Alberta politics started October 31, 2018

155 posts / 0 new
Last post
MegB
Alberta politics started October 31, 2018

Continued from here.

Issues Pages: 
Regions: 
epaulo13 epaulo13's picture

'No answers for me': Chief says First Nations left out of McMurray fire response

It was May 8, 2016, and the Fort McMurray wildfire was in full blaze.

Municipal and provincial leaders had gathered to discuss a response when Chief Allan Adam of the Athabasca Chipewyan First Nation walked in wanting to know how their plans would affect Indigenous communities.

"All these heads started looking at each other and they had no answers for me," he recalls. "It was clearly evident they had no plans for emergency procedures for First Nations in the surrounding area."

That's also the main conclusion of a lengthy report by 11 Indigenous communities in and around Fort McMurray. It was funded by the Red Cross and is the result of two years of surveys, meetings and focus groups.

"You had this breakdown in understanding," said Tim Clark, the consultant who wrote the report.

quote:

The Fort McMurray wildfire became one of Canada's worst natural disasters.

More than 88,000 residents fled their homes and more than 2,400 structures were damaged or destroyed. The estimated cost was pegged at about $10 billion and nearly 6,000 square kilometres in northern Alberta were scorched.

Nobody knew who was in charge

There were no deaths directly caused by the fire, but the report suggests that wasn't because things went smoothly.

Nobody knew who was in charge, it says. Between municipalities, the province and Ottawa, responsibility for Indigenous communities was up in the air.

There were few relationships and less trust between government and First Nations groups, says the report. Indigenous leaders weren't included in the Regional Emergency Operations Centre.

"You had Fort McMurray First Nation, just east of Fort McMurray, and they didn't even know there was an emergency operations centre," Clark said. "(The municipality) did not reach out to First Nations because it assumed they were being dealt with by the federal government."

Most residents from the nearby hamlet of Janvier left for safety in Lac La Biche, 175 kilometres away. But when a few Janvier kids acted up, everyone, including elders, was rousted and moved again — some back to Janvier, which was still under threat.

Re-entry after the fire was similarly tone-deaf, the report says.

quote:

More Indigenous people lost their homes

There was also initial doubt about whether residents would be allowed to rebuild in the Waterways neighbourhood — one of the oldest parts of Fort McMurray and settled by Indigenous people generations ago.

"The municipality understood it in financial terms," Clark said. "The Indigenous people understood it in more of a cultural, historical perspective."

Governments also failed to consider the circumstances of Indigenous communities, he said. Many houses damaged in the fire started off in bad shape. Fewer Indigenous homeowners were insured.

About one-quarter of Indigenous people in the survey lost their homes — a far higher percentage than in Fort McMurray as a whole. About one-third of those who lost homes had no insurance.

epaulo13 epaulo13's picture

Alberta regulator privately estimates oilpatch's financial liabilities are hundreds of billions more than what it told the public

Cleaning up Alberta's fossil fuel industry could cost an estimated $260 billion, internal regulatory documents warn.

The staggering financial liabilities for the energy industry’s graveyard of spent facilities were spelled out by a high-ranking official of the Alberta Energy Regulator (AER) in a February presentation to a private audience in Calgary.

The estimated liabilities for the oil-rich western Canadian province are far higher than any liability amount made public by government and industry officials.

The official who delivered the new estimates is Rob Wadsworth, vice president of closure and liability for the AER. He said that a “flawed system” of industrial oversight is to blame for a problem that ultimately could leave taxpayers on the hook to cover a portion of the costs.

He also called on all stakeholders to accept tougher regulations and move away from a system that now allows the largest companies to take centuries to clean up their toxic well site graveyards.

“We can continue down our current path until the impacts are felt by the public ... or we can start to implement the numerous changes that we now know need to be made,” say notes from Wadsworth's presentation. He added that the liabilities are underfunded and the collection of security funds from industry is “insufficient.”

Until now, the public has been told the liabilities have been calculated at $58 billion, far less than Wadsworth’s estimate. The presentation did not spell out what he based his estimate on and Wadsworth declined an interview. The government meanwhile has only collected $1.6 billion in liability security from companies....

epaulo13 epaulo13's picture

..damage control

Alberta regulator apologizes for spooking public with $260-billion cleanup cost estimate

quote:

But following the media report, the regulator went further, suggesting the decision to use the numbers in the presentation was a mistake.

“We want to apologize for the concern and confusion that this information has caused,” said the statement. “The numbers are staggering – $260 billion in total liability, which is $200 billion more than we have consistently reported. This particular estimate was created for a presentation to try and hammer home the message to industry that the current liability system needs improvement.

“While the message to address liability is important, the numbers were not validated and were based on a hypothetical worst-case scenario. Using these estimates was an error in judgement and one we deeply regret.”

That statement appears to be at odds with Wadsworth’s presentation, which stated multiple times that the $260-billion figure was likely to be a low estimate.

quote:

Pressed by journalists to respond to the report, Alberta Premier Rachel Notley noted that the problem was significant.

She said the liabilities would be hard to address amid the “biggest oil price drops in generations,” adding that company practices have improved, but after decades of buildup, the existing problem is “not one that we can fix overnight.”

“The issue has always been one that is of concern to us,” Notley said. “It’s actually a matter that I raised with the provincial government well before we were in government – back when I was in opposition.”

United Conservative Party leader Jason Kenney declined to comment on the investigation’s findings.

However, UCP MLA Jason Nixon said his party will likely have more to say about the issue in Alberta’s upcoming provincial election, scheduled for Spring 2019.

“Regulations were behind when our industry started, and there’s going to be some creative ways that governments in the future are going to have to look at tackling,” Nixon said. “I don’t have an answer for that today.”

The issue also came up during question period in the House of Commons on Thursday, as federal politicians sparred over the investigation’s findings.

Alexandre Boulerice, NDP MP for Rosemont — La Petite-Patrie, asked what it would take to get the Liberal government to take “real action” on climate change.

“That’s a hefty bill for pollution,” Boulerice said in French, referring to the estimated $260 billion price tag.

“When you have to take the Liberals to court to get them to take real steps on climate change, things must be pretty bad. Is that what the Liberals are waiting for? To be taken to court?”

epaulo13 epaulo13's picture

..someone must be punished for the truth getting out. as if the lie was his creation and not a government directive.

Head of Alberta regulator to resign in January after $260-billion oilpatch cleanup estimate leads to apology

The president of Alberta’s fossil fuel industry regulator will resign in January, after the organization publicly apologized for the alarm caused by its $260-billion estimate of financial liabilities in the province’s oilpatch.

Jim Ellis, president and chief executive officer of the Alberta Energy Regulator, will be resigning effective Jan. 31, 2019, the organization announced Friday. He became president of the regulator in June 2013.

The announcement comes on the heels of a Nov. 1 report by National Observer, Global News, the Toronto Star and StarMetro Calgary that revealed the regulator’s stunning internal estimate of the cost of cleaning up aging and inactive oil and gas exploration wells, facilities, pipelines and toxic tailings ponds from oilsands mines.

The estimated financial liabilities, contained in a presentation by the regulator’s vice-president of closure and liability Robert Wadsworth, were $200 billion greater than a previous public estimate of just over $58 billion.

The AER said the decision for Ellis to resign “has been in the planning stages for the past several months.”

"The story you reference is unrelated to today's announcement," said AER's communications and international relations director Bob Curran, referring to the liabilities report.....

epaulo13 epaulo13's picture

The damage control from Alberta's oilpatch watchdog is nonsensical

t’s difficult to overstate the consequences of the predicament that the regulator – assumed to guard the public interest, but long since captured to serve industry – has plunged the province

For months its top experts have known that the financial liabilities accumulated by the oilpatch are staggering figures that are far higher than any the industry and government have told the public.

