Just the Sight of Joe Oliver Makes Me Want to Punch Him in the Mouth

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Not that I would, mind you.  I do not resort to violence - ever.  That said, I sure would like to give Joe Oliver a knuckle sandwich in his greasy cakehole.

Joe's a business guy - well, a business guy and a damned lair - no, that's redundant - a business guy will suffice.  That has come through loud and clear in his barrel-scraping smears of opponents of the Northern Gateway pipeline and the outrageous lies Joe lays on thick in support of the bitumen superhighway.

You know who wouldn't be surprised that Joe's such a chronic, persistent liar?   Adam Smith, that's who.   You know, the Adam Smith who wrote the 18th century masterpiece, the Koran of Free Enterprise Capitalism, The Wealth of Nations.  It was this same Adam Smith who warned of the "order of men" like Joe Oliver.

"The proposal of any new law or regulation of commerce which comes from [the business community] ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.  It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."

A corporatist government in the modern Canadian petro-state is an integral component of the business community Adam Smith envisioned.  It introduces laws and regulates commerce on terms that both deceive and oppress the public and the public interest to instead suit the interests of that order of men it serves.

There's a subtle difference between Joe Oliver and Enbridge in which of them tells the most outrageous lies over the bitumen boondoggle.   Neither of them hesitates to spew out any sort of nonsense that crosses their minds that they think might skew events their way.

One example is the now shopworn business about how Canada is losing countless billions of dollars in bitumen revenues be being unable to access Asian markets.  It's a lie that has been repeated so often by the bitumen traffickers and by their federal and provincial minions as to have become part of the national folklore and, like most folklore, it's bullshit.

Many Canadian politicians have invoked the argument that because western oil is landlocked it’s not fetching international prices and therefore is being sold at a discount. If Canada could build more pipelines such as Keystone XL or the proposed Northern Gateway through British Columbia, it would reach tidewater ports where it would attract world prices, the so-called Brent and West Texas Intermediate prices.

The second part of the discount comes from backlogs at U.S. pipeline terminals that can result in lower prices for some Canadian heavy crude oil.

But is there any truth in the “double discount”?

Energy economists say that the situation is not nearly as cut and dry as the politicians pretend. Some call the claim “bogus.” World prices are based primarily on quality and so Canada’s bitumen, which has the lowest quality of the heavy oils, naturally fetches lower prices. Sending the oilsands bitumen to Gulf Coast refineries is not going to change that fact, they note.

“It just doesn’t make any sense,” Michal Moore, an energy economist at University of Calgary, said of the discount argument. 

“Anything that does not meet that quality standard is going to trade at a discount relative to Brent.  All that discount means is that any refinery owner is going to pay less for something they have to spend more time and energy to upgrade. That’s all it means.”

Moore noted that Canada already tests international markets when it pipes thousands of barrels of bitumen daily to the Gulf Coast through existing pipelines. There is no indication this oil is attracting higher prices because it is reaching tidal waters, he said.

B.C. Energy economist Robyn Allan, who recently wrote a report on the pricing of Canadian oil, said “the discount has been used by the federal and provincial governments to shadow out the fact that by shipping raw bitumen to U.S. refineries, Canada is also shipping jobs.”

So where did Oliver and Horner get their figures from?

Christopher McCluskey, who is Oliver’s media aide, said the minister took his $50-million figure from a CIBC report of March 2012 that coined the phrase “double discount” and mentioned the $50-million-a-day figure.

After Postmedia questioned McCluskey about the use of the CIBC report, he replied on behalf of Oliver that the government is in fact using an average annual price differential between Brent and WTI prices that implies a $45-million-a-day discount on Canadian crude.

But Moore said this is not a logical comparison because Brent is a better quality sweet crude than WTI and therefore refineries are willing to pay more for it. He added that it is “just crackers” and “not realistic” to think that Brent-WTI pricing can be applied to lower quality Canadian heavy crude.

“The most desirable mix on the block is the Brent,” he said. “So anything that does not meet that quality standard is going to trade at a discount relative to Brent.  All that discount means is that any refinery owner is going to pay less for something they have to spend more time and energy to upgrade. That’s all it means.”

When people in positions of power, like Joe, can't begin to speak honestly about the bitumen issue, when they have to resort to blatant deception in flagrant breach of their public duty, when they have to smear those who oppose their plans because they have no interest in addressing their legitimate concerns, they powerfully confirm Adam Smith's warning that they be treated with the "most suspicious attention."