And here's the bad news about big oil...
This news went un-noticed, more or less. But keep in mind that the new company will be Canada's biggest energy corporation and the fifth biggest in North America.
Executives with both Suncor and Petro-Canada were all smiles after the deal. Shareholders with Petro-Canada certainly had particularly big grins on their faces, as the share price for P-C stocks went up over six dollars the day after the merger.
Writer Andrew Nikiforuk knows the Alberta oil sector inside and out. He's the voice of sober second thought who writes for Canadian Business magazine. He's the one who writes about toxic tailings ponds, dead ducks covered in oil, well water that can be lit on fire... you know, fringe stuff like environmental degradation due to unregulated development by mostly foreign owned companies intent on increasing profits on a quarterly basis.
On the topic of the oil sands, and oil in general in Alberta, Nikiforuk is really less an environmentalist than he is a realist. He knows full well that the world's supply of oil is diminishing daily as consumption increases. This trend really hasn't changed that much even with the “global economic crisis” causing “tsunamis” of financial ruin across the globe.
Things have become so tight that Bono thinks U2 needs to put out another crappy album in order to cover the costs of buying another castle outside Dublin; his investments have taken a beating lately, and selling more bad music to people with tin ears seems like the easiest way to prop up his portfolio.
Back to Alberta and Nikiforuk.
Nikiforuk is certainly no fan of oil sands development, but he sees the problem as one of Canada's own creation. Our political leaders long ago lost control of how this natural resource is controlled. Nikiforuk calls oil a “strategic” resource. That means we really can't do without it, and that having oil under the ground in Canada creates a certain amount of power with which we can leverage other countries, like the US, that buy our oil.
Currently the US imports around two million barrels of Canadian oil per day.
Imagine if the relationship was reversed. Would the US sell us their oil at market price? Would they subsidize their own oil companies in order to partially control production? Would they maybe stick a small export tax on each barrel right now to generate a little money?
Think about it. Canada exports in the range of 3,000,000 barrels per day. A dollar tax on each barrel Canada exports would — even with my math challenged skills — create a significant cash flow. That kind of cash comes in very handy when the country is losing well over 50,000 jobs per month.
The amount of money collected will still be less than what the US spends on its domestic farm bill, for instance, which will be close to $10 billion this year. A lot of that money goes straight into the pockets of US farmers and agricultural companies, who then sell their goods and services abroad.
It's a neat trick maintaining double standards. It's like when two profitable oil companies merge, and then also announce there will be significant Canadian job layoffs, as in the case of the Suncor-Petro-Can deal. It's almost like they don't care about anything other than money…