While industry has pocketed hundreds of billions in profits from public resources, complicit regulators have enabled $260 billion in unfunded cleanup to accumulate, as National Observer, Global News and the Toronto Star reported this week. Most of these liabilities have been kept off the balance sheets of government and industry.

quote:

At the heart of the problem is a regulatory system that Wadsworth admitted was "flawed."

The AER will soon tweak rules governing the cleanup of aging and expired oilfield infrastructure. But the changes were developed in close collaboration with industry and will almost certainly fail to address the true scale, urgency or cost of the crisis.

Before the provincial election this spring, Albertans must get informed and get engaged if there is to be any chance of making the polluter pay and avoiding the worst consequences of the mighty oilpatch’s capture of Alberta energy regulators.

The starkest example is the scandalous mismanagement of aging and expired oilfield infrastructure and the accumulation of $260 billion in cleanup liabilities while hiding the true amount from the public.

Shocking scale of unreported liabilities

It puts the scale of off-balance sheet liabilities on a shocking level.

Liabilities not recorded on a company's balance sheet are hidden from investors and lenders. Such hidden liabilities can become a significant concern when trying to assess a firm’s financial health.

This scale of unaccounted for liability also has the potential to seriously affect the province’s credit rating.

Regulators have failed to impose meaningful cleanup deadlines. Another central reason that industry has failed to fulfill a legal obligation to return sites to near their original state is this: accountants simply make the problem disappear.

Accountants do so in three ways. First, they begin with absurdly low estimates of the actual cost of reclamation.

Then, the schedule of payments necessary to fund cleanup is drawn far into the future with unrealistically long well lives.

Finally, the underestimated costs are discounted over too many years to arrive at the “net present value” that is recorded on a company’s balance sheet.

The result leaves fractions of a penny on the dollar of the actual cleanup costs on today’s books.

quote:

This makes a mockery of what the Canadian Association of Petroleum Producers told the last royalty review: “The LLR Program protects industry, and industry protects the public.”

The days of hiding this crisis are over

The truth is that the LLR program protects industry from having to pay even tiny deposits on multi-billion-dollar cleanup costs. How is industry protecting the public?

The cleanup of hundreds of thousands of kilometres of pipeline has never been a part of a regulatory program in Alberta, so the liabilities are not accounted for on company balance sheets, and regulators hold no security for them. The internal AER estimate pegs the pipeline price tag at $30 billion.

The low-ball liabilities publicly reported under the MFSP are supplied by industry without verification by the regulator. And almost all oil and gas producers use the public LLR numbers, shown to be gross underestimates, to state cleanup costs.

What’s more, a case currently before the Supreme Court of Canada could effectively render polluters and their bankers immune from the environmental consequences of their profit. This is the RedWater Energy case in which lower courts in Alberta accepted an extreme interpretation of bankruptcy law that allows bankrupt companies to disown liabilities, dealing a huge blow to regulators' ability to force polluters to clean up their mess.

epaulo13 epaulo13's picture

..wow! gorsak talks about being surprised at how much support there is for her ideas.

MINI-EP: Paige Gorsak for Edmonton-Strathcona

Paige Gorsak is running for the federal NDP nomination in Edmonton-Strathcona, a seat currently held by the NDP's Linda Duncan (who is not seeking re-election). Kate interviews Paige about her ambitious platform and bold vision for the future, which includes a fossil-fuel phaseout and just transition fund, housing as a human right, free education, universal healthcare, drug decriminalization, and Indigenous sovereignty.
Members of the Federal NDP in Edmonton-Strathcona can vote for Paige at the nomination meeting on November 26th, 2018. See votepaigegorsak.ca for details.

 

epaulo13 epaulo13's picture

Alberta oilpatch cleanup would provide decades of employment

Jobs, jobs, jobs, especially in Alberta’s oil industry; they have been at the centre of our national political debate for most of the last three years.

According to Prime Minister Justin Trudeau and Alberta Premier Rachel Notley, they’re the reason we bought a pipeline, and need to twin it and fill it with bitumen in a hurry. According to United Conservative Party leader Jason Kenney (and federal Conservative leader Andrew Scheer, and Ontario Premier Doug Ford) they’re the reason we can’t have a price on carbon.

quote:

If Alberta retooled its economic engine to restore the landscape of this beautiful province, rather than continuing to ravage it with extraction, riggers could keep right on rigging and truckers could keep on trucking. With comparatively little retraining or relocation, hundreds of thousands of oilfield service workers could keep doing what they do, where they do it — protected by the same unions too.

We don’t need another pipeline or gargantuan bitumen mine to pump money into the coffers of multinational oil companies. On the contrary, the much greater economic opportunity lies in cleaning up the mess they have already profited from.

And all we need to spark this boom is for governments to enforce the law and make polluters pay. You see, in Canada, the oil industry has a legal obligation to return oil and gas sites to near their original state after their productive life ends.

Now of course there are barriers, huge ones. First, cleanup money has not been set aside. Forty four years of petro-Conservativism resulted in only $1.6 billion in industry deposits against that vast slag heap of liabilities. That works out to just 0.6 cents of every dollar the AER predicts we’ll need for the eventual cleanup.

And needless to say, while the Notley government has been utterly relentless in demanding a new pipeline, it just hasn’t gotten around to pressuring industry to kick any more cash into the cleanup kitty.

Hurtin Albertan

Petro-conservatism.  I like that.  Good article, couldn't agree more.

epaulo13 epaulo13's picture

May warns Ottawa will be forced to pay for oilpatch cleanup costs

quote:

On Tuesday, Alberta's governing New Democrats and official Opposition United Conservatives prevented an emergency debate on the issue proposed by a Liberal MLA.

“Yes, the federal government is going to end up being responsible for some of that cleanup,” said May in an interview Wednesday, following remarks she gave at a biotechnology conference in downtown Ottawa.

“Right now all Canadians should know that we have a very heavy debt load that we’re carrying on behalf of the oil industry, because they won’t be paying off their cleanup costs.”

Speaking on Parliament Hill after a caucus meeting, Sohi told National Observer that companies are responsible for cleaning up their environmental destruction — and provinces are responsible for holding those companies accountable.

“This is a report that was generated by the regulator in Alberta...it is a liability that the oil industry is responsible for, and it’s a liability that a provincial government manages, or asks companies in Alberta to manage,” he said.

Feds gave millions for Sydney Tar Ponds cleanup

May argued that the federal government had already spent hundreds of millions of dollars for an environmental cleanup of a provincial installation — the Sydney Tar Ponds on Cape Breton Island, which she called one of the country’s worst toxic waste sites.

Toxic sludge had flowed into an estuary into the harbour of Sydney, N.S., the byproducts of a steel plant that ha been bought by the Nova Scotia government. In 2001, May — at the time the executive director of the Sierra Club of Canada — went on a 17-day hunger strike to demand relocation of residents away from toxins in a Sydney neighbourhood.

Six years later, the federal government committed $280 million to a joint $400-million fund with Nova Scotia to clean up the mess. May said it was a recognition of Ottawa’s responsibility — even though it was much smaller than the size of operations in Alberta’s oilpatch.

“That’s one estuary on Cape Breton Island — a fraction of the size of the tailings ponds the oilsands are creating,” she said. “So yes, we’re all going to end up paying for the cleanup.”

Asked about whether the Sydney Tar Ponds set a precedent for federal government investment in environmental cleanups, Sohi said “I don’t know the specifics of the project that you are mentioning,” and reiterated his stance on provincial responsibility.

