Anybody living in British Columbia, and possibly the rest of the world, is aware that oil prices have fallen from historic highs over the last couple years reaching over $140 per barrel to under $60 a barrel currently.
So what? Now I can fill my van for $70 instead of $98 so everything is great right? Money is tight so I really could use a break on gas. But, what about that global climate change thing and 2014 being the hottest year on record that humanity has ever measured, again? Leaving that aside, what does this mean for Canada economically? This current federal government has been stripping environmental oversights, Arctic research and protected areas paving the way for exploration, extraction and pipelines in the name of prosperity, financial security and progress. Something from my grade 7 social studies bugs me though when they spoke about Canada’s tar sands saying that the price of oil would have to be over $100 a barrel (working entirely from memory here) in order to make the tar Sands a reasonable development prospect? Well, it happened, and the tar sands development exploded over the last 10 years but can it continue with Saudi Arabia and OPEC dumping cheap oil on the market? If you believe the Russian media it is a Western/Saudi Arabian ploy to break the power of the Russian gas fields to Europe while other media say OPEC is trying to break United States shale oil producers, and can.
The Bank of Canada surprised everybody today by announcing a lowering of the key interest rate from 1% to 0.75% saying that “already, the drop in oil prices has led to layoffs in the oil patch, postponed energy projects and signs of a housing bust in Alberta”. Indeed, one sharp friend of mine observed on Facebook, “They got to prop up Calgary house prices”, While another observed “we look desperate cutting further while the US is raising rates”. The Bank of Canada is forecasting no increase until the end of 2016, two years from now.
Can the low oil prices stop the tar sands development? Will it slow down the Fracking and shale oil producers? Will it contribute to accelerated global climate change? None of this is really known yet but what is for sure is the oil industry has to respond, somehow. Believe it or not, they have made great strides in changing public opinion through careful and deliberate advertising campaign over the years and Cenovus media relations advisor Brett Harris explains. “We have to engage with people, including our critics, and what we have to do is to educate them about what’s really going on out there”. And educate us they have with at least one “And educate us they have with “the latest effort in an ongoing, two-year campaign to improve the public image of Canada’s oil industry—particularly the lucrative but much-maligned bitumen extraction business in the oil sands of northern Alberta”.