00:00:14.460Hi, thanks for joining us. This is tplmedia.ca. I'm Mike, and today the topic, well, it is what everybody's talking about on a global front,
00:00:23.880an MOU that has been drawn up by the U.S., presented and negotiated with Iran.
00:00:29.360and today we're going to dive a little bit deeper into that topic to find out how this directly
00:00:35.240affects Canada and to do that of course Paul Micucci who does the deep dive on the numbers for
00:00:40.980us always and beyond I appreciate you doing this because you've gone through this almost every
00:00:47.700section of this MOU yeah and you've looked at it from a number of perspectives kick us off Paul0.93
00:00:54.040what do you think overall this has done globally what do you think that this mou is going to do0.87
00:01:03.080to the economy of the world oh my goodness well the world changes it forever you know and we0.96
00:01:09.600talked about this on other shows mike it changes uh how transportation logistics happens throughout
00:01:16.080the world the global powers who secures what nation what nations eventually take over other
00:01:22.300nations it is it basically causes a chain of reaction which will impact every continent
00:01:30.780in the world every country so but you know i'm really really focused right now on canada because
00:01:36.220of course we live here and what impact it has on us and how we are so oblivious to the impacts i i
00:01:44.300am shocked that actually this summer everyone's just going off on summer vacation after this and
00:01:50.860when i looked at it i thought am i missing something you know should we be more focused on
00:01:57.180how this is going to impact us because i think we thought okay you know the the u.s for all intensive
00:02:02.700purposes that are pulling out they've lost they've decided to back down and go come home and last
00:02:09.020night even you know it was interesting i don't know late late in the day yesterday the senate
00:02:14.300voted the u.s senate voted 50 to 48 with a bunch of republicans turning uh the to make the vote go
00:02:22.860through um empowering the wars act which is interesting that basically says he has to stop
00:02:29.020you you have to come home now you have to come home now which you know of course they're saying
00:02:33.260i have veto power because this is the house bill it's gone to the senate the senate finally passed
00:02:38.460it and he's saying no it won't have any impact it makes my life more difficult but i'll still get
00:02:44.060this mou done i'll still get the agreement done um but i don't know right it's it's it's kind of
00:02:50.620crazy because senator um wicker who is the armed services committee chair roger wicker from a
00:02:58.140republic from mississippi um i saw was tearing up the mou and just disgusted at how it had in his
00:03:06.220mind had uh downgraded or uh made epic fury look like it was nothing and then now he's asking the
00:03:15.180really big question is where does the 300 billion dollar reconstruction fund money come from which
00:03:21.420is right now unanswered that's on the table who makes up that money within minutes of this uh
00:03:26.700occurring uh in the senate floor of course the iranian parliament and and you know this uh
00:03:32.700galabaf of one of the parliamentary ministers and uh representing speaker yeah i came out and this0.72
00:03:38.620is uh the islam is bad the islamabad understand that it's not the result of pressure and coercion0.74
00:03:45.340but rather the result of the resistance and authority of the brave iranian nation0.81
00:03:50.540that's what he said on national television that's why the islamabad memorandum of understanding
00:03:56.140became and i like that he calls it that's very interesting uh became a declaration of america's
00:04:02.540defeat right well so now iran is saying okay he's got to go home he lost right that has a huge
00:04:10.460impact oh it does and i want you know for those of you and we want to spend a few minutes mike
00:04:15.180and just go through the mou yeah sure so i really wanted to go through um a little bit about what's
00:04:21.420going to happen so the biggest thing is it reopens the straight yeah right so you know
00:04:29.660whatever you have to say the straight controls one-fifth of our oil supply so now the u.s is
00:04:37.820going to back off they said they're not going to uh you know be uh blocking the straight of hermuz
00:04:45.100so it now opens up the straight and they're going to go in and they're talking this morning or
00:04:49.660yesterday about sweeping it for landmines making sure it was all clear again and really rolling
00:04:55.260through right which as we're seeing now i don't know if you've noticed at the pumps the price of
00:05:00.540gas is starting to go back down it is yeah it's it's back into the realm of some sort of reality
00:05:06.620it feels like we're headed back to normal right back to normal the interesting part is remember
