Crude Observations

Opposite of Nice

Another eventful year has come and is almost gone. Across the world, leaders and followers have done their best to keep us entertained if not firmly on our toes. Whether it’s an Almost Best Summer Ever or an insurrection executed by the grossly incompetent or a tanker getting stuick in the Suez Canal as the ultimate metaphor for supply chain disruptions, we have without a doubt seen a decade’s worth of ups and downs in one lonely year.


Market gyrations, pandemics, elections, insurrections, conflict, Bitcoin, Trump, sky-high electricity prices, coal recovery, natural gas rallies, oil price surges, COP26, Biden, sky-high valuations for tech, still record low valuations for energy, AMC, Robin Hood, Dogecoin, lockdowns, waves, vacations, vaccinations, flights, real estate price runups, Brexit, Wexit, Texit, inflation, insane weather events– you name it, we’ve probably seen it.


One thing about the end of the year is that there is always a rush of news leading into it and then it goes quiet. It just seems so volatile now, what with Omicron-induced panic and we don’t know where things are ultimately going to land, but we have had vaccines for a year now and as of Monday, days will start getting longer again so as always at this time of year, it seems like there is a light at the end of a tunnel. Hoping it’s not the proverbial oncoming train, but we’ve seen worse.


What is a poor blogger to do when confronted with all this mayhem and change during a year? I know what I do. I take a holiday break and catch my breath. Calm down, realize that I can’t control everything and concentrate on what is within my grasp.


And then, as I do every year, I get my hands on Santa’s naughty list to see what is really happening. I know, I know. It’s poor form to share this broadly, as many of the names will be disappointed at where they end up, but I feel like it’s my job to let the people know what Santa thinks of our range of familiar influencers that we spend such a disproportionate amount of time talking about.


First off, it is worth noting that in such an eventful year, there have been some changes to the list, some additions and some subtractions. And as always, it is up for interpretation as to relativity. For example, in some years, Vlad “the Impaler” Putin has been naughty and in some he has been nice (mostly naughty TBF). As with all lists it evolves and is a relative ranking.


But certain rankings are pretty much self-evident.



Donald Trump – Naughty


Donald Trump is almost a permanent entry on the naughty list. This is the 85th year in a row on the naughty list for young Donald. He was on the naughty list before he was born. It was expected that being President might soften the Don and that spending a few years under the thumb of Nancy Pelosi would bring to him a more conciliatory perspective. Nope. Rather than make nice, last year Donald doubled down, refused to concede that he lost the election and somehow managed to be the first sitting president to forment an insurrection. Which when you think about it, is quite the accomplishment. He also go kicked of Twitter and if Jack thinks he’s a bad dude, who are we to argue? Since leaving Washington, Donald has continued his “will he/won’t he in 2024” fundraising grift that does little except line his own pockets. So yeah, naughty list. Just the way it goes. DJT’s gift is going to be a visit from the SEC to talk about his money-laundering SPAC grift.



Rudy Giuliani – Naughty


I usually avoid looking up the fate of low-level stooges like this, but Rudy was so much fun last year given his prominence as the grifter in chief in trying to dig up dirt on Joe and then Hunter Biden, association with various and sundry international crooks and, bizarre press conferences. His unhinged lunacy is overshadowed only by his colossal incompetence, Rudy’s place on this list is well-earned and has now become permanent. As someone who watched him rally a country after 9/11 and who believed his rep as a hard-charging, take no prisoners prosecutor, this fall from grace was initially jarring but now is more amusing than anything.  Graft, corruption, makeup… Rudy’s gift is a celebrity spokesman gig for a sex shop next to a landscaping business.



Boris Johnson – Naughty


Boris comes by this honestly. He’s just a bad person and a buffoon. Notwithstanding his recent conversion to environmentalism and climate change or his passing concern about COVID, Boris maintains his place on this list for the shambolic and economy wrecking Brexit, rotting fish, soaring energy prices and an emerging party mutiny thereby assuring the UK a continued descent into mediocrity on the world stage. He is also a despicable clown. His gift? A retirement home in Majorca he can’t use.



