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Energy East’s demise is Canada’s Peak Oil Divide moment

Public Policy

Canadian leaders cannot despise oil and pipelines and maintain high living standards. Without the goose, there will be no golden eggs.

It’s that simple.

This week’s cancellation of another oil pipeline – from Alberta to New Brunswick – should not be a cause for celebration as it is in some minds. It represents Canada’s Peak Oil Divide moment as well as a tipping point in terms of the country’s future prosperity.

Without new markets, Canada’s engine of economic growth will slow and never regain momentum.

It’s a known fact that the world lumbers toward a fossil-free future, due to exponential technologies such as solar. But to rush toward that as a nation – without anything to replace it – is foolish. Only countries without fossil fuels are well-advised to do this. Not Canada.

Canada should be doubling down on its resource potential in order to afford the transition to a fossil free future a generation or two from now.

It’s irrational for politicians to support restrictions on resources and those that do must first provide an alternative economic model for a country whose population is very dependent upon government benefits.

Canada cannot subsidize itself into prosperity by plunging billions into Bombardier factories, dairy farms, bridges to nowhere, or by sprinkling a few grants to tech start-up entrepreneurs in the hopes one may turn out to be Steven Jobs.

The fact is that Canada’s only current world-class innovation and investment clusters are oil and mining, both of which are under attack by politicians at all levels. These sectors provide the highest salaries in the country because they are world-class and their workers are high-tech trained in science, engineering, technology, and IT.

Everyone knows that fossil fuels will be phased out eventually, so it’s simply a matter of timing. The King of Saudi Arabia estimates the last drop of oil from his kingdom will be produced in 2050 (as though he knows for sure). Others maintain the transition will happen sooner, but whatever the guess, the only strategy for an energy-based economy like Canada is to simply pump out as much oil as possible to as many customers as possible then invest in other ways to make a living.

Why can’t Canada’s leaders get this?

They won’t due to petty politics, said an angered Saskatchewan Premier Brad Wall this week. He framed the pipeline struggle as a regional war with Ottawa and the east and blamed politicians for not understanding the importance of the west’s economic contribution. He stated in a press conference that the project’s failure on the National Energy Board’s August decision to ask for the impact of upstream and downstream emissions from potential increased consumption of oil.

“TransCanada made the decision to cancel Energy East – but make no mistake, the reasons for it fall at the feet of Prime Minister Justin Trudeau and the federal government. They have been, at best, ambivalent about the project and then moved the goalposts at the last moment by asking the regulator to consider the impact of upstream greenhouse gas emissions.”

But Ottawa Natural Resources Minister Jim Carr was firm Thursday that the cancellation was a “business decision.” “Ultimately, it’s not up to me to explain why TransCanada made this decision on the basis of what’s in its interest. I respect that. Nothing has changed in the government’s decision-making process.”

Wall rebutted that the company made 700 changes in good faith to its original proposal to meet changing conditions imposed by regulations before finally giving up. He also took aim at Montreal Mayor Denis Coderre who called the pipeline abandonment “a major victory” for municipalities and Indigenous groups.

“Coderre cheers the cancellation of this pipeline,” said Wall. “He who leads a city that, just two years ago, used a pipeline to dump 4.9 billion liters, or nearly 2,000 Olympic-sized swimming pools, of raw sewage into the St. Lawrence Seaway.”

Certainly, there’s enough hypocrisy to go all around.

New Brunswick, Atlantic Canada, and Quebec will continue to import millions of barrels of fossil fuels via ship and rail, mostly from the U.S. and Saudi Arabia.

And if politicians are committed to environmental purity then they should target and shut down gas-guzzling automobiles, trucks, railways, and airlines. Instead, they want to put the brakes on energy itself which kills the national golden geese Saskatchewan and Alberta that ship about $2.5 billion in equalization payments a year. By contrast, most of the rest are have-not provinces. Quebec receives $11 billion in equalization per year and Ontario $1.4 billion.

