By Aaron Wherry - Thursday, February 21, 2013 - 0 Comments
When asked to clarify his position regarding the Northern Gateway pipeline project, Mulcair launched. “I am adamantly opposed to Northern Gateway. Is there anything unclear in what I just said?” he asked. And he went on. “It is madness to think of bringing those supertankers into that pristine coast. It is a non-starter. It is the most abject misunderstanding of the importance of protecting the environment I have ever seen in Canada. The company that continues to propose that is the same company that was described by the highest level of the U.S. administration as the, quote, Keystone Kops.”
… The irony in all this is that Enbridge was one of the luncheon sponsors – and Mulcair was seated to the right of one of its government relations execs.
At last report, 75% of Albertans were in favour of the Northern Gateway pipeline (but only 35% of British Columbians felt likewise).
Mr. Mulcair does support sending oil east from Alberta, but one such proposal, from Enbridge, is a source of concern for environmentalists.
By Chris Sorensen - Tuesday, February 5, 2013 at 7:00 PM - 0 Comments
How the most valuable resource in our history got mired in politics, protests and logistical nightmares
Prime Minister Stephen Harper first dubbed Canada an “emerging energy superpower” back in 2006. He was talking, primarily, about Alberta’s oil sands. “We are a stable, reliable producer in a volatile, unpredictable world,” he said, sending a clear signal that Ottawa intended to realize the oil sands’ full economic potential, as well as the geopolitical clout that comes along with it.
It was music to Albertans’ ears. With the world’s third-largest proven crude oil reserves, some 175 billion barrels, behind Saudi Arabia and Venezuela, the province had long been aware it was sitting on a gold mine. All that was needed were global oil prices above US$80 a barrel (needed to offset the expense of separating gooey bitumen from the sandy soil) and the necessary political vision to make it all happen. Canada finally had both. Industry forecasts predicted that, over the next quarter-century, the oil sands would draw more than $364 billion in investment, create some 3.2 million “person-years” of employment and add $1.7 trillion to Canada’s GDP. Continue…
By Aaron Wherry - Wednesday, November 14, 2012 at 4:20 PM - 0 Comments
Thomas Mulcair makes his pitch for resource development.
Mulcair told reporters the increasing supply of oil in the U.S., combined with soft demand, is already having an impact on the Canadian energy industry. He said while Eastern consumers pay higher prices for oil, producers in Western Canada are hit by the price differential — the discounted price they must accept for their crude as a result of surging production and jam-packed pipeline capacity in the U.S.
“It’s in the interests of everyone to try to get the best possible price for our natural resources, to add the jobs here,” Mulcair said at an NDP rally at a nightclub on 17th Avenue S.W. He said focusing on shipping oil from Western Canada to central and eastern provinces, and processing it domestically, could be a solution and a nation-building project on par with railroad construction in the 1800s. “It could be a win-win-win situation.”
The IEA report is here.
By Colby Cosh - Thursday, October 18, 2012 at 9:00 AM - 0 Comments
Forget the doomsayers. Cheap abundant fossil fuels will drive our future.
Marion King Hubbert’s famous theory of “peak oil” has gained a great deal of traction in the scientific literature of various fields. Want to read up on peak oil and urban planning? Check. Peak oil and tourism? No problem, you’re not the first. Peak oil and public health? Where to even begin? There have been articles on the peak oil phenomenon in publications such as the International Journal of Child Rights; Behaviour and Social Issues; and Physica: Statistical Mechanics and Its Applications.
Curiously, however, there is one field whose literature is a tad light on serious discussions of peak oil: economics.
There is a simple explanation for that. Hubbert’s theory has economic implications, but no economic content per se. In his famous 1956 paper, Hubbert, a Shell geologist who joked about growing up in “the only part of Texas where there isn’t any oil,” argued that a non-renewable resource in any particular region tends to be exhausted according to a predictable bell-shaped curve. There is an exponential ramp-up, reaching a rounded peak, like a roller coaster, and then a symmetrical, equally rapid drop-off to zero. Prices didn’t appear anywhere in Hubbert’s equations. Their logic was supposed to work regardless of changing incentives or human innovations.
And, in fact, the logic did seem to work. Based on his estimate of the total amount of U.S. crude oil already used up and the amount he thought was remaining, Hubbert figured that oil discovery would soon become much more difficult, and that the domestic production peak would arrive sometime between “about 1965” and “about 1970.” Peak oil fans who talk about Hubbert’s theory never mention the wiggle room in his forecast, and even critics don’t seem to be aware of it.
They also don’t mention that it was predicated on a total estimate of U.S. oil reserves, including those already extracted, as being somewhere between 150 billion and 200 billion barrels. Hubbert preferred the lower figure—which, if it had been accurate, would have seen the last teacup of oil solemnly drawn from the last working American oil well in the year 1987.
