Friday, February 11, 2011

Another Warning on Oil Prices

This must be music to ever Petro-pol's ears.  High oil prices are back and they're back for good.  Think of all that vast, unearned wealth just waiting to be boiled out of the ground in Athabasca.

The European Union energy czar, Guenther Oettinger, says $100 a barrel oil is here to stay.   Prices dropped considerably during the recession due to low demand but today's prices are going straight back up especially with increased demand from Asia, the political unrest in the Middle East and the warning that Saudi Arabia's reserves may have been overstated by as much as 40%.

The EU is actively trying to reduce oil consumption but Asian demand will more than make up for any European decrease.  

High world oil prices increase the pressure for more bitumen production in Athabasca and might put Alberta right back on top again, this time perhaps for a decade or two.  Whether that's a good thing for Alberta, for Canada or for the world is debatable.

It's a double edged sword.   Higher prices at the pump encourage the public to become more aware, more fuel efficient.   But those higher prices also mean higher windfalls for the politicians, provincial and federal, who are quite pleased to see Canada turn into another petro-state.  This includes the opposition leader who fawns over the Tar Sands as the beating heart of the Canadian economy for the 21st century.  Is that what we've become?  Have we been reduced to that?  Is our country so degraded that it cannot prosper without that revenue?  What an odious thought from such an odd man.

The pressure is on.   Some prominent Americans would like to see Tar Sands production increased five fold.   The ramifications of that are mind-boggling.  Leaving everything else aside, there is the issue of greenhouse gas emissions and the farcical notion of carbon sequestration.  The Tories have their dodge.  It's called sectoral emissions reductions.  Sector as in some sectors will have to cut their emissions a lot more so that another sector is taken off the hook.  And what sector do you think the Tories intend to coddle on emissions?  But Steve will tell you it's all for the good of the nation and if you doubt that his sidekick Mike will back him up.


LMA said...

Just listened to Suzuki talking with John Abbott of Shell re Tar Sands on CBC radio. Suzuki pointed out that with the price of oil rising, Tar Sands production could be slowed down without any loss of company profits, at least long enough to properly prove the feasibility of CCS. Also, Suzuki was quick to correct Mr. Abbott's claim that air, water, soil/land are "resources", reminding him that they are the essential requirements for life. Suzuki was in good form, and obviously very concerned about the speed of Tar Sands expansion. As he said, the environment has to take precedence over the economy when considering sustainability, because without a healthy environment you cannot have a healthy population. Hope somebody was listening to his plea for sanity!

The Mound of Sound said...

No one with any say in the matter is going to slow down Tar Sands production. Unfortunately it's all going in the other direction. It isn't about sustainability but availability and opportunity. If they didn't heed Suzuki before, they're even less likely to now.

It's sad, LMA, but I think this one is lost. There's not nearly enough public dissent in this country. Look at it this way, if Mubarak had been able to pump oil out of his ass, he could have been our prime minister by now.