That is why this week was about more than just another energy project nixed. It reveals that Canada is a divided nation without a mechanism to unite itself to serve the best interests of its populace.

As Wall said this was not a good week for Canada.

And, frankly, it won’t be a good generation for Canada either.

Fin Post

9 Comments on "Energy East’s demise is Canada’s Peak Oil Divide moment"

  1. eugene on Sat, 7th Oct 2017 8:07 am 

    Maybe Canada’s leaders can’t see this as your world isn’t what you think it is. Hopes/dreams often aren’t believed as they simply aren’t reality. I read web sites which are hope driven. One had the climate site has the head line “Tesla’s sales explode”. “Explode” is a perspective issue. Tesla sold 26K vehicles third quarter which translates into 100k+ a yr. Total US auto sales are something like 17 million. Tesla sold .005% of total auto sales. Hardly an “explosion” in the big picture. We are one helluva long way from and electric/renewable world.

  2. Shortend on Sat, 7th Oct 2017 8:34 am 

    Another propaganda piece of crap that ignores reality and props up a dying, deadly toxic industry..Canadian author, William Marsden, exposed it all in his book
    Stupid to the Last Drop: How Alberta Is Bringing Environmental Armageddon to Canada (And Doesn’t Seem to Care) Paperback – September 30, 2008
    e rivers and water sheds are being chemically polluted. Indian communities north of Fort McMurray where the Athabasca flows are getting rare forms of cancer. Farmers in southeastern Alberta develop skin rashes and irritations because their water wells are becoming toxic from extraction of natural gas. The Alberta and Canadian governments are ignoring this. The energy companies are obfuscating. The Alberta government, ignoring the Kyoto Protocols, has given energy companies an environmental carte blanche to come in and shop. All for money and jobs – a good election platform. It makes one wonder what happens to people in less developed areas of the world where there are no environmental movements and human rights can be trampled. Even though the farmers and the Indians are suffering they are at least permitted an outlet and can voice some dissent – and their claims can be made to the governments.

    Mr. Marsden is excellent at pointing out the problems of minority groups and small communities – Indians in Fort Chipewyan or dispersed farmers can do little to combat the forces of energy companies that are being backed up by the government.

  3. Sissyfuss on Sat, 7th Oct 2017 8:55 am 

    The oil based version of Industrial Civilization is expiring and the replacements are either too EROEI deficient or years away from implementation. The Establishment is locked in to doing what it has always done, promote growth in both economic activity and human numbers.

  4. paulo1 on Sat, 7th Oct 2017 9:33 am 

    I’m Canadian.

    Actually, Canada is also wolrd-class in farming and forestry, as well as mining and oil production. It also has a strong manufacturing base and a well-educated population. A big big problem was the oil industry as it exploded growth and expectations.

    When a country has to make a concerted attempt to import foreign workers and change labour laws to make an industry work, perhaps the ‘necessary’ growth is a bit to rapid? Polish iron workers, Phillipino welders and electricians, Indian engineers, Somali drivers, all living and working in segregated camps providing the supposedly necessary and driving-down-wages cohort for huge Oil Sands projects…..
    All this when Canada exports over 2X domestic use?

    No, the oil industry is JUST one important component of our overall economy. It is not the reason and foundation of what we do to make a living.

    It is nice to know we are energy self-sufficient, and that’s good enough.


  5. rockman on Sat, 7th Oct 2017 12:57 pm 

    paulo – Are you trying to convince us Canada had a viable economy prior to the oil sands boom? Come on bro, you know most Americans never knew Canada existed before you started shipping that nasty crap south. And I’m not referring to that stuff y’all call beer, eh. LOL.

    Multi $BILLION infrastructure projects are proposed when oil is $90+/bbl and then some get cancelled when oil drops to $50/bbl. Now there’s a f*cking mystery we need to bring in Sherlock Holmes in to solve. LOL.

