Canadian crude oil fell to a historic low as prices plummeted to $13.46 a barrel on Thursday.
In contrast, US crude prices surged 19 percent over the last week.
Experts are citing lack of pipeline infrastructure and government support for the Canadian energy industry as a main reason for the lackluster prices.
Federal government criticized for failing to deliver on energy promises
Speaking on the Trans Mountain pipeline Darren Gee, an oil executive at Calgary-based Peyto Exploration & Development Corp. told Bloomberg that Trudeau has “absolutely no interest in having that pipeline built or expanding this basin.”
Speaking on the oil price differential Finance Minister Bill Morneau said that the situation is “an enormously challenging issue” but that broadly the Canadian economy is “doing well.”
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Canada has increasingly faced obstacles to get its energy to global markets. Earlier this month, a federal judge in Montana ordered construction on the Keystone XL pipeline to be halted citing indigenous concerns.
Energy has been divisive issue in domestic politics as the Western provinces feel further alienated by the government’s failure to deliver on its promises.
“I’m quite afraid that we’re going to see a separatist agenda in the west and a lot of separatist movement because of the energy industry. I’m afraid for Canada for that reason,” said Darren Gee.
Jason Kenney wants to see a private sector solution
Alberta will be heading into an election this spring, and Conservative front-runner Jason Kenney is eyeing a private sector solution.
“Obviously a private-sector solution is preferable to government intervention,” said Kenney’s office in a statement. “All industry players have a shared interest in addressing the short-term oil glut in Alberta that is contributing to the price-differential crisis.”