Wow, midsummer already. Where does the time go when you are having so much fun? Although to be truthful, with the rainy July we have been having it really doesn’t seem too summery to me yet. Never mind the fact that vacation time is still weeks away and I have so far been work slave, which is actually a good thing – money and all, but still, patios need some love as well.

 

One of the hallmarks of this period for me is the true funk I fall into as a blogger. This isn’t because I have trouble stringing random words together – clearly that is not a weakness in this scribe. No, the issue is that because everyone is away on vacation or doing summery summer things that there is actually very little to write about.

 

The political circuit is quiet (relatively) as most legislatures take much needed multi-month breaks (insert eye roll here). The energy market is quiet, even though prices can’t figure out what is going on. Even Trump is relatively quiet – outbursts here and there, but even when he does pop up, all you want to do is send him back where he came from because hey, it’s summertime and we all have better things to do than go down his rabbit holes of torment.

 

I thought for a moment that I could write something inspiring about the Apollo 11 moon landing 50 years ago but so many others have done the job far better than I ever could, so I took a hard pass on that one. Not to mention that any write-up by myself on the moon landing would inevitably degenerate into inane conspiracy theories about fake landings and flat earth or some hackneyed comparison of the space program with Canada’s inability to build a pipeline and to be truthful, I wanted to avoid the blood pressure raising discussion about TransMountain. In fact, I think we would all do ourselves a collective solid by avoiding talking about it as the project quietly goes about its business in the background – because like it or not, trust the Feds or not, that project is moving forward.

 

Which of course leads me to my random topic du jour. Are there other things like TransMountain that I can opine on like I just did? That I can scan the crystal ball that sits on my desk and engage in meaningless conjecture on? Of course there are, and since it’s summer and no one actually reads this blog in the summer, I’m going to take on a few major political topics and put some crazy predictions out there and see what sticks. Who’s with me?

 

A Commie in Every Pot

 

As a Canadian, I am always somewhat amused by the American obsession with “socialism” and “communism” and how both need to be confronted head-on with animal-like ferocity lest they take root and destroy the very fabric of American society. I mean seriously, is the United  States so fragile and at such a tipping point politically that the very idea of universal health care is the catalyst that will send the world’s greatest democracy crashing into a dystopian soviet-style nightmare? Of course not. Do they even realize that US has some of the more socialist redistributive programs in the free world already (social security, food stamps, medicare, affirmative action). Of course not.

 

But fears of “socialism/communism” and its stigma is a useful political cudgel and has been used to great success by various levels of government for decades. In fact, the Apollo 11 landing would never have happened without the Soviet communist boogeyman beating the United States into orbit, setting fire to the space race.

 

In the current political discourse, with the Democrats in a bit of disarray, we are seeing it rear its head as a political rallying cry. And I think Donald Trump and the Republican party intend to weaponize the fear of socialism (and immigration) as the issues that will see them re-elected in 2020.

 

That’s right. First wild prediction – Donald Trump has a 70% chance of being re-elected.

 

Stay with me here. It’s not crazy.

 

First off, let’s all remember that the popular vote doesn’t decide US elections, the electoral college does. Hillary won the popular vote but lost the Electoral College. So it doesn’t really matter how big  a thumping Donald Trump gets in, say, wacky progressive California if he can carry the swing states that put him in office in the first place.

 

And how does he do that? By politically maneuvering and positioning the Democrats as one step away from Che Guevara. And the Democrats are only too willing to cooperate as they self-destruct before they can even get going.

 

As the whole world knows, this past weekend Donald Trump tweeted out ridiculously racist comments about the four new US congresswomen known as “the squad” but there was a method to the depravity. It’s not about him being racist, it’s about winning and it’s about tying the Democratic Party to the ideologies espoused by the Squad – the Green New Deal, free healthcare, student loan forgiveness, universal basic income – socialism! Nay, COMMUNISTIC Bolivarian hell!

 

The Squad had been waning in influence and Pelosi ascendant in maintaining party discipline into 2020 when those tweets went out, forcing all the Democrats to rally to the Squad’s defence because of the racist nature of the tweets, tying them inexorably as one anti-Trump entity. This gives Trump a race-baiting, communist foil to hammer away on while the shambolic, 20 person caravan that is the race for the Democratic nomination unfolds in sleepy Joe Biden slow motion. It’s a malignant and repugnant strategy. But it’s a winner.

 

Donald Trump doesn’t win by going toe-to-toe with an invigorated presidential ticket of and of Joe Biden, Elizabeth Warren or Kamala Harris.