“It is my understanding that companies are responsible for making sure that they have plans in place to mitigate the damage that is done to the environment,” he said, “and it’s the province’s responsibility to make sure that when these resources are extracted, companies are held responsible to pay for the costs of remediation and cleanup that has to occur afterwards.”

The federal government has already chipped in some money to help Alberta clean up abandoned wells. In its 2017 federal budget, the Trudeau government offered $30 million in support for the oilpatch, including funding to support reclamation of orphaned wells. An orphan well is an inactive site that no longer has an operator due to bankruptcy.

epaulo13 epaulo13's picture

..from an email

quote:

This past week has been overwhelming. Together, we've raised an astonishing $30k for the Tar Sands Trial, bringing out grand total to over $500,000. This success is thanks to 10 new online fundraisers, great events in Montreal and Victoria, and extraordinary people stepping up to have their contributions doubled by our matching funds donors. It's amazing, it's goosebumps-inducing, and here at RAVEN the realization is dawning that we just may be able to pull off our audacious goal.

JKR

Main Street Poll; November 2, 2018:

UCP: 54.3%

NDP:  29.1

Alberta Party: 5.5

Liberals: 5.2

Green Party: 2.7

Freedom Conservative: 2.5 

 

 https://www.scribd.com/document/392941521/Mainstreet-Ab-Nov12#fullscreen...

Quote:
The Wildrose and the PCs garnered a total of 52% of the vote in the last election, and the UCP today has 54.3%”, continued Angolano. “This indicates that UCP support is most likely an aggregate of pre-existing support for the two former small-c conservative parties.

The poll also found that Albertans have a positive view of Kenney compared to Notley. While respondents have +14.3% net favourability rating of Kenney, Notley has a -20% rating.

Ken Burch Ken Burch's picture

At this stage, it looks as though Kenney could promise to legalize bestiality and still win in a landslide.

epaulo13 epaulo13's picture

The silence on Alberta's $260 billion environmental liability is deafening

quote:

Anger among many Albertans that successive governments have let this issue worsen has not led to accountability – yet. You would think that the revelation of a $260 billion in off the books environmental debt against a mere $1.6 billion in security deposits collected might garner more sustained interest. Yet headlines the next day in Edmonton focused on a $79 per household proposed city tax hike and not the quarter trillion dollar elephant in the room.

It’s difficult to imagine companies investing such a large sum of money in reclamation efforts and even more inconceivable that this would take place when revenues dry up. If companies walk away, Alberta taxpayers could ultimately be on the hook for the cleanup, which would amount to about $150,000 per household or more than six times Alberta’s current provincial debt. That’s why it is critical that Alberta strengthens its regulatory regime to ensure that companies that reap the benefits of the province’s natural resources are also responsible for the cleanup.

United Conservative Party avoided the issue

The official opposition, the United Conservative Party, which will likely campaign around financial responsibility and the deficit in Alberta’s 2019 election, curiously declined to comment on the $260 billion liability – an issue of financial mismanagement that dwarfs all others. What’s more, party leader Jason Kenney signaled that he wants to appoint a “minister of deregulation” and undo environmental policy advancements. To go back to the old way of doing things and relax already weak requirements is the opposite of what needs to be done and would expose Albertans to further financial risks of this inherited problem. Such regression in policy is illogical.

It is also troubling that the smoking gun on the need to protect citizens and reform Alberta’s weak liability system, was met in large part with silence. If nothing else, it might temporarily quiet the usual refrain about Alberta’s “world class” regulatory system and cause a moment’s pause in industry and opposition arguments that the oil and gas industry needs even more deregulation.

epaulo13 epaulo13's picture

..meanwhile

Top Alberta Fossils Stayed ‘Incredibly Profitable’ Despite Oil Price Crash

The five companies that dominate the oilsands industry have remained "incredibly profitable" despite low oil prices and delays in building new pipelines, according to a report from the Parkland Institute.

"Despite the 2014 oil price crash and the ongoing hand-wringing over pipelines and the price differential, the reality is that the big five oilsands producers have remained incredibly profitable corporations," said Ian Hussey, lead author of a report released Thursday by Parkland Institute and the Canadian Centre for Policy Alternatives.

Last year alone, the companies banked or paid out to shareholders a total of $13.5 billion, he said.

"These companies have been able to continue to transfer sizeable amounts of money to their shareholders or to their bank accounts, while at the same time in 2015 cutting almost 20,000 jobs from the Alberta economy," Hussey said.

The report analyzed the business economics of Suncor Energy, Canadian Natural Resources Limited, Cenovus Energy, Imperial Oil, and Husky Energy, who together produce 80 per cent of Canada's bitumen.

quote:

Industry response

Those in Canada's oil industry say the comparison of money paid to shareholders and money paid to governments in taxes and royalties shows the system is fair.

"Both companies and the governments are sharing in the benefits of the development, which is actually quite consistent with the nature of the royalty and resource development system that was built in Alberta," said Ben Brunnen with Canadian Association of Petroleum Producers. "So I would sort of make the case that we see here is an example of the system working quite well."

epaulo13 epaulo13's picture

Canadian Fossils ‘Lose Patience’ with Trudeau as World Oil Prices Drag Them Down

With world oil prices heading toward another crash, the swashbuckling free marketeers in Canada’s oilpatch are doing exactly what you would expect: amping up the pressure on Prime Minister Justin Trudeau and Alberta Premier Rachel Notley to somehow, magically solve a complex cluster of problems that is ultimately beyond Canadian governments’ control.

The fossil execs and their financiers say they’re losing patience with the federal government. Warning of a new wave of western Canadian separatism. Accusing-not accusing Ottawa of treason. Even risking the appearance of insider trading by participating in a meeting with Notley to discuss production volumes.

quote:

Nearly three years later, Canadian fossils seem to have forgotten both the humour and the truth in Nenshi’s comment. The grade of oil that Alberta sells into world markets, Western Canadian Select, hit a rock-bottom price of US$13.46 per barrel on Thursday, its lowest since Bloomberg began keeping track in 2008. They’re producing at a loss, and they want a solution right now. And they imagine that faster federal action to approve the intensely controversial Trans Mountain pipeline extension—a project that would be years away from delivering an ounce of heavy crude if construction restarted tomorrow—will somehow give them relief from today’s problem.

They also imagine that they have anything less than the federal government’s full-throated support.

That’s after Prime Minister Justin Trudeau and his cabinet bought them a C$13.8-billion pipeline, graciously postponed regulations to control the industry’s climate-busting methane emissions despite alarming new research on their total output, pays out fossil subsidies estimated at $3.3 billion per year by the International Institute for Sustainable Development and $46 billion by the notoriously radical International Monetary Fund, posted the highest per capita greenhouse gas emissions of any G20 country, and incurred the shame, to be frank, of being named one of the three countries whose climate policies would put the world on track to more than 5.0°C average global warming if every other government followed their civilization-ending example.

They still seem convinced that Ottawa could speed up a pipeline it fully intends to approve after a new round of regulatory review, even though a court told them in no uncertain terms that a faster process violated Canadian law.

epaulo13 epaulo13's picture

Alberta officials are signalling they have no idea how to clean up toxic oilsands tailings ponds

quote:

More than one trillion litres of the goop, called tailings, fill these man-made waste lakes that can be seen from space. An equivalent amount of water would take five days to tumble over Niagara Falls.

The contaminated tailings ponds attract and kill migrating birds. They emit methane and other greenhouse gases.

Despite years of public promises from officials that the tailings ponds would shrink and go away, they are growing. And in the meantime, troubling gaps are opening in the oversight system meant to ensure the oilpatch cleans up its mess. Alberta has collected only $1 billion from companies to help remediate tailings — a problem that is now estimated to cost about 100 times that.