But U.S. oil production did, in fact, peak in 1970 at 3.5 billion barrels; and since then, it has, in fact, mostly declined at about the same rate it initially grew. The curve, until recently, looked enough like the one Hubbert drew to provide an impressive suggestion of theoretical power. That has spawned a veritable library of pessimism, with figures like Gwynne Dyer and Jeff Rubin warning that the world, too, counts as a “region.” Once global peak production is passed, they argue, that is the signal that there is about as much oil left to be extracted as we have already taken out.
And the decline is inherently terminal—monotonically decreasing, a mathematician would say. Production can never again rebound. The world will be left with a growing population battling over an ever-dwindling resource that is the irreplaceable key to its economy. Cue global war, mass starvation, genocide, etc.
So should we all be investing in riverfront land and ammo and developing a taste for squirrel meat? Thus far, attempts by Hubbert’s followers to imitate the master and project the world oil peak have met with the same repeated ruin as kooks’ predictions of the Rapture. Their response, more or less, is always, “Aha, but we have to be right eventually!”
Yet even now U.S. oil production is enjoying a rebound of the sort that peak oil theory characterizes as impossible. Horizontal drilling and hydraulic fracking technologies are propagating throughout the country, rehabilitating old oil fields and opening up the Bakken Formation in Montana and South Dakota. After Hubbert’s 1970 peak, oil production continued to dwindle, with the opening up of Prudhoe Bay in Alaska delivering an upward blip in the ’80s. It reached a new postwar low of 1.83 billion barrels in 2008—but then picked up. Through July, according to the U.S. Energy Information Administration, the country was on pace to produce 2.33 billion barrels in 2012.
That is already an increase of 27 per cent from what may be remembered as the Trough of 2008—with fracking still barely off the ground in oil-producing areas like California’s Monterey Shale. In short, “peak oil” has turned upside-down. That is awkward for those who insist that the descent in production, once the Hubbert oil peak has passed, must be irreversible, rapid, and accompanied by pervasive social and economic chaos. The history in Canada is perhaps equally awkward: Canadian oil production still has not peaked, as the “unconventional” tar sands and the products of fracking took over from conventional oil with a smooth, easy gradualness that didn’t factor into the catastrophists’ plans at all.
The North American oil and gas business is still coming to grips with the possibility of an Indian summer. Estimates of technically recoverable natural gas in the U.S. were in the order of a quadrillion cubic feet in 2003 and 2004. Today, thanks to fracking, the best guesses range from twice that to 3½ times. In 2000, Canada and the U.S. were readying infrastructure for massive imports of liquid natural gas (LNG); now there are hopes of LNG export business. Meanwhile, the Bakken play has delivered a proof-of-concept for billions of barrels of “tight oil” that could equal almost half the remaining onshore conventional supply.
In short, the immediate North American energy future is likely to look a lot like the past: reports of the death of the SUV, commercial aviation and the suburbs were exaggerated. Moreover, the environmental freight is being paid. As environmental writer Bjorn Lomborg recently pointed out in Slate, American utility companies have executed a massive switch from coal to natural gas, reducing total national carbon dioxide emissions by at least 400 megatons a year—“about twice the total effect of the Kyoto Protocol . . . in the rest of the world.” Per-capita CO2 is down to Eisenhower-administration levels.
As the U.S. defies oil-patch decline, the prestige of global peak oil theory must inevitably evaporate. Fracking has, as yet, barely gotten a toehold abroad; it faces high regulatory hurdles and exaggerated fears in many places. But no one really believes that China, to take only the most obvious example, will let itself be influenced by a few low-budget documentaries. The new talk of increasing American energy self-sufficiency sets a much more powerful example, as do the environmental numbers. China is just beginning to apply Western technology to its large reserves of shale gas and shale oil.
Academic economists never did buy into peak oil. It is hard to get them to accept a model of resource extraction that doesn’t give at least an implicit role to price signals. The University of Calgary’s John Boyce is one of the few economists who has put the Hubbert model to serious statistical tests. They are fairly obvious ones that, if peak oil had been taken more seriously by his profession, would have been performed 40 years ago. Hubbert’s curve turns out to be not much use as a source of predictive power—the ultimate test of any scientific hypothesis. It is not only that Hubbert’s own 1956 estimate of remaining U.S. oil was much too low—this turns out to be a general feature of his oil-extraction model, no matter where you look in the past and no matter what region you study.
It is also true no matter what non-renewable resource you happen to look at—Hubbert’s “law” failed for coal, which used to be the global economy’s “irreplaceable” fossil fuel, and it fails for other minerals. Boyce even cheekily applied “Hubbert peak” logic to agricultural production, which has no cumulative upper bound at all, and showed that a motivated catastrophist could, on the basis of world statistics, use the model to generate a bogus prediction of imminent “peak food.”
