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2 hours ago, hitman9172 said:

I presume you mean in terms of GDP per capita? It definitely is for now, but I don't think that's going to continue for so long. The common refrain I hear whenever I go out with my friends in Calgary or Edmonton seems to be "man, you should've seen how much more bumping it was 5/7/10 years ago". A lot of people there seem to lament the fact that everyone's still trying to wring every last dollar out of the oil industry when it seems to be in a secular decline. I don't know what would replace oil there though (tech maybe? although they would need to put some massive investment into that space. I would think most of the tech jobs in Canada are based in Toronto and then Vancouver).

I live in Calgary and this why Calgarians are dumb. It was, emphatically, more bumping pre-2014. But the Alberta economy remains relatively strong today (well, maybe pre-COVID, I don’t have a crystal ball as to what six months from now may look like). For some reason in Alberta “not having $100/bbl oil and massive yearly profits” = “the sky is falling and Alberta is is rapidly declining”. I think this attitude is well represented by Jason Kenney, a petulant child who needs to be the victim, despite Alberta’s relatively strong economic footing. 
 

Alberta still has the highest GDP per capita because oil and gas still generates a huge amount of economic activity, even at $25-30/bbl prices. And none of my clients, all very well-informed in O&G economics, are “still trying to wring every last dollar out of the oil industry when it seems to be in a secular decline.” Global demand for oil and gas is not evaporating in the short to mid-term.

As much as I wish personally that we could wave a wand and rapidly decarbonize, it’s still a very low probability scenario. The general paradigm that Calgary operates in is “there will be demand for fossil fuels for the foreseeable future, therefore producing Alberta oil is rational as the demand will otherwise be met, and in some cases met by producers in jurisdictions with lax environmental and human rights protections”. I think this worldview is defensible and tend to agree, but can see how those who balance competing values differently could come to a different conclusion. 

Over a longer time period, yes Alberta needs to wean itself of the fossil fuel teat, but I’m not certain that having an economy dependent on a constant influx of capital and high real estates prices is preferable. I love Vancouver and know BC has other industries, my point is only that it’s unclear to me that Alberta is uniquely vulnerable to shifting macroeconomic trends (eg global fossil fuel demand). 

As to lawyers, Calgary is still a good legal market since the activity that O&G is generating trickles down to lawyers. The E&P, midstream and downstream sectors are all highly regulated and involve overlapping contractual relationships in a specialized legal environment. A well staffed oil and gas practice requires environmental, project finance, administrative law, M&A, infrastructure, power/cogeneration, tax, derivatives and competition experts. It’s also a fairly litigious industry as well. 

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38 minutes ago, MinesAndMinerals said:


Alberta still has the highest GDP per capita because oil and gas still generates a huge amount of economic activity, even at $25-30/bbl prices. And none of my clients, all very well-informed in O&G economics, are “still trying to wring every last dollar out of the oil industry when it seems to be in a secular decline.” Global demand for oil and gas is not evaporating in the short to mid-term.

 

Over a longer time period, yes Alberta needs to wean itself of the fossil fuel teat, but I’m not certain that having an economy dependent on a constant influx of capital and high real estates prices is preferable. I love Vancouver and know BC has other industries, my point is only that it’s unclear to me that Alberta is uniquely vulnerable to shifting macroeconomic trends (eg global fossil fuel demand). 

 

Just on the point of these 2 paragraphs:

1) Global demand for oil and gas is not evaporating, but do you think Alberta will be able to satisfy less and less of that demand moving forward because of its high per-barrel cost of production and the shifting Canadian attitudes and regulatory environment towards oil? I'm just thinking of all the recent international oil giants that have either sold off their Alberta assets or scrapped their large Canadian energy investment projects over the past few years. Oil demand might not disappear in the next 50-75 years, but do you think that the production will shift moreso to other countries than Canada (i.e., Alberta), especially with the COVID-19 crisis and OPEC price war giving another gut-punch to a recovering oil industry?

Also, just as an aside, I wouldn't take people who've spent their lives in the oil industry trying to keep the Alberta industry going as a sign that everything's hunky-dory - that's likely all they know and they might well be in survival mode until their business plans go bust. For example, the BC government's been trying to bring real estate prices down with all these taxes and the new beneficial ownership registry, but anyone who's rode the real estate gravy train the last 20 years is still trying their hardest to wring every last dollar out of real estate because that's all they know. It's hard to get a man to understand something when his pay cheque depends on him not understanding it, which ties into my next point...

2) Vancouver is 100% fucked if there's a big collapse in real estate prices. Other than natural resources like mining/forestry (which have already been hit fairly hard since the '08 recession) and tech (which is up-and-coming with a lot of start-ups and large new offices opening up from Amazon, Facebook, Apple, Microsoft, but still not a world-wide heavyweight by any means), there's really nothing else here other than real estate. I think RE and construction activity make up a larger % of BC's GDP than any other sector.

