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US releases 50 million barrels of oil from strategic reserves as gas prices soar

It comes the same day as a legal challenge from Calgary-based TC Energy seeking $15 billion in damages after Biden cancelled the Keystone XL pipeline expansion project on his first day in office in January.

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Faced with escalating gas prices because they are short of oil, US President Joe Biden has authorized the release of 50 million barrels of oil from the countries Strategic Petroleum Reserve.

It comes the same day as a legal challenge from Calgary-based TC Energy seeking $15 billion in damages after Biden cancelled the Keystone XL pipeline expansion project on his first day in office in January.

The move was done in concert with China, India, Japan, South Korea and the UK, which will also tap into their own strategic reserves.

“Today’s announcement reflects the president’s commitment to do everything in his power to bring down costs for the American people and continue our strong economic recovery,” the White House said in a statement.

The US is facing the same inflation battle as Canada, with inflation at a 30-year high in the States.

Biden last week asked the Federal Trade Commission to investigate whether oil companies are illegally increasing prices.

But The Hill reported Wyoming Republican Sen. John Barrasso, the ranking member of the Senate Energy and Natural Resources Committee, said on Tuesday Biden’s own policies were to blame for needing to tap into the strategic reserve.

“We are experiencing higher prices because the administration and Democrats in Congress are waging a war on American energy,” Barrasso said in a statement, arguing Tuesday’s announcement would not fix the problem alone.

“Begging OPEC and Russia to increase production and now using the Strategic Petroleum Reserve are desperate attempts to address a Biden-caused disaster. They’re not substitutes for American energy production.”

“At the same time, the Administration remains committed to the president’s ambitious clean energy goals, as reflected in the historic Bipartisan Infrastructure Law signed last week and the House-passed Build Back Better Act that together represent the largest investment in combating climate change in American history and is a critical step towards reaching a net-zero emissions economy by 2050 and reducing our dependence on foreign fossil fuels.”

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4 Comments

4 Comments

  1. Declan Carroll

    November 23, 2021 at 12:59 pm

    This foolish action by the Biden regime shows how infantile their understanding of the most basic economic principles and the oil business in general. Releasing this oil reserve is a temporary solution to the problem. It does not address the root cause of the problem which is lack of production and capital expenditure to find new deposits. Even after deposits are found there is an 18 month lag between discovery and production. Until these issues are addressed there will be no relief at the pumps. If your an investor this is a buy on dip opportunity because as soon as these reserves are used up the price is going to start spiking again. Only the most incompetent, corrupt and stupid people in our society are in charge. It is a satanic inversion of our meritocracy.

  2. Left Coast

    November 23, 2021 at 10:02 am

    Imagine if Canada had built the 4 pipelines that were approved back in 2014 . . . Canada would be cashing in getting the global price instead of a $20 per barrel discount.
    Govts. at all levels would be rolling in Royalty Cash . . .

    Instead we are loading oil on Railcars, in the USA Buffet’s San Fran/Burlington Railway is making him billions. There have been several Oil Train derailments in the USA over the last decade, but hardly a mention in the media. In Canada it’s only a matter of time till an oil train drops into the Fraser Canyon . . .

    Investigate oil companies for price fixing? When the largest profiteer off a Gallon of Gas is the friggin Govt. and they do nothing to earn it.

  3. Dennis

    November 23, 2021 at 9:58 am

    Go Brandon!

  4. Westcanguy

    November 23, 2021 at 9:53 am

    In the past, every time the Americans have done this with their reserves, oil prices went up even higher. The province of Alberta thanks President Brandon

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Energy

IEA recognizes Canadian oil industry as the environmental world leader

In 2018, oil and gas companies also invested $3.6 billion in environmental protection initiatives, recognized by the IEA as by far the largest environmental protection spend of any industry in the country.  

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Canada is doing great but should take measures to continue its reputation as a preferred oil and gas supplier on the global market, says the International Energy Agency.

IEA Executive Director Fatih Birol is a big advocate for net zero targets, but still recognizes the reliance on oil and gas that will persist into the future.

He said he prefers oil supply to come from “good partners” like Canada, he told a press conference.

“Canada has been a cornerstone of global energy markets, a reliable partner for years,” said Birol.

“We will still need oil and gas for years to come… I prefer oil is produced by countries … like Canada (that) want to reduce the emissions of oil and gas.” 

The same IEA report included recommendations for Canada to incentivise moves away from oil production, yet the director still recognizes Canada’s contribution to the global market.

World oil consumption returned to pre-pandemic levels and natural gas demand surpassed levels pre-COVID-19 last year, according to IEA data.

Yet Canada only supplies 6% of the current world market.

Consumption of both oil and gas is expected to continue rising even as more renewable energy sources come online. 

A Russian-caused natural gas crisis in Europe has many looking to Canada as a great alternative.

“The world needs reliable partners,” said Birol, of the European situation.  

Canada is the fourth-largest producer of oil and natural gas in the world and home to the third-largest oil reserves.

“This creates employment for Canadians and secure and reliable oil and gas for both domestic and global markets,” the IEA said.  

