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.]

Thursday, March 14, 2013

Collapse of oilsands boom will scramble Canadian economy

Disregarding global warming and the risk of putting all your eggs in one basket, the Harper government has bet Canada’s economic future on the oilsands. But do we want to return to a time when Ontario consumers paid half a billion dollars to subsidize an imperilled Alberta oil industry, with two-thirds of its capacity shut in for lack of sales?

At risk are hundreds of billions of dollars in jobs, government and industry revenue, and capital investment. Essential to diminishing hopes for an oilsands bonanza are three proposed pipelines, costing $17 billion, to move oil to the U.S. Gulf Coast and to the West Coast for tanker shipment to China. There is no certainty they will be built — even assuming government authorizations.

A fortune from the oilsands was foreseen as recently as the middle of last year. In a study last June, the Canadian Association of Petroleum Producers (CAPP) predicted an increase in oilsands output from 1.8 million barrels per day to 5 million by 2030, plus another million barrels a day of conventional crude oil. The Canadian Energy Research Institute predicted $253 billion in new oilsands investment, generating $1.2 trillion in Alberta government revenue over a 34-year period.

But in November, the International Energy Agency forecast demand for oilsands production at just 3.3 million barrels per day in 2035. Worse was British Petroleum’s 20-year forecast to 2030, published in January. BP expects U.S. oil imports of 11 million barrels a day in 2011 to be slashed 70 per cent by 2030. If BP is correct, Canada will be fortunate to just maintain current oil export sales to the United States, let alone increase them by 2 or 3 million barrels a day.

With this outlook, why would the United States need the controversial Keystone XL pipeline, intended to move oilsands oil to U.S. Gulf Coast refineries? Even assuming Keystone is approved, who will risk investing $7 billion to build it?

A host of factors dims the prospects for the oilsands.

The “shale revolution,” which releases oil and natural gas from buried shale rocks, promises a fivefold increase in the world’s known recoverable oil, according to estimates by the International Energy Agency, and double known gas reserves, according to the U.S. Energy Information Administration. The shale revolution has enormously increased the volume and dramatically slashed the price of natural gas in North America. Shale oil production is increasing almost as dramatically.

Other factors weighing against the oilsands include slower growth in world oil demand, increasing energy efficiency, alternative fuels and possible caps on global warming emissions of carbon dioxide.

BP sees world oil demand growth slowing to a rate of less than 1 per cent a year, but still increasing 2030 requirements by 16 million barrels a day. China is expected to account for fully half the increased demand. It will soon pass the United States to become the world’s largest oil importer. But the ability of high-cost synthetic oilsands production to crack that market at a time of ample world oil supplies is no slam dunk.

Increasing efficiency in energy use will continue to reduce the U.S. need for oil. So will growing alternative fuels, such as ethane and fuels that come as a by-product of natural gas production.

As for caps on CO2 emission, if they were “implemented worldwide, the Canadian bitumen production (from the oilsands) becomes essentially nonviable,” according to a study by the Massachusetts Institute of Technology.

Plans to increase Alberta oil sales to Ontario, Quebec and the Atlantic provinces have been mooted. That would likely require an expanded version of the long forgotten National Oil Policy, which prohibited the use of imported oil and refined products west of Ottawa from 1961 to 1971. Ontario paid an average $3.46 per barrel for Alberta and Saskatchewan oil, while Quebec paid $2.65 for imported oil. The difference cost Ontario consumers a calculated $527 million — billions in today’s money. The program ran for 11 years before collapsing in 1972. A new, expanded National Oil Policy does not seem likely.

Under any plausible scenario, the oilsands prop of the Canadian economy seems likely to collapse. Too bad the government has leaned so heavily on it.

Original Article
Source: thestar.com
Author:  Earle Gray

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