Canada is a commodity cornucopia for the U.S. and the rest the world
A simple question at times requires a complicated answer. One way I learned to get around this problem was in Mrs. MacDonald’s Grade 6 math class; and was she ever smart.
Enter the pie chart!
When I was asked a question, I learned to break down my answers into reasons and allot these into slices of the total answers into pie pieces. Because almost everyone likes pie, everyone is happy with the answers, and they go away amazed at your brilliance.
As Mrs. MacDonald always use to say, “See, simple as pie!” Told you she was smart.
When I am asked, what will happen to gasoline and diesel prices over the next six months to a year, I turn to my Rolodex of factors that normally affect end prices of transportation fuels.
The answer can be influenced by any or all of the following:
• U.S. inventories of crude
• Gasoline and distillates
• Demand numbers for all three
• Time of year, weather (cold winter, hot summer, hurricanes)
• Refinery or pipeline problems
• The strength or lack thereof of the Loonie, or USD
• And finally, politics domestic, foreign or both
Today, if I were to throw a pie chart against the wall to see what would stick it would be a pie without any charts because politics would be the only ingredient in the current pricing recipe, and it’s leaving a sour taste in my mouth.
Let’s start with north of the 49th parallel. Life would be easy to explain and accept were it not for the likes of some of the dysfunctional provincial premiers trying to drive the political magical mystery tour bus while chanting, “Mirror, mirror on the wall.”
Message to B.C. Premier, Christy Clark and new Alberta Premier, Dave Hancock: Canada is a commodity cornucopia for the U.S. and the rest the world. Our only crude oil customer may not need us right now, and we’re going to need a larger customer base real soon.
Stop playing, “My ego is bigger than your ego,” or both your provincial economies, as well as those of the rest of the country, will join both of you on the unemployment line.
Approve the Northern Gateway pipeline and the Edmonton to Burnaby Kinder Morgan expansion.
As for the eastern provincial leaders – move the western crude by approving the Enbridge and TransCanada proposals. Get the crude to the eastern refineries and export the excess to Europe or India. Exporting lower cost WCS will lower the European Brent price, which will lower eastern refinery costs and eventually pump prices, while increasing the value of WCS for the western provinces so everyone on the bus will be happy.
The political influence on diesel and gasoline prices is Cancerian when we look at our NAFTA friends in the U.S. in the person of President Barack Obama. What is his decision making formula? How about – any excuse is a good excuse.
The U.S. is swimming in crude, but pump prices remain high and will increase in the U.S. and Canada because the crude has nowhere to go because, as is the case in Canada, politics has blocked delivery of crude to the market – which is you and me, and the rest of the electorate.
It’s a virtual ego dam.
If the hesitation on both sides of the border is to ensure re-election, my advice would be: Give us all a break! Decline the penalty! Take up another sport because we don’t like the way you’re playing the game.
~ The Grouch
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