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“What’s really holding back the oilsands? It’s not the bill of goods you’re being sold,” according to Andrew Leach at the CBC.

This came across my desk today, and could not let it go without calling out some very blatant oversights and short sighted vision from Andrew Leach.

The only factual part Leach got right in his op-ed was the pipeline constraints that have stalled the Canadian oil and gas industry, along with the endless eco-warrior attempts to shut it down, both of which are not commonly found elsewhere.

There are several key factors that he omitted, or chose not to include to sell his point, mostly on short-cycle projects and why companies have shifted to them versus the legacy assets such as oilsands.

One of the main as well as strongest reasons companies have been focusing on short cycle projects is to strengthen balance sheets and long term cash flow due to the protracted growth, revenue losses and sharp reductions in capital spending to maintain shareholder value, along with liquidity for operating capital as the markets rebalanced themselves.

His projections about US investment being down are also a bit misleading, as it has nothing to do with demand, and more to do with infield production infrastructure delays to offset the increased production being brought on stream through rapid expansion of key shale resource plays, as well as a sharp increase in drilled but uncompleted wells that have led to a decrease in drilling activity as shareholder value is not being met despite increased production that has nowhere to currently go.

The other factor he neglects to add in, is the steep production declines becoming more apparent in the largest shale basins that are exponentially above the estimated decline rates that were first predicted in the early exploration and development stages.

Decline rates have started to show a trend of over 45% of original estimates within the first twenty four months of production, and heading towards 65% loss of initial production within fifteen months, and growing to 80% over a two year period. At these decline rates, combined with even steeper production declines as more infill drilling is completed, as well as fewer discoveries of long term stable reservoirs to offset these rapid declines, the US will quickly lose it’s top spot in oil production within five years, returning to becoming a net importer of oil within a decade.

The last key point he also failed to acknowledge, the increased investment in projects that were considered uneconomical less than five years ago at $100 plus oil, ultra-deep water offshore exploration, marginal shelf reservoirs such as Southern Pacific, Guyana and Africa, as well as a resurgence in Arctic developments, all seeing near record investments returning.

The demand is not going away, and in fact is increasing in emerging economies that are anxious to prop up their economic strength, of not only their nations, but their people as well.

Renewable energy simply is not as competitive in that spectrum, and quite possibly never will be as far as job growth, prosperity, and GDP contributions through stable growth over the next decade or longer.

He completely left out the continuous engineering and technological work the Canadian oil and gas industry has not only invested in, but has implemented to reduce the emissions, environmental footprint and increase efficiencies per barrel of oil produced, and simply turned what could have been an excellent op-ed into nothing more than his personal endorsement of the climate alarmist crowd, extolling the virtues of this former NDP employers on their failed climate action scam and carbon taxes, both of which have yet to show any real evidence of any factual emissions reductions.

The need for long term, legacy projects to meet the increasing demand are found right here in Canada. We have the opportunity to step in and provide these resources, all we need is the right leadership to ensure the future growth is not squandered on fairytales of renewable energy and zero carbon world meeting the demands of the expanding population’s needs any time in the next half century, or longer.

Finally, I will leave you with this report from earlier this year, one of many that quickly dispels most of what he wrote.

The energy market can expect a surge in oil and gas project approvals in 2019, as operators in the sector are playing catch-up to clear final investment decisions (FIDs) on endeavors that were put on ice in the wake of the 2015 crude price slump.

“Put it all together, and we expect global FID volumes in 2019 to triple over last year, and 2019’s megaproject awards could lead to billions of subcontracting dollars in coming years,” Islam adds. “The only supply segment likely to shrink this year is the oil sands, whereas deepwater, offshore shelf and other conventional onshore developments are all poised to show substantial growth. From a geographical perspective, all regions are headed for robust growth except Europe and North America, still bearing in mind that shale plays are not included in these numbers.”

Vote for strong leadership this October to stop the job-killers.

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