Greta Thunberg – Nice. Sorry


No. Not sorry. I like Greta. I don’t agree with everything she says or stands for. And she wasn’t much of a newsmaker this year except for when she was dressing down each and every participant at the COP26 climate change conference as a bunch of hypocrites. But I like how easily she triggers and makes the old white guy cohort squirm and bleat and run around in circles in cataclysmic self-righteousness. Anyway, Greta – I think there is a depth to the issues that she misses, but seriously folks, is it really that terrifying to have a young person so engaged in the major issues of the day? Is climate change a problem? Yes. Is it man-made? Not exclusively but certainly enough to make a difference. Are politicians playing a game as she claims? Absolutely – most don’t care about climate, it’s all about re-election. Should fossil fuel companies quake in their boots? No. Carbon-based energy will be required for decades. Does she have a point and should we listen to her? Absolutely. Our kids are being raised to be activists. Social media connects them. They are less than a decade away from kicking us to the curb. Pay attention. The gift to Greta? People listening and engaging. And an apology on behalf of old white guys everywhere. We aren’t all that thin skinned and frightened. I can defend my energy industry and hear your words.


Justin Trudeau – Last year he managed to get on the nice list, this year he is off. Sorry.


There was a lot of debate on this one. Where does he fit? Great socks, fabulous selfies, but… a giant mess on both the left and the right when it comes to policy implementation, pipelines under construction, an energy sector wondering which way is up with carbon taxes and renewables, relations with China, India and the US completely off the rails and an economy that is seriously underperforming its developed world peers. Last year of course, the pandemic hit and he was able hit the Liberal Party of Canada big government go-button and a tsunami of cash saved the country and the economy. And carbon tax notwithstanding (don’t be afraid, there’s rebates!), the support and programs keep coming. Child care? Awesome! Others, not so much – EV quotas? No, that’s so dumb. Sacrificing the economy for climate change? Not as popular as it seems it should be. Add in the unforgivable surfing trip and the do-nothing, change nothing, weak mandate election that was about nothing. That puts him back on the naughty list and to be honest, fading fast. This year’s gift? A leadership race.


Joe Biden – Nice


How can you not put Joe on the nice list? He’s Grandpa Joe! Joe is the epitome of the nice list. Everyone’s go to for empathy and a socially-distanced shoulder to cry on. He slew the dragon against all odds and, crises notwithstanding, is bringing a sense of normalcy and quiet competence back to the most important political office in the world. He is boring. He is quiet. He rocks his aviators and drives a vintage Corvette. Sure he cancelled Keystone XL, most of us knew that risk (ahem Mr. Kenney). But stability? Predictability? That is worth so much more. Joe’s gift? A built back better US economy and some good old-fashioned Canadian oil to keep those gas prices low.


Jason Kenney – Naughty


Speaking of Keystone XL, the Jason Kenney call is always a risky one. This ranking is less to do with his response to the pandemic – which at this stage no one likes. Look, I’m the first one to make fun of his “Best Summer Ever”, but to be fair, my family had a pretty great summer. Rather it is his ideological rigidity in the face of a rapidly changing political, social and economic reality that keeps him in the naughty ranks. Whether it was waging a war against doctors during a pandemic, blowing billions on a shitty pipeline bet, being myopic about the energy sector, fixating on things he can’t change like equalization, avoiding things he can change like a sales tax, pandering to the looney tunes right, enabling his twitter henchmen, selling off parks to coal developers (come on), losing more money by cancelling crude by rail, gutting post secondary education and implementing a rabidly politicized new school curriculum, Jason’s inability to get off the ideological train risks making him a one hit wonder. Alberta has changed, fundamentally, since the UCP won election. Jason Kenney has not. Until he figures that out, it will be hard to get off the naughty list. If he does, next year might be quite the resurrection for him (religious pun 100% intended).


Gifts for Jason this year include patience, humility and continued low poll numbers to bring him back to earth. And new brakes for Blue Dodge Ram. Speed kills. Slow down Jason.



