Justin, Andrew Would Like a Moment of Your Time

Is petro-statehood the path that leads to the Americanization of Canada? It kind of looks that way to Canada's top petro-journo, Andrew Nikiforuk.

The Tyee energy scribe sees Justin as "Harper-lite with a surfboard." Rachel Notley is one who thinks a bad bet can be transformed into a winner if only you double down. As for Brad Wall, he offers this:

In Saskatchewan, Premier Brad Wall has compared pipelines to economic miracle workers even as his petro-province flounders thanks to the overproduction of heavy oil in a glutted market.

(Wall’s subservience to petroleum interests, by the way, has taken on Trump-like proportions. The province’s recent Throne Speech even dubbed proposals to limit climate change as “misguided dogma.”)

For these misguided petro-pols, Nikiforuk offers up "four hard truths."

Numero Uno - first and foremost, there is no way, as in none, to clean up a bitumen spill.

There's a reason the Harper government and now the Trudeau government have resolutely dodged this issue. They know it can't be cleaned up. If they could the easiest way to respond to opponents would be to demonstrate that they can clean it up. 

Yet our bitumen-besotted politicians would have British Columbia gamble with its fisheries, tourism and coast on the bold lie that diluted bitumen, a dirtier product than crude, can be cleaned up in a timely and tidy fashion.

Because the low-grade heavy oil must be diluted with a gasoline-like product to move through a pipeline, it presents an even graver logistical challenge than a conventional spill.

A 2015 report by the U.S. National Academy of Sciences summed up the nature of the dirty problem: “Spills of diluted bitumen into a body of water initially float and spread while evaporation of volatile compounds may present health and explosion hazards, as occurs with nearly all crude oils. It is the subsequent weathering effects, unique to diluted bitumen, that merit special response strategies and tactics.

So what do Justin and his enviromin, Dame Cathy, have in mind for a bitumen spill on the B.C. coast? They've authorized the use of Corexit for chrissake! Corexit, the thalidomide for marine habitats. It's promoted as an oil dispersant but it's really