Decades and billions have been spent on research and still there is no sure solution to a problem that is getting attention beyond Alberta. In August, the Commission for Environmental Cooperation — a NAFTA organization composed of officials from the U.S., Mexico and Canada — announced it would investigate and produce a report on tailings ponds and the threat they pose to surrounding groundwater and rivers.

'My people will become environmental refugees'

While the world watches, the mining companies operating here have been allowed by regulators to pursue a clean-up technique called water capping.

It’s supposed to work like this: put the tailings into a mined-out pit, then cover it with fresh water from a nearby river or reservoir. The idea, according to oil producer Syncrude, is that the tailings will settle to the bottom and over time the lake will turn into a healthy ecosystem supporting fish, animals and aquatic plants.

“It’s biologically and chemically an impossible fantasy,” said David Schindler, a former University of Alberta professor and renowned freshwater scientist and officer of the Order of Canada.

Other scientists say the water-capped ponds may become effective in storing tailings even if they do not one day support aquatic life, though it will take years to be sure.

What is clear is that the technique is unproven, and by conditionally approving industry plans that include it, Alberta officials are signaling they still have no idea how they’re going to clean up the waste of the oilpatch.

The Alberta Energy Regulator (AER) “can approve tailings management plans that rely on unproven technologies,” the agency said. Water capping “requires more research, assessment and policy direction.”

The ponds, meanwhile, are polluting the air and leaking out the bottom, possibly reaching surrounding groundwater and the nearby Athabasca River.

“One day, because of the environmental impacts, my people will become environmental refugees,” said Athabasca Chipewyan First Nation Chief Allan Adam.....

epaulo13 epaulo13's picture

A screenshot from a presentation delivered by Alberta Energy Regulator vice-president Robert Wadsworth on Feb. 28, 2018 shows internal estimates by the agency evaluating the financial liabilities of companies in the province's oilpatch. Document released through freedom of information legislation by the AER

epaulo13 epaulo13's picture

Alberta’s Problem Isn’t Pipelines; It’s Bad Policy Decisions

The Alberta government has known for more than a decade that its oilsands policies were setting the stage for today’s price crisis.

Which makes it hard to take the current government seriously when it tries to blame everyone from environmentalists to other provinces for what is a self-inflicted economic problem.

In 2007, a government report warned that prices for oilsands bitumen could eventually fall so low that the government’s royalty revenues — critical for its budget — would be at risk.

The province should encourage companies to add value to the bitumen by upgrading and refining it into gasoline or diesel to avoid the coming price plunge, the report said.

Instead, the government has kept royalties — the amount the public gets for the resource — low and encouraged rapid oilsands development, producing a market glut.

quote:

Some energy companies have called on the government to impose production cuts to increase prices.

The business case for slowing bitumen production was made by the great Fort McMurray fire of 2015.

The fire resulted in a loss of 1.5 million barrels of heavy oil production over several months. As a result, the price of Western Canadian Select rose from $26.93 to $42.52 per barrel.

Premier Rachel Notley has appointed a three-member commission to considering possible production cuts, something Texas regulators imposed on their oil industry in the 1930s to help it recover from falling prices due to overproduction.

epaulo13 epaulo13's picture

..not asking for investment in refinery but...

Alberta's Rachel Notley wants Trudeau government to invest taxpayer dollars in oil-by-rail

Alberta Premier Rachel Notley wants more taxpayer dollars to fund a plan to boost the transport of oil-by-rail.

The premier from the oil-rich province made the comments on Wednesday, while speaking to a lunchtime business crowd at a five-star hotel in Ottawa. At the event, hosted by the Canadian Club, Notley said that she has asked Prime Minister Justin Trudeau to commit to co-purchasing two new unit-trains to transport an additional 120,000 barrels of Alberta oil a day.

“To be clear: that would increase the already record levels of crude by rail by another third,” she said in a prepared speech.

The Trudeau government has already spent $4.5 billion on what some have described as an oilpatch bailout plan to purchase the Trans Mountain oil pipeline and related assets from Texas energy company Kinder Morgan, in order to proceed with construction of the Trans Mountain pipeline expansion project to the west coast of British Columbia.

This decision has been welcomed by industry stakeholders who say that Ottawa should be doing a lot more to support fossil fuel expansion. Environmentalists and other critics, including federal New Democrats, say that this is the wrong approach needed to address the threat of climate change....

epaulo13 epaulo13's picture

False oil price narrative used to scare Canadians into accepting Trans Mountain pipeline expansion

Alberta Premier Rachel Notley is aggressively advancing a false narrative about heavy oil’s deep discount. She presents the problem in two parts, neither of which stand up to scrutiny.

First, Notley purports that the abnormally wide price spread affects every barrel of heavy oil leading to millions of dollars a day in losses to the Canadian economy. And second, that the Trans Mountain pipeline expansion is crucial. Neither of these claims are supported by the facts.

Previous story

Alberta Premier Rachel Notley is aggressively advancing a false narrative about heavy oil’s deep discount. She presents the problem in two parts, neither of which stand up to scrutiny.

First, Notley purports that the abnormally wide price spread affects every barrel of heavy oil leading to millions of dollars a day in losses to the Canadian economy. And second, that the Trans Mountain pipeline expansion is crucial. Neither of these claims are supported by the facts.

Most Alberta oil is sheltered from the price discount

When you crunch the numbers, and include the variety of methods even the smaller players rely on to protect their exposure including long-term supply arrangements, hedging and access to rail, it turns out that only about 20 per cent of oilsands supply is actually affected by the light-heavy differential.

WTI is West Texas Intermediate light oil priced in Cushing, Oklahoma and WCS is Western Canadian Select heavy oil priced in Hardisty, Alberta. The WTI-WCS spread is referred to as the light-heavy differential.

Alberta’s heavy oil is a low-quality crude that always sells at a discount to lighter, higher quality oil. It costs money to deliver it to Cushing which further reduces its price. The natural discount for quality and transportation is $15 US to $20 US per barrel which means if WTI is selling for $50 US a barrel we would expect WCS to sell for about $30 US to $35 US a barrel.

However, even as WTI hovers around $50 US a barrel, the discount for WCS has fallen below the normal range for quality and transportation. The problem is, Notley claims the abnormal spread affects every barrel when relatively few barrels are actually exposed. Notley’s claim is based on an egregious error about how the market works. Oil producers have implemented price protection business strategies that ensure hardly any barrels are affected at all.

Notley has frequently repeated this story since last spring when she started alarming the public claiming that the heavy oil discount was costing the Canadian economy $15 billion a year — $40 million a day. That estimate was lifted from a report prepared by Scotiabank which is replete with errors and it is a huge mistake to use that one report as the entire basis for any claim.

Last week, Notley doubled the figure to $80 million a day and launched a Canada-wide ad campaign, including a Real Time Revenue Loss Calculator located near Parliament Hill.

I asked the Alberta government how the $80 million a day was calculated and was advised that Notley once again relied on the flawed Scotiabank report.

epaulo13 epaulo13's picture

..more from above

quote:

We’ve heard these false claims before

It reminds me of a similar false narrative advanced in support of the Northern Gateway pipeline proposal, way back in 2012. A CIBC analyst claimed there was a $50 million a day loss because Northern Gateway was not built. When I asked for the calculation he did not have it. Natural Resources Minister, Joe Oliver aggressively relied on the figure in public statements. I asked Natural Resources Canada for their calculation and was given a run around. Eventually, an after-the-fact calculation was provided that made little sense.

