Oil price plunge, trade wars drive drilling land sales down in Alberta

A boom in sales of drilling rights in Alberta is fading as U.S. President Donald Trump's trade war and OPEC+ production increases hammer crude prices.
Article content
The average price paid to lease oilsands lands for development tumbled to C$771 per hectare this year, according to provincial data. That's down 18 per cent from last year's average, which was the highest since 2007. For lands outside of the oilsands, the price has fallen 25 per cent.
Article content
Article content
The slumping land prices are an early sign the Canadian drilling boom spurred by last year's completion of the Trans Mountain pipeline expansion may be coming to an end. With the Trans Mountain project giving producers almost 600,000 barrels of new daily shipping capacity, drillers increased output and snapped up new drilling sites, sending land prices to multidecade highs in 2024.
Article content
Article content
But the twin shocks of Trump's global tariffs and OPEC+'s faster-than-expected production increases have sent oil prices tumbling to four-year lows in recent weeks, sapping drillers' appetite for new production sites.
Article content
'Canada is not immune to the world's oil price pains,' said Trevor Rix, head of the Canadian oil and gas research team at Enverus.
Article content
The softening in Canada's oilpatch mirrors the situation in the U.S., where drillers are retrenching and some executives are saying shale production has likely peaked.
Article content
Article content
But Canada's producers are expected to keep ramping up output in the years ahead. For oilsands producers, lower oil prices can be countered by increased volumes, and a new liquefied natural gas plant in British Columbia will encourage drilling in oil-rich areas of western Canada, Kevin Birn, chief analyst for Canadian oil markets for S&P Global.
Article content
Not only is Trans Mountain not fully filled, the company is already looking to expand capacity on its system. Enbridge Inc. is also working to add 150,000 barrels of daily capacity on its Main Line in the coming years.
Article content
Oilsands output will grow by about 500,000 barrels a day to 3.8 million barrels a day by 2030, according to S&P Global Commodity Insights. Much of the new oil is likely to flow through Trans Mountain to the Pacific Rim, and it may be matched by growing volumes of natural gas as Canada's first major LNG terminal is slated to start later this year.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Winnipeg Free Press