Part of the reason the peak oil hypothesis keeps hanging around, Boyce showed, is that Hubbert’s doomsaying successors operate with a pretty movable set of goalposts. When estimates of future oil reserves increase, theorists like Colin Campbell are quick to claim jiggery-pokery on the part of OPEC. (It is not that OPEC is above that sort of thing, and individual exporters have been caught red-handed fudging reserve estimates, but in general it is in the interests of folks sitting on oil for everyone to believe that it is scarce.) Less justifiable is the tendency to simply discard inconvenient data from the distant past that would throw off the model. Hubbert’s estimate of the U.S. peak was calculated using production figures beginning only in 1930, though he had access to a longer series, and later theorists have repeated the practice.
What is most comical about the popular peak oil phenomenon is that Hubbert was much more of a natural optimist than his acolytes. You would never know, seeing the uses to which his theory is applied, that his grand-scale vision of the human energy future originally had a happy ending. In the 1956 paper, he discussed both shale oil and the Canadian oil sands, showing that he understood their scale and promise. Moreover, he noted that “by means of present production techniques, only about a third of the oil underground is being recovered . . . secondary recovery techniques are gradually being improved so that ultimately a somewhat larger . . . fraction of the oil underground should be extracted than is now the case.” That is a clumsy but otherwise excellent description of fracking.
But all of that, Hubbert observed, is small potatoes. The title of the paper he delivered, which is something else his fans often skip over, was “Nuclear Energy and the Fossil Fuels.” Hubbert gave his talk in March; the world’s first commercial nuclear reactor, Calder Hall, would not be switched on by Queen Elizabeth II until October. But the geologist’s discussion of uranium and thorium was well-informed, and even at that early date it was clear “that there exist within minable depths in the United States rocks with uranium contents . . . whose total energy content is probably several hundred times that of all the fossil fuels combined.” On the scale of millennia, Hubbert said, “the discovery, exploitation, and exhaustion of the fossil fuels will be seen to be but an ephemeral event.”
In the short term, however, the hydrocarbon barons will still count. Wind power in its vanguard country, Germany, is confirming many of the problems that fossil-fuel types foresaw with relying upon it as a source for steady commercial-scale electrical power. Put simply, it cannot provide any such thing. Old-fashioned carbon-emitting sources must make up for periods when the weather does not co-operate, and Chancellor Angela Merkel is involved in a terrible political fight over who will cover the added costs.
The renewables revolution is unlikely to arrive until mass energy-storage technologies that could alleviate the problems of connecting solar and wind to the grid prove themselves ready for prime time. There are two kinds of systems that are broadly proven: ones that pump water uphill, turning electricity or heat into positional energy that can be liberated later by letting the water run the other way, and techniques for compressing air and storing energy underground as pressure. Unfortunately, both kinds of “battery” are landscape-dependent. Pumped-water storage requires a pair of matching reservoirs, and compressed-air storage is normally implemented in abandoned mines.
The ideal electrical “battery” for pairing with wind farms and solar facilities would be, well, a battery. Research into energy storage is not yet flying forward with the same Moore’s Law haste as computing power. Techniques for grid-level electricity storage must not only be able to contain huge quantities of energy in a space of practical size—they have to be able to release it at an acceptable power rate on demand, and to remain efficient over many cycles. The batteries being researched now are, in many cases, jumbo versions of ones you might have in your home: lead-acid, nickel-cadmium, and lithium-ion are all candidates. But the bankruptcies earlier this year of two U.S. energy-storage companies, battery manufacturer Ener1 and flywheel experimentalists Beacon Power, have left a bit of a stench in the tech investment community.
With policy-makers still ambivalent about nuclear alternatives in the wake of Japan’s Fukushima disaster, it is looking as though the world is stuck with fossil fuels for a while yet. But with the fracking revolution increasing the supply of natural gas to God-knows-how-much, the opportunity is present for industry to shift down the ladder of environmental harm from coal to methane.
For the ordinary consumer, Google’s driverless-automobile software may actually begin to change lives and cityscapes before promising new forms of energy. Driverless taxicabs—whatever their engines happen to run on—might extend some of the eco-benefits of public transit to the suburbs, minimizing the footprint of parking lots in urban cores.
A slow shift to robo-chauffeurs might not seem very glamorous compared to the wildest of peak oil fantasies: a romantic reversion to pre-industrial life, perhaps, or multi-sided atomic wars over the last of the oil fields. What seems most certain is that even those who support the intellectual peak oil fad will quietly and politely move on once its problems grow too self-evident.
By Aaron Wherry - Friday, September 28, 2012 at 10:04 AM - 0 Comments
Jim Prentice raises concerns about pipeline development on the West Coast.
The Calgary native told his hometown audience that Ottawa’s neglect of the aboriginal relations could doom proposed oil pipelines, including Enbridge Inc.’s Northern Gateway project and Kinder Morgan Inc.’s TransMountain pipeline expansion.
