10. MARKETS:
Price gap plagues Canadian oil market
Published:
Alberta is short on cash lately due to the huge price gap between Canadian and U.S. crude oil prices.
"On the U.S. Gulf Coast, Mexican Mayan heavy crude, which is very similar to our bitumen [blend], is getting $94 a barrel today while ours is $48 a barrel," said Alberta's Energy Minister Ken Hughes. "We are giving a $30 billion benefit to the American economy because of this. Is that in our national interest?"
Hughes is concerned about the Bakken Shale oil play in North Dakota, which may be driving prices down for both American and Canadian companies. He worries oil may follow the same path as natural gas in North America -- too-cheap prices and a supply glut.
"Two years ago, no one would have said Bakken would double production, but it did," he said.
Alberta could develop pipelines to access better markets on the Pacific or elsewhere, although such lines have seen political and environmental push-back in British Columbia and the United States.
Hughes said Alberta must "engage British Columbians in a thoughtful conversation about what is in everybody's collective interest" (Dave Cooper, Edmonton Journal, Jan. 16). -- BS