I’m back! Did anyone miss me? Anyone? Anyone? Bueller? Probably not I guess. But I missed all of you. Really. I did.

When you are in the depths of the summer doldrums it can be very hard to figure out what to write about, especially if you have used up all the readily available rants about varied and interesting subjects such as “infrastructure”, “tax” and “how people act against their own self interest”

Plus I find myself stubbornly stuck in vacation mode even though the vacating is over.

That said, I need to do something this week as I only gave myself one glorious week off. Or to be fair, I probably gave my readers the week off.

Interestingly, and if you are curious about who hasn’t given themselves time off, I will tell you – it’s those happy, smiley folks who are running to lead the fledgling United Conservative Party of Alberta, which as we know is the result of the widely supported merger of the once invincible Progressive Conservative Party of Alberta that got trounced by the NDP in the last provincial election and the grassroots led, theoretically right of Texas Wildrose Party.

This new party is of course (in theory at least) expected to win the next provincial election so handily that whoever wins this leadership contest will of course be our next premier. So the race actually matters.

And judging by the barrage of emails I am receiving on a daily if not hourly basis, these candidates appear to be taking nothing for granted and have brought out the big guns in terms of possible policy and NDP bashing to demonstrate their bona fides across a wide range of issues, from the banality of ballooning deficits to the election and political career defining scourge of photo radar.

Each of the three candidates (recently raised to four) is so sincere and committed in their approach to annihilating the socialist scourge that I feel a bit remiss in stating the following, but asa keen observer for political dialogue, it is hard not to to tell them the following

Can we all please calm down? At least a little bit?

That’s right, tone it down.

Notwithstanding what your advisors are telling you, the sky is not falling. Stop acting like hyperventilating looney tunes trying to win the election before it’s even called. Save your ammunition for when it counts and please, stop giving all you best stuff away so early.

And as we cruise through towards the October vote (gadzooks, 2 more months of this stuff? Help!), I would like to give these putative candidates for leader and the United Conservative Party they seek to lead some unsolicited political advice.

Party Name

Change it. Change it now, change it soon, change it as often as it takes to get it right. If it takes me half a second to turn your acronym into Captain Underpants style potty humour, you’re in trouble. UCP? Wait no, I c p. C3pO. Does a bear CP in the woods? This is the worst party name since the Canadian Conservative Reform Alliance Party. And brought to you by the same group of guys too. At least none of the candidates is named Tippy Tinkletrousers.

Candidate weirdness

If you wear a suit all the time and beetle around in a blue truck, please avoid using the word “clicks” in official correspondence. It’s awkward, weird and spelled wrong anyway. And by the way, what is couch surfing? It all sounds a bit sketchy to me. Call me crazy but can any of us really picture Jason Kenney bunking on a farmers’ sofa? You’re auditioning for a big job and you’re a career politician – doing the aw shucks one of the common people routine isn’t convincing. Regardless of how many “kilometres” your assistant drove you.

Brian Jean – I know you’re an earnest “get ‘et done” sort and that you have endured family tragedy in spades in the last few years. So I will cut you a lot of slack. You are also a bit of a policy nerd. I get that. But photo radar? Come on.

Doug Schweitzer seems a capable and affable type. And I sure like the idea of slashing taxes, but I’m not sure what role you fill in this race. You’re like a photogenic Jason Kenney. A Brian Jean lite without the photo radar. That said, promising a holy war with BC if you don’t get a pipeline is a little over the top

I don’t know much about the new candidate and have yet to get slammed with his propaganda, but can we all take a minute to contemplate the late great opposition finance critic Derek Fildebrant? He seems a fairly earnest type, but who in their right mind would ever think it was OK to take a housing allowance and then put your pad on AirBnB? At least wait until you win to fleece the taxpayer

Random stuff about issues

It’s not all about carbon taxes. That’s right. Look, I get that the NDP never campaigned on a carbon tax. And the one they introduced has its flaws. And really no one likes it much. But saying you’re going to repeal it is just a lot of hot air when the federal government is going to impose one anyway. Carbon taxes in Canada are, for better or worse, a reality. Rather than railing about how you are going to repeal the tax, tell me the truth. That it’s likely here to stay and what your plans are to try and fix it. Are you going to repeal the bribe to lower income Albertans? Make it revenue neutral? Tinker with  the emissions cap in the Oilsands? I don’t know. All I hear is that you will repeal it, which I don’t think you can.

For the record, Brad Wall is not a political savant. And pointing out his perceived strengths and wisdom only serves to highlight your weaknesses. If Brad Wall is Alberta’s great champion, what do i need you for?  Although I suppose now that he has resigned in saskatchewan it’s only a matter of time until he surfaces in some capacity in Alberta given how much he has to say about the province.