This didn’t stop the Canadian Chamber of Commerce from releasing a pamphlet in September 2013 claiming that same $50 million a day loss. That document was paid for by industry, including Kinder Morgan. I checked with the Chamber of Commerce. They did not confirm how the figure was derived but said they relied on sources like CIBC and Oliver.

Flawed analysis makes Notley’s numbers meaningless

Notley relies on the Scotiabank report which attempts to put some analysis behind its figure, but Scotiabank misrepresented how the market for crude oil actually works. Scotiabank mistakenly applied the discount to all barrels supplied as if they are all exposed to spot market pricing when relatively few are.

What matters is not the size of the discount, but the number of barrels exposed to it. Reliance on a flawed Scotiabank analysis renders Notley’s claim meaningless.

Take for example the integrated operations of major oil producers active in the Alberta economy. Scotiabank would have Canadians believe that when Suncor, Husky and Imperial sell the crude they produce to their refineries in Canada, they suffer a loss. They don’t. They make profits in their refinery operations — in Canada — as if they paid the international benchmark price, Brent, for their feedstock.

Scotiabank would also have us believe that when other Canadian refiners — such as Regina Co-op, in Saskatchewan, or Parkland in B.C. — buy discounted crude, that this is a loss to the Canadian economy, when it is a clear gain.

Since Scotiabank “forgot” that we have a refinery sector in Canada, this error alone overstated the number of barrels it subjected to its "loss" estimate by about 20 per cent. I asked Scotiabank about this. I was told that their report was not intended to be a cost benefit evaluation. When I said their report is presented as such, suddenly they had no further time for discussing the flaws in their analysis with me.

There are a number of other major flaws in Scotiabank’s report.

epaulo13 epaulo13's picture

..finally even though there is plenty more

quote:

Reality check on the need for new pipelines

The second part of the misleading narrative around the deep discount says the abnormally wide differential is due to one factor — a lack of pipeline capacity. Therefore, the spread can only be narrowed to its normal range by building Trans Mountain’s expansion. The problem is, other factors are driving the steep discount and excess pipeline capacity will be available long before Trans Mountain is ever built.

Earlier this year producers became more concerned about access to pipeline capacity. They began to nominate for pipeline space not only based on barrels they had available to ship, but for barrels they didn’t have. The industry has a term for these imaginary barrels — they call them “air barrels.”

The idea is that, if they over-nominate for pipeline capacity and the pipeline operator apportions the space, they will get all the space they could possibly need. The problem is, exaggerating the barrels they have available comes at a cost to the system and the Canadian economy. Over-nomination leads to unused capacity.

Pipeline space runs idle when oil producers abuse the system by nominating barrels they don’t have because Enbridge plans the batches as efficiently as possible at the beginning of the month, based on what the company was told. When those barrels don’t materialize, Enbridge is unable to replace them.

Enbridge Executive vice president, Guy Jarvis, explains the air barrel problem this way: “We find ourselves, mid-month, falling short on crude … we've got to … make sure that those barrels that are nominated and granted space are real so that we can move them … what we're seeing is that the throughput at the end of the month versus what we accepted for nominations is not matching up.”

Enbridge is reluctant to say how much space runs idle. Canadian Natural Resources estimated last spring that as much as 125,000 barrels a day of capacity on Enbridge Mainline is running empty because of air barrel nominations. Recent throughput statistics on Enbridge’s system suggest it could be closer to 150,000 barrels a day.

Enbridge’s inefficient use of its pipeline capacity is significant. It produces a serious widening of the differential because it takes relatively few barrels in the spot market to do so. If Enbridge were able to run its pipeline at a higher rate of throughput, the discount would narrow to a more natural range based on quality and transportation costs.

quote:

At Justin Trudeau’s press conference at the Alberta Chamber of Commerce in Calgary last Thursday, the prime minister picked up the $80 million a day figure and stated that oil producers “are forced to sell our oil at a discount.”

There is no forcing here. Nobody is making huge oil companies do anything. These companies are making Alberta and Ottawa do their bidding. Trudeau overpaid for an aging pipeline and the right to expand it so irresponsible producers can continue to exploit fossil fuels without constraint at a time when the world marketplace and global ecosystem is signaling it’s time to stop.

kropotkin1951 kropotkin1951's picture

So what direction does the oiligarchy want this oil train to go in;  South, East or West? Or maybe it will be flexible and head for the refinerery with the best price for the day.

epaulo13 epaulo13's picture

..every which way is my guess.

eta: from an email

quote:

Well — knock us over with a feather.

On #givingtuesday, incredible supporters flooded RAVEN with donations for the Tar Sands Trial, each one matched dollar for dollar. We raised nearly $50k in a single day!! ~ reaching our ambitious November goal of $575k. To our rock steady Circle of Allies, to all of the online fundraisers who reached out to friends and family, to everyone who reached deep and gave big —YOU are what solidarity looks like. Yes we have more work to do.  Yes, the struggle will continue.

We're mobilizing on many fronts — to stop tar sands expansion, to defend sacred land from open-pit mining, to defend orca whales and coastal communities from pipelines and tankers. 

But today, just for one sweet moment, can you let it sink in? That a group of passionate and generous people, spread out all over the country — and the world — can form a circle of support for Indigenous Peoples and, by extension, write a new story of our collective future. 

From the dirt under our claws to the wind under our wingtips — we're sending you fierce love and soaring admiration. 

High fives and warm embraces,

epaulo13 epaulo13's picture

Alberta plans to buy 7,000 railcars to ease 'crisis' in oil price differentials

Alberta needs to buy as many as 7,000 railcars if it wants to be able to meet its goal of shipping an additional 120,000 barrels of oil a day, says Premier Rachel Notley.

In a speech to the Toronto Board of Trade, Notley says her province is prepared to buy roughly 80 locomotives, with each train pulling 100 to 120 cars.

quote:

This is the first time she has specified how many railcars will need to be purchased. She did not give estimates on the cost of the cars but industry experts suggest that one rail car can cost between $120,000 and $150,000 to buy or about $1,200 per month to rent, putting Alberta's plan at upwards of $1.05 billion.

quizzical

yup trains. but no pipelines too hazardess.

lack of working from a harm reduction to people standpoint makes me furious 

 

Pondering

The railcars will never be bought. I just read an article that claims Alberta isn't fully using the pipelines they already have and it is going to be investigated.

https://www.ctvnews.ca/politics/sohi-orders-neb-to-study-whether-canada-...

Harm reduction means no new pipelines and no new rail cars either. If they were a good financial investment it would have been done already. Companies have been forced to use rail because they are producing more than they can export and storage costs money. They want Notley to put a cap on production because they are selling at a loss.

Using rail cars as a threat isn't going to work. It's just going to increase opposition to the rail cars.

Notley is hoping the feds will help pay for them but buying the pipeline was enough. If rail cars are profitable then the oil industry will obtain them if they are not profitable then the government has no business buying them.

epaulo13 epaulo13's picture

quizzical wrote:

yup trains. but no pipelines too hazardess.

lack of working from a harm reduction to people standpoint makes me furious 

..i'm not clear on who your furious with quizz. is it the indigenous foks who blocked the pipeline expansion with their court case?

quizzical

no. it's their right to block for whatever reason.

but you know so well as i do there's no United front amongst FN along the routes.

 i am pissed at arm chair environmentalists who have never set foot on a pipeline and who do not live on the rail line.

 

Pondering

quizzical wrote:

no. it's their right to block for whatever reason.

but you know so well as i do there's no United front amongst FN along the routes.

 i am pissed at arm chair environmentalists who have never set foot on a pipeline and who do not live on the rail line.

That indigenous peoples are not united matters not at all. There are some major territories in which they oppose it and they have rights under the law. There is an "s" on First Nations for a reason.

