What if your parents bought 1 more property 25 years ago?

[RedlineBrett]

[quote user=RealtorDave]He wants a meltdown because that's how you make money. I don't believe he's saying there's going to be a meltdown in Canada.


Go look at post 14. His assertions are clear to me, and there are suggestions of it elsewhere on this forum...

 

[Thomas Beyer]

[quote user=RedlineBrett][quote user=RealtorDave]He wants a meltdown because that's how you make money. I don't believe he's saying there's going to be a meltdown in Canada.


Go look at post 14. His assertions are clear to me, and there are suggestions of it elsewhere on this forum...


Everyone loves to buy at a discount, be it stocks or real estate.



The question remains: why would there be one, say in Alberta with now lower unemployment, strong in-migration, new projects coming on-stream daily, rising prices, lower vacancies and higher rents after a 3 to 4 year flatness. The time to buy was last year and the year before to get a discount. The Alberta discount is gone in 2012. Wait for a correction in 2015 or 2016 perhaps when the market has gone up 30% between now and then .. and it retracts 5-10% again in 2015/2016.



Of course buying real estate in the US or buying stocks makes sense if you know what you are doing.

 

[kir]

Is there a possibility of pipelines not being built and Alberta can't ship oil west or south ??

Is there a possibility that that the Bakken oil reserves would meet US energy needs? I see reports online, but need to dig deeper. Assuming try, not saying it is, that would leave Alberta in a bad position in year 2020-30??

Kir.

 

[Thomas Beyer]

[quote user=kir]Is there a possibility of pipelines not being built and Alberta can't ship oil west or south ??

Is there a possibility that that the Bakken oil reserves would meet US energy needs? I see reports online, but need to dig deeper. Assuming try, not saying it is, that would leave Alberta in a bad position in year 2020-30??
Perhaps we all use flying pigs too by 2020 ?



What about a possibility of a pipeline going EAST to Quebec, NB or Ontario ..



See Danielle Smith's, possibly the next Alberta Premier, article of today: http://business.financialpost.com/2012/03/09/keep-pipeline-all-canadian-wildrose-leader



Or going north to Alaska.



Alberta might have 4 pipelines getting oil out: west (Enbridge Gateway Pipeline), east (re-using much existing pipelines being upgraded or reveresed), north, or south (Keystone XL) .. and at least two by 2020.



Oil & other resources (coal, gas, uranium, potash, copper, nickel, water, ..) is the main reason why CANADA overall is doing so well, through GST payments and factories across Canada benefitting.



The world runs on oil .. and will for the next 40 to 60 years until a better alternative emerges, at far higher price points like Sugar Cane based ethanol (used in Brazil) or hydrogen fuel cells or solar generated electricity, but at far higher prices than today. But then Europe is functioning on $2.50/liter gasoline today .. and would work on $5 too .. five fold Canads's prices. Oil is also used in many products so even if oil was not used at all for energy it would still be useful for fertilizer, clothing, shelter, computers, ..



Without oil the world as we know it would not exist.



Oil has very high energy density, ideal for transportation. Only nuclear carries more energy per cubic foot of space. Gasoline has 10-20 times the energy density of current electric cars battery technology. Thus e-cars are OK for cities but not for long distance yet. Also, if even 10% of cars today were electric the grid coudl not handle it.



I think we will see natural gas as a new energy alternative including transportation and for export, and Alberta has that too in spades btw. Natural gas is triple to quadrule the price in Europe and Asia today, thus much room for exporting LNG too (liquid natural gas, i.e. highly compressed/cooled, with several terminals being built right now on BC coast for export purposes)

 

[bizaro86]

[quote user=kir]Is there a possibility of pipelines not being built and Alberta can't ship oil west or south ??

Is there a possibility that that the Bakken oil reserves would meet US energy needs? I see reports online, but need to dig deeper. Assuming try, not saying it is, that would leave Alberta in a bad position in year 2020-30??

Kir.





It is possible, but not likely that none of the proposed pipelines will be built. Also, the Enbridge mainline has significant excess capacity currently. More important is additional transportation out of the US Midcontinent to the coast, to reduce the very large differential between Brent (the world price) and WTI (a benchmark set in Oklahoma that controls Canadian crude prices.) So even if none of the pipelines are built from Canada, new capacity from Cushing, OK to the gulf coast will help Alberta.



But the Bakken is another question. It's not quite phrased correctly though. What you want to ask is, "Could technological innovation and new play types increase US/world oil supply dramatically?" The answer is emphatically yes. That could happen. New technology and new play types have dramatically increased supply of natural gas in North America, and that huge increase in supply has lowered the price. There is absolutely no reason why that couldn't happen with oil as well! Oil is easier to transport, so the change would have to be bigger to have the same effect on price, but it's certainly possible, and it's much more likely than pigs flying. New technologies are coming at a fast and furious pace that may not be obvious to someone not in the industry. Some things to try googling if you're interested: multi-stage fracing, slick water fracs, and the Eagle Ford Shale, pre-salt drilling, 4D seismic.



The current high prices are also stimulating huge capital investments around the world, which will result in new supplies.



If supply comes on fast enough to reduce the price, that would absolutely be negative for Alberta. That doesn't require some replacement for oil, it only requires oil supply to grow faster than oil demand.



Regards,



Michael

 

[bizaro86]

I should also add with respect to pipelines from Cushing to the coast, that the difference is colossal. It would be huge for Alberta, and the numbers involved are large enough that it would impact Canada as a whole. Canada produces ~3 million barrels of oil per day, most of which is priced based on WTI benchmarks, with additions and subtractions to the price based on the quality and location of the oil. Some isn't (ie offshore Newfoundland) because it's already at a coastal market. The oil going through the Trans Mountain pipeline is also priced off of Brent (ie World price) benchmarks.



Why does that matter? Currently, the differential between Brent oil prices and WTI oil prices is very high. You can follow it here. http://ycharts.com/indicators/brent_wti_spread Right now it's about $20.



So some simple math, say 2.5 million barrels per day are subject to WTI pricing, and if the pipeline situation changes they'd get brent pricing.



2.5 million barrels per day * $20/barrel *365 days/year = 18.25 Billion



Since the current GDP of Canada is ~1.5 Trillion, we're looking at >1% growth for the entire country of Canada. And all we need are a few pipelines from Oklahoma to Texas, or Alberta to BC! Looked at another way, the oil companies will pay ~6 billion in extra federal tax if that happens, or ~20% of the budget deficit.

 

[Thomas Beyer]

[quote user=bizaro86]Since the current GDP of Canada is ~1.5 Trillion, we're looking at >1% growth for the entire country of Canada. And all we need are a few pipelines from Oklahoma to Texas, or Alberta to BC! Looked at another way, the oil companies will pay ~6 billion in extra federal tax if that happens, or ~20% of the budget deficit.


Indeed !!



As stated the Alberta oil benefits THE WHOLE NATION.



This should be grade 10 teaching material. Is it ?



Or is it still Al Gore's Global Warming myth video ?