an hour ago

• Winnipeg Free Press

How Senate Republicans want to change the tax breaks in Trump's big bill

WASHINGTON (AP) — House and Senate Republicans are taking slightly different approaches when it comes to the tax cuts that lawmakers are looking to include in their massive tax and spending cuts bill. Republicans in the two chambers don't agree on the size of a deduction for state and local taxes. And they are at odds on such things as allowing people to use their health savings accounts to help pay for their gym membership, or whether electric vehicle and hybrid owners should have to pay an annual fee. The House passed its version shortly before Memorial Day. Now the Senate is looking to pass its version. While the two bills are similar on the major tax provisions, how they work out their differences in the coming weeks will determine how quickly they can get a final product over the finish line. President Donald Trump is pushing to have the legislation on his desk by July 4th. Here's a look at some of the key differences between the two bills: Tax break for families The child tax credit currently stands at $2,000 per child. The House bill temporarily boosts the child tax credit to $2,500 for the 2025 through 2028 tax years, roughly the length of President Donald Trump's second term. It also indexes the credit amount for inflation beginning in 2027. The Senate bill provides a smaller, initial bump-up to $2,200, but the bump is permanent, with the credit amount indexed for inflation beginning next year. Trump campaign promises Trump promised on the campaign trail that he would seek to end income taxes on tips, overtime and Social Security benefits. Also, he would give car buyers a new tax break by allowing them to deduct the interest paid on auto loans. The House and Senate bills incorporate those promises with temporary deductions lasting from the 2025 through 2028 tax years, but with some differences. The House bill creates a deduction on tips for those working in jobs that have customarily received tips. The House also provides for a deduction for overtime that's equal to the amount of OT a worker has earned. The Senate bill comes with more restrictions. The deduction for tips is limited to $25,000 per taxpayer and the deduction for overtime is limited to $12,500 per taxpayer. The House and Senate bills both provide a deduction of up to $10,000 for interest paid on loans for vehicles made in the United States. And on Social Security, the bills don't directly touch the program. Instead, they grant a larger tax deduction for Americans age 65 and older. The House sets the deduction at $4,000. The Senate sets it at $6,000. Both chambers include income limits over which the new deductions begin to phase out. More SALT The caps on state and local tax deductions, known in Washington as the SALT cap, now stand at $10,000. The House bill, in a bid to win over Republicans from New York, California and New Jersey, lifts the cap to $40,000 per household with incomes of less than $500,000. The credit phases down for households earning more than $500,000. The Senate bill keeps the cap at $10,000. That's a non-starter in the House, but Republicans in the two chambers will look to negotiate a final number over the coming weeks that both sides can accept. Medicaid providers The House bill prohibits states from establishing new provider taxes or increasing existing taxes. These are taxes that Medicaid providers, such as hospitals, pay to help states finance their share of Medicaid costs. In turn, the taxes allow states to receive increased federal matching funds while generally holding providers harmless through higher reimbursements that offset the taxes paid. Such taxes now are effectively capped at 6%. The Senate looks to gradually lower that threshold for states that have expanded their Medicaid populations under the Affordable Care Act, or 'Obamacare,' until it reaches 3.5% in 2031, with exceptions for nursing homes and intermediate care facilities. Industry groups have warned that limiting the ability of states to tax providers may lead to some states making significant cuts to their Medicaid programs as they make up for the lost revenue in other ways. The Medicaid provision could be a flashpoint in the coming House and Senate negotiations. Sen. Josh Hawley, R-Mo., was highly critical of the proposed Senate changes. 'This needs a lot of work. It's really concerning and I'm really surprised by it,' he said. 'Rural hospitals are going to be in bad shape.' Tax breaks for business The House bill would allow companies for five years to fully deduct equipment purchases and domestic research and development expenses. The Senate bill includes no sunset, making the tax breaks permanent, which was a key priority of powerful trade groups such as the U.S. Chamber of Commerce. Clean energy tax credits Republicans in both chambers are looking to scale back the clean energy tax credits enacted through then-President Joe Biden's climate law. It aimed to boost the nation's transition away from planet-warming greenhouse gas emissions toward renewable energy such as wind and solar power. Under the Senate bill, the tax credits for clean energy and home energy efficiency would still be phased out, but less quickly than under the House bill. Still, advocacy groups fear that the final measure will threaten hundreds of thousands of jobs and drive up household energy costs. Monday Mornings The latest local business news and a lookahead to the coming week. Odds and ends The House bill would allow millions of Americans to use their health savings accounts to pay for gym memberships, with a cap of $500 for single taxpayers and $1,000 for joint filers. The Senate bill doesn't include such a provision. The House reinstates a charitable deduction for non-itemizers of $150 per taxpayer. The Senate bill increases that deduction for donations to $1,000 per taxpayer. Republicans in the House bill included a new annual fee of $250 for EV owners and $100 for hybrid owners that would be collected by state motor vehicle departments. The Senate bill excludes the proposed fees. ___

Vancouver Sun

3 hours ago

• Vancouver Sun

Transportation Minister Chrystia Freeland 'dismayed' about BC Ferries' contract with Chinese shipyard

