This week, the question of whether or not and, if so, how, the Government of Alberta should encourage upgrading and/or refining of bitumen in the province is back on the front page. Much of this coverage is due to backlash over the Government’s decision to not proceed with the Alberta First Nations Energy Center (AFNEC) under the Bitumen Royalty in Kind (BRIK) program. There are as many myths as ever bouncing around this, and so I’ve spent the last little while trying to untangle them for myself. Here are some thoughts and, as always, your comments and clarifications are welcome.
Month: March 2012
When you fill up your tank, thank our “petrodollar”
Last night, I wrote a long post on exchange rates, and discussed the impact of the Canadian dollar appreciation on our purchasing power. As usual, the best way to demonstrate that increase in purchasing power is with a graphic, so here you go: What you’re looking at is the relative changes in gas prices, in local … Read more
On exchange rates and the importance of “net” exports
Last week, BC economist Robyn Allan weighed-in on the McGuity-Redford fiasco with a post of the effect of oil extraction on the Canadian dollar, and the knock-on effects of a high dollar on Canadian industry, including the oil and gas sector. Ms. Allan makes some important points, some which surprised me, but she also makes some points which are simply not accurate. Let me start with the good, and move on to the bad.