Investment isn’t “fleeing” Alberta rly because of the NDP. Yes it’s distressing that a whole bunch of majors have sold their operations here but chicken little never won an election. I think that after 3 years of downturn, the last thing people in Alberta need to be reminded of is that the energy sector has gone through a brutal recession driven almost every exclusively thing commodity prices. To pin it on the NDP is easily refuted by the fact that the only places in the world seeing incremental capex this year are the US and Canada . What I hear when you talk about the oil patch are tired bullet points and poached memes. Don’t be a complainer. Propose a solution.

Calling the NDP disloyal to Canada and Alberta. Stop it. That’s just silly. I’m not sure what voting cohort your focus groups told you to target with statements like that but here’s what I think – they’re probably in your base already. You don’t need to win them over here ridiculous statements.

Contrary to how you are campaigning, I believe the coming election in Alberta is going to be won or lost in the middle. Playing too far to the right in a leadership contest will only come back to bite you when it really counts in the spring of 2019.

Don’t tell me how bad the NDP has been, I’m able to make that judgement for myself. I want to know what you are going to do differently. And remember, it’s the middle and it’s the economy. Fix it.

Don’t make the assumption that all albertans are mad as hell and aren’t going to take it anymore. The majority of us have adapted and figured out how to navigate both the slow recovery in the oil patch and the edicts of our Liberal in everything but name overlords. Some of what they have done hasn’t been so bad.

That said, the fiscal path Alberta is on is not sustainable. I do believe that a government committed to responsibly managing expenses and committed to deficit and debt reductions, facilitating the delivery of our wealth creating hydrocarbons from our world class regulatory regime via pipeline to tidewater while keeping the social contract we have with each other intact  has a pretty fair chance of forming the next government. Don’t blow it in your haste to appeal to people who are on the fringes and are going to support you anyway. I cannot stress this any more emphatically. The win comes from the middle – the votes the Conservative party lost in 2015. And the middle wants a nice guy. Not an angry complainer.

The reality is he economy is improving and by 2019 the deficit and taxes may both be coming down. Are any of you prepared to campaign in that environment? Because you should be. And it will need to be a civil campaign.

If you want to talk more, you know where to reach me.

Prices as at August 11, 2017 (July 28, 2017)

The price of oil rallied during the week on solid US inventory draws and positive comments from Saudi Arabia.
Storage posted a large decrease
Production was down marginally
The rig count in the US appears to have plateaued
Natural gas was relatively flat on the week as we sit in summer doldrums. Injections feel small this year, especially with the incremental rig count. Gas looks like a fairly constructive play into the fall and winter
WTI Crude: $48.78 ($49.71)
Nymex Gas: $2.983 ($2.941)
US/Canadian Dollar: $0.7890 ($ 0.8050)
Highlights

As at August  4, 2017, US crude oil supplies were at 475.4 million barrels, a decrease of 6.5 million barrels from the previous week and 17.6 million barrels below last year.
The number of days oil supply in storage was 27.4 behind last year’s 31.3.
Production was down for the week by 7,000 barrels a day at 9.423 million barrels per day. Production last year at the same time was 8.435 million barrels per day. The change in production this week came from a decrease in Alaska deliveries and higher Lower 48 production.
Imports fell from 8.253 million barrels a day to 7.762  compared to 8.404 million barrels per day last year.
Refinery inputs were down slightly during the week but still strong at 17.574 million barrels a day
As at August 4, 2017, US natural gas in storage was 3.038 billion cubic feet (Bcf), which is 2% above the 5-year average and about 8% less than last year’s level, following an implied net injection of 28 Bcf during the report week.
Overall U.S. natural gas consumption was down 1% during the week – with increases in power and industrial demand offsetting declines in retail and commercial demand
Production for the week was flat and imports from Canada were down 2% compared to the week before. Exports to Mexico were up 2%.
LNG exports totalled 9.9 Bcf.
As of August 8  the Canadian rig count was 189 (30% utilization), 133 Alberta (31%), 22 BC (31%), 29 Saskatchewan (25%), 5 Manitoba (33%)). Utilization for the same period last year was just above 15%.
US Onshore Oil rig count at August 11 was at 768, up 3 from the week prior.
Peak rig count was October 10, 2014 at 1,609
Natural gas rigs drilling in the United States was down 8 at 181.
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 unchanged at 18
Offshore rig count at January 1, 2015 was 55
US split of Oil vs Gas rigs is 80%/20%, in Canada the split is 56%/44%

Drillbits
Wildfires continue to rage in British Columbia. Please consider a Red Cross donation if you can. It’s simple, easy and it helps.
Earnings season is on – Lots and lots of cash flow!
Trump Watch: So less than a week after I visited the USS Missouri, on whose deck Japan formally surrendered and WW2 ended, the Donald is trying to start a new world war. Fab. On the plus side, in a sign of how credible the market considers Donald Trump, there is exactly zero risk premium in the oil price.