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PostPosted: Tue Nov 22, 2011 1:16 pm
 


Filibuster Cartoons
Title: Harper's pipe dream (click to view)
Date: November 22, 2011
Canada and the United States are, in many ways, perhaps best akin to an old, loveless married couple. Though we provide endlessly for each other, and help each other enjoy the comfortable standard of living to which we’ve become accustomed, very rarely are we forward enough to ask for anything that would require much individual effort. The status quo is usually good enough. But on those rare occasions when we do ask, the potential for drama can be very high.

The current source of drama? Oil.

The Canadian province of Alberta is home to the world’s largest deposits of what are known as either “oil sands” or “tar sands,” depending how euphemistic you want to be. In any case, the product in question is a sort of mushy, clumpy, crumbly mixture of dirt and petrol that we’ve recently learned how to process in such a way as to extract the precious liquid from the useless solid.  Digging up this composite has become a huge business in Northern Alberta, and provided something of a renaissance to the province’s energy industry at a time when traditional petroleum reserves have been steadily declining. Visiting the province for the first time last year, I, like many tourists, came away amazed at how many young men were suddenly able to afford their own homes, cars, and families after only a few short years of working in “Fort Mac” — the casual term for the northern town of Fort MacMurray, the province’s open-pit Mecca (town slogan: “We have the energy”).

Trouble is, this boom can only last so long as there are other countries willing to buy all the oil the Albertans are digging up. And thus America enters the picture.

The United States is hungry for oil, as you may have heard. So a company known as TransCanada (motto: “in business to deliver”) has proposed building an enormous pipeline, codenamed “Keystone,” that would snake some 2,700 km from the reserves of Alberta to the refineries of Texas. The line would pump some 800,000 barrels of crude a day into the US market, and according to some estimates, satisfy American energy needs for at least a century, allowing the country to greatly lessen its reliance on Saudi Arabia and Venezuela in the process.

But of course nothing with oil is ever easy or uncontroversial. Though the Canadian political and business establishments have been near-unanimous in their support of Keystone, the country's environmentalist lobby has long rallied against the oil sands, portraying it as the most disgraceful ecological scourge of our time.  And to be fair, their criticisms do have some merit; for a small community, Fort McMurray already holds the dubious honor of being one of the planet’s largest emitters of greenhouse gases, and there are no shortage of horrific photo galleries floating around depicting just what a hideous mess the oil sands extraction process has made of the once-pristine Albertan countryside.

In the United States, similarly, there are significant concerns that Canada is serving as a kind of “pusher,” encouraging America to deepen its addiction to dirty oil at a time when the country should be actively exploring clean, renewable alternatives to fossil fuels. Old-fashioned NIMBYism has also proven to be a powerful force of opposition in some of the six states Keystone is supposed to pass through. Despite being under Republican rule, Nebraska in particular has been extremely vocal in its (perhaps understandable) desire to not have thousands of gallons of oil bubbling past the aquifer that provides much of the Midwest with its drinking water, as the original blueprints called for. As I write this, the Nebraska legislature has just unanimously passed a resolution demanding TransCanada either reroute or get out.

Since the Keystone project transcends the boundaries of numerous states and two countries, ultimate authority for the project’s survival rests with the White House, and for his part, President Obama has hardly made his own views clear. Already a declining brand in the eyes of many liberals and progressives, the environmental file is one of the few remaining policy realms where the President hasn’t actively done anything to enrage the left. Vetoing keystone, as over 10,000 protesters at the White House gates recently demanded he do, seemed like a fairly reasonable bone to throw at a time when Obama has had precious few opportunities to embark upon big, principled gestures designed to delight his base.

On November 10, Obama’s State Department announced that it would not make any definitive decision regarding Keystone until at least late 2013, rather conveniently moving the issue off the burner until after next year’s presidential elections. Prime Minister Harper did not take the news well.

“This underscores the necessity of Canada making sure that we are able to access Asian markets for our energy products,” the PM said snippily, noting that he had already begun chatting up the Chinese president on the topic. Other Canadians politicians have since expressed a desire to fast track another proposed pipeline project, an Alberta to Asia one, in the aftermath, describing the US market, in so many words, as a bit too “uncertain” and “politicized” at the moment.