“The obligation to consult with and accommodate first nations … these are responsibilities of the federal government,” said Mr. Prentice, who held posts as minister of Indian affairs, industry, and environment before leaving government in 2010. “And take it from me as a former minister and former co-chair of the Indian Claims Commission of Canada, there will be no way forward on West Coast access without the central participation of the first nations of British Columbia.”
By Tamsin McMahon - Thursday, September 20, 2012 at 6:40 PM - 0 Comments
Their offshore oil industry is gushing with good fortune. So why is everyone unhappy?
Norway, already one of the world’s largest oil producers, scored a coup when it announced it had discovered one of the world’s largest oil finds last year in the North Sea. Elation over the Johan Sverdrup find, estimated to contain nearly 3.3 billion barrels of recoverable oil, was short-lived, however. In what could be a cautionary tale for other oil nations, including Canada, Norway is suddenly grappling with a host of labour and cost troubles linked to its rising success.
A persistent shortage of oil workers has pushed Norwegian wages to the highest in the world. Oil workers now earn an average of $180,300 a year, according to a new survey by Hays Oil & Gas, more than double the global average and $56,000 more than workers in the Alberta oil patch. Drilling in Norwegian waters also costs as much as $75,000 per worker more than in neighbouring U.K. waters, an expert panel commissioned by the Norwegian government wrote in a report last month. That’s mostly due to regulations requiring that offshore oil workers get four weeks off for every two weeks of work. Meanwhile, rules requiring workers to speak Norwegian on rigs are hampering efforts to import workers.
Doing away with many of the perks that offshore oil workers have enjoyed could save the country’s energy sector as much as $167 billion, the panel said. Its chair warned that letting costs escalate could put the future development of Norway’s offshore oil industry in “grave danger.”
By Aaron Wherry - Monday, September 17, 2012 at 11:30 AM - 0 Comments
The cabinet is apparently divided over how to deal with China.
CNOOC Ltd.’s groundbreaking $15.1-billion deal for Calgary’s Nexen has revealed a continuing fault line in the Conservative caucus, pitting the more ideologically driven members who distrust the undemocratic regime in Beijing against their colleagues who want to expand trade and investment ties with the fast-growing Asian powerhouse.
The split has even surfaced in cabinet, according to several sources close to the government. Finance Minister Jim Flaherty, who has made it a personal priority to build commercial relations with China, has spoken in favour of judging the CNOOC deal on its merits rather than allowing broader political differences to derail it. Immigration Minister Jason Kenney – with his anti-communist roots and promotion for religious freedom – voiced his concerns that China is not a trustworthy economic partner.
By David Agren - Thursday, September 13, 2012 at 5:00 AM - 0 Comments
There’s an unfamiliar challenge in his bid for a fourth term as president: a legitimate political opponent
TV screens often switch without warning across Venezuela for unscheduled messages brought to them by the Ministry of People’s Power for Communication and Information. Radio stations follow suit—as obligated for these interruptions, known as cadenas, or chains. The cadenas usually carry an address from President Hugo Chávez, who is known to talk at length—nine-plus hours on one occasion—about his political projects and plans for “21st-century socialism.” The appearances seldom highlight pressing problems, such as a recent prison riot that added to the more than 300 deaths that have occurred behind bars this year, or the late August explosion that ripped apart the country’s most important refinery and claimed 48 lives.
Cadenas have been a fact of life in the Bolivarian Republic of Venezuela, but with elections scheduled for Oct. 7, Chávez has had a lot more to opine about of late. The broadcasts underscore what opponents and analysts say is an unfair advantage for Chávez as he seeks his fourth term as president of a country with the world’s largest proven petroleum oil reserves. The often confrontational president and cancer survivor—he credits his recovery to treatments in Cuba—can already count on positive press coverage, having forced non-compliant channels off the air or into submission. He also has the courts and the electoral commission in his corner, the opposition contends. Then there’s his seemingly bottomless barrel of petro bucks to ply poor voters with everything from cheap appliances and free houses to clinics staffed with Cuban doctors.
Still, some polls place Chávez in a surprisingly close race with opposition candidate Henrique Capriles Radonski, a state governor, 40-year-old grandson of a Holocaust survivor, and standard-bearer of a new generation of opposition politicians whose careers began after Chávez won power in 1998. Capriles’s predecessors often campaigned on simply ousting Chávez from office—failing to recognize the military-man-turned-populist president’s pull with the poor, and their parties’ own unpopularity from past years of presiding over petroleum-fuelled booms that didn’t benefit the bottom rungs of society. Capriles, in comparison, promises no radical changes to the programs for the poor that Chávez claims to champion—health, housing and poverty reduction, to name three. He campaigns on the issues: crime, corruption and depoliticizing public policy and petroleum.
By macleans.ca - Tuesday, September 11, 2012 at 10:48 AM - 0 Comments
A boom in American oil production may affect demand for Canadian crude, the Globe…
A boom in American oil production may affect demand for Canadian crude, the Globe and Mail reports.
