The current state of the oil and gas industries at
this time is said to be in a reduced activity. Scott Saxberg President &
CEO of Crescent Point said that “reduced industry activity will alleviate cost
pressure in the second half of 2012, leading to improved operating costs and
cash efficiencies” (Healing, 2012) . However Crescent Point’s net income
rose by 55% to $287 million and cash flow was up by 24% to $386 million.
With the current state of the pipeline situations
with Enbridge Northern Gateway, Kinder Morgan Trans Mountain and Keystone XL pipeline
finding ways to move the oil and gas to lucrative markets such as Asia is proving
to be quite a challenge. The cost of moving a barrel of diluted bitumen is $7
in the pipeline, the cost of moving the same quantity by rail is $6 to $8. Rail
is a form of transportation which is being looked into for an alternate source
of moving oil and gas.
Oil and gas are fairly inelastic in the short term.
As shown in the gas shortage of the 1970’s in the long term individuals and
industries adapted and made changes to improve cars, hot water heaters, furnaces
etc. as well as using technology for new sources of energy. However in the
shorter term we as consumers still consume the same amount and just end up paying
the higher prices.
Citing:
Fekete, Jason (2012) Canadian Newsstand Complete,
Edmonton Journal, Pipeline protests spur option search; companies consider
alternative routes, shipping crude by rail. Retrieved August 4, 2012,
search.proquest.com.libresources1.sait.ab.ca/canadiannews/docview/1033267389/13890A6F8BA6E177ADO/1?accountid=13652.
Healing, Dan (2012) Canadian Newsstand Complete,
Calgary Herald, Crescent Point aims for six-figure production; Company says
income up 55% to $287 million. Retrieved August 14, 2012, search.proquest.com.libresources1.sait.ab.ca/canadiannews/docview/1033175767/1389041892E49BC97CE/2?accountid=13652.
Works
by an Oil Rig
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