just Transition Strategy for fossil fuel workers and ready the next economic stimulus package to Mission Possible and the Green New Deal,” concluded Ms. May.
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