    Same sad story as the Sierra Club et al patting themselves on the back due to the border crossing permit for Keystone XL not being approved. And at the same time other pipelines and transportation systems are upgraded to allow record volumes of Alberta oil to be exported to the US. Difficult to think that such typically well educated folks believe what they are saying.

  6. kervennic on Sat, 7th Oct 2017 3:42 pm 

    What wealth is this about.
    Western people are fat, sick, stack of fat, have a lower IQ and reflex timing much lower than their ancesters. They can even no longer have children.

    This is the result of oil. Oil is a poison, worse than heroin.

  7. Apneaman on Sat, 7th Oct 2017 5:12 pm 

    The reason some think the tar sands are the be all & end all of the Canadian economy is from an full court propaganda press by the Conservative Harper government & various cancer funded think tanks and true believer amateurs. The truth, based on the numbers, tells a much different reality then all the squawking (same as it ever was).

    Canadian oil sands economic impact highly overrated: poll

    “Most Canadians overvalue the contribution the oil sands industry make to the country’s economy, finding it hard to believe it only contributes 2% to Canada’s total Gross domestic Product (GDP), results of a recent poll published Friday show.

    According to the survey conducted by polling firm Environics for the environmental group Environmental Defence, 57% of Canadians think the industry’s impact is larger than what Statistics Canada shows.

    The study found that 41% of Canadians think the oil sands contribution to the world’s 11th largest economy is between 6 and 24 times higher than it actually is.”

    That’s from 2014, so I would not be surprised if it’s dropped below 2% of GDP. It’s been a rough go on Alberta or for many in the Cancer industry, but they are still there and have not imploded due to the price drop. The tar sands have not disappeared nor has Alberta…… not yet.

    ‘Catastrophic’ oil prices hurting Alberta, but province to lead GDP growth next year: Ceci – June 29, 2017

    “Alberta’s real GDP contracted 3.5 per cent last year, following a 3.6 contraction the year before, which marks the worst two-year contraction in recorded history in Alberta.

    At the same time, the province’s unemployment rate averaged 8.1 per cent as 37,000 net jobs were lost and Alberta’s labour force participation rate, a measure of working-age people either employed or looking for work, dipped to 72.5 per cent – its lowest level since 2001.”

    There was a rash of cancer industry worker suicides after the layoffs and in my mind they can be given a big assist by the propaganda on all ‘sides’. The Harper regime and think tank propaganda screaming about the entirety of Canad hinges on it (priming for subsidies and environmental regulation roll backs). The peak oilers and envirotards promoting the end is neigh for the cancer industry. For the recently laid off and hopeless, it was dire news from all prognosticators, albeit with different motives. On a happier note, their were plenty of deals to be found on craigslist for ATV, Skidoos, boats and all the other expensive toys the overextended bought. Apparently none of them knew about the well documented history of oil boom & bust cycles. Much of it within living memory. Or maybe they are just Cancers who are programmed for growth?

  8. makati1 on Sat, 7th Oct 2017 7:12 pm 

    kervennic. you are correct. Most of the world’s poisons are made from petroleum in huge quantities. It poisons the ground, air and water over most of the planet. It is the grim reaper in liquid form.

  9. jawagord on Sat, 7th Oct 2017 7:29 pm 

    Poorly titled article, It’s not Canada’s Peak Oil moment, it’s simply TransCanada Pipelines cancelling their expensive plan B Energy East ($15billion) for Keystone XL ($8billion) as it is no longer required now that President Trump gave approval to KXL. Given KXL is half the cost of EE, 90% of the pipe was bought 6 years ago and is sitting on the ground, southern part already built and operating, approvals all completed except for Nebraska, it’s a no brainer they would drop Energy East. The best market for Canadian oil is still the US, we simply need pipelines that get the oil directly to the more lucrative US markets other than Chicago. And while its a good plan to get more export capacity to tidewater, US refiners can and will outbid Chinese and Indian refiners for almost all Canadian oil production due to short shipping distance from Canadian ports to US refining hubs.

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