These are hard days for Fort McMurray. But, Andrew Nikiforuk writes, there is another fire burning -- a slow burning one -- that will eventually bring the place to its knees. And Murray Edwards, the head of Canadian Natural Resources, has seen the future:
Murray Edwards, the billionaire tycoon behind Canadian Natural Resources, one of the largest bitumen extractors, has decamped from Alberta to London, England.
Edwards and company slashed $2.4-billion from CNRL's budget in 2015.
Since the oil price crash, by some accounts, Murray's company has lost 50 per cent of its market value.
(Cenovus, another oilsands player, got cursed with junk bond status.)
Edwards likely has read the tea leaves and understands that bitumen might not play a significant role in the secular age of stagnation.
Former CIBC chief economist Jeff Rubin has also seen the future:
Last but not least comes a pithy analysis by Jeff Rubin, CIBC's former chief economist. Rubin warns that contraction is the only future for the oilsands unless Canada wishes its economy to become "obsolete and non-competitive."
He correctly notes that 80 per cent of the increase in new global oil did not come from OPEC but from high cost bitumen mines and fracked U.S. shale deposits.
North American corporations, in other words, engineered the global oil glut.
Encouraged by easy credit, Big Oil flooded the market with difficult and largely uneconomic hydrocarbons.
The Saudis, the world's number one and cheapest producers, refused to scale back production or give up market share. Instead they precipitated a price free-fall.
When oil prices stood at $100, rash bitumen development made some sense. But when prices fell below $45 the gamble turned into Russian roulette.
Most of our movers and shakers haven't figured it out yet. But bitumen's days are over.