Armchair environmentalists. Interesting turn of phrase. Am I not allowed to care about the whales? Climate change knows no borders. Tripling production in the oil sands is not a good plan.

That Alberta is landlocked is the luck of the draw not part of some plan to victimize Alberta. I can't really relate but to some extent I can sympathize with the frustration and anger. I just think it is misdirected. I think the provincial governments have mismanaged the industry and are continuing to mismanage it.

epaulo13 epaulo13's picture

..underneath it all you have indigenous rights vs colonization. this struggle goes back to before this country was ever founded. and will not go away anytime soon.

eta:

Canadian youth occupy MP offices across the country calling for climate action

quote:

The day of action on Friday included occupations of federal MP offices in Vancouver, Edmonton, Ottawa, Toronto, Montreal and Halifax where the young Canadians made a three point call for climate action and respect for Indigenous rights:

  1. Transition to 100 per cent renewable energy by 2030, and create one million climate jobs in the process

  2. Meaningfully implement the UN Declaration on the Rights of Indigenous Peoples

  3. Keep fossil fuels in the ground and align the federal climate plan with the 1.5 degree threshold

 

epaulo13 epaulo13's picture

quizzical wrote:

no. it's their right to block for whatever reason.

but you know so well as i do there's no United front amongst FN along the routes.

 i am pissed at arm chair environmentalists who have never set foot on a pipeline and who do not live on the rail line.

..as is the right of an environmentalist to have a different opinion than yourself..arm chair or not. but they don't decide rail vs pipe. the feds, alta and the oil industry make those decisions. same as they don't make the decision about refineries. yet your lashing out at bit players. if the pipeline twins certainly i or doubt anyone else on babble would blame you for that. 

..there are many environmentalists in the lower mainland that would face the impacts of a tanker or pipe spill. in chilliwack the pipe twins near their main source of water. people have good cause to be concerned environmentalist or not.

..finally the process of obtaining consent has been and is as corrupt as the neb or meaningful consultation processes are. that's not to say they have all been under duress or undemocratic but there is enough evidence to place the process itself into question.

NorthReport

Alberta’s Problem Isn’t Pipelines; It’s Bad Policy Decisions

Bitumen prices are low because the province has ignored at least a decade of warnings.

https://thetyee.ca/Analysis/2018/11/23/Alberta-Policy-Problems/

Pondering

NorthReport wrote:

Alberta’s Problem Isn’t Pipelines; It’s Bad Policy Decisions

Bitumen prices are low because the province has ignored at least a decade of warnings.

https://thetyee.ca/Analysis/2018/11/23/Alberta-Policy-Problems/

That is shocking. I don't see how anyone here can avoid accepting that the bad guy here is the Alberta government and the oil industry, not Quebec, not BC, not environmentalists.

Industry deliberately chose to take this path because it is more profitable for American companies to refine the oil at their existing facilities in the US.

Alberta is not being victimized. Alberta chose this path against formal expert advice. We who suggest refineries are not geniuses nor crazy. To experts and amateurs alike the answer is obvious. Both Quebec and BC would be supportive of the federal government creating a crown corporation to build refineries in Alberta. Or Alberta could do that instead of spending a billion dollars on rail cars.

I have a question for those of you who have for years supported pipelines and condemned opponents. I believe you are good conscientious people. How do you not know this stuff? Why are you falling for industry and government propaganda? It's not like refineries are a new idea.

If the oil were more refined pipeline capacity wouldn't be as big an issue because there would be no need to add dilutents. Pipeline opposition would weaken tremendously because the fact that it is bitumen has been heavily relied on to stop the pipelines.

I'm genuinely curious to read your answers if you choose to respond. Will you accept now that opponents to the pipelines are not the bad guys? Do you accept that your government and industry are the bad guys that have failed Albertans? Do you accept that Notley has betrayed you because she does know this stuff?

JKR

I'm not an expert on the oil industry so I'm not comfortable arriving at a verdict on whether building oil refineries in Alberta makes economic sense. I've seen oil industry experts say that Alberta oil refineries would be economically uncompetitive with US oil refineries located in areas that give the US oil refineries a competitive advantage.

Pondering

JKR wrote:
I'm not an expert on the oil industry so I'm not comfortable arriving at a verdict on whether building oil refineries in Alberta makes economic sense. I've seen oil industry experts say that Alberta oil refineries would be economically uncompetitive with US oil refineries located in areas that give the US oil refineries a competitive advantage.

You seem comfortable promoting pipelines which we are also not experts on. You don't need to rely on uninformed opinion. The article cited reports.

n 2007, a government report warned that prices for oilsands bitumen could eventually fall so low that the government’s royalty revenues — critical for its budget — would be at risk.

The province should encourage companies to add value to the bitumen by upgrading and refining it into gasoline or diesel to avoid the coming price plunge, the report said....

The business case for slowing bitumen production was made by the great Fort McMurray fire of 2015.

The fire resulted in a loss of 1.5 million barrels of heavy oil production over several months. As a result, the price of Western Canadian Select rose from $26.93 to $42.52 per barrel.....

According to a recent government report, it can cost oilsands producers $14 to dilute and move one barrel of bitumen and condensate through a pipeline....

While a few oilsands companies such as heavily indebted Cenovus say they are losing money due to the heavy oil discount, others are making record profits and say no market intervention or change is necessary.

The difference is those companies heeded the decade-old warnings and invested in upgraders and refineries to allow them to sell higher-value products.....

Imperial Oil, for example, boosted production at its Kearl Mine to 244,000 barrels in the most recent quarter, but refined and added value to that product.

As a result its net income for the quarter doubled to $749 million.....

Suncor also reported that most of its 600,000-barrel-a-day production is not subject to the price differential because it upgrades the junk resource into synthetic crude or refines heavy oil into gasoline.

In its most recent business report, Husky reported a 48-per-cent increase in profits as cheap bitumen has fed its refineries and asphalt-making facilities.....

In 2009 the province’s energy regulator said in an annual report on supply and demand outlooks that low bitumen prices were a direct consequence of overproduction. ...

According to a Nov. 6 article in the Wall Street Journal, Phillips 66, a major buyer of cheap Canadian bitumen, ran its refineries at 108 per cent of capacity and was “earning an average $23.61 a barrel processed there.” Profits jumped to $1.5 billion, an increase of 81 per cent over last year.

“U.S. refining has really gone from being a dog to being a fairly attractive business model,” one consultant told the Wall Street Journal. “I don’t think that’s going to change any time soon.”...

It's all there in black and white. It is more profitable for American companies to ship bitumen for processing to their existing refineries. Oil companies don't need Alberta refineries they just want the cheap oil. Alberta needs refineries to get world prices. The need for pipelines is reduced because the refined product takes up less space so no battles for new pipelines.

Trudeau was an idiot to buy TM. Nothing could better illustrate that decisions are being made on behalf of foreign corporations rather than in the interests of Canadians.

If I were Albertan I would be beside myself with fury at the betrayal by my own government. Millions spent promoting pipelines when refineries are what is needed. Deliberate over-production driving down prices, probably as a strong arm tactic to push pipelines.

Clear facts are right in front of you that you are getting screwed over by your own government and you respond with "I'm no expert"? Then how are you able to support pipelines? I don't understand how you can put your faith into foreign owned oil companies to be telling you the truth while government reports show otherwise. The 2007 report was solicited by the Conservative government. It wasn't some left-wing think tank offering. Over-production leading to dropping prices is a well-known predictable phenomenon not some surprise that has been sprung on Alberta.

