I was taking a look at the calendar this morning and I realized that we are a week away from the halfway point of summer. How did that happen? Where did the time go? I mean think of it, by the time you read next week’s blog, we will be into August. I think these are officially the dog days of summer and all we can hope for is that the weather, at least here in Calgary, will warm up and we can maybe go outside for more that an hour before yet another severe thunderstorm warning is issued.

Given that these are the dog days and that at some point I will be taking some time off and writing a short and lazy blog, I figure that this is the week that I need to finally share with all of you my Fair Deal Demands ^TM so that everyone will know and understand the terms under which I will remain in Calgary, Alberta and indeed Canada. If they aren’t met, I am declaring myself and my family an autonomous collective.

Just by way of background, the UCP party initiated a Fair Deal process of their own back in 2019, whereby a panel consulted with a bunch of Albertans to ask them what they felt worked and didn’t work about Confederation and Alberta’s place in Canada. The panel prepared a report and it was issued in June of 2020 containing a list of 25 demands/recommendations that the province might consider pursuing. As usual, some of these are patently absurd, some make sense and some are window dressing, feel good ideas that are just there to mollify the crankpots.

So I figured, why not do the same? I have demands. We all do. Some are political, some are unpopular, some are inspired and some are stupid. But is we are going to be asking Canada for a Fair Deal, aren’t I allowed to ask for one too?

So forthwith (followed by the answer key to last week’s trivia contest!) are my unvarnished and in no particular order Fair Deal Demands ^TM and woe to the politician who doesn’t treat these with the gravitas they deserve. And note, these demands are non-partisan and are directed at any level of government or corporation or person that I choose. You will notice I came up with a full 25.