New wells in North Dakota, Oklahoma, Colorado, Michigan, and Florida have American oil production up by 75 per cent. Today the U.S imports 45 per cent of its petroleum, and 6.7 million barrels a day from OPEC countries, but experts predict that by 2022 only a million barrels per day will be delivered to U.S. shores by tanker.
This shift to home grown oil has been inspired by changing political alliances, and made possible by changing technology.
For Canada, there may be grim consequences. Canadian crude will still be exported to the U.S, but the demand will likely stop growing and level out by 2018. This new reality almost certainly raises the stakes when it comes to the controversial Northern Gateway pipeline, which would help to export Canadian oil to Asian markets.
By Stephen Gordon - Thursday, September 6, 2012 at 7:27 PM - 0 Comments
- Refineries’ margins are paper-thin, and have been so for decades; that’s why North American oil companies stopped building them long ago and have been shutting them down. This is true.
- The West Texas Intermediate (WTI) crude oil price set in Cushing, Oklahoma is currently trading at a significant discount from the Brent price set in the North Sea and which is used as the reference price everywhere where supplies are available by tanker, such as Eastern Canada. This is also true.
- Refineries buying WTI oil are more profitable than those buying Brent oil. Market pressures being what they are in the market for gasoline, this is also true.
From this, Rubin concludes that the path to prosperity is for Canadians to get in on the business of refining WTI-priced oil – namely, the oil produced in Canada.
This makes no sense to me:
- If refining WTI-priced crude was the path to long-term prosperity, oil companies would be building refineries without any encouragement from Ottawa (or Washington, come to that).
- The WTI-Brent spread opened up sometime around January 2011. The economics of refining have been dodgy for decades.
- The WTI-Brent spread is an opportunity for arbitrage: buying in the low-price market and selling in the high-price market. Ordinarily, arbitrage is a cheap and riskless way of making money. As long as the price differential exists, demand will increase in the low-price market, and supply will increase in the high-price market. The reason why the Brent-WTI differential has persisted is that it was difficult and costly to buy oil in Cushing and transport it to the Gulf Coast, where the Brent price prevails.
- Unsurprisingly, the private sector is falling over itself to take advantage of this arbitrage opportunity. The Seaway pipeline reversal has already begun to ship oil from Cushing to Houston, and the southern part of the Keystone XL project is under way. It makes no sense at all to make policy based on the assumption that the WTI-Brent spread is an immutable constant.
- It won’t be long — a few years — before the WTI-Brent spread is arbitraged away, and we’ll revert to a world where refining is everywhere a marginal business with razor-thin margins, and in which oil production is lucrative – which probably explains why the private sector doesn’t see much point in investing in Jeff Rubin’s business plan.
Diverting capital and labour away from a lucrative industry towards a marginal one isn’t creating “value-added.” It’s creating value subtraction.
By Aaron Wherry - Wednesday, August 29, 2012 at 4:44 PM - 0 Comments
The Justice Department doesn’t think Nathan Cullen’s request to address the joint review panel considering the Northern Gateway pipeline is in order.
Here is Mr. Cullen’s letter outlining his request. Here is the letter from the Justice Department outlining its objections. And here is Mr. Cullen’s response to the Justice Department’s objections. And here is the website for the Northern Gateway review panel.
Update 6:27pm. Joe Oliver’s office passes along a statement from the Natural Resources Minister.
“The Joint Review Panel independently makes all decisions respecting its proceedings. Our officials will answer any questions that the independent panel deems relevant. Nathan Cullen is seeking to politicize the work of the panel instead of waiting to hear the independent experts report.”
By Aaron Wherry - Tuesday, August 28, 2012 at 3:51 PM - 0 Comments
Former NHL star Scott Niedermayer, captain of Canada’s 2010 Olympic hockey team, reiterates his objections to the Northern Gateway pipeline.
With your voice behind us, WWF and the Coastal First Nations have sounded powerful messages about the unacceptable risk this project poses to the Great Bear, our Canadian treasure. We’ve urged provincial and federal decision-makers to understand what is really at stake here. We’ve helped voice the concerns of communities, leaders, artists and studentsfrom across the country. And we’ve spoken out for whales, bears, and other animals that cannot do so on their own…
And today, right now, we need your voice more than ever. August 31st is the deadline for public comment to the Joint Review Panel . This body is charged with assessing whether the Northern Gateway project is in Canada’s best interest.Please take a few moments to register your comments online right now.
By Aaron Wherry - Monday, August 27, 2012 at 1:31 PM - 0 Comments
Federal scientists have concerns about the expansion of the Jackpine oil sands mine.
