If you haven’t been reading the business pages, you might not know that Canadian ingenuity has developed a stunning new business model: producing expensive oil and giving it away cheap.

The gap between Canadian and U.S. oil is nudging US$50 a barrel. Alberta gets around US$26 a barrel, while West Texas Intermediate is in the neighbourhood of US$72. The discount is so juicy that China has started switching away from Venezuela towards bargain-basement Canada. That tells you something — even claptrap, broken down, corruption-riddled Venezuela can’t undersell Canada’s sad-sack inability to peddle its oil.

If the brainy entrepreneurs who figured out how to extract a valuable commodity from Alberta’s challenging oilsands had known the result would be treated like a loss-leader at Walmart, they might have directed their creativity elsewhere. Most countries recognize that natural limits on resource supplies dictate that they be husbanded carefully, for maximum advantage. Not Canada: we might as well hand out free oil at roadside stands with every 50-cent glass of lemonade. The next time Chrystia Freeland takes to lecturing Russia or Iran on their failings, the obvious comeback is easy: “And how much do you get for YOUR oil, Miss Bossypants?”

Read full article here.

Kelly McParland – National Post – October 15, 2018.


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