00:05:12.380before this happened normal was low right we were remember we were talking on shows a few months ago
00:05:18.380before uh the war happened about 60 58 we were even in calgary and they were complaining about
00:05:25.180it oh man you know things aren't so great they had several zero barrels which is you know they
00:05:31.260basically just keeping the flow going yeah uh at zero profit uh per barrel uh for a long time the
00:05:36.940the bottom had been hit i think in canadian oil by the time this occurred yeah exactly so it kind
00:05:43.340of breathed a new uh a new existence into that oil business here in canada yeah yeah we rode
00:05:49.420the waves so we've been you know it's interesting we we've been in a uh a recession you know uh
00:05:56.300technical how dare you yeah a technical recession as they're calling it but we've been in a technical
00:06:01.580recession now but we've been in a technical recession with the bump in oil prices so where
00:06:07.420does that leave us without the bump in oil prices we're about to find out yeah so you know the sugar
00:06:12.940coating is coming off the apple right now and quite frankly uh the prime minister got to be
00:06:17.980saying oh now i've got a few more quarters coming i'm going to lose the advantage of the uh large
00:06:24.300exporting cost of oil right and i haven't got a pipeline going which we're going to talk about
00:06:30.380that in a minute yeah i don't have a pipeline going and i don't have the backdrop of that
00:06:34.620happening so when we did our last show on the technical recession that was one of the caveats
00:06:39.340we put on it it's gonna just watch out if this war ends and and oil plummets right where does
00:06:45.340that leave us yeah so how do you feel about this i'm just gonna this is the you know the expert
00:06:50.140opinion keeping the root open helps stabilize gasoline prices transportation costs and inflation
00:06:56.060directly benefiting canadian households and businesses that sounds opposite to what we
00:07:02.300think the effect might be because if we're not if we're not beholden to our own oil
00:07:09.260dollars and we need the straight of her moves to subsidize this i really don't believe that
00:07:15.020to be honest with you paul i think that no i think that it will cause a destabilization in
00:07:19.900our economy because the price and value of our own oil is about to plummet right now this is
00:07:26.220we're going to get into in a minute what's going to happen to the reconstruction who's going to
00:07:29.740bear the cost how that's going to be passed down whether there are fees on the so that that's coming
00:07:34.700up but i want to say thanks to our research team for putting up a nice powerpoint for us to follow
00:07:38.540along and maybe what we could do is actually post that along with this episode so that you can follow
00:07:43.100along yep uh the restoration of commercial shipping yeah yeah so all of a sudden it's back so you know
00:07:51.580the we were starting to see the impacts it was funny i was going to order something yesterday
00:07:56.860and it was 500 and it had a 500 shipping cost that's a crazy yeah situation for those of you
00:08:04.940who do any shipping internationally you find that your shipping costs were starting to match your
00:08:10.860goods costs and so we were stopping right this yeah so you know hopefully that'll go back if
00:08:17.420i'm a manufacturer and i have global shipping challenges this one's got to be hurting me right
00:08:22.380now well i think any petroleum byproduct uh which is an enormous amount of products that we use on
00:08:29.500a daily basis uh i think have been drastically reduced over this the agreement puts that back
00:08:35.660in place the partial removal of u.s sanctions on iran now you and i had a discussion about this
00:08:42.380we'll talk about that the united states could agree to ease selected economic sanctions in
00:08:47.340in exchange for Iranian compliance with security commitments.
00:08:50.600And for Canada, the impact would be mixed, according to some experts.
00:08:55.300Additional Iranian oil exports would increase global supply and lower energy prices,
00:09:02.440but Canadian consumers and transportation companies would benefit from lower fuel costs.
00:09:07.920But at the same time, lower oil prices reduce revenues, investment, and royalty income in Alberta
00:09:13.920at a time where we're trying to get people interested
00:28:07.660So this has, in my mind, pretty negative effects potentially on Canada.
00:28:11.720Oh, yeah, definitely has negative effects.
00:28:13.680And, you know, the real key issue that we have to think about now is are they going to put a transfer fee on everything going through the strait?
00:28:20.280So that was on the table, off the table.
00:28:23.000So it's now part of, you know, the negotiation that's going forward.
00:28:26.560So are we going to see an increase in prices in our oil and gas going forward?