 

He wins by scaring the bejeepers out of middle America – those electoral college seats he needs – that these crazy, communist, UNAMERICAN rookie congresswomen are going to take over the Democratic Party and turn the US into a smoking ruin like Venezuela. And people will buy it.

 

There is a reason Canada’s flag is red.

 

What’s that? Red. Yes. Liberal red. Red Tory. Not communist red. It used to be blue. But now it’s red. It’s red to reflect the brand of the “natural governing party of Canada”. Which are the Liberals. Who will, in just under 100 days, most likely be re-elected with a majority government and return Justin Trudeau as Prime Minister.

 

Look – I know this isn’t a popular opinion out here in Calgary, and it’s certainly not an endorsement, it’s just a simple statement of how I read the tea leaves.

 

So why do I say this?

 

The math is actually pretty simple for the Liberals. They need to carry Quebec and keep their heads above water in Ontario and they are in. Isn’t that always the case?

 

Andrew Scheer’s math is different. For the Conservatives to win, they have to carry Western Canada and steal some Liberal seats in the Maritimes and hope for a great showing in Ontario and some inroads into Quebec. Not an easy task, but doable.

 

I’ll get to the other parties later.

 

Let’s start our journey in Western Canada. British Columbia is a mixed bag, with lots of urban seats that are mixed between the Liberals and the NDP and then a vast interior which leans conservative. Expect pipeline politics to play a role in BC but not as big a role as everyone thinks. Maybe a few seats change from red to orange in the Lower Mainland, but the votes are just as likely to go Green as Orange and the mixing of colours will likely not result in much change in the electoral map. Same in the rural areas which are the CPC’s strengths.

 

In Alberta, it would be very surprising if we didn’t see a clean sweep. The Liberals have three seats in the province and that is a high water mark. A bag of mini-donuts if you can name all three ridings and their MPs. That said, Albertans aren’t dumb and if they read the tea leaves properly, the voters may choose to return at least one of the Edmonton MPs if only to maintain a seat at the table.

 

In Saskatchewan, there are traditional Liberal seats that could be up for grabs, but they are just as likely to go NDP as Conservative. Expect little change and feel free to send Ralph Goodale a congratulatory note now, he’s a permanent Liberal fixture.

 

Manitoba is where we start to see the tide move more in the Liberals favour. The province typically goes its own way, but doesn’t have a solid tradition of leaning one way or another.

 

Skipping to the Maritimes, there is an opportunity for the CPC to pick up a decent amount if seats here, particularly in New Brunswick which has moved provincially conservative and there is a fair amount of hostility toward the Trudeau government stemming from endless Irving related scandals and the demise of Energy East.

 

So where are we now? If we count all these seats up, we are actually looking at a Conservative majority – who knew!

 

But now we have the big two. Quebec and Ontario. And it’s here where two external parties are going to be major players. The Federal NDP and the Ontario Provincial Conservatives.

 

A major factor in giving the Conservative party power previously under Stephen Harper, has been the NDP, who traditionally steal the left leaning votes away from the Liberals and allow the conservatives to be ascendant. Remember the last majority Harper government? It was made possible by Jack Layton taking the NDP to heights it had never been before and will likely never be again, delivering an absolute thrashing to the Liberals in Quebec.

 

This time around? Not so much. Under Jagmeet Singh, the NDP seem rudderless and uninspired. They are polling like a true third, if not fourth party and have little chance of making inroads against the Liberals. Quebec is not going orange this time around and the Liberals are polling very well there. And the Conservatives? They could hope for some breakthroughs in Quebec, which recently rejected the Liberals for a conservative provincial government, but that is unlikely to be significant. The last time Quebec went blue was under Brian Mulroney. Maxime Bernier was at one point the CPC’s best and brightest in Quebec, but even he is going to be hard-pressed to maintain his People’s Party seat.

 

All of this brings us at long last to battleground Ontario where this Federal election will be won.

 

This is where the Conservatives were hoping to ride the provincial blue wave to government but a funny thing happened on the way to victory and that funny thing isn’t so funny. It’s Ford. The Doug Ford government in Ontario has been such a colossal failure that its approval rating is below that of its disastrous predecessor. The Ford government is less popular than a root canal. This has serious electoral implications for Andrew Scheer and the Conservatives as the Liberals will do anything in their power to tie the Federal and provincial parties together. While it remains to be seen how successful they will be and the CPC’s are already in rapid retreat from anything Ford-like, this is the game-breaker for Andrew Scheer.