Fair Deal Demands ^TM

1. No more panels. The Alberta Government has far too many panels. We didn’t elect you to have panels. We elected you to make decisions.
2. What’s with all the issue managers and their Twitter rage? These people aren’t managing issues, they are whipping up anger and opposition on social media. And they aren’t doing a particularly good job at it.
3. NDP – do a better job in opposition. Stop treating every announcement from the UCP as a leading indicator of fascism, it’s not – they are in fact ruling from a different set of ideologies than you did. Note too – it’s a provincial government, not a national movement.  Fascism in a sub-national government is hard. Perspective matters.
4. Conservative Party of Canada – you too. Stop with the drama. Get your leadership thing buttoned and start acting like a legitimate opposition party and not a pandering lobby group.
5. Liberal Party of Canada – can we maybe for a week or so just stop with the ongoing litany of scandals, conflict of interest breaches and feathering the nests of your buddies?
6. In fact, all of you. Dial down the partisanship, stop the sniping and get back to leading the country. We are in the middle of a pandemic and we need serious people doing serious stuff. All this partisan clowning around just further erodes trust in government and makes us less likely to follow important directives.
7. Where are my Cool Ranch Doritos? We need those back. Someone get on that.
8. Ha – City of Calgary, bet you thought you were getting a pass! No way. This one is for you. There is a pothole near my house that you can park a Mini Cooper in. Are you going to fill it ever?
9. Can we cut it out with the war on doctors? Why are we disincentivizing Alberta as a destination? Look, I get it, you want to manage costs, but what it comes down to is this – I want my province to be a desirable place for doctors to work. Why? Because we are all aging and we all need doctors. I know I do. Mine is leaving. And he supports your party.
10. If we are sending our kids back to school, there needs to be a better fiscal plan to get schools, educators and students the PPE and investments in infrastructure they need to be safe. This doesn’t mean a shell game of moving money around or changing accounting entries or using reserves. It means new money.
11. Speaking of new money, I get everyone hates equalization. This is mainly because they don’t understand how it works. But I get the optics of money leaving the province and maybe not coming back to fund doctors and schools and pandemic responses. It’s a fiscal tool that we don’t have. But you know what fiscal tool we do have? The ability to implement taxes at the provincial level. So let’s take a look at that. Did you know that money collected by a PST will stay in Alberta and can be used to pay for all sorts of Alberta stuff? And will reduce the distorting equalization transfer calculation? How about it. A 2%-5% PST. Maybe have a referendum on it.
12. I would like to see a Canadian team win the Stanley Cup before I retire. Preferably Montreal. Someone needs to get on that.
13. The oil and gas industry is the largest industry in Alberta and should be treated fairly and get the attention it deserves. As do the second, third, fourth and fifth largest industries. See where I’m going with this? All industries deserve support, especially the ones that are growing in scale when the primary one is not.
14. Federal government – you need to be way more proactive, open and prompt in your support of the energy industry. Super long timelines for approval and fiddle-farting around on key industrial files isn’t going to cut it as we drag ourselves out of this pandemic-induced recession.
15. Edmonton EE’s is dumb. Have a contest and get a real name before the season starts. If you can’t figure it out, the new name is the Edmonton Ruff Ryders. The clock is ticking.
16. I was on a call last week that talked about the future of renewable energy in Canada. Did you know that solar is set to double in the next decade and wind is expected to grow by 40%? Pretty cool, right? Hey – did you know that 70% of the wind development and 80% of the utility solar is going to happen in the PROVINCE OF ALBERTA? Demand: Rest of Canada, give us some credit for that – we are an all forms of energy powerhouse. Alberta, do a better job of promoting that.
17. If the US border is going to remain closed, I want an NFL team to relocate to Calgary. I’d be willing to build a giant stadium that no one can go to because of COVID to make this happen.
18. Retirement savings and pension plans are not political toys. Stop messing with them. It makes people fearful and distrustful. If a pension plan is outperforming its benchmark, it’s not the ideal time to move it to a new manager – it’s called being a prudent fiduciary.
19. Provincial Police Force – I’m 50/50 on this one. The RCMP seems to have issues with officer rotation and a lack of community engagement. If you can do it without it becoming an amateur hour of wannabe para-military meat puppets, I think it could work. But make sure community activists are fully engaged in the creating and structuring of how it would work.
20. Let’s have more announcements like the UCP’s technology R&D and human capital incentives. If we want to re-establish ourselves as a high tech destination, we will need to continue to stretch more than our peer provinces.
21. Calgary is the financial centre of Western Canada. The provincial and city government need a task force to figure out a way to get more asset managers to locate here – Venture Capital, Private Equity, Private Debt Funds, Traditional Managers. This will likely require relocating AIMCO from Edmonton and some pretty big tax incentives. Just bite the bullet and do it.
22. #WEXIT… #STOPIT… #NOW. Everyone knows this is a dumb idea.
23. I would like to be able to stream the ESPN 30for30 series from one of the three platforms I already pay for. Disney – you own it, why isn’t it on Disney +?
24. City of Calgary, time to reopen that Arena deal. Aren’t there any force majeure clauses in the contract you can use to get a better deal?
25. I’m all done with COVID. Someone needs to fix that.

Simple right? It’s like my personal manifesto. I’m sure the powers that be will get right on it.

OK – Trivia answers. No one won this BTW, participation rate was low so I’m just going to send nice door prizes to those who tried. Like my family didn’t even bother.

• Geography

1. Name the two largest sub-national landlocked producers of oil in North America. Answer: Alberta and North Dakota
2. In the seminal golf movie Caddyshack, noted Bon Vivant and erstwhile philosopher Ty Webb said “the shortest distance between two points is a straight line in the complete and opposite direction.” Given this logic, how far must Alberta oil travel to reach a refinery in Saint John New Brunswick? Answer: About 12,000 kms.
3. With an estimated 70 billion barrels of recoverable oil, this reservoir is considered the largest conventional oilfield in the world. Name the field and the country it resides in. Answer: Ghawar Field, Saudi Arabia
4. Ironically, this contiguous heavy oil deposit contains approximately 133 billion barrels of oil in place, making it that actual largest oilfield in the world. Name the field and the location. Answer: Athabsaca Oilsands, Alberta.
5. If you took all the oil and gas pipelines in North America and laid them end to end, how many return trips to the moon would you be able to take? Answer: Two and a half.
6. Where was the first producing oilwell in North America located? Answer: Oil Springs, Ontario

