It’s the new economy.
It’s the killer of the economy. It’s the economy’s salvation.
It’s the pain at the pump.
It’s the joy in the stock market (the Canadian one, anyway).
It’s the price of oil. And no wonder everyone is talking/worried/elated about it — and yes, sometimes all at the same time.
In the past year, the benchmark price of crude has risen by more than 60%. Though at press time it’s wobbling well below the record high of mid-July, it is still spurring dire predictions of a US$200-a-barrel world that will create a global economic depression — while at the same time creating unprecedented revenues for the companies that pump the stuff out of the ground. (ExxonMobil just reported a record quarterly profit of US$11.7 billion, and the Street was disappointed.)
Yet there is more to the story of oil than price, especially here in Canada. In Saskatchewan, technology is unlocking the billion-barrel-plus potential of the Bakken Formation — while in Alberta the techno-fix for deep reserves in the oilsands is proving more than a little problematic. Meanwhile, the sheer mass of potential production from the sands is creating challenges downstream — in the pipelines and at the refineries — that could change the economics of the industry. All this, amid mounting environmental concerns that have already stalled one oilsands megaproject, and that could become a defining issue in the U.S. presidential race.
In the following pages, we report on those and the other bubbling issues in the new age of oil. If you thought only its price was volatile, think again.