 

At the end of the day, Andrew Scheer is a competent and serious leader, at the head of a credible, centre right governmental alternative to the centre left Liberals. And he would likely have made a fine prime minister. But he is going to be undone by a buffoon.

 

What about the Green Party? What about them? Well aside from bizarrely hiring the Trudeau-hating Warren Kinsella as a strategist, don’t expect major waves from the Greens. I rather suspect they will lose one of their two seats in BC. They are polling at about 10%, but that is really at the expense of the NDP. Their platform is a mess and they aren’t likely to have much impact, notwithstanding media efforts to prop them up and make them more important than they are.

 

One final point. I know that many people in Alberta are “anxious” to see the devil incarnate Justin Trudeau ride off into the sunset and blame him and the Liberal Party for all manner of transgressions, both earned and invented, particularly as they have been in power during the entirety of this brutal downturn. But if you step back and really assess things, you can’t hang commodity price declines around Trudeau’s neck and on the egress front, the Federal government is actually doing its part, albeit at a snail’s pace. C-69 and C-48 are going to be election issues for sure, but not in the two provinces that will decide the election.

 

And as bad as Alberta’s economy has been (note it too is improving) for the rest of the country it’s a totally different story. The broader Canadian economy is actually doing pretty well. Quebec is booming. Ontario is cruising. BC just posted a surplus. So there are no immediate pocketbook issues that typically move large blocks over to the conservatives and the SNC and Mark Norman scandals are too complicated to make a big difference.

 

So, to Alberta, Jason Kenney, Doug Moe and Saskatchewan and any other Western separatist pot stirrers out there who are expecting a big change in October, I say cool your jets and tone down the rhetoric. Justin Trudeau will be Prime Minister for the foreseeable future. He may not have as big a majority but when the dust settles, this is who you’re getting. You have been warned. Act accordingly.

Prices as at July 19, 2019

• Finally oil prices stop rallying!
  • Storage posted a decrease week over week
  • Production was down
  • The rig count in the US was down and Canada was flat
  • Prices fell 10%. Makes perfect sense.
  • Natural gas storage was up and remains higher than this point last year

• WTI Crude: $55.90 ($60.26)
• Western Canada Select: $41.15 ($48.17)
• AECO Spot : $1.05 ($2.28)
• NYMEX Gas: $2.262 ($2.468)
• US/Canadian Dollar: $0.7683 ($0.7660)

 

Highlights

• As at July 12, 2019, US crude oil supplies were at 455.9 million barrels, a decrease of 3.1 million barrels from the previous week and 44.8 million barrels above last year.
  • The number of days oil supply in storage is 26.3 compared to 23.4 last year at this time.
  • Production was down for the week at 12.000 million barrels per day – impacted by GOM storms. Production last year at the same time was 11.000 million barrels per day.
  • Imports fell to 6.832 million barrels from 7.302 million barrels per day compared to 9.006 million barrels per day last year.
  • Exports from the US fell to 2.524 million barrels per day from 3.048 million barrels per day last week compared to 1.461 million barrels per day a year ago
  • Canadian exports to the US were 3.536 million barrels a day, down from 3.945
  • Refinery inputs rose during the during the week to 17.433 million barrels per day
• As at July 12, 2019, US natural gas in storage was 2.533 billion cubic feet (Bcf), which is about 5% lower than the 5-year average and about 13% higher than last year’s level, following an implied net injection of 62 Bcf during the report week
  • Overall U.S. natural gas consumption rose by 2% during the report week
  • Production for the week was down 2% week over week due to storms. Imports from Canada were flat from the week before. Exports to Mexico were up 3%
  • LNG exports totaled 32.9 Bcf
• As of July 19, 2019, the Canadian rig count was up 1 at 118 (AB – 63; BC – 11; SK – 39; MB – 3; Other – 2). Rig count for the same period last year was 194.
• US Onshore Oil rig count at July 19, 2019 is at 779, down 5 from the week prior.
  • Peak rig count was October 10, 2014 at 1,609
• Natural gas rigs drilling in the United States was up 2 at 174.
  • Peak rig count before the downturn was November 11, 2014 at 356 (note the actual peak gas rig count was 1,606 on August 29, 2008)
• Offshore rig count was down 1 to 25.
  • Offshore peak rig count at January 1, 2015 was 55

US split of Oil vs Gas rigs is 80%/20%, in Canada the split is 67%/33%

 

Trump Watch: Racist tweets. Says it all.

Kenney Watch (new!): Political circuit – Edmonton K-days this week.