The IEA recommends that remaining competitive in global oil and gas markets requires further emission reductions, to ensure the sector remains a major driver of the Canadian economy beyond 2050.

Emission reduction has already been steadily implemented in Canada, analysts praised the oil and gas industry’s “strong track record” of reducing emissions intensity.

The oilsands by have decreased emissions by 32% since 1990 and further reductions of up to 27% are expected by 2030. 

Canadian oil and gas companies spend an average of $1 billion per year on clean energy technology, in addition to billions in environmental protection.  

In 2018, oil and gas companies also invested $3.6 billion in environmental protection initiatives, recognized by the IEA as the largest environmental protection spend of any industry in the country.  

“Canadian oil and natural gas producers are leveraging their improving environmental, social and governance performance and Canada’s stringent environmental regulations to build a global competitive advantage.”

Ewa Sudyk is a reporter with the Western Standard
esudyk@westernstandardonline.com

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Energy

Oil price jump prompts additional $6 billion in investments

Oilsand investments alone are expected to increase to $11.6 billion in 2022, a 33% jump.

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The largest oil and gas industry group in Canada says it’s expecting $32.8 billion in oil patch spending this year, a 22% jump from last year.

Canadian Association of Petroleum Producers (CAPP) says the increased investment will help capitalize on the surge in crude oil prices, the growth will amount to an additional $6 billion this year.

Oilsand investments alone are expected to increase to $11.6 billion in 2022, a 33% jump.

As of Friday, the price of West Texas intermediate crude oil today is $87.05.

Tim McMillan, president of the CAPP, said the seven-year high price of oil doesn’t mean bad news, as companies are recording record cash flows and investment remains well below what it was in the boom years.

For example, in 2014 the Canadian industry captured 10% of total global upstream natural gas and oil investment, and the oil patch received record investment at $81 billion.

“Today we’re at $32 billion, and we’re only capturing about 6% of global investment,” said McMillan.

“We’ve lost ground to other oil and gas producers, which I think is problematic for a lot of reasons … and it leaves billions of dollars of investment that is going somewhere else, and not to Canada.”

Alberta is expected to be the leader among provinces in overall oil and gas capital spending, with upstream investment expected to increase 24% to $24.5 billion in 2022.

Over 80% of the industry’s new capital spending this year will be focused in Alberta, representing an additional $4.8 billion of investment into the province compared with 2021, according to CAPP.

Investment increase is also excepted in British Colombia, Saskatchewan and offshore production.

This means major recovery for the industry, as 2020 was harsh with global demand crashing and oil prices collapsing.

Global investment is on the down turn, as potential investors are discouraged by Canada’s history of cancelled pipeline projects, regulatory hurdles and negative government policy signals.

McMillan explained many now see Canada as a “difficult place to invest.”

“Rapid demand growth for oil and natural gas globally and strengthening commodity prices mean there is opportunity for Canada’s industry for decades to come,” said McMillan.

“To ensure a true recovery takes hold in Canada, government at all levels along with the industry must work together to create an environment where the natural gas and oil industry can thrive and attract investment back to Canada.”

Ewa Sudyk is a reporter with the Western Standard
esudyk@westernstandardonline.com

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Energy

Energy report tells feds to incentivize moves away from oil

The IEA calls for the Canadian government to creating transparent changes to the oil and gas industry but incentivizing technology changes and creating emergency oil stocks.

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A new report says Canada should further invest in clean in electricity and that our country is already among the cleanest energy production in the world.

The International Energy Analysis (IEA) came out with a report outlining recommendations for Canada’s energy future, including balanced decarbonization across the country.

That means higher coordination between federal, provincial and territorial levels to set clear targets for energy efficiency in buildings, transport and industry sectors.

The IEA calls for the Canadian government to create transparent changes to the oil and gas industry but incentivizing technology changes and creating emergency oil stocks.

Canada’s electricity system is one of the cleanest globally according to the IEA report, as 80% of supply is from non-emitting sources such as hydropower and nuclear power.

“Canada’s wealth of clean electricity and its innovative spirit can help drive a secure and affordable transformation of its energy system and help realize its ambitious goals,” said IEA Executive Director Fatih Birol.

“Equally important, Canada’s efforts to reduce emissions — of both carbon dioxide and methane — from its oil and gas production can help ensure its continued place as a reliable supplier of energy to the world.”

The report follows Environmental Minister Steven Guildbeault’s announcement for Canada to be ready to eliminate fossil fuels in 18 months, with zero-emission cars and stricter methane regulations.

Conservative leader Erin O’Toole expressed concern on Twitter with the zero emission plans, calling attention to the need to invest in the oil sector rather than turn away from it.

Energy makes up over 10% of Canada’s GDP, being a major source of capital investment, export revenue and jobs, making the net-zero goals both a challenge and opportunity.

Since the last IEA review in 2015, Canada has made international and domestic commitments dedicated to transforming the energy sector, including a target to cut greenhouse gas emissions by 40‑45% by 2030.

Canada is also a part of the United Nations zero-emission 2050 target that involves over 130 countries worldwide.

Ewa Sudyk is a reporter with the Western Standard.
esudyk@westernstandardonline.com

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