Human capital is key to building a successful economy

Canada’s economy has transitioned from the resources under our feet to the resources between our ears

Human capital is key to building a successful economyThe first month of a new year is named January after the Roman god Janus, who had two faces – one looking backward and the other looking forward. Janus illustrates humanity’s ambition that the first month of the new year is a time to take stock of the past and make plans for the future.…

Fossil-fuel demand is set to surpass pre-pandemic levels

Oil markets breaking out of their long-term downward trend

Fossil-fuel demand is set to surpass pre-pandemic levelsDespite the Omicron variant of COVID-19 hitting the world badly, the Organization of Petroleum Exporting Countries and its allies in the expanded OPEC+ have confirmed the scheduled output increase of 400,000 barrels per day (bpd) for February. By now, OPEC+ countries have restarted about two-thirds of the production they halted in the early stages of…

Expect more oil price uncertainty in 2022

No one has a real handle on the market and its future direction

Expect more oil price uncertainty in 2022Despite the growing call for a cap on their consumption, fossil fuels are going nowhere. They will continue to drive our energy-driven civilization for the foreseeable future. Global oil demand is on the verge of reaching its pre-pandemic levels. As a result, oil markets posted their biggest gains since at least 2016 as 2021 wound…

Think the oil industry is dying? Think again

Lack of investment in the industry could lead to an energy crisis

Think the oil industry is dying? Think againLed by kingpin Saudi Arabia, oil-producing nations are gaining confidence and delivering a message: the oil era is far from over. Last week, Saudi Petroleum Minister Prince Abdulaziz bin Salman warned that global oil production could drop by a massive 30 million barrels per day (bpd) by 2030. That’s around 30 per cent of the…

Crude oil markets cool, thanks in large part to Omicron’s rise

In this cat and mouse game, OPEC+ had little option but to veer off the collision course

Crude oil markets cool, thanks in large part to Omicron’s riseDespite bearish crude oil market signals over the last 10 days, thanks to the Omicron COVID-19 variant and the associated possibility of demand destruction, the Organization of Petroleum Exporting Countries and its allies in the extended OPEC+ opted to veer off a collision course with consumers. They avoided a knee-jerk reaction and decided instead to…

Minimum corporate tax is just price-fixing collusion by governments

Expect reduced jurisdictional choice and competition, higher tax burdens and more political patronage

Minimum corporate tax is just price-fixing collusion by governmentsRhetoric is one thing; reality is another. As is becoming increasingly clear, the proposal from the Organization for Economic Co-operation and Development (OECD) earlier this year for a 15 per cent global minimum for corporate taxation is nothing of the sort. Although the initiative slated for 2023 won’t and can’t achieve a level playing field…

Oil markets dampen with new COVID strain, release of reserves

The dip came as a new COVID-19 strain sparked fears of renewed lockdowns and demand destruction

Oil markets dampen with new COVID strain, release of reservesWorld crude oil markets crashed on Friday by more than 10 per cent. For the first time since late September, West Texas Intermediate, the U.S. crude, tumbled below $70 a barrel, while the global benchmark, Brent, slumped to less than $75 a barrel. This crash wasn’t anticipated. The relief didn’t just come from the co-ordinated…

U.S. tries to force a drop in world oil prices

U.S. "commitment" to tackle climate change crumbles in the face of climate poverty

U.S. tries to force a drop in world oil pricesWith the possibility of co-ordinated moves by major crude-oil consuming nations, the markets took a hit last week. On Friday, oil prices were down four to six per cent. Strong demand growth and a tight leash on global supplies have driven the oil markets in recent months. New COVID-19 lockdowns in parts of the world…

Achieving net-zero will take decades to accomplish

The world is learning the hard way that the global economy still relies on fossil fuels

Achieving net-zero will take decades to accomplishWith the UN-sponsored Climate Change Conference (COP26) climate talks in Glasgow over, it is important to review some of the agreements and implications that have resulted from this process and assess the impact on Canada’s energy resources sector. Putting the rhetoric in context One can take seriously the undeniable threat posed by climate change while…

Biden must act now to rein in rising oil prices

Most likely course of action is a release of oil from emergency reserves

Biden must act now to rein in rising oil pricesU.S. President Joe Biden must act – and act quickly – to rein in the crude oil markets. Pressure is coming from all sides, including from his Democratic Party. Last week, 11 Democratic senators, including several known for their concerns on climate change, urged Biden in a letter to act quickly. “As the United States…