Alberta is way out of line trying to force pipelines across other provinces when Alberta has the solution. Build refineries and transition to refined products as soon as it is feasible. Until then limit production to exporting capacity to get the best price for.

We are told politicians and CEOs know better and it is all too complicated for us to understand. People who don't vote say they don't know enough to vote. They don't know enough to be for or against trade deals. They don't know enough to know if free public transport is a good idea.

Both you and quizzical, with her armchair environmentalist comment, suggest we don't know enough to have an informed opinion. That suggests we should be deferring to government and industry because they know better.

We do know enough to evaluate the layperson information coming to us. We do know enough to make some logical deductions about whose interests are being served.

Pondering

PS on Alberta refineries. They don't need to compete with US refineries. The bitumen is in Alberta so no need to compete for raw product. Alberta refineries may well earn less profit than US refineries but any profit is better than no profit and it ends the expense of trying to get new pipelines.

Notley doesn't need to study cutting production. It's a stall intended to keep prices depressed as a pressure tactic. Production should always have been limited to export capacity.

JKR

When did I say I support pipelines? I'm happy the BC government here is opposed to them.

If new Alberta refineries are so beneficial, why aren't they being built?

kropotkin1951 kropotkin1951's picture

JKR wrote:
When did I say I support pipelines? I'm happy the BC government here is opposed to them. If new Alberta refineries are so beneficial, why aren't they being built?

Because they don't benefit Texas and the real North American oil barons.

Pondering

JKR wrote:
When did I say I support pipelines? I'm happy the BC government here is opposed to them. If new Alberta refineries are so beneficial, why aren't they being built?

I apologize for misunderstanding. I actually don't want them built. I want the lack of pipeline capacity to constrain production.

What Krop said. A different set of people get to be the winners. I'm sure the corporations were dead set against Hydro Quebec. If Alberta decided to build a refinery the oil companies would be lining up arguing they should build it with government subsidies.

JKR

What's stopping Albertans and other non oil barons from establishing refineries in Alberta?

kropotkin1951 kropotkin1951's picture

JKR wrote:
What's stopping Albertans and other non oil barons from establishing refineries in Alberta?

 I haven't studied the text itself but where there not reports that our latest corporate trade deal with the US would mean that China, for instance, would not be able to build them.

jerrym

Canadians have been hosed by the federal government, the Alberta government, banks, the pipeline companies, and the oil industry. There is NO ASIAN MARKET FOR BITUMEN, as the following article explains. Not only that, the bitumen oil sands projects are economically unviable, in addition to being environmentally disastrous. But politicians can't say that and get re-elected.

Canadians are often told the Trans Mountain pipeline project is imperative to access Asian markets anxious to buy Alberta bitumen. ...

Crunching the cargo statistics from the Port of Vancouver a very different picture emerges. In 2016 — the last year that complete data is available — the U.S. accounted for 99.99 per cent of outbound crude oil shipments. Of the 1,185,289 tonnes of crude shipped in bulk tankers that year, 1,185,121 tonnes were delivered to the United States.  In fact, total crude tanker shipments from Vancouver peaked eight years ago in 2010 at 4.3 million tonnes and have since declined 72 per cent.

And what about those hungry Asian markets? Crude exports from Vancouver to China topped out in 2011 at only 28 per cent of total outbound shipments. By 2014, they dropped to six per cent, and in 2016 they were essentially zero. The next largest Asian importers of crude from Vancouver were Singapore, which peaked at four per cent of total shipments in 2009, and India reaching two per cent in 2013.

The market seems to have decided that shipping diluted bitumen across the Pacific Ocean is a money loser. Like it or not, the main customer for Alberta bitumen remains existing refineries in the U.S. already tooled up to process high-sulfur low-value bitumen. And with the current U.S. administration anxious to complete the Keystone XL pipeline to refineries in Louisiana, why do we need to endanger the B.C. coast with tankers carrying dilbit to the same market? 

Many Albertans would prefer to believe that once the Trans Mountain pipeline is rammed through, the good times will be here again. Again, the numbers tell a different story. 

Oil economist Jeff Rubin recently published a damning assessment of the viability of increased pipeline capacity out of Alberta. Asian markets actually pay $8 a barrel less than U.S. refineries for heavy oil like Alberta bitumen. Likewise, European refineries typically pay $3 below the U.S. market after a long expensive boat ride.

Many multi-billion-dollar bitumen projects are already the economic equivalent of dead men walking, according to Rubin. 

“Exxon had to write off US$16 billion of its oil sands assets, including all 3.5 billion barrels of bitumen reserves at its massive and still expanding Kearl Lake mine,” he writes. “Following the huge decline in oil prices since 2014, Exxon’s high cost oil sands resource no longer meets the US Securities Exchange Commission’s definition of a proven reserve, which is one that can be commercially exploited at today’s prices with current technology. Having already spent billions of dollars to develop the mine, Exxon and its Canadian subsidiary, Imperial Oil, have little choice but to complete the ongoing expansion, whose increased output only adds to the current glut of oil already weighing on the price of WCS (Western Canada Select diluted bitumen).”

In other words, the bottom has already fallen out of many bitumen projects, yet they stagger on, animated solely by political and economic inertia. Of course hope springs eternal in the oil industry, which clings to the idea that if the Trans Mountain project is uneconomic now, perhaps in 10 to 40 years prices will improve. 

On the same planet, but in an alternate universe, policy makers are striving to keep global temperature increases below two degrees Celsius. This would require decreasing oil demand by 20 per cent by 2030. If these efforts are successful, the market share of the most expensive, lowest value petroleum on the planet will be the first to go. 

The U.K., France and China have all announced impending bans of the sale and manufacture of gasoline and diesel vehicles. These bold actions are in stark contrast to the moral origami of Prime Minister Justin Trudeau, who is maintaining with a straight face that the best way to protect the climate is by massively scaling up bitumen production. So absurd is this position that it seems hardly worthy of even ridicule. Beyond climate conference photo-ops and aspirational rhetoric, Canada has a wretched record reducing carbon emissions, and Ottawa seems determined to make it even worse.

So what about continued calls to approve the Trans Mountain pipeline? In this age of conflicted information, it is important to look at the sources and their interests. For instance, Scotiabank recently released a report advocating rapid pipeline approvals, stating “The sooner governments move to allow additional pipeline capacity to be built, the better off Canada will be.” Scotiabank has the largest exposure to oilsands debt of any Canadian bank at $32 billion. According to Peter Routledge, an analyst at National Bank Financial quoted in the Financial Postregarding the dangerous debt exposure of oilsands creditors, “Banks effectively go into business with their clients, businesses or households, when they lend to them. Therefore, it is in a bank’s interest for its clients to remain going concerns.”

https://thetyee.ca/Opinion/2018/02/23/Fantasies-Keep-Pipeline-Plans-Aliv...

 

epaulo13 epaulo13's picture

Trump could strike back at Alberta oil cuts, says former provincial trade envoy

A former Alberta trade envoy to Washington, D.C., believes U.S. President Donald Trump could slap the province with countermeasures for its decision to impose mandatory oil production cuts. 

Gary Mar, Alberta's representative in the U.S. capital for four years from 2007, said it's uncertain how Trump will feel about the province's decision to wade into the free market in a bid to raise Canadian crude prices.

But the president could take action if he becomes concerned with climbing prices, Mar said.

quote:

Mar, now president of the Petroleum Services Association of Canada (PSAC), made the comments in Ottawa, where he is meeting this week with federal officials to stress the importance of the domestic energy sector.

His remarks follow Premier Rachel Notley's announcement Sunday of a temporary 8.7 per cent oil cut, or a decrease of 325,000 barrels a day, in the production of raw crude oil and bitumen starting Jan. 1.

