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Alberta - A Wealth of Oil, but No Money

It's not Ottawa or Ontario that stands in the way of Alberta's success, nor will the rants of Thomas Mulcair or Justin Trudeau have any noticeable impact on the well-being of Albertans. An independent Alberta would face the same problems as now, and even worse, because British Columbia next door would be even less inclined to open its territory to a pipeline from the "Republic of Alberta".
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isolated oil pump in action at...
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isolated oil pump in action at...

Here and there, some people voice their support for an independent Western Canada, or independent Alberta. But seeing how difficult it will be for Alberta to sell its oil, it makes you wonder how useful, or even realistic, such a scenario is.

The Keystone XL pipeline will probably be built one day, but the Northern Gateway line to the coast of British Columbia will in all likelihood remain just that, a pipedream (no pun intended).

Alberta has had tremendous difficulties selling and shipping its bitumen overseas, and as a result the precious resource has been given away at a discount, with potentially billions of dollars in revenue that are now lost forever to Canadians, businesses and government.

If this keeps up, it might be better to leave the oil in the ground until a solution can be found - although that would mean that Alberta's wasteful government would be left with almost no substantial revenue stream. Alberta would quickly become Canada's worst-performing province, complete with deficits and debt on the scale of Greece or Portugal.

I, too, believe that the Northern Gateway pipeline is dead. It won't happen. And if Keystone ever gets flowing, it won't be the perfect solution either, as oil would 'merely' be sold to Americans, just as before. However, in light of America's growing independence in terms of oil and gas, and the prospect of America's economy sliding into yet another recession and prolonged economic woes, our neighbours to the south aren't exactly our best customers anymore.

Even though the Chinese have now successfully gained a foothold in Alberta's oil sands, the big question remains: how are they going to get the oil to China?

This is where Alberta's oil wealth will eventually stop to generate jobs and money. Without efficient infrastructure and the means to get the oil to countries with the biggest demand, Albertans might just as well start learning to be subsistence farmers.

Unfortunately, Alberta's economy is a monoculture. Despite my warnings for almost ten years, nothing has been done to diversify the economy. There is still very little a person can do in Alberta unless they work in the oil and gas sector or one of the services closely associated with it.

It's not Ottawa or Ontario that stands in the way of Alberta's success, nor will the rants of Thomas Mulcair or Justin Trudeau have any noticeable impact on the well-being of Albertans. An independent Alberta would face the same problems as now, and even worse, because British Columbia next door would be even less inclined to open its territory to a pipeline from the "Republic of Alberta".

Unless something changes drastically, such as new technology, Albertan oil will, at best, flow to the U.S. and to other regions in Canada. At the very least, this would ensure that Canada could look to a future of secure oil supply for domestic consumption without having to rely on imports from iffy or rogue nations.

But that, of course, won't produce the kind of wealth investors, including the Chinese, have been dreaming of.

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