Carbon taxes on imports will cripple the global economy

Carbon border taxes won’t save the climate but they will create trouble for the world economy

Carbon taxes on imports will cripple the global economyCarbon taxes at borders are becoming a popular idea among some countries and regions of the world. It’s an idea destined to damage the global economy. For example, the European Commission, the European Union executive institution, wants environmental tariffs “on imports from countries with less stringent climate-protection rules.” Democrats in the United States Senate proposed…

Pressure mounts on OPEC+ from all sides

It is defying oil-consuming nations to increase output, for now

Pressure mounts on OPEC+ from all sidesA tug of war has erupted on the world oil market. Despite growing pressure from major crude-oil consuming nations, the Organization of Petroleum Exporting Countries and its allies in the expanded OPEC+ announced they would stick to their original plan by increasing output by only 400,000 barrels per day (bpd). OPEC+ members seemed to be…

Energy market cool-down sought on multiple fronts

Is Biden getting ready to cave in to Iran to help rein in oil prices?

Energy market cool-down sought on multiple frontsDiplomatic pressure is mounting as the Organization of Petroleum Exporting Countries and allies in OPEC+ prepare to decide their next crude oil output move. Global leaders are assembling in Glasgow for the COP26 climate summit this week with considerable unease over increasing gasoline prices. The leaders seem intent on discussing ways to rein in the…

Let’s be smarter on carbon capture. We won’t get to net-zero without it

There is a real opportunity to reduce GHG emissions through decarbonization

Let’s be smarter on carbon capture. We won’t get to net-zero without itCOP26 in Glasgow is likely to call for even more ambitious GHG emission reduction targets than the ones that have been consistently missed by virtually all countries. Canada’s existing target of reaching net-zero emissions by 2050 is daunting enough as is. Strangely, much of the focus of carbon policy has been on reducing the amount…

Oil market turmoil may well benefit consumers

The push and pull of conflicting factions may be providing some relief to consumers

Oil market turmoil may well benefit consumersLast week ended on a calmer note for crude oil markets and major oil-producing countries. Crude oil prices fell slightly as the week ended, finally hovering a little below the recent highs. Forecasts of a warm U.S. winter put some brakes on the price rally that carried the crude markets beyond $86 a barrel early…

We need a Plan B to deal with climate change

Adapting to a changing climate is the only feasible option

We need a Plan B to deal with climate changeDrawing heavily from physicist Steven Koonin’s recent book – Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters – my last column looked at some of the challenges involved in getting to global carbon-free by mid-century. Koonin actually calls it “a practical impossibility.” Now let’s talk about contingency planning. If carbon…

Climate summit forced to confront inconvenient truths

Movement to reduce global emissions toward net-zero is still too slow

Climate summit forced to confront inconvenient truthsWith the United Nations climate summit in Glasgow scheduled to open on Oct. 31, global powerhouses are coming up with their annual energy outlooks earlier than the customary November. With climate issues coming to the forefront at the COP26 summit, most of these reports and analyses are meant to help world leaders make decisions. But…

What happens to climate talks in the face of rising oil prices?

Decision to open the taps and let the markets surge comes just before UN Climate Change Conference

What happens to climate talks in the face of rising oil prices?Rapid moves with long-term ramifications are being made on the global energy chessboard. Early last week, the Organization of Petroleum Exporting Countries and its allies in OPEC+ opted to stick to their original plan and gradually open the crude oil taps. After their Oct. 4 ministerial meeting, OPEC+ said it had “reconfirmed the production adjustment…

Raising corporate tax rates will hurt us all

Raising corporate taxes would hurt firms’ profitability and growth. Employment and wages would suffer

Raising corporate tax rates will hurt us allThe finance ministers of more than 130 nations and territories have arrived at a tentative agreement to create a tax floor⁠ – a minimum corporate tax rate of a proposed 15 per cent. Its proponents, sadly including Canada, claim it will create a "level playing field" and stop a "race to the bottom." Some nations face…