• Entertainment

1. This American music icon recorded a tribute to oil and gas workers in 1963. Name the artist and the song. Answer: Johnny Cash, Roughneck.
2. Starring a former oilrig worker, this movie is considered among the greatest oil and gas films ever produced. Name the movie and the star that worked the rigs. Answer: Boom Town, starring Clark Gable
3. There Will be Blood garnered Daniel Day-Lewis one of his three Best Actor Oscars. What was the name of the book on which the movie was based and who was the author. Answer: Oil! By Upton Sinclair
4. This man, who always hits his depth, is considered the best off-shore wildcat drillers in cinematic history. He doesn’t know how to fail. Name him. Answer: Harry Stamper
5. Deepwater Horizon, the movie chronicling the Macondo blowout in the Gulf of Mexico, rightly distills the majority of the culpability for the blowout to BP, personified by its on rig “company man” Donald Vidrine. Which actor channeled his inner Snidely Whiplash to play that role. Answer: John Malkovich
6. The fictional town of Dillon Texas, the setting for Friday Night Lights and the Dillon Panthers are based on what real life football team and Texas town. Answer: Permian High School Panthers from Odessa, Texas

• History

1. After drilling the first commercial oil well in the United States in 1859 in Titusville, Pennsylvania, this man “colonel” executed what is arguably the first frac’ed oil well by dropping a torpedo down the bore hole of a well in 1865. Fortunately, no one died. Name him. Answer: “Colonel” Edwin Drake
2. The first commercial development of the oil sands was begun in what year and by what company. Answer: 1967 by Great Canadian Oil Sands, owned by Sun Oil Company
3. The earliest historical reference to the use of oil products was over 4000 years ago by this historian. Answer: Herodotus – reference to oil used as tar and pitch “the oil, which the Persians call rhadinace, is dark and evil-smelling”
4. John D. Rockefeller, the founder of Standard Oil, got his start in the industry by investing in a refinery in what city. Answer: Cleveland.
5. Natural gas has been used commercially since the 1700’s when it was used to light street lamps in Britain. In 1885 this man invented a burner that opened up a whole range of uses for the now easily controlled combustion of the fuel. Name him. Answer: Robert Bunsen.
6. The FSO Safer is a tanker that has been stranded off the coast of Yemen for the past five years. It contains an estimated 1.1 million barrels of oil and if it ruptures and spills into the Red Sea it will be an environmental catastrophe 4 times worse than the Exxon Valdez oil spill in 1989. What was the name of the reef the Exxon Valdez hit. Answer: The Bligh Reef.

• Arts & Literature

1. This obscure academic is considered one of the most influential writers on the subject of energy. Name him. Answer: Vaclav Smil
2. Name the term coined by Canadian lobbyist and gadfly Ezra Levant in his book of the same name touting the moral superiority of Canadian oil production or what The Economist called a “polemic defence of the tar sands”. What year was the book published and what was the term. Answer: 2010, Ethical Oil
3. “The Prize” by Daniel Yergin is widely considered one of the most comprehensive narratives about the oil and gas industry ever prepared. What was the name of his less popular follow up book. Answer: The Quest
4. Robert Service is known for his many odes to Yukon gold mining. The closest the energy industry has is this obscure Texas poet. Name him. Answer: Joe Clay “Blackie” Wilson
5. Name the Hollywood star who wrote the preface for It’s a Gas: The Allure of the Gas Station, a photo book documenting gas stations around the world. Answer: Jay Leno
6. It has been dubbed the world’s most beautiful gas station. Where is it located and which famous architect is it credited to? Answer: Nun’s Island Quebec (Montreal) and Ludwig Mies van der Rohe

