Silliness from Paul Martin re: Oil
OK... yesterday I'm driving around town and I hear on the news that our illustrious Prime Minister is "ordering" an increase in oil production to help the American's out after the disaster on the Gulf Coast.
Most of the public will hear this and assume that the government has some sort of control over oil production and that we had significant excess capacity being held back due to the actions of government.
Except that it's a lie. The Government of Canada has no capability whatsoever to control rates of oil production. At US$68/bbl, oil production was already at maximum because who would be stupid enough to hold back profits???
Yes, the government may ask oil companies to hold off on planned maintenance that would curtail production, but I suspect that at current prices shutdowns are being avoided anyway...
Today I read that we are going to increase production by 91,000 bbl/day. I suspect that is production Alberta is going to add through the lifting of conservation regulations. And it's a drop in the bucket compared to the total national production of 2,400,000 bbl/day.
Oh - and for you folks who think that the conservation regulations might be about conserving resources (ie. environmental-type conservation) - you'd be wrong. Conservation in this context means conserving the integrity of the resource to maximum recovery over the life of the reservoir.
Most of the public will hear this and assume that the government has some sort of control over oil production and that we had significant excess capacity being held back due to the actions of government.
Except that it's a lie. The Government of Canada has no capability whatsoever to control rates of oil production. At US$68/bbl, oil production was already at maximum because who would be stupid enough to hold back profits???
Yes, the government may ask oil companies to hold off on planned maintenance that would curtail production, but I suspect that at current prices shutdowns are being avoided anyway...
Today I read that we are going to increase production by 91,000 bbl/day. I suspect that is production Alberta is going to add through the lifting of conservation regulations. And it's a drop in the bucket compared to the total national production of 2,400,000 bbl/day.
Oh - and for you folks who think that the conservation regulations might be about conserving resources (ie. environmental-type conservation) - you'd be wrong. Conservation in this context means conserving the integrity of the resource to maximum recovery over the life of the reservoir.
posted by Technical Bard | 10:31
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