For Your Information

Two Pay-the-Rich Schemes

The Alberta government announced on February 19 that it has signed contracts with Canadian National and Canadian Pacific to lease 4,400 rail cars to take bitumen to the Gulf Coast, with a capacity of 120,000 barrels per day. The Alberta government announcement states it will buy crude oil from Alberta producers and then sell different grades to various destinations, including the U.S. Gulf Coast.

The government says the program will result in $5.9 billion in revenue over the same period, with a profit of $2.2 billion accruing to the provincial government. It did not elaborate how this will be possible after paying whatever price the oligarchs demand for the oil to be shipped and the subsequent price of transportation, and receiving in return whatever the oligarchs at the other end want to pay for the oil. Some analysts say the aim will not generate revenue but is to guarantee space for transportation for smaller producers.

The following day, Alberta Premier Rachel Notley announced $80 million in royalty credits to privately-owned Nauticol Energy to begin construction of a $2 billion methanol plant near Grande Prairie to open in 2020. The methanol will be derived from natural gas obtained through hydraulic fracturing ("fracking") and is used in antifreeze, rocket fuels and as a solvent. No information is available as to where the methanol will be sold and subsequently manufactured into derivative products.

This article was published in

Volume 49 Number 8 - March 9, 2019

Article Link:
For Your Information: Two Pay-the-Rich Schemes


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