Why I’ve Divested From The Oil Sands
Jeff Rubin, one of the world’s most prominent experts on the future of “black gold,” explains why the end of cheap supply means the end of easy answers to renewing prosperity—and the end of globalization as we now know it. Rubin was the former Chief Economist at CIBC World Markets (for almost 20 years), is a frequent columnist for The Globe and Mail, and is the bestselling author of Why Your World Is About to Get a Whole Lot Smaller, and The End of Growth. In this new column in The Globe, Jeff writes about why he’s divested from the oil sands:
Adherents of index investing in Canada have had a rough month as falling oil prices have inflicted considerable pain on not just the energy sector but the entire Canadian market. After surveying the landscape I’ve finally thrown in the towel on the TSX and switched my investing allegiance south of the border to the less oily S&P 500.
Look back over the last few years and the biggest challenge facing oil sands producers would certainly seem to be the inability to get a major new pipeline project approved that would allow the industry to sell its ever expanding production to new markets. Now, however, falling oil prices are changing the conversation that Big Oil is having with the rest of the country about the need to build more pipeline infrastructure. At today’s oil prices, the expected doubling of oil sands production over the next decade just isn’t in the cards. If oil sands output isn’t going up then where exactly is the impetus to break ground on a new pipeline? Indeed, the more relevant issue facing oil sands investors at the moment isn’t about how production from northern Alberta might be expanded, but whether the industry’s current level of production is sustainable.
Could Northern Gateway Oil Pipeline Give Us Saudi Albertia?
Former CIBC economist Jeff Rubin always looks at the big picture.
When he says that a review panel’s endorsement Thursday (December 19) of Enbridge Inc.’s Northern Gateway oil pipeline is an “important victory” for Prime Minister Stephen Harper, he puts it into a broad perspective.
“For Stephen Harper to fulfill his dream of the country becoming an energy superpower, we’re going to need four or five pipelines like this,” Rubin told the Straight by phone from Toronto.
As Rubin notes in this year’s updated version of his 2012 book The End of Growth, Alberta’s daily oil production of about 1.9 million barrels is projected to double by 2020, reaching five million barrels in 2030.
Combined with other sources, Rubin writes, this projected 2030 production will push Canada’s daily production to about six million barrels, up there with Saudi Arabia and Russia.
Why I joined Al Jazeera America
From Al Jazeera America, June 2013
If I got a dollar for every time someone asked me why I joined Al Jazeera America, I wouldn’t need the job. But since nobody is offering to pay me for the answer, I’ll give it up for free.
It excites me. It’s awakened senses I haven’t felt for a while.
I’m a business reporter; that’s code for “frustrated business person.” I talk endlessly about business. I know what works and what doesn’t. I know why businesses fail. I can read financial statements and identify good CEOs and great workers and amazing opportunities. Business, to me, is not about money; it’s about passion and commitment and hard work.
So now I get to be part of a business. A start-up, for that matter. As a global media network, Al Jazeera doesn’t suffer from some of the common start-up problems. But it does face the single biggest challenge ALL businesses face: “If we build it, will they come?” And that excites me.