The idea that Canada would ever be able to make the same kind of money shipping oil across the Pacific Ocean as it could pumping it directly into the United States is an obvious fantasy, but it’s still a fantasy that holds a fair bit of currency in a nation whose economic dependence on America breeds powerful anxiety at the best of times. Canada is a nation, after all, that waited over 120 years to even propose free trade with its next-door neighbour. Embarking upon spitefully ill-conceived economic policies is not unknown to us.

In particularly dark moments of foreign policy isolation, US diplomats have been known to quip "at least the Canadians are on our side." As Obama's Republican opponents continue to hurl slurs about alienating allies and damaging US interests, the President's Canada policy may prove to be a far less savvy political move than he originally thought. What president, after all, wants to go down in history as the man who gave America's faithful spouse a wandering eye?


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PostPosted: Tue Nov 22, 2011 1:45 pm
 


"Fort MacMurray"

"Fort McMurray", if you please.


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PostPosted: Tue Nov 22, 2011 1:58 pm
 


Obama takes a potshot at Canada again. Y'all still infatuated with him?


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PostPosted: Tue Nov 22, 2011 2:23 pm
 


BartSimpson wrote:
Obama takes a potshot at Canada again. Y'all still infatuated with him?


Never was.

Which is why I say cancel Keystone XL, build more refineries and build the Northern Gateway pipeline. Reinforce the railway to Prince George for all the lumber we can also ship to Asia that the US doesn't want. Turn all the pinebeetle leftovers into pulp and paper and ship that too.

As they say, "let the market decide". If the US doesn't want our stuff cheap, others will want it at a slightly higher markup.


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PostPosted: Tue Nov 22, 2011 2:33 pm
 


The Nebraska problem got solved by re-routing the line away from the aquifer. The governor and legislature are ready to sign off on it right now.

All this amounts to is a delay. This thing will probably get final approval after the 2012 election is over regardless of who wins the White House. Alberta's been making money hand over fist without this pipeline so even in the eventuality that it gets rejected it'll do little damage to our overall provincial economy. Transcanada'll take a bath but if they jerked around on the applications end of things and didn't re-route it away from that aquifer before all the negative publicity hit the fan then they've got no one else to blame but themselves.


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PostPosted: Tue Nov 22, 2011 2:37 pm
 


Right on JJ. One of your funniest in a while. :lol: [B-o]


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PostPosted: Tue Nov 22, 2011 3:34 pm
 


I'd put the refineries in Milk River or Cardston, but that's just me.


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PostPosted: Tue Nov 22, 2011 4:20 pm
 


Thanos wrote:
The Nebraska problem got solved by re-routing the line away from the aquifer. The governor and legislature are ready to sign off on it right now.

All this amounts to is a delay. This thing will probably get final approval after the 2012 election is over regardless of who wins the White House. Alberta's been making money hand over fist without this pipeline so even in the eventuality that it gets rejected it'll do little damage to our overall provincial economy. Transcanada'll take a bath but if they jerked around on the applications end of things and didn't re-route it away from that aquifer before all the negative publicity hit the fan then they've got no one else to blame but themselves.


On the contrary, the delay is a HUGE problem - for two reasons. The first is that we get less for our oil because we can't get our oil to market;

Quote:
On the production side, since most of the export capacity leaving Alberta goes to the Midwest, our producers have been receiving significantly less value for their oil than they would if that oil were shipped to the Gulf Coast, or to any other port where it would sell at world prices. With Canadian oil exports to the Midwest at over 1.6 million barrels per day, a discount of $25 per barrel translates into about $15 billion per year of lost value to producers. And because these lower revenues mean lower royalty payments and income taxes, these costs are felt by all Canadians and in particular Albertans.


http://www2.macleans.ca/2011/11/21/expl ... n-the-u-s/

The second is that because of this delay, it's highly likely that new projects in Ft. Mac will be delayed in turn, because no company is going to build/expand a SAGD plant without a method of transporting its end products, especially not when it receives $25 less per barrel than it would if the pipeline was built.

No, this decision was a huge slap in the face and I wish Canadians would wake up and smell the coffee. It's well past the time to diversify our trade and if that means selling oil to China and India via the Gateway (or any other method), I'm all for it.