In their final submissions to the Canadian Environmental Assessment Agency, several federal departments say they still have questions about Shell’s plans. They include how growth in the industry has outpaced the company’s assessment of cumulative effects, how changing flow in the Athabasca River will affect contaminant levels and how well Shell is able to control effluent from artificial lakes that will be used to store tailings …
Shell has failed to look at the overall picture of how total development has already affected wildlife habitat, let alone the impacts of further expansions, says Environment Canada. Its document goes on to say that where those impacts are measured, Shell’s assessment minimizes them. For example, Shell says the amount of high-quality caribou habitat destroyed is of “low magnitude,” even though the company acknowledges the amount of those losses total about 40 per cent. “It is unclear how Shell Canada defines a 40 per cent loss … as a low-magnitude effect,” Environment Canada says.
And a scientist with the Department of Fisheries, whose job might be eliminated, is concerned about Northern Gateway and Enbridge’s planning for a potential spill.
Enbridge Inc.’s response plan for a potential spill of Northern Gateway oil into the pristine waters off British Columbia doesn’t take into account the unique oil mixture the pipeline would actually carry, documents show … Kenneth Lee submitted a research proposal last December saying the matter requires further study because Enbridge’s plan had “strong limitations due to inaccurate inputs.” ”The Northern Gateway pipeline proposal lacks key information on the chemical composition of the reference oils used in the hypothetical spill models,” wrote Lee, head of DFO’s Centre for Offshore Oil Gas and Energy Research, or COOGER.
By Aaron Wherry - Monday, August 20, 2012 at 8:00 AM - 0 Comments
The marine contaminant group that would have been involved in a spill in B.C. has been disbanded and the fisheries and environmental legislation gutted, said Otto Langer, a retired fisheries department scientist. “[Harper] says the science will make the decision. Well he’s basically disembowelled the science,” said Langer. “It’s a cruel hoax that they’re pulling over on the public.”
Former federal Liberal fisheries minister David Anderson agrees. Given the Dec. 31, 2013, deadline set by the federal government, Anderson said scientists in the Fisheries Department simply don’t have time to complete any substantial scientific study of the project. “You can’t do these studies on the spur of the moment. It takes time to do them,” Anderson said. “And the federal Fisheries have just been subjected to the most remarkable cuts, so you’re in the throes of reorganization and reassessment and re-assigning people, and on top of it you throw them a major, major request for resources and work. It can’t be done.”
In a radio interview Saturday, Mulcair suggested that efforts to add new refining jobs in Canada would become a “win-win” situation for the oilsands industry and the rest of the country. “But I think that overall, the idea of adding the value in Canada, developing, upgrading, processing, refining, our own natural resources is a good one,” Mulcair told the CBC’s weekly politics show, The House. “That’s what we should be working on together.”
By Aaron Wherry - Friday, August 3, 2012 at 5:54 PM - 0 Comments
“Over the last decade we’ve transported almost 12 billion barrels of crude oil with a safe delivery record better than 99.999 percent,” Al Monaco, Enbridge’s president, said in a statement. “That’s good, but for us, it’s not good enough. We will never stop striving for 100 percent.”
In a rarely used amendment to a Corrective Action Order issued on Wednesday, PHMSA said it has concerns about what it called “a pattern of failures” on Enbridge’s system over the past several years and demanded the company present a comprehensive plan, overseen by an independent third party, to improve its operations. Enbridge handed in the plan yesterday but said PHMSA has yet to offer a response.
Meanwhile, the Harper government has set a December 31, 2013 deadline for the joint review of the Northern Gateway pipeline. NDP MP Denise Savoie has posted her submission to the joint review here (pdf).
By Aaron Wherry - Friday, August 3, 2012 at 1:58 PM - 0 Comments
“This project will not survive scrutiny unless Enbridge takes far more seriously their obligation to engage the public,” he told a radio show Wednesday. Mr. Moore did not agree to an interview on Thursday.
The federal government staunchly supports Northern Gateway, and the opposition New Democratic Party said Mr. Moore’s comments may have been designed to keep B.C. voters happy. ”It’s damage control,” said NDP MP Peter Julian, who is the party’s natural resources critic and represents the B.C. riding of Burnaby-New Westminster. ”The Conservatives have been pushing this for months, and now that opinion has turned against it in B.C., they’re looking to shift the blame to Enbridge.”
By Aaron Wherry - Friday, August 3, 2012 at 11:15 AM - 0 Comments
Rolling Stone takes note of the pipeline debate in Canada.
Harper also went after those who oppose the pipeline. Days before Obama’s decision on Keystone, Harper’s minister for natural resources was denouncing “environmental and other radical groups” who “hijack” regulatory bodies and “use funding from foreign special interest groups to undermine Canada’s national economic interest.” Just to make sure environmentalists got the message, Harper issued a budget that gutted protections for endangered species and pushed through new laws requiring nonprofit groups to “provide more information on their political activities, including the extent to which these are funded by foreign sources.”
