Hey Susan... they are going to build that pipeline

Warn your friends that the feds are brewing their message to force the Gateway pipeline through.

The latest salvo is that they are blaming the drop in pricing that Canada charges for oil exports on the fact that we sell primarily to the US.  Read here that Canada needs to expand to markets in Asia... thus the Northern Gateway Pipeline must be built.  The reality though is that the price we receive is falling because oil sands bitumen is heavy oil and costs more to ship and refine than does light or medium crude.

Just prior to that, came the message that the economy is slipping based on lower petrochemical royalties.  Unless the royalties go back up (How?  Expanding to the Asian market!  See above.) then the balanced budget promised for 2015 will have to be pushed back again.  The reality is that the structural budget deficit created by the 2% point drop in the GST is what is causing them the problem.  Combine that with the poor stewardship of the economy and the Canadian dollar, and there you go.  So much for the fiscally conservative and wise Cons!

I wrote in an earlier blog entry that the so-called Dutch Disease, where petrodollars currency inflation killed manufacturing in the Netherlands, was not the only issue with so-called Dutch Disease.  Dutch Disease also led the government to focus their effort on the petrochemical industries while ignoring other industries, such as manufacturing.  When was the last time the Cons talked about manufacturing?

The Cons are cagey.  They will eat away at the pipeline debate without ever mentioning it by name.  It is up to Canadians to stay alert, because this government does not seem to want to represent Canadians.

Provincial "squabbles"? Don't listen to me!

I would love to work for a Think Tank. 

According to a definition from McGill University: "Think tanks are organizations, institutes or groups involved in research and advocacy in a range of fields including social policy, political strategy, economy, science and technology, industry, business and national defense. Many think tanks are non-profit organizations; their funding may come from governments, businesses or private advocacy groups, or from consulting and research work they engage in. (http://www.mcgill.ca/files/caps/CanadianThinkTanks.pdf)

There are so many of them in Canada that you would think that I could find one that would hire me or at least listen to my rantings.  I thought that I found one in the Macdonald-Laurier Institute, but no.  Unless you are a lawyer, an economist or an accredited journalist they, like the rest, could care less what you think.  You would think that with people of those exalted qualifications every utterance they make would be a gem of logic.  But no.

In a recent report from the MLI entitled Sustaining the Crude Economy, authors Laura Dawson and Stefania Bartucci tackle the issue a National Energy Policy for Canada under the guise of "Global Energy Competitiveness".

What first struck me was the way MLI introduced the paper; "Provincial squabbles threaten future energy exports, study says".  The term squabble is used when a pushing argument breaks out on a playground.  The "squabble" they are talking about is the one between Alberta and B.C. over the Northern Gateway Pipeline.  Squabble?  Are you kidding me?

When papers like this (you can read it at http://www.macdonaldlaurier.ca/provincial-squabbles-threaten-future-energy-exports-study-says/) tackle a complex issue such as inter-provincial disputes, it would be worthwhile if they took a stab at being more inclusive with the issue, rather than picking and choosing their study points.

The issue of the pipeline is not one of only getting Alberta raw materials to the coast to be sent to Asia to be processed.  It is a far more reaching issue of who pays when the process fails... when the pipeline springs a leak or when a tanker runs aground.  Think these things can't happen?  B.C. sits on an active fault line.  One good jolt and the rigid pipe could break.  Who's going to pay to clean that up?  And before you say that nature will take care of it over time, remember that this is not oil in the pipe... it is bitumen (upgraded or not) and bitumen does not break down in nature like oil.  Same goes for the shipping.  Unlike the pretty cartoons that the oilsands folks use to describe the shipping route, the channel from Kitimat is narrow and winding.

So let's take a minute to break down this "squabble".  The oil industry wants to ship a volatile and dangerous substance across pristine land to a port on the west coast, load it on boats the size of small countries and ship it to other countries to be refined and used (and in some cases ship it back to Canada in some finished goods, like plastics).  The Alberta government and their friends at the federal level are all for it... after all they stand to make a lot of money in royalties and excise taxes.  The government of B.C. are potentially going to be left holding the bag if any fault occurs anywhere along the process.  Is B.C.'s concern shared by the federal government?  Pigs will fly first.

So is this a squabble?  Are two kids arguing in a playground?  And what about the people?  Remember them?  They are the ones who elect the politicians (who subsidize Think Tanks) and pay their salaries.  You think, just maybe, they should ask our opinion instead of just reading yet another burp from a Think Tank?

(Bet you that just cost me a job prospect!)
 

Something to think about in the CNOOC takeover

I have been closely following the proposed takeover of NEXEN by CNOOC.  In all the rhetoric and verse that has been penned in past six months there appears to be a couple of items that have been overlooked.

If the Chinese spend $15.5 billion for an oil exploration company, with holdings in the Alberta oil sands, doesn't it follow that they may want to use some of the oil in China?  Yes?  So how will they get it from Ft McMurray to Shanghai.  The Northern Gateway Pipeline?

You may notice that the Harper government has been pretty quiet on the pipeline as of late.  Is it because they are talking with the Chinese about it?

Secondly, you can't help but applaud the speech given by John Baird at the UN this week.  Since we have no trade or relations with Syria and we do not seem to care about the UN, talk is what we do best.

But... where is the resistance at the UN over Syria coming from?  Primarily the Russians, we are told, but also from the Chinese.  So what are we going to do about that?  Nothing.  We will continue to trade with Russia and China wants NEXEN. 

Trade trumps human rights yet again.

An open letter to BC Premier Christy Clark

Premier Clark,

Congratulations for your stand at the Council of the Federation, better known as the Premier's Conference, on the Northern Gateway pipeline project.  You made a couple of minor errors but the overall message was sound.

It is true that BC will shoulder the majority of consequences and cost should that pipeline ever spring a leak. (Enbridge's track record suggests that the word is when and not if.)  However only a small percentage of the revenue for the pipeline flows to BC.  The federal government's share of the pie is 33% and to date they have not done anything for their money.  Alberta, where the high-paying jobs are and where the wealth is, is the major government winner in the project.

Premier Clark, you cannot argue that a percentage of Alberta's royalties should be given to BC anymore than Alberta can demand a percentage of your stumpage fees collected by BC for lumber shipped from BC to Alberta.  You have to get your money from Enbridge, the company that stands to make more than anyone on the project.

I suggest that you do the following:

1.  Tell Enbridge that they must use the best and most sensitive technology to detect spills along the length of the pipeline and that technology must originate in BC.

2.  Enbridge must establish monitoring stations and fully-equipped rapid response stations every 100 kilometers along the pipeline.  The stations must employ fully qualified and trained BCers and First Nations People.

3.  Enbridge must establish and maintain a minimum $5 billion fund to cover first response to any incident.

4.  Enbridge must agree that they will be 100% responsible for any and all costs for any incident.

5.  BC must be named as prime creditor status in the event of any default proceedings by Enbridge or any of its subsidiaries or partners involved in the pipeline.

What is the results of all this, Premier Clark?  First, you protect BC environments and jobs as best you can without scuttling the project.  Second, you put the costs on the right organization.  And third, you force Enbridge to price all this into its charge to carry the bitumen, and if the price gets too high then the project will not go ahead.