Quote:
Originally Posted by Teriyaki
What is in it for BC to let it run through our land and putting our coastline at risk?
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The world economy is based on oil. When the demand for oil is high, the price of oil goes up. In turn, our economy does well since we're a huge producer of oil for export. Oil is what makes the world go round, whether it's production, transport, or packaging, everything is based on oil.
Our tar sands oil costs on average about $45/barrel to produce. With world oil prices hovering around $65/barrel this leaves us with a net profit of about $20/barrel. Not bad considering that oil sands production has generally been increasing since 2006, peaking at 2.42 million barrels per day in 2016. 2,420,000 x $20 = $48,400,000 profit per day.
The problem is that we can't get this oil to the customers. The cost of shipping via train and truck cuts deeply into the bottom line. West Texas intermediate, which is your typical oil derived from shale and fracking cost about $25/barrel to produce. Combine the lower cost of shipping, because they have a huge network of pipelines makes them much more glamorous to the global market. The thing is, the US produces their own fuel and is busy trying to meet their own demands, let alone what the world needs.
This is where Canada comes in. Our oil sands are second only to Saudi Arabia in volume. A pipeline would be a huge boom for the Canadian energy sector because it allows us to get that oil to the global market. Right now the oil is landlocked.
Everything is based on oil. Once we understand that, it becomes obvious that a pipeline is needed. What I would like to see is major profit sharing to help take the burden off the consumer. I'm tired of paying $1.54/L