In reality, it’s not environmental groups that are funded by foreigners – it’s the companies eager to exploit the tar sands. Many of Canada’s biggest energy companies – firms that are headquartered in Canada and trade on Canadian stock exchanges – are in fact largely owned by foreign interests, including Suncor (57 percent), Canadian Oil Sands (57 percent) and Husky Energy (91 percent). All told, some 70 percent of all tar-sands production in Alberta is owned by non-Canadian shareholders.
By Aaron Wherry - Friday, August 3, 2012 at 10:00 AM - 0 Comments
Could the Norwegian model work here? Would industry and investment flee Canada if we were to demand greater oversight and resource rents? This view seems a common refrain from many pundits and politicians, and was a central issue in the last Alberta election. Yet capital flight has never been a problem in Norway. More foreign petroleum companies than ever are lining up to invest billions, while submitting to levels of government oversight and taxation unheard of in Canada.
In fact these conditions seem attractive to investors since from the point of view of the Norwegian population, the development their oil industry has been a consensual act. This national buy-in by the taxpayers of Norway builds investor certainty, in contrast to the unpredictable pitched battles ongoing here in Canada.
‘There’s a difference, I think, night and day between a company that gets public engagement, Aboriginal engagement, environmental stewardship and Enbridge’
By Aaron Wherry - Thursday, August 2, 2012 at 4:13 PM - 0 Comments
Heritage Minister James Moore was interviewed by Bill Good yesterday on CKNW in British Columbia about the Northern Gateway pipeline. Mr. Moore was first asked to respond to criticism of how little BC Conservatives have said in response to Christy Clark’s demands and then asked specifically for his thoughts on the proposed pipeline.
Bill Good. So do you think that British Columbia needs to get a much bigger share of the revenue that will be generated by a pipeline if it ever came to be?
James Moore. Well, that’s Christy Clark’s demand and she hasn’t been clear on what actually constitutes a fair share or where the fair share would come from. She’s put five demands on the table, or requests, and many of them, frankly, were already well on their way to being addressed. She knows that. The provincial government knows that. The first three, with regard to environmental assessments, environmental considerations while on land and on the water, those are all things that the federal government has been moving on, we are moving on, and I think those will all be addressed. The aboriginal consultation part is something that coastal First Nations have been very vocal about, will continue to be vocal about, and that needs to be addressed, for sure, by Enbridge, in order for the project to go forward. On the money side, it certainly, of course, it sounds great, as a British Columbian, to say British Columbia should get our fair share and I understand that. But Premier Clark hasn’t been specific about what she’s talking about, how much or where it would come from, so until she’s clear on that, it’s kind of an empty zone to have a debate about this. But I do understand, certainly, the reaction by the rest of the country, when you have one province, who is, geographically, the Pacific gateway for the entire country to the markets of the Asia-Pacific, the perception of us closing the door to the rest of the country doing business with the largest emerging markets in the world, it’s something that’s cause for concern. On the other hand, Christy Clark is very much, I think, in the right in terms of her responsibility to represent British Columbians. To make sure that the rest of the country understands that just because British Columbia is physically the Asia-Pacific gateway, it doesn’t mean that we’re the doormat for companies like Enbridge to think that they can go ahead and do business without having due diligence and taking care of the public’s interest.
Bill Good. A lot of people would be asking why we are even talking about doing business with Enbridge right now, given their track record, their recent environmental disasters, their what seems to be lack of procedures when it comes to oil spills. Why are we even talking about doing business with that particular company?
By Luiza Ch. Savage - Thursday, August 2, 2012 at 10:15 AM - 0 Comments
On the road today in Colorado where Mitt Romney is trying to turn the page form his fraught foreign trip with a laser focus on the economy.
His aides say he will announce a 5-point “Plan for a Stronger Middle Class.” From the sounds of it, the plan is a repackaging of the same economic policies Romney has already outlined in his campaign — cuts to income taxes and corporate taxes, deregulation, and reducing government spending to 20% of GDP.
Interestingly, the first plank of the “new” plan is a goal of achieving “North American energy independence by 2020.” It’s not an easy goal — that in practice would likely require both increases in production and reductions in energy consumption (and expensive investments in new technologies).
The Romney campaign said it would be done through increased domestic US production and building more infrastructure (including Keystone XL) within North America.
North American energy independence was for a long time the notion that Canadian representatives would pitch in Washington.
That changed with Stephen Harper’s comments on the subject during his April visit to Washington when he said continental independence was not in Canada’s interests any longer:
I’ve got to say that Canada’s interests here are a little bit different, and particularly—I might as well be frank with you—in light of the interim decision on Keystone. What it really has highlighted for Canada is that our issue when it comes to energy and energy security is not North American self-sufficiency; our energy issue is a necessity of diversifying our energy export markets.
We cannot be, as a country, in a situation where really our one and, in many cases, almost only energy partner could say no to our energy products. We just cannot be in that kind of position.