00:28:31.280as a transfer fee but remembering quite frankly that transfer fee strictly goes back to Iran
00:28:37.160so that doesn't have any economic benefit to Canada other than a cost so that's not going
00:28:42.660to help our economy no and and also the U.S. economy I was going to say or the U.S. yeah
00:28:47.360uh this really and and okay so we'll get to the 300 billion down the road I wonder if this is part
00:28:54.340of that you know settlement okay you'll be able to you'll be able to charge a uh i guess a toll
00:29:01.320yeah as you make your way through the yeah and that will be part of the 300 billion so in other
00:29:06.100words if that does happen the u.s has negotiated on behalf of all of us a an increase in cost to
00:29:13.520our countries yes so and not an economic benefit not at all so you know again when the price of
00:29:20.900oil goes up in canada you know the west coast actually we lived listen we can't deny it you
00:29:27.060know in the harper days we all benefited from the increased cost of oil and gas right you know we
00:29:34.040were we were a rich country we were flying because you know a barrel price per barrel was you know
00:29:39.720just below 100 we were rocking development was happening on the west coast we were all seeing
00:29:45.360the spinoff benefits everyone was heading west to work you know manufacturing back home the auto
00:29:50.840industry was robust all those things were happening right now we're not in that now and
00:29:56.360quite frankly a uh a tariff or a transfer fee on oil coming through the strait just increases the
00:30:02.680cost of our all of our manufacturing again and makes us less yes so self-sufficient would be a
00:30:11.080better scenario for us you know kind of okay so let me take a dive off to the left on this one
00:30:16.040if i'm yeah let's go this is the moment where you think to yourself okay we really do need to think
00:30:22.760about our own oil it's not going to be valuable in the global marketplace yeah we don't have uh
00:30:28.760delivery mechanisms to make it efficient and a better deal for people in other countries
00:30:33.720the last time that we found ourselves in this scenario uh thanks to jimmy carter i believe
00:30:39.560we pivoted really in a smart direction as a nation and we started our own oil company
00:30:45.640a national oil company that processed shipped became internationally uh well-known and and
00:30:54.040quite a vibrant corporation petro canada yeah here we are uh let me share some of this with you
00:31:01.640mark carney and uh daniel smith of course i met uh in when was it september i believe
00:31:06.920october september or october something like that for the first time and then they uh got together
00:31:13.880and put together an mou to create a pipeline so uh the deal lowers the effective carbon price
00:31:22.140this is so crazy for alberta to 130 a ton by 2040 instead of 2030 and still we have
00:31:31.180no this is a major project we have no plan for this no it's not a major project at july 1st
00:31:37.660we're going to know if it's a major project coming up well it can't be a major project
00:31:42.300two big two big things on july 1st mike right yeah kuzma with the united states and what happens
00:31:48.420with the pipeline yeah well kuzma i don't think anybody's going to i think that i haven't got my
00:31:52.340invite i think they forgot about it uh the provincial government have uh said that they'd
00:31:57.500like to see the new pipeline up and running no later than 2033 out of alberta 2034 that's eight
00:32:03.680years eight years to get this up and running uh but there's no answers whether or not they've got
00:32:09.160anybody private to come in and back this and let's talk about that for a second why would they
00:32:15.000no why would they what is the appeal to coming into a country that has such strict regulation0.53
00:32:21.040yeah it's going to take eight years to build the thing yep it goes through indigenous lands that
00:32:26.660have not properly been negotiated through this thing already it's a bad investment by all accounts1.00
00:32:32.740we'll throw it up actually they haven't even figured out a route of north through northern bc
00:32:37.620so i was actually looking this morning trying to find if they determined a route take a look at this
00:32:42.020map what yeah okay so we'll throw it up on the screen for the show but there's three routes
00:32:46.340they're still looking at they don't have a route determined they don't have anyone interested so
00:32:49.940far in building the pipeline they don't have a timeline that's reasonable but it's okay here's
00:32:54.980the thing mike here's that i find ironic it's okay for everyone to take the summer off it's okay for
00:33:00.500us to you know relax a little yeah right on the heels of what's happening with iran so you know
00:33:07.380there are and the funny thing is they'll say you know what it's a good thing you know well our
00:33:12.420prime minister came out our prime minister came out and he said it he said you know i'm happy that
00:33:16.420there's an mou being signed yeah okay i'm happy too right i'm happy when any war ends i'm happy
00:33:22.500right but what are the consequences of that war ending and how does it impact us and
00:33:30.100you know it's too easy to say oh thank goodness the war ended just in time for summer vacation
00:33:36.180yeah so what what yeah i'm with you this is interesting i think that our our parliament
00:33:41.860needs to be working visibly yeah for canadians right now saying here's how we're going to react
00:33:47.780Our major projects need to step up now, and we need to add oil to that because of this, this, this, and this.
00:33:53.800Here's the economic impact this whole thing has had on us.
00:33:56.660Here's how we're going to react, and here's our plan.
00:33:59.580Well, so think about our earlier conversation.
00:34:02.420Our earlier conversation is the price of oil goes down, right?
00:34:06.540So therefore, the economic benefits we get from the West Coast, from an increased price per barrel, go away.