EconMatters had the pleasure of speaking at the 2012 Ontario Advocis School for the Financial Advisors Association of Canada on August 14, 2012. Chairman Mr. Dennis Yanke was kind enough to leave the topic at our complete discretion. We finally decided on the topic of energy, since oil and gas not only touches people's lives everyday whenever you flip on the light or gas up at the gas station, but it is also something we frequently discuss here.
In North America, the unconventional oil and gas resources (shale plays in the U.S., Oil Sands in Canada) have always been available; however, the capital-heavy and complex extraction process was not economical until recent years with high enough oil prices.
NIMBY (Not in My Back Yard) and related environmental debates of fracking and oil sands have made optimizing this new resource controversial from Washington to community town halls. Meanwhile, the surge in drilling has also created new environmental, infrastructure, personnel, and supply chain related challenges.
It is important that policy makers as well as community members to come to this common understanding that ultimately, world's energy demand has to be met by energy supply from somewhere. If it is not fossil fuels, it will be the minerals or other materials that make up the electric car battery, solar panels, etc.
Of course, it is ideal that clean and renewable energy could supply all of the world's energy demand. However, the reality is that demand can not and will not be met by clean or renewable energy sources despite the higher than average growth rate, which has been consistently concluded in various studies by both governmental as well as private sources. The world needs to acknowledge this boundary in an imperfect world in order to move on and plan ahead.
In this presentation, we give a high level comprehensive look at the unconventional energy in the U.S. and Canada, the impact from the shale drilling boom, constraints and challenges of the oil industry, and the near term outlook of the oil and gas market. Hope our readers will find it interesting as well as informative.
[Note: The near-term price outlook in the presentation reflects only the current market fundamental supply / demand factors, and does not include a scenario of extreme geopolitical or weather events.]