We Can’t Please Everyone

Last week we published a blog post on how Electric Vehicles (EV’s) have the potential to significantly impact the demand for oil (and consequently oil prices).  We had one particularly scathing comment that we wanted to address.

The link to the original article is here, followed by the comment below:

“You guys are so gullible…this is just BS propaganda…everything needs oil even the computer and keyboard you used to write this crap…you’ll be eating your [sic] words once oil goes back to 70$…keep drinking the green coolaid you libtards”

First, we truly do appreciate the comment.  We started our blog a few years ago with the intent of providing interesting and relevant information that directly or indirectly relates to the commercial real estate market in Edmonton.  Whether or not people agree with our opinions, we genuinely value each person’s comments.  So as strange as it may be to say thanks for being called a “libtard”, we are thankful that you read our article in the first place.

From a political standpoint, we actually pride ourselves on being apolitical.  In other words, we do not have a bias to any one particular party.  We are born and raised Edmontonians and grew up with a Conservative provincial government until the NDP’s were elected in 2015.  We think Edmonton (and Alberta) was a great place to live under the Conservatives and it continues to be under the NDP’s.  There are plenty of people who speak strongly for one party or vehemently against another, but we are indifferent.  While we admire anyone with the conviction to stand up for their political beliefs, we do not identify ourselves as democrats, republicans, cons, torys, dippers or even libtards.

Political ideology aside, we believe one fundamental aspect of government (irrespective of the party) is to save money in good times and spend money in bad times.  To Edmonton’s benefit, the NDP’s are spending quite heavily and we think this is helping prop up our city’s economy, particularly as we have a large public sector.  It’s almost a form of quantitative easing, and we only need to look south to our neighbours in Calgary to see how much worse this recession could be.

More important than our political stance (or lack thereof), we are unreservedly proud Albertans.  In fact, we have written about oil in a number of articles, and we’re also known to take pictures of pump jacks and oil derricks from time to time.  We wrote the article about EV’s simply to provide another perspective on the future of oil prices.  We have written over 150 articles and we suspect people would tire of seeing the same rhetoric about how great Edmonton is and how the future looks so bright.  We simply acknowledge there are risks to the economy (which includes the commercial real estate market) and it would be naive, if not reckless, to pretend they don’t exist.

We agree completely with your sentiment about how oil will still be required for the foreseeable future.  However, basic economics would suggest that the price equilibrium of oil (as a commodity) exists at the confluence of supply and demand.  If more people switch to electric vehicles, that will lower the demand for gasoline, which will in turn lower the demand for oil, and correspondingly the price of oil.  We’re not sure how dramatic this impact will be, nor how quickly it will come, but the author of the report we referenced suggests it’s only 8 years away and will drive oil prices down to $25 / barrel.  Unless something impedes the proliferation of electric vehicles, we expect his would have a dramatic impact on our economy.   Of course Albertans are a resilient bunch, so we also would expect the economy to adapt and continue to thrive into the future.  Like we said, we are proud Albertans.

Lastly, who doesn’t like a glass of Kool-Aid in the middle of summer 😉

 

 


Disclosure:

Views and opinions contained herein are strictly the authors and do not represent any other company, board or association.  View our full disclosure statement here.

 

Our Team

CHAD GRIFFITHS

CHAD GRIFFITHS

Partner

Chad is a partner with NAI Commercial and has finished as a top 15 producer Canada-wide for the past three years. Chad owes his success largely to his commitment to uncompromising client representation, his active involvement in the real estate and business communities and a lifelong pursuit of continuous learning.

RYAN BROWN

RYAN BROWN

Partner

Ryan is a partner with NAI Commercial Real Estate in Edmonton. He is currently ranked nationally as one of NAI’s top advisors in Canada. Having completed his Bachelor of Commerce majoring in Finance, his eye for detail and great understanding of the numbers associated with any business decision makes him an asset to his clients while providing them the highest level of service.

DARCIE BOUTEILLER

DARCIE BOUTEILLER

Associate

Darcie began her career in Commercial Real Estate after completing her studies in Business Administration. Her personable nature coupled with a results-driven attitude is a perfect match for customers. Darcie understands the importance of delivering a custom, accountable solution for her clients.

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6 thoughts on “We Can’t Please Everyone

  • This is a great reply to the negative blog post that was put up.

    My question is if you are currently short oil futures?

    In order for any one to take the statement above as something you believe vs. a nice article to round out some content needed for your website, we need to know if you actually have some skin in the game.

    All predictions are difficult so it is good to understand when someone is simply making a statement or if they are actually committed to the outcome financially.

    • Thanks for the comments Adam. We are not short on oil and actually have long positions on a few different oil & gas companies. While this may seem peculiar given the context of the article, it’s important to clarify that the demise of the internal combustion engine (and correspondingly depressed oil prices) is Tony Seba’s prediction. I think he makes a very convincing argument that EV’s will inevitably become more affordable and cheaper to maintain, and this expected shift will stifle demand for oil. However, this shift could still take longer than the 8 years Seba proposes, and I believe there will continue to be dramatic fluctuations in supply (for a number of geopolitical reasons or market forces), which could swing the future price of oil in any direction. Further, many companies will continue becoming more efficient in producing oil, so even if the long term price of oil happens to drop, we should still see profitable companies in that sector.

      All that being said, ultimately you are correct in calling this an article to round out content for our website. Our intent is to provide different perspectives and hopefully stimulate some conversation. It’s a true labour of love.

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