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PostPosted: Tue Nov 22, 2011 4:42 pm
 


If we sell oil to China and India can we first refine it here please?


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PostPosted: Wed Nov 23, 2011 6:19 am
 


JJ wrote:
Filibuster Cartoons
Title: Harper's pipe dream

Trouble is, this boom can only last so long as there are other countries willing to buy all the oil the Albertans are digging up. And thus America enters the picture.


There is plenty of demand from all sorts of countries. China (through MEG Corp) is willing to pay for part of Enbridge's Gateway pipeline. India, Japan and even South Korea have expressed willingness to buy from Canada too.

JJ wrote:
Filibuster Cartoons
Title: Harper's pipe dream“This underscores the necessity of Canada making sure that we are able to access Asian markets for our energy products,” the PM said snippily, noting that he had already begun chatting up the Chinese president on the topic. Other Canadians politicians have since expressed a desire to fast track another proposed pipeline project, an Alberta to Asia one, in the aftermath, describing the US market, in so many words, as a bit too “uncertain” and “politicized” at the moment.

The idea that Canada would ever be able to make the same kind of money shipping oil across the Pacific Ocean as it could pumping it directly into the United States is an obvious fantasy, but it’s still a fantasy that holds a fair bit of currency in a nation whose economic dependence on America breeds powerful anxiety at the best of times. Canada is a nation, after all, that waited over 120 years to even propose free trade with its next-door neighbour. Embarking upon spitefully ill-conceived economic policies is not unknown to us.


It's hardly spiteful economic policy - most people have heard the saying about what happens when one has all their eggs in the same basket. And as the MacLean's articles above notes, we already losing close to $25 per barrel tht we ship to the US because it is going to a saturated market. If we had access to a seaport, we would get world prices, which would increase both royalties and income taxs here in Canada (nevermind coprorate profitability and all those shareholder dividends).

Diversifying our trade will help create better economic stability for Canada. We shouldn't be dependent on any one nation for 73% of our exports and 63% of our imports.

http://en.wikipedia.org/wiki/Economy_of_Canada

Of course, we should still continue to trade with the US, and for the foreseeable future, they will remain our main trading partner, but dropping our exports to the US to maybe 50% - 60% would increase Canada's ability to weather recessions in the US market and increase our ecnoomic prosperity.


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PostPosted: Wed Nov 23, 2011 8:36 am
 


I think we should all just frolic in teh meadows and live off the limitless energy of Love Power.

I wish we couold build the refineries here, but, so I'm told, the economics of that son't work at all. We simply cannot compete with the scale of the Gulf of Mexico operations. And BC isn't to amenable to being a world-scale oil port either.


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PostPosted: Wed Nov 23, 2011 10:59 am
 


DrCaleb wrote:
"Fort MacMurray"

"Fort McMurray", if you please.


Thanks JJ.


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PostPosted: Wed Nov 23, 2011 11:03 am
 


Zipperfish wrote:
And BC isn't to amenable to being a world-scale oil port either.


Must have something against jobs and money.


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PostPosted: Wed Nov 23, 2011 11:27 am
 


DanSC wrote:
I'd put the refineries in Milk River or Cardston, but that's just me.
I'm curious, why would you build them there? if you're in Cardston, you have to cross the border to get your booze!
I would build at least one more refinery and host it in Edmonton, or somewhere around Fort mac. or it's possible to upgrade the 3 we already have here.

Not sure if it's a great idea, but what about building a pipeline to the arctic, or even the Yukon and throw up a refinery or two there. Jobs for the pipeline and jobs building a refinery.


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PostPosted: Wed Nov 23, 2011 11:54 am
 


1Peg wrote:
DanSC wrote:
I'd put the refineries in Milk River or Cardston, but that's just me.
I'm curious, why would you build them there? if you're in Cardston, you have to cross the border to get your booze!
I would build at least one more refinery and host it in Edmonton, or somewhere around Fort mac. or it's possible to upgrade the 3 we already have here.

Not sure if it's a great idea, but what about building a pipeline to the arctic, or even the Yukon and throw up a refinery or two there. Jobs for the pipeline and jobs building a refinery.

It places the refineries as close to the US as possible while keeping the refining jobs in Canada.


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