Erin O’Toole and the Conservative Party of Canada – Naughty


Erin O’Toole. He seems like a decent enough guy, the sort to win back the suburban vote during an unnecessary and unpopular election. But the poll numbers cratered and kept cratering in all the areas he needs to build up support in. He couldn’t even maintain Fortress Alberta. What is up with that? Sadly, a lack of leadership. The CPC has become a mockery of itself and is adrift, the new leader was supposed to change that. Whether it is the parliamentary antics of Pierre Poilievre and Michele Rempel-Garner (the member from Oklahoma who is actually mellowing a bit) of the butchering of messages about vaccine roll-outs, mandates and pandemic preparedness, one has to ask – is anyone adult in the room? Erin O’Toole – Step. Up. Take control of your party. Present a credible and stable alternative to Liberal largesse. Accountability and jobs. The economy. That should be your singular mantra. You aren’t going to flank the Liberals on pandemic response. Get it together. Rein in the clown-show. Erin’s gift? A broom, to sweep out the deadwood. A policy book to follow. A louder voice to drown out the crazy.


Pierre Poilievre – does anyone really care?


I don’t want to give this guy any oxygen. He is the parliamentary manifestation of fingernails on a chalkboard. Channelling the sneering condescension that I had thought only achievable by climate zealots, he pontificates and gesticulates and orates at a near non-stop breakneck pace about “inflation” and “money printing” in such a bizarre and misinformed fashion that it boggles the mind how he ever became Canada’s worst finance critic. Lord help us if the CPC ever came to power and he got the legit role. Gift? A text book. On finance. And inflation. And a mute button.



Shale Oil – Naughty and Nice


Wait. What? How can shale be on both lists? Well, shale, as a general rule, has been on the naughty list since 2014 when runaway production growth upended the energy market and caused our current six to seven year and counting disaster. In particular, the Permian has been a blackhole for capital, sucking up investment that might otherwise have gone elsewhere (Oh Canada!) all in the relentless pursuit of production growth at all costs, right here, right now. But the light tight oil moment, such as it was, has come to an end. Which is nice. Look, production and investment in US light tight oil plays is going to continue, there is no doubt about that, but with the ass-kicking the sector got from the Saudi-Russia price war and the pandemic and capital discipline now being applied by lenders and investors, the go-go days are for now in the rear-view mirror. Even if Joe Biden is begging them to drill more. So what about American energy independence? Well, production is down significantly but not existentially and rig counts are slowly re-inflating. But we are a couple of years out from significant reinvestment. Anyway, shale’s gift? Capital discipline, free cash flow, debt reduction and share buy-backs and a maintenance business model, which is actually what we all want. Oh and a healthy dose of “I told you so” to the “end of fossil fuels” crew.


Canadian E&P’s – Nice


It has been a tough go for the Canadian oilpatch, there is no way to sugar coat that. The pandemic started with layoffs and the current market isn’t exactly a job-creating machine, notwithstanding prices. However inside of that was some much-needed consolidation to achieve market scale, a renewed “Canadianization” of our little patch of oil (second largest in the world, ahem) and some long overdue attention from the markets who have suddenly come to the realization that above a certain price-deck (like $50 WTI and $2 natty), Canadian oil and gas companies, in particular oil sands companies and, to a lesser extent, nat gas players are cash flow vomiting machines. Gift – Line 3, TMX, Coastal Gas Link, bought deals, institutional interest and elevated prices – there has rarely been a better time to load up on Canadian oil and gas.


Oil and Gas Investors – Nice


After suffering through what is arguably the worst seven years the energy industry has ever seen, the energy industry has been a bright light since the election of Joe Biden. Go figure. While I am sure most investors have simply rolled their cash into Tesla and shitcoins, for the ones who decided they were masochistic enough to stick with it, they are now participating in what may be the greatest value play in history. Gift? Positive annual returns – very quiet doubles and triples.



Saudi Arabia and OPEC/OPEC++++++ – Nice


Aside from the colossal blunder of an attempted price war with Russia in the early part of the pandemic, which really helped no one, Saudi Arabia has since done a fine job this year being respectful of the “cuts” they made to oil production in their largely self-serving goal of stabilizing prices and drawing down inventories. And they have kept the greater OPC and OPEC + crew in line and the resulting stability has allowed the energy sector to survive and thrive. An appropriate gift in return for keeping prices steady? How about the highest oil and gas receipts to Aramco… ever. Does anyone actually ever expect the Saudis to let prices collapse again?



