The Canadian economy is on the edge of a major contraction that will devastate those socialist provinces so dependent on a vibrant export market for Canadian oil
Flash Point: The Significant Impact of U.S. Oil Production
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US Global Investors have given us a concise overview of US oil production up to t2020. In an article titled The Significant Impact of U.S. Oil Production, CEO Frank Holmes considers trends in production and demand that show by 2020, the US may require only about 3 MMBbls/day imports.
He shows rates of growth, shale production and discusses legislative obstacles.
From this chart it is interesting to see that the North Sea and Mexico are in decline, along with dome of the old fields of the Persian Gulf. Most of OPEC is in decline or barely increasing. Iraq is the one country in the Mid East whose production is increasing well but this may simply be recovery to prewar levels. Iran has large reserves but the geopolitical situation is causing a decline in their production. We have commented before that the geopolitical implication of these production growth trends are large and not far off.
We’re not sure that the impact on Canada has sunk in or even reached Canadian consciousness. By 2021, the US will not need Canadian oil. Thus the Keystone Pipeline will be an economic disaster. Canada needs to move oil east to Canadian refineries and west to the coast via the proposed Northern Gateway pipeline to service Pacific markets. Failure to act means Eastern refineries will be fed by shale oil from US Appalachia, particularly when in the next decade, the US is a net oil exporter. Western production will be shut in or sold below market value into the US if a West Coast pipeline is not developed. The Canadian economy is on the edge of a major contraction that will devastate those socialist provinces so dependent on a vibrant export market for Canadian oil (British Columbia, Ontario and Quebec).
Obama and the tree-hugging fraternity are doing Canada a favour by scuttling the project or at least delaying it until somebody can do some rational projections.