The oil industry could have a bright future for years to come.
That’s according to Tim Pickering, President and CEO of Auspice Capital, who says the sector can continue to grow if Canada starts accessing markets other than the United States.
This means focusing on pipeline projects.
Pickering tells Mix News, without fixing this issue, we’ll continue to struggle.
“You got one buyer for that product and one way to get it there to get a fair price for it – well you can’t because the buyers got you, that’s the situation we’re in.”
Right now, we’re selling our product at a discount rate, not seen since 2013, because Canada only ships its product to our southern neighbours.
“We don’t have enough pipelines to get our product to markets that want our oil – our only option is the refineries of the United States and we have no options to send it to Asia which is arguably the largest demand market for oil in the world,” added Pickering.
He says getting Energy East and Trans Mountain restarted will do wonders for the economy as it would shrink the sector’s discount.
Pickering also believes projects such as the Alberta to Alaska Railway are also good solutions to getting our product to other markets.
Future Looking Bright
These projects, which could see construction start in 2019, makes Pickering believe the future could be strong for the oil sector.
Teck Resources is currently going through a public hearing for its proposed Frontier Oilsands Mine – a project many are calling the last giant of its kind.
Pickering says if we start accessing global markets – there could be many more oilsands projects.
“If we can get a decent amount of oil to the coast and onto other markets and supply our own nation with a pipeline like Energy East, I don’t think it’s the last we’re going to see.”
Next year also looks like there could be a lot of positives for the sector, such as construction on the Trans Mountain expansion project, Enbridge’s Line 3 replacement, and the Alberta to Alaska railway.
Pickering adds the potential hostile takeover of MEG Energy by Husky Energy could be a good thing as the oil company could rejuvenate “undervalued assets.”