And the truth of the matter is that when it comes to oil in particular, we do face a significant discount in the marketplace because of the fact that we’re a captive supplier.
So we have made it clear to the people of Canada one of our national priorities is to make sure that we have the infrastructure and the capacity to export our energy products outside of North America. Now, look, we’re still going to be a major supplier to the United States. It’ll be a long time, if ever, before the United States isn’t our number one export market. But for us, the United States cannot be our only export market. That is not in our interests either commercially or even, as I say, in terms of price.
By Aaron Wherry - Tuesday, July 31, 2012 at 8:58 AM - 0 Comments
Pressure is now building on the federal Conservative government to step in and respond to B.C.’s demands – by stating, among other things, whether Ottawa is willing to share some of the billions of dollars of federal tax revenue that would be generated by the pipeline or pony up cash for environmental protection.
Federal Natural Resources Minister Joe Oliver said Monday that Ottawa has a role to play in pipeline safety and maritime environmental protection, and that “we’re going to fulfil our obligations in that regard.” However, the government doesn’t sound too interested at this time in sharing more of the economic benefits with British Columbia, although it won’t directly state a position on the matter. ”The economic benefits are, in fact, already shared across the country,” Oliver said in an interview with Postmedia News. ”I just don’t want to get into that specific issue at this time.”
A report from the Canadian Energy Research Institute projects that the vast majority of tax revenues from three proposed pipelines—Keystone XL, Northern Gateway and Trans Mountain—would go to Alberta.
By Aaron Wherry - Monday, July 30, 2012 at 8:00 AM - 0 Comments
Enbridge, the company behind the proposed Northern Gateway pipeline, makes the news for a minor spill in Wisconsin.
The spill blackened a small field but did not appear to cause major damage. It comes almost two years to the day after a much larger spill in Michigan’s Kalamazoo River and at a time when the company is seeking support for its proposed Northern Gateway pipeline, which would carry oil from Alberta to British Columbia for export to Asia.
BC critics fret. Massachusetts Congressman Ed Markey invokes BP. The U.S. Transportation Department is investigating. And Reuters tallies accidents and leaks at Enbridge facilities over the last decade.
By Aaron Wherry - Friday, July 27, 2012 at 9:00 AM - 0 Comments
Harry Swain, a former deputy minister, explains what the federal government needs to make the Northern Gateway pipeline an acceptable proposition.
For starters, we need a serious oil spill response capacity on the West Coast. The Coast Guard currently has no capable ships, and no trained crews, for dealing with even a modest spill. The closest response capacity is many hours from the Douglas Channel. The Coast Guard needs a base in the region, a dozen small ships and a few bigger ones, new regulations, new response doctrine, new training manuals, and a lot of at-sea practice before the first tanker sails the channel.
One will also need quite a number of new licensed pilots. These take almost as long to train as neurosurgeons, so it’s time to get started. For a federal government whose only relevant action so far is moving the sole West Coast oil spill response facility to Quebec, there is a lot to do.
Meanwhile, the Globe editorial board pans Christy Clark’s proposal, but offers an alternative.
If Ms. Clark’s worries are genuine, but not so great as to be prohibitive should the project pass environmental reviews, a more defensible condition would be insisting upon some form of insurance to help cover costs in the case of an accident. That could involve an iron-clad commitment from the federal and Alberta governments (along with Enbridge, the company that would build the pipeline) to ensure that B.C. did not absorb any cleanup costs, or even the establishment of a fund to cover those costs in the event they’re ever incurred.
By Aaron Wherry - Thursday, July 26, 2012 at 9:36 AM - 0 Comments
“We can’t have a Canada where we try to toll-gate different goods and services in different parts of the country,” Baird told CBC’s Power and Politics. ”Alberta has a great resource, it’s a great resource for Canada, and they obviously have to get that resource to market.”
Central to the Harper government’s response would seem to be an effort to turn tollgate into a verb.
By Aaron Wherry - Wednesday, July 25, 2012 at 4:44 PM - 0 Comments
Conservative MP Brent Rathgeber questions Christy Clark’s position on the Northern Gateway pipeline.
If she truly believes that the possible risks of a pipeline outweigh the $6B in proposed benefits, than she should oppose it unequivocally. That is the apparent position of the BC Opposition Leader Adrian Dix; a position shared by federal NDP Opposition Environmental Critic, Megan Leslie. They oppose the Northern Gateway Project full stop. I disagree with their position but at least I respect them for taking an unequivocal position and having the courage of their conviction to stand by it.
That is quite different from the position of the BC Premier. She apparently has environmental concerns. Fair enough, but she has publically stated that for enough money or BC’s “fair share”, she will give the project her blessing. The BC Premier is stating that her supposed concern for the environment has an undisclosed price tag. I am being kind when I call her position “disingenuous”.
Ms. Clark, meanwhile, wants “Alberta and Canada to come to the table and sit down with British Columbia and work to figure out how we can resolve this.”