• Science & Nature

1. Name the four types of fossil fuels. Answer: Petroleum, Coal, Natural Gas and Orimulsion
2. What fuel has the highest energy density? Answer: Hydrogen
3. What is the process of injecting water, sand and chemicals under extremely high pressure into an oil well called? Answer: Fracing
4. With oil under tremendous pressure underground in ever deeper wells, temperatures can be very high – reaching up to what temperature? (Celsius or Fahrenheit) Answer: 133 degrees Celsius
5. Name the three primary processes used in the refining of crude oil. Answer: Separation, Conversion and Treating
6. Just for fun, name 5 (aside from fuel) of the more than 6000 products that are made with or derived from oil and gas Answer: Caulking, Fertilizer, Dice, Antihistamines, Shoelace Aglets

• Sports & Leisure

1. What was Coach Eric Taylor’s combined won-loss record as coach of the Dillon Panthers and East Dillon Lions, including playoffs. Answer: 47-15 (12-2 playoffs)
2. How many of the NFL’s 32 franchises have owners who made their fortunes in the energy or immediately related industry? Answer: 8
3. Name the Quarterback who led the Washington team to an improbable come from behind victory in the last game of the season to earn a playoff berth as a replacement player. Answer: Shane Falco
4. Two franchises in big league professional sports have been called the Oilers. Name teams and the greatest player each one has produced. Answer: Houston Oilers/Earl Campbell and Edmonton Oilers/Wayne Gretzky
5. What is the average amount of fuel burned in a NASCAR race assuming 40 cars? Answer: 6,000 gallons
6. Name the actor who played #3 above. Answer: Keanu Reeves

Bonus Question

What was the subject of the very first Crude Observations in May of 2015 and who designed the logo. Answer: The election of the provincial NDP. The Crude Observations logo was designed by my dad.

Stormont Capital Crude Coffee

Great group last week. This week we are going to talk Fair Deals – my version! Maybe.

Email me if you want to participate at sparnell@stormontcapital.com

Prices as at July 24, 2020

• Oil
  • Oil storage was… down! (male up your mind!)
  • Production was … FLAT?
  • OPEC+++++ is musing about increasing production come August
• Natural Gas
  • Storage was up, historically very high; consumption flat; production flat; exports flat.

• WTI Crude: $40.59 ($40.53)
• Western Canada Select: $33.93 ($32.54)
• AECO Spot: $1.970 ($1.763)
• NYMEX Gas: $1.718 ($1.832)
• US/Canadian Dollar: $0.7364 ($0.7365)

Highlights

• As at July 17, 2020, US crude oil supplies were at 536.6 million barrels, a increase of 4.9 million barrels from the previous week and 91.5 million barrels higher than last year.
  • Production was up for the week at 11.100 million barrels per day, which of course we know is impossible. Production last year at the same time was 11.300 million barrels per day.
  • Imports rose to 5.941 million barrels from 5.567 million barrels per day compared to 7.028 million barrels per day last year.
  • Crude exports from the US rose to 2.993 million barrels per day from 2.583 million barrels per day last week compared to 3.292 million barrels per day a year ago
  • Canadian exports to the US rose to 3.354 million barrels a day from 3.170 million barrels per day last week
  • Refinery inputs decreased during the current week to 14.206 million barrels per day
• As at July 17, 2020, US natural gas in storage was 3,215 billion cubic feet (Bcf), which is 16% above the 5-year average and about 26% higher than last year’s level, following an implied net injection of 37 Bcf during the report week
  • Overall U.S. natural gas consumption rose 1.0% during the report week.
  • Production was up 0.9% for the week. Imports from Canada fell 3.6% from the week before. Exports to Mexico were down 0.7%
  • LNG exports totaled 25 Bcf
• As of July 24, 2020, the Canadian rig count increased 10 to 42 (AB – 28; BC – 9; SK – 4; MB – 0; Other – 1). Rig count for the same period last year was 127.
• US Onshore Oil rig count at July 24, 2020 is at 181, up 1 from the week prior.
  • Rig count a year ago was 776
• Natural gas rigs drilling in the United States is down 3 at 68
  • Rig count a year ago was 169
• Offshore rig count was unchanged at 12.
  • Rig count a year ago was 23

Trump Watch: Person. Woman. Man. Camera. TV. …What. The. Heck. Is. Happening.

Kenney Watch (new!): A summer pause. New tech plan!

Trudeau Watch (for balance): Testify!