Steve MacLellan

Even Alberta’s oldest, largest tar sands/oil sands producers can’t cover operational costs at prices U.S. refiners will currently pay for bitumen-based crude, so they are cutting capital spending, shrivelling dividend payments to shareholders, and laying off workers. Storage tanks are now brimming with unwanted bitumen product. Contracts to ship Alberta bitumen to refineries by rail have all but vanished.

Worse, the first of many Saudi supertankers carrying two million barrels of dirt cheap oil is now bound for a U.S. Gulf of Mexico refinery that Canada now partially supplies. It is the largest on the continent. It is owned by the Saudi state oil company. The Saudis have also hired a fleet of oil tankers to store at sea their growing stocks of surplus oil.

These are brutal realities, particularly for Alberta, because it has dug itself a very deep hole by gambling that its tar sands/oil sands would be a chief source of capital investment, jobs, and royalty payments for decades to come. What Premier Jason Kenney proudly proclaimed as the “economic engine of Canada” (and un-claimed as the biggest source of national greenhouse gas emissions) now has clanking pistons and a crankshaft about to seize.