Europe remains dependent on imported oil from repressive states

Its policies on renewable energy mean that dependence will only deepen

Europe remains dependent on imported oil from repressive statesBy Mark Milke and Lennie Kaplan Canadian Energy Centre One of the more bizarre developments in Europe in recent years has been the twin policy path in which fossil fuels are discouraged in favour of wind and solar energy, but deals are struck with autocracies such as Russia to import more fossil fuel via pipelines.…

Crude oil prices are soaring as production slows

A global energy crunch could help propel prices above US$100 a barrel

Crude oil prices are soaring as production slowsAll eyes are focused on the Organization of Petroleum Exporting Countries and its allies in OPEC+ as they meet today. With crude oil prices touching US$80 a barrel and prospects of hitting US$100 this winter looming large, markets are on edge. The market trajectory is virtually impossible to delineate. A global energy crunch could help…

Warning shots fired over cryptocurrencies?

China's crackdown on cryptocurrencies may be the first shot in its battle for financial dominance

Warning shots fired over cryptocurrencies?Canadian and British regulators are on an entirely different wavelength to a significant portion of the cryptocurrency market and industry. They have implemented new regulations and cast doubt on the future of decentralized digital currencies. The moves come as China is cracking down on all but one form of cryptocurrency, forcing Bitcoin miners out of…

Why wind and solar energy aren’t the answer to reducing global emissions

Wind and solar farms replacing the 84% of global energy from fossil fuels is technically impossible

Why wind and solar energy aren’t the answer to reducing global emissionsIn a previous column I pointed out that since switching coal-fuelled power plants to natural gas cuts CO2 emissions in half, exporting liquefied natural gas (LNG) to displace coal benefits our economy and reduces global emissions. And that since converting gasoline and diesel-fuelled vehicles and ships to natural gas cuts emissions by 25 per cent,…

Canadian oil and gas sector has huge impact in U.S.

The reality is, Canadians have a significant stake in the United States oil and gas industry

Canadian oil and gas sector has huge impact in U.S.By Mark Milke and Lennie Kaplan Canadian Energy Centre One critical problem for political and business leaders is getting people to think outside their local box. While many people might prefer a local restaurant or coffee shop to a national chain, international trade is the very reason a Canadian restaurant can offer inexpensive vegetables in…

Can Canada establish profitable trade links with South American bloc?

Taking a neutral position can give Canada an advantage. But government will have to be pragmatic

Can Canada establish profitable trade links with South American bloc?In November 2018, Canada and Mercosur opened free-trade negotiations. Any such deal represents great potential for Canada – but there are concerns. Mercosur – Argentina, Brazil, Paraguay and Uruguay – is a bloc with a gross domestic product of over $3 trillion and a population of 261 million in 2019. That compares to the GDP of…

China, United States move to stabilize crude oil markets

If OPEC forecast turns out to be correct, oil prices could go much higher

China, United States move to stabilize crude oil marketsA strong message is being sent to major global oil capitals: it’s time to cool down the markets. By urging the Organization of Petroleum Exporting Countries and their allies in OPEC+ to open taps – and endeavouring to impact the markets by selling crude oil from strategic reserves – the world’s major oil consumers are…

Dampening Asian demand cools crude oil prices

New restrictions to fight the Delta variant will slow demand growth in the second half of 2021

Dampening Asian demand cools crude oil pricesInteresting moves are being made on the global energy chessboard. In an unexpected move, Saudi Arabia announced it would slash its official selling prices (OSPs) for oil exports to Asia in October. The price cut was more than expected. Saudi Aramco, the state-controlled oil giant, said in a statement on Sept. 5 that the official…

The economic dangers of a new inflationary era

Interest rates will rise dramatically to compensate financial institutions with effects lasting for years

The economic dangers of a new inflationary eraIt’s not entirely clear whether the Canadian and the global economies are heading for a new inflationary era. It may turn out that inflation is not only elevated from recent negligible levels, but escalates, steadily at first, and then dramatically, as it did in the 1960s until the early 1980s. If it does, the havoc…

Blowing in a fierce wind: Why crude oil prices are declining

Non-fundamental factors appear to be controlling crude oil market patterns

Blowing in a fierce wind: Why crude oil prices are decliningA number of major events weighed on global oil markets throughout last week. Those factors included: Hurricane Ida; the United States Federal Reserve delaying the tapering off of its economic stimulus; the decision of the Organization of the Petroleum Exporting Countries and its allies in OPEC+ to stick to their original output increments; the rising…
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