Edited by hitman9172
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5 minutes ago, hitman9172 said:

Just on the point of these 2 paragraphs:

1) Global demand for oil and gas is not evaporating, but do you think Alberta will be able to satisfy less and less of that demand moving forward because of its high per-barrel cost of production and the shifting Canadian attitudes and regulatory environment towards oil? I'm just thinking of all the recent international oil giants that have either sold off their Alberta assets or scrapped their large Canadian energy investment projects over the past few years. Oil demand might not disappear in the next 50-75 years, but do you think that the production will shift moreso to other countries than Canada (i.e., Alberta), especially with the COVID-19 crisis and OPEC price war giving another gut-punch to a recovering oil industry.

2) Vancouver is 100% fucked if there's a big collapse in real estate prices. Other than natural resources like mining/forestry (which have already been hit fairly hard since the '08 recession) and tech (which is up-and-coming with a lot of start-ups and large new offices opening up from Amazon, Facebook, Apple, Microsoft, but still not a world-wide heavyweight), there's really nothing else other than real estate. I think RE and construction activity make up a larger % of BC's GDP than any other sector.

On your first point, I think the effects of COVID/OPEC+ price war will likely be minor with respect to oil sands projects since these have long-term investment horizons. More concerning is what may happen to oil field services companies. Conventional (ie non oil sands) operators will likely weather the storm, but how many of the smaller well services and similar companies will survive is worrisome.

Regarding share of production, the key variable over the long term is access to tidewater. We have to sell our oil at a discount and can’t meaningfully supply Asian LNG demand. So yes, I can see that happening. Nevertheless, there doesn’t seem to be any abatement of US appetite for Canadian oil, even with the increased Bakken/Permian production over the last decade. We’ve steadily increased exports year over year since 2010.

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^ I'll also add to this that there is a strong demand for heavy crude in gulf coast refineries.  The shale boom is going to continue to put downward pressure on oil prices generally, but all that light oil from shale can't replace the heavy oil that the gulf coast refiners need.  With increased takeaway capacity hopefully coming on line soon (Line 3, Keystone XL), Alberta should be in a good postion to provide heavy oil to gulf coast refineries for the foreseeable future.  Traditionally Venezuela provided lots of those heavy oil barrels but their production has dropped dramatically in the last couple years.  

Edited by calglaw91
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1 minute ago, calglaw91 said:

^ I'll also add to this that there is a strong demand for heavy crude in gulf coast refineries.  The shale boom is going to continue to put downward pressure on oil prices generally, but all that light oil from shale can't replace the heavy oil that the gulf coast refiners need.  With the increased takeaway capacity coming on line soon (Line 3, Keystone XL), Alberta should be in a good postion to provide heavy oil to gulf coast refineries for the foreseeable future.  Traditionally Venezuela provided lots of those heavy oil barrels but their production has dropped dramatically in the last couple years.  

Alberta's only able to take Venezuela's share until it too is taken over by a Communist dictator (although some of my Alberta friends already think this has happened with Trudeau in power 😉)

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8 minutes ago, hitman9172 said:

Alberta's only able to take Venezuela's share until it too is taken over by a Communist dictator (although some of my Alberta friends already think this has happened with Trudeau in power 😉)

Honestly, if it came down to it I would probably pick the communist dictator over Kenney.

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On 5/4/2020 at 7:28 PM, hitman9172 said:

Was going to say Uriel doesn't try too hard to hide where he works or who he is. You could probably figure it out on your own without asking him.

What's the over/under on how many times he's been approached by a star-struck LawStudents poster on the street?

Zero times.  Coffee or lunch with an LS.ca poster?  Maybe 40?

The most fun is when I just drop it on a fresh articling class. I don't think people realize what a not-big-deal it is to have just continued to exist here for a long time, but it'll seem a lot less fancy in, like, five years when 30 of us are partners in various practices across Canada.

On 5/5/2020 at 1:00 AM, Hegdis said:

We discourage outing any poster as an Official Policy.

That said, a little detective work can yield (quiet) results re any number of posters. This is why we always refer to posters as “pseudo-anonymous”.  
 

A good lesson to learn early re your professional reputation. 

Just diving in here a few months late -- I'm super easy to find, on account of you can just DM me and then I buy you coffee.  At least, I did prior to the apocalypse.

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While we are necro'ing threads...

Q:

On 5/7/2020 at 5:03 AM, Jaggers said:

What is Edmonton?

A:

On 5/7/2020 at 6:46 AM, Jaggers said:

a dustbag city

Love, Calgary.

 

(It's actually a totally alright place to practice litigation, municipal, do government work, etc. but the biggest players are all local or regional firms.) 

 

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Ain't necro'ing nothing.  In the Province of Ontario, it's March until September.

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12 hours ago, Uriel said:

Ain't necro'ing nothing.  In the Province of Ontario, it's March until September. This is the time of Covid-19, where months last years and all the days all blend together into one long "Rona Friday". 

FTFY

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