The action is aimed at lifting Alberta crude prices, which plummeted earlier this fall after production growth and pipeline bottlenecks contributed to a costly oil glut.

The day after Notley's announcement, the price of Western Canadian Select heavy oil jumped $8.02 US to $29.95 a barrel.

Oil companies that had called for production cuts praised the premier for her decision. The move also found support among her political rivals.

However, Husky Energy and Imperial Oil — which both opposed mandatory cuts  — have warned that government-ordered curtailment could have implications for trade and investment.

"We believe the market is working and view government-ordered curtailment or other interventions as possibly having serious negative investment, economic and trade consequences," Husky spokesperson Mel Duvall said Sunday.

epaulo13 epaulo13's picture

Alberta Crown land proposed for sale not treaty land, Kenney says

United Conservative Party Leader Jason Kenney says the northern Alberta Crown land he proposes to sell if he becomes premier next year is not treaty or reserve land.

"It's Crown land, and it's land that belongs to Albertans which is not being put to economic use right now," Kenney said Thursday, in response to a reporter's question at an end-of-session news conference.

"The notion that all of northern Alberta should suddenly be turned into a park, I think, runs contrary to our entire history as a people, where we seek in a responsible way to allow for the development of our resources, including our agriculture resources."

Kenney first raised the issue in late November at the Rural Municipalities Association convention in Edmonton. At the time, Treaty 8 leaders said no sale would happen without their consent. They also took issue with Kenney's characterization of the land as "unproductive."

Treaty 8 Grand Chief Arthur Noskey said on Thursday that Kenney could face legal action if he tries to implement the plan.

"I guess we have a major court case in the making if he does come into power and if he doesn't pull this plan," Noskey said.

Kenney said Mackenzie County council wants to expand the land auction undertaken by the government of then-premier Ed Stelmach 10 years ago. The UCP leader first mentioned the idea last month as one measure to help balance the provincial budget. 

Asked about the comments by Treaty 8 leaders, Kenney said Indigenous people did not raise any concerns over the land sale a decade ago.

Noskey said no one raised concerns because they didn't know about the sale until after the fact. Noskey said Kenney's proposal is "insulting," adding that no one from the UCP ​has tried talking to Treaty 8.

Asked about Kenney's statement that the property isn't treaty land, Noskey said Treaty 8 was signed in 1899, six years before the creation of the province of Alberta.

'It's always been our lands'

"So whose land was it prior to the province assuming authority over it?" he asked. "It is our land. It's always been our lands."

Kenney said the proposed land sale would be one way to grow the province's economy.

"We would obviously listen to First Nations, and other stakeholders," he said.

quizzical

Notley is calling for proposals for a refinery. about time. 

 

Hurtin Albertan

Alberta looking for new refinery to be built in face of ongoing oil price crisis

https://edmontonjournal.com/news/politics/notley-to-announce-new-made-in-alberta-energy-strategy

quizzical beat me to it.  Still in the discussion phase, likely requiring some sort of government buy-in, guess we'll see if something comes of it or not.

epaulo13 epaulo13's picture

It devours our land

Surrounded on three sides by oilsands operations, the Fort McKay First Nation has benefited tremendously from industrial development — while also experiencing firsthand its environmental consequences.

While the nation has historically supported nearby operations, when Prosper Petroleum proposed a 10,000 barrel per day oilsands project near Moose Lake, an area of sacred cultural value for the people of Fort McKay, the community reached a tipping point.

The nation filed a lawsuit against the province of Alberta on December 3, after years of effort to prevent the proposal from going forward failed to protect the treasured region and the Fort McKay way of life.

The lawsuit contends that, because of significant forestry, mining, oil and gas development and road building, Fort McKay’s ability to practice treaty rights — to hunt, fish, trap and gather medicinal plants — relies almost exclusively on their continued access to the relatively intact landscape surrounding Moose Lake.

quote:

Prosper Petroleum’s $440 million Rigel oilsands project would come within two kilometers of the Moose Lake reserve, a remote ancestral territory of unspoiled land with two lakes, Gardiner and Namur, known to the community as Moose Lake and Buffalo Lake.

The community views this land as all that remains of their rights to the wilderness — a lifeline to their culture. Many Fort McKay residents still practice their traditional ways of life here: hunting, fishing, trapping, collecting wild plants and cultivating spiritual practices.

It’s where families take their vacations, where grandfathers pass traditional knowledge to their grandchildren and where people who spent their lives working for oilsands companies build their retirement homes.

epaulo13 epaulo13's picture

..my bold

Can Canada’s Tar Sands Industry Be Profitable Without Government Subsidies?

Todd Paglia of Stand Earth says Canadians taxpayers increasingly foot the bill for Canada’s fossil fuels industry

quote:

TODD PAGLIA: Oh, absolutely. And this is the product of a lot of work by the oil and gas industry, to the extent that since April, meetings just on the environmental assessment law, they met with federal officials more than once per day since April. So an extraordinary lobbying effort. And they’ve been rewarded by that law being watered down and delayed. They’ve been rewarded by lobbying the Notley government in Alberta to not hold them liable for the enormous tailings ponds full of toxic waste; that they’ve been able to delay that implementation of new tighter restrictions on the tailing ponds. The emissions cap has now been delayed.

So it’s been a highly successful strategy for the oil and gas sector. And Canada so far continues to hitch its wagon to that single industry. And if you look at the kind of reductions that be required across the country to allow oil and gas sector to continue to expand, and to expand with subsidies and lax regulation, this is a this is a train wreck in slow motion, and there’s no clear indication that they’re going to be able to pull themselves out of this. So the advocacy for high ambition is great, but they’re aiming very low when it comes to policy.

DIMITRI LASCARIS: And I just want to alert our viewers to the fact that part of what you just talked about, Todd, we covered that recently and it talked about in this report that your organization, Environmental Defense, has issued. There was a revolution recently–a revelation, I should say–that the estimated cost for cleanup of the tar sands tailing ponds and obsolete oil wells is $260 billion, and the Alberta government has only collected $1.6 billion in security from the fossil fuels industry. So that is obviously one area, I imagine you would agree, where the fossil fuels industry has been extremely effective in terms of weakening government protection of the environment.

TODD PAGLIA: And that’s–and that’s a subsidy, right? So that’s an externality. That’s a cost of doing business that the sector now doesn’t have to deal with. And what Alberta is saying is you never have to deal with it. So you know, more and more, when you take a close look at this industry it looks a lot less like a business and more and more like some sort of nonprofit. I mean, there is no way this business works without massive subsidies, and without completely failing to meet the Paris agreement.

epaulo13 epaulo13's picture

Athabasca Chipewyan First Nation seeks to stop Syncrude oilsands expansion project

 

The Athabasca Chipewyan First Nation is seeking to block a major oilsands expansion project, adding another Indigenous legal challenge to the region's resource exploitation.

In a filing to the province's energy regulator, the First Nation asked to stop the expansion of Syncrude Canada Ltd's Mildred Lake oilsands operation.

"We can hardly get a boat through the Delta, migratory birds don’t fly over, the fish are diseased, and our people are sick," said Chief Allan Adam of Athabasca Chipewyan First Nation, fighting the expansion of Syncrude's Mildred Lake project.

If approved, the expansion would add around 184,000 barrels of oil per day to Mildred Lake's production. Hearings on the matter are to be held by the Alberta Energy Regulator in Fort McMurray from Jan. 22-Feb. 8, 2019.

Chief Allan Adam said that Syncrude's oilsands operations have persisted for 40 years in his nation's territory and have had a deleterious effect on the land and his people. He said that an expansion will only exacerbate these.....

Pages