Blogging About Income and Cross Elasticity

Canadian Oil Sands

For this excersize I wanted to research Canada's oil and gas industry. Like many of you I'm sure, just looking at the gas prices here right now makes you think that all those oil and gas wallets just get a little thicker. Daniel Tencer's article "Canada Oil And Gas Industry: Shrinking Profits May Be A Sign Of Things To Come" tells me differently. The article, which was written in July of this year reports losses to Canada's largest oil company's Suncor, Encana and Cenovus in the past quarter.


So surprise! The Oil and Gas industry here may not be as lucrative as we all thought. According to Tencer things may only get worse. The U.S. is starting to find new and better ways to extract oil at home in places like Texas. Canada's best bet is the Asian markets. Asia is now the largest consumer of oil and gas in the world. Canada muct find a way to get our oil to other ports so we can get our oil to Asian markets to save itself.  We could improve the industry, but first we must diversify!

Source: Kent Marketing Services

One thing about oil and gas is it's so necessary all the time. We always need it everyday. Yet, it's still quite elastic. As Canadians, we'll always have to buy oil and gas, but (I know I do anyways) we'll wait to fill our tanks one day when we see gas at $1.22 a litre and wait to see if it will drop. So demand for oil and gas is always high but gets significantly higher when we see that gas is suddenly $1.10 at the pumps.



References:
http://www.huffingtonpost.ca/2012/07/25/canada-oil-gas-shrinking-profits_n_1702807.html
link to the article I used.

http://www.google.ca/imgresum=1&hl=en&biw=1366&bih=685&tbm=isch&tbnid=h5n_WYnSC7v7qM:&imgrefurl=http://www.cppi.ca/index_e.php%3Fp%3D57&docid=neX_hiyIt_D4GM&imgurl=http://www.cppi.ca/userfiles//image/Chart2525201%252520-%252520GPQA%252520components%252520of%252520gasoline%252520pricing%2525202010%252520(eng).jpg&w=528&h=411&ei=Qp5gUKHnKqLlyAGXqIGYDA&zoom=1&iact=hc&vpx=745&vpy=156&dur=2596&hovh=198&hovw=255&tx=79&ty=76&sig=110826988698318660708&page=1&tbnh=156&tbnw=169&start=0&ndsp=16&ved=1t:429,r:3,s:0,i:77
link to the price of a litre of gas chart.

http://s.ngm.com/2009/03/canadian-oil-sands/img/candian-oil-sands-615.jpg
Oil sands picture