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Saudi ARAMCO initiates oil price war that will hit Alberta hard

If every dollar lost on oil prices equates to $200-$355 million in revenue losses for the province, it equates to a potential $4 -$7 billion-dollar loss of revenue for 2020.

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Saudi ARAMCO dropped its per barrel prices by as much as $8 on the weekend, initiating a price war with Russia that will put Alberta in a precarious situation.

Alberta Premier Jason Kenney admitted last week the reduction in trade due to the global coronavirus outbreak would affect Budget 2020, released only a few short weeks ago. That was before Saudi Arabia announced on Saturday it was starting an oil price war.

The politics have little to do with Alberta – or Canada.

On Friday, OPEC was awaiting word from Russia – a non-member ally – on whether they would agree to continue voluntary production curtailment. The current agreement is set to end March 31.

Russia declined.

The Financial Times reported that the coronavirus issues were not on the forefront of Russia’s decision.

… Moscow also eyed an opportunity to damage rival US shale producers and the wider American economy, said three people familiar with the discussions in Vienna. 

“Russia has had enough of the shale guys living off Opec-plus,” said one person familiar with negotiations, referring to the cartel and allied non-members.

OPEC+ has voluntarily reduced production levels since the U.S. shale boom in 2017 in an attempt to maintain oil prices. The U.S is neither a member nor ally of OPEC.

With Russia willing to wage a production war with North American shale, and Saudi ARAMCO reducing prices to wage a price war with Russia, Canadian heavy oil producers will be caught in the middle.

Saudi Aramco made the announcement Saturday that they would reduce prices to Asia, the U.S., and Europe in the range of $6 to $8 per barrel.

Alberta – still smarting from the last downturn in 2014 – recently saw the government pass a optimistic budget that banked on a return to oil prices at $58, even though the average WTI price had been just under $57 for the past year.

Even at $58/bbd, the Alberta government was still projecting an $8 billion dollar deficit in 2020.

“OPEC’s decision to drive down prices has very serious implications for the Alberta and Canadian economies,” Kenney posted on social media Saturday, even though it was Saudi ARAMCO’s decision – not OPEC as a whole.

“Our energy producers are now more efficient, innovative and resilient than ever – but we will all need to work together to get through what may be very challenging times ahead.”

If every dollar lost on oil prices equates to $200-$355 million in revenue losses for the province, and the /bbd price is already almost $20 less than the budget forecast, that signals a potential $4 -$7 billion-dollar loss of revenue in 2020.

In a budget briefing to the Calgary Chamber of Commerce on March 2, Finance Minister Travis Toews promised if revenue projections proved to be inadequate, “more spending restraint” would follow.

Alberta is also still reeling from Teck’s decision to abandon approval for the Frontier mine and news that MEG Energy requested the Alberta Energy Regulator delay approval on its May River project for another three years.

There are around 20 other Alberta oil and gas projects that have been granted approval but have no plans to move forward at this time.

West Texas Intermediate (WTI) closed at $41.28 on Friday and dropped $9 as markets opened in Asia Monday local time. WTI is now at $32, its lowest since 2015.

Deirdre Mitchell-MacLean is a Senior Reporter for Western Standard
dmaclean@westernstandardonline.com
@Mitchell_AB on Twitter

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Horgan leads NDP to majority government in B.C.

Preliminary results from Saturday’s election show the NDP turned its 41-seat minority into a 55-seat majority.

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John Horgan’s NDSP party now rules B.C. with a majority government.

Preliminary results from Saturday’s election show the NDP turned its 41-seat minority into a 55-seat majority.

More than 500,000 mail in ballots still have to be counted. Final results won’t be known for several weeks.

“B.C. has voted, and a majority has been called, but there are many many hundreds of thousands of votes yet to be counted,” Horgan said at a victory rally in Vancouver.

“While we wait for that final count to happen, I want to assure people that I’m going to keep the focus right where it belongs, on helping people get through this pandemic and making sure that they have the services that they need.”

“All British Columbians can sleep safely knowing that we’re going to do everything we can to keep them safe, healthy and secure.”

The Liberals won 29 seats and the Green party, three.

Dave Naylor is the News Editor of the Western Standard
dnaylor@westernstandardonline.com
TWITTER: Twitter.com/nobby7694

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Kenney says Albertans may get ‘multi-issues’ referendum

The government has already committed to hold a referendum on equalization payments next October at the same time as municipal elections

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Alberta Premier Jason Kenney says the UCP could have multiple referendum questions for voters next year.

The government has already committed to hold a referendum on equalization payments next October at the same time as municipal elections.

Speaking virtually to the UCP’s AGM on Saturday, Kenney said the party is also looking at adding other issues.

“I believe on the big consequential issues it’s right to go to the public,” kenney told 1,400 delegates who had signed up for the virtual convention.

He said a decision to get rid of Daylight Savings Time, a Senate election, constitutionally changing property rights and a provincial pension plan are some of the things Albertans may have a chance to vote on.

Kenney spent most of his speech hilighting UCP policies they have brought in, including scrapping the carbon tax and repealing Bill 6.

“We are one-third through our mandate and we have implemented two-thirds of our 261 election promises,” said Kenney.

Dave Naylor is the News Editor of the Western Standard
dnaylor@westernstandardonline.com
TWITTER: Twitter.com/nobby7694

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RCMP able to save ice-bound calf in northern B.C.

The on-duty police officer responded to the area and was able to locate the calf clearly in distress

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For a B.C. Mountie, it was a very moo-ving rescue.

On Tuesday morning, RCMP were told about a young calf that had fallen through ice, into a slough along Farrell Creek Road, north east of Hudson’s Hope, in northeastern B.C.

The on-duty police officer responded to the area and was able to locate the calf clearly in distress, said the RCMP in a release.

“It was obvious that the calf had been doing its best to stay afloat and was getting tired, however could not move forward or backwards due to the surrounding ice,” said the release.

“Thinking quickly, and using any means available to the officer, and some locals that had stopped to assist, the ice around the calf was broken. The very tired calf was able to be lassoed and brought to the edge and out of the slough to rest.”

When we suit up and start our shifts each day, we really never have any idea what our day on the front line will entail,” said Cpl. Rob Gardner.

The front line officer, who responded to the scene, did a great job thinking quickly and outside the box to work with some locals to break the ice and free the small calf. We’d like to thank all those who stopped to assist with this rescue.

The wet calf, who seemed un-injured during the ordeal.

Rescued calf. Courtesy RCMP

Dave Naylor is the News Editor of the Western Standard
dnaylor@westernstandardonline.com
TWITTER: Twitter.com/nobby7694

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