Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Friday, June 29, 2012

It’s hard to be an energy superpower

The first thing we should all be honest enough to admit about Prime Minister Stephen Harper’s plans to transform Canada into an “energy superpower” is that Plan A, which is really all about Alberta bitumen, is perhaps just a bit more reckless and sinister than we might have imagined.

It’s true that Ottawa has been “getting the fundamentals right,” if you can forgive the cliché. If you can forget that he has to stand on the shoulders of his Liberal predecessors to do so, our Conservative prime minister can crow that the World Economic Forum has given Canada a blue ribbon for bank regulation. In any case, Prime Minister Harper can rightly boast that Canada’s tax rate on new business investment is the lowest of the G7 countries, as is Canada’s ratio of debt to gross domestic product.

But if you believe that Opposition Leader Thomas Mulcair is merely being wicked and divisive for pointing out the dramatic regional disparities in Canada’s recovery from the debacle of the 2008 recession, you will have already forgotten that while Alberta’s oilsands were booming, Canada’s manufacturing sector shed roughly half a million jobs over the past five years, mainly in Ontario and Quebec.

Still, it’s becoming exceedingly difficult to disremember everything the Conservative government has already had to jettison into the sea lanes of Canada’s bold expedition into the uncharted waters of energy-superpower status.

Opposition to Chinese state-owned enterprises buying up key Canadian energy-sector properties: over the side. Promises to end the Liberal-pioneered practice of stuffing legislative agendas inside phoney and undemocratic omnibus budget bills: into the drink. Dedication to a Canada-U.S. strategy on climate change: tossed. An end to government subsidies for the oil industry: flotsam. A commitment to processing Canadian bitumen in Canada: please avert your gaze.

Remember when we used to say that keeping oil prices low was vital to the flourishing of Canada’s economy and to global free-market capitalism? You’ll have to forget all that, too, because Alberta bitumen is what Plan A is really all about, and it costs big money to get bitumen out of the ground and more money again to upgrade and refine the stuff. Rising oil prices are necessary for Plan A to work.

To break even, new oilsands projects require prices of about $80 per barrel. Last week, crude oil prices dropped below $79 U.S. Care to wager where oil prices are going? Foreign Policy magazine just polled 57 industry analysts and while none claimed clairvoyance, most saw no great price hikes on the horizon. One in five foresaw further price declines.

To carry on oblivious to price you’d have to be a Beijing-owned oil behemoth mandated to lose money to keep the masses from revolting. Conveniently for Ottawa, Alberta oilpatch bigshot Sinopec just reported a 16-fold hike in its refining losses and bitumen-buyer Petro-China reports losses that nearly doubled for the last quarter.

That splashing sound is your Conservative government’s commitment to free market principles going over the gunwales. Suncor is in Beijing at the moment looking for ways to cut costs by offshoring the oilsands equipment, procurement and construction jobs that were supposed to be Plan A’s big benefits in the first place.

You don’t have to be a serious free-enterprise conservative to find all this a bit creepy. The global economic “fundamentals” Ottawa’s Plan A needs to keep itself from sinking would make just about anyone’s skin crawl. Tehran, the Kremlin and Venezuela’s Chavistas need Brent prices to stay above $110-a-barrel to break even. Brent crude prices fell below $90 only last month. Even the Saudi royal family’s bean-counters need $80 a barrel to balance the oligarchy’s books.

The more Canada’s vital national interests are made to depend on high oil prices, the closer our interests will have to be realigned to depend on what’s good for the Saudi finance ministry, Iran’s ayatollahs, Hugo Chavez and Vladimir Putin. It seems like only yesterday that whatever threatened harm to that lot was to be regarded as a thing to put a smile on the face of anyone with even a passing commitment to “Canadian values.” All that’s just the jetsam you now see disappearing in our wake.

Ottawa used to clamour for the overthrow of Khomeinist despotism, but if sanctions on Iran were suddenly rendered unnecessary and all that Iranian oil started gushing through western economies it would be “bad” for Plan A. Heaven help us if Beijing fails to crush any reformist tumults that could curb Chinese oil appetites.

Prime Minister Harper first made his energy superpower pitch in London in 2006. He’d just got elected and oil prices were rising, and while he can’t be faulted for failing to see the crash of 2008 coming, “Peak Oil” was never a threat to Plan A anyhow. Peak demand was the thing to have been watching for. That’s where we’re at now.

It’s not just economic paralysis that’s keeping the United States’ overall oil demand at 10 per cent below 2005 levels. It’s Washington’s sensible emphasis on fuel efficiency. It’s deep structural changes in the U.S. economy.

It’s a lot of things, but mostly it’s about new technology.

The sharply upward incline in renewable energy is just a small part of it. Innovations in hydraulic fracturing have quickly brought previously inaccessible gas reserves from two per cent of U.S. natural gas production to 37 per cent and rising. Enormous volumes of domestic American shale oil are coming online too. Europe isn’t exactly begging for our bitumen either.

What we’re left to hope for is at least a doubling of bitumen production before the end of the decade, which will depend on a continuing upward drift in oil prices which will in turn depend on a lot of things, not least Khomeinist boots in the faces of the Iranian people, indefinitely.

There is no Plan B by the way, but whatever happens, Fort McMurray will probably do just fine.

Original Article
Source: ottawa citizen
Author: Terry Glavin  

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