Trans Mountain Expansion – Nice


Pipeline projects in general have been nice this year, especially if you measure niceness as a function of patience and calm in the face of absurd opposition. I don’t know how you can file an application for a project, spend a billion dollars, get denied for political reasons, spend another billion, become a political football, get denigrated, demonized, misrepresented and otherwise vilified for years and still be at the table with a smile on your face, ready to spend capital to create jobs, opportunity and prosperity for the biggest set of ingrates that exist. And that was before the Federal Government bought it. But buy it they did and the project is full speed ahead. That’s right, the Pierre Elliot Trudeau Memorial Pipeline is underway, on budget and on schedule. And when the BC storms hit and washed away highways and ROWs? The TransMountain construction crews were there to save the day. Gift? A safe operating environment, higher prices and higher tolls. And grudging acknowledgment of why this stuff is important.


Energy East Revivalists – Naughty


Unfortunately, in the wake of Keystone XL being scrapped and Line 3 and 5 being under continued scrutiny in the US, some people still suffer EEDS, Energy East Derangement Syndrome, characterized by a misplaced belief that this massive (and massively uneconomic) project has a snowball’s chance in hell of being resurrected. The proponent is out. The refinery the product it was going to is out. There is no will to fight the political battle to make it happen. Quebec is intransigent. And ultimately it doesn’t make sense anyway. Get me to ports on the West Coast and the Gulf Coast and we can talk about maximizing value. Build a pipeline to the East and load discounted oil onto a tanker near a New Brunswick refinery that can’t process heavy? Stop it. Gift: A map of Canada.


Vladimir Putin – Naughty


OK, I get it, his Vladness is a despot, but has he really done anything this year to merit a spot on the naughty list? OK, so there’s the whole global domination stuff and his threatening war with NATO by amassing troops on the Ukraine border for a possible invasion. Well, OK. I guess that’s enough. Look, the naughty list is all about redemption – every year is a fresh start, well except for Trump. So, for Christmas this year Vlad gets a brand new Lada taxi-cab to take him back to his youth. Maybe interaction with the little people will reform him. Ah, who am I kidding, right?


People in Calgary and the Energy Sector in Western Canada in general – Nice


It’s been a long seven years. We can’t give you another boom, but I think it’s fair to say that the pieces are in place for a recovery. Seriously, cautious optimism folks! Things are looking up!


#Wexit – Naughty


Seriously folks, what is this all about? Why is this still going on? What are there, like seven wexit parties now? What are you trying to accomplish aside from drawing attention to yourselves. Look, I get “western alienation” but this isn’t the way to solve it. I grew up in Quebec in the 1970s and 1980s. I lived through an actual referendum on separation. I know how divisive it can be at the family and personal level. I have lost valuable friends because of my position or their position. And Quebec is an actual distinct society, with a much better case for independence.


In Alberta’s case? What do you solve? Do you solve market access? No! Do you fix the differential? No! Do you reduce your taxes or change the size of the economy? No! Will you get to keep everything (like all the oil)? No! Will there be First Nations support? No! All the money you think you will save on equalization? It’ll just go to the new government. Will yelling at the top of your lungs about how hard done by Alberta is engender any sympathy from people across Canada? No! You come across as misguided crackpots and inevitably get labelled as Quebec hating racists. You want real constitutional change and a better deal from the Canadian government? I’ve got your back. Say you want to become a landlocked state with no egress solutions for all the fossil fuels we will still be selling to only one customer? Don’t waste my time.


Gift for these folks? An all-expenses paid trip to anywhere but here and muzzle. We don’t need you. You aren’t contributing to the dialogue. You aren’t.


#Texit – Naughty


This is suddenly a thing. Stop it. Gift? A copy of the Alamo.


COVID – Naughty


That’s it. No gift.


That’s it folks. I hope I didn’t miss anything! It’s really just the recurring cast of characters anyway.


As many of you know, this is my last blog of the year, when you next hear from me I will be reviewing my disastrous forecasts from last year before rolling the dice on my 2022 Fearless Forecast (hint – Oil! And gas!).


I do of course reserve the right to send out a note on the Night Before Christmas – it’s kinda my thing.


But if I don’t or you don’t see it…


Merry Christmas, Happy Holidays and Happy New Year from us to you in this strange and wacky time. Stay safe, stay warm, be kind. Reach out to friends and family. Get together or don’t, make your decisions based on best knowledge and mutual safety.


It gets better from here.

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