VICTORIA — Federal Transport Minister Chrystia Freeland says she is 'dismayed' that BC Ferries has contracted a Chinese state-owned shipyard to build four new vessels in the current geopolitical context that includes 'unjustified' tariffs on Canada. Freeland says in a letter sent to provincial Transportation Minister Mike Farnworth that she expects BC Ferries to inform her about all measures that it plans to take to 'mitigate any security risks,' including cybersecurity problems that might arise from the decision. BC Ferries announced earlier this month that it has contracted China Merchants Industry Weihai Shipyards to build four new major vessels following a five-year-long procurement process that did not include a Canadian bid. Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. Freeland adds she is 'surprised' that BC Ferries does not have a mandate for an 'appropriate level' of Canadian content in the procurement given the value of the contract, although the dollar figure hasn't been made public. Farnworth says in a statement that the ministry is reviewing the letter, adding that he has spoken with Freeland about the need to bolster B.C.'s shipbuilding industry. BC Ferries says in a statement that the Chinese bid was 'the strongest bid by a significant margin' and that security is a 'top priority,' adding that all sensitive systems will be sourced separately and independently certified before the vessels enter service. Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark and sign up for our daily newsletter, Posted, here .

Global News

4 hours ago

• Global News

Slowing sales raise questions about B.C.'s electric vehicle mandate

The British Columbia government is facing renewed questions about whether its aggressive electric vehicle (EV) sales mandates can be achieved. Under current B.C. law, 26 per cent of new light-duty vehicles sold in B.C. must be zero-emission by 2026, a figure climbing to 90 per cent in 2030 and 100 per cent in 2035. B.C. has, to date, been a Canadian leader in EV adoption, with 24 per cent of new vehicle shoppers snapping one up in 2024. But that momentum has run into trouble. Both Ottawa and B.C. phased out their EV subsidies earlier this year, and the auto industry says sales dropped quickly afterward. 2:24 BIV: EV sales in Canada plummet over last year 'The first quarter, we were pushing 19 per cent in adoption rate. In April, it was down to 15 per cent … in May it's about flat with 15 per cent again, so the math is just not there to achieve the 26 per cent in 2026,' said Blair Qualey, president and CEO of the New Car Dealers' Association of B.C. Story continues below advertisement 'The 2030 number is virtually impossible.' Get daily National news Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Powering British Columbia's roads under a fully electric scenario is another concern. Barry Penner, chair of the Energy Futures Institute, said his group modelled the electricity needs B.C. would face if it did meet its 100 per cent adoption target by 2035. 'It would require, at full implementation, two more site C dams worth of electricity. And this year, we have been importing electricity,' Penner said. 'In the last couple of years, on average, we've imported 20 to 25 percent. Of our domestic electricity needs from outside the province.' Penner said consumer behaviour has also been shifting towards plug-in hybrids, which are cheaper, but have typically not qualified for government rebates. 3:48 B.C. electric vehicle rebate pause The Ministry of Energy and Climate Solutions did not respond to a request for comment by deadline. Story continues below advertisement However, Global News obtained a technical review of B.C.'s Zero-Emission Vehicles Act and Regulation, which appears to show the government is open to adjusting the program. The document shows the province is considering 'several changes' to the legislation 'to respond to current economic conditions, support affordability for consumers, and lessen pressures on automakers.' Those changes include revising the 2030 zero-emission sales targets, amending compliance ratios for battery electric and hydrogen-powered vehicles, changing the percentage of plug-in hybrids dealers can sell under the law, and changing range requirements to ensure more vehicles qualify for credits. The document further notes that challenges to EV adoption still include range anxiety and vehicle price. 'They're more expensive on average than a non-electric vehicle. Some studies suggest about $8,000 per vehicle,' Penner said. 'Internal government polling shows almost 60 per cent of British Columbians say that's the number one problem buying an electric cars is the cost and yet what have they done? They've removed the rebate.' B.C. has been working to upgrade infrastructure; BC Hydro has installed about 600 fast chargers around the province, with more to come. 'And while the province has paused EV subsidies for now, the policy document hints that it is looking at 'new initiative agreement pathways to support affordability for consumers.' Story continues below advertisement The province is also conducting a wider review of its entire CleanBC program. Qualey said new rebates would help the situation, but argued that even with them in place, the targets are too aggressive. 'Ideally, we would like a pause on all of it right now to continue the conversation so the manufacturers, who are the obligated parties in all of this, can sit with government … (and determine) what targets are achievable,' he said.