Red Deer 1913 — 2013 Create Celebrate Commemorate
RED DEER
ADVOCATE WEEKEND EDITION BREAKING NEWS ONLINE AT WWW.REDDEERADVOCATE.COM
STARS HOUSE OF DREAMS
MEXICO GETAWAY TRAVEL: PAGE B1
PAGE C1
SATURDAY, JAN. 19, 2013
HOW TO DESTROY A SPORT
MUSICIANS TOGETHER IN HARMONY
Lance Armstrong’s fortune is waning
ENTERTAINMENT
PAGE C4
A6
Is Alberta’s petroleum industry
MISSING OUT? BY HARLEY RICHARDS ADVOCATE BUSINESS EDITOR Petroleum pipeline proponents say it’s an economic necessity to get oilsands crude to foreign markets. Opponents argue it’s an environmental imperative to prevent that flow. Alberta government officials have been strenuously making the former case. They warn of imminent spending cuts due to plummeting royalty revenues, which in turn are the result of the low prices that oil companies in the province are receiving. “Over the last few years, there’s been a growing differential between what Alberta producers get and what the world price is,” said Energy Minister Ken Hughes, pointing out that there’s a gap of approximately $40 between the price of Western Canadian select blend and West Texas intermediate crude. Part of the problem stems from a glut of oil being produced in North America, most notably in the Bakken fields of North Dakota, Montana and Saskatchewan, said Hughes. “The energy industry has been immensely successful at developing reserves that previously weren’t thought to be economic,” he explained. “They have doubled production there in the last few years.” That, combined with limited pipeline capacity to carry Western Canadian crude to costal ports and refineries, has resulted in the discrepancy between the world price and the Alberta price. Greg Stringham, vice-president of oilsands and markets with the Canadian Association of Petroleum Producers, pointed out that the difference also reflects the fact that West Texas intermediate is a light crude while Western Canadian select is a lowervalue blend of heavy oils. But, he added, the prices for both heavy and light crude in Canada are still well below the world rate. Stringham agreed that access to global markets is an issue. “The real crunch has been trying to get to places on the coast where they’re actually paying world oil prices.” The Alberta discount is affecting more than government coffers, said Hughes. “Industry is missing out on some $30 billion in revenues,” he said. “Really, it’s a net subsidy by Canadians to America of some $30 billion.” Some companies have scaled back production and capital expenditures, said Hughes. But investment is still occurring, especially in the oilsands.
‘Over the last few years, there’s been a growing differential between what Alberta producers get and what the world price is.’
File photo by THE CANADIAN PRESS
The Suncor oilsands upgrader facility near Fort McMurray.
Please see OIL CASH on Page A2
RECYCLE
INDEX
Flurries. High -7. Low -20.
Five sections Alberta . . . . . . . . . . . . . . . . . . . . . A3 Business. . . . . . . . . . . . . . . . C7,C8 Canada . . . . . . . . . . . . . . . . . . . . . A3 Classified . . . . . . . . . . . . . . . . E1-E5 Comics . . . . . . . . . . . . .C6,D7,D8 Entertainment . . . . . . . . . . . C4,C5 Sports. . . . . . . . . . . . . . . . . . B4-B8
FORECAST ON A2
ALBERTA
WORLD
QUEUE-JUMP SCHEME REWARDED DONORS
HOSTAGES KILLED DURING BLOODY SIEGE
Three doctors have testified about an elaborate queue-jumping scheme that saw deep-pocket donors of the U of C rewarded by being sent to the front of the line for cancer screening at a public clinic. A2
The bloody three-day hostage standoff at a natural gas plant in the Sahara took a dramatic turn on Friday as Algeria’s state news service reported that nearly 100 of the 132 workers kidnapped had been freed. A4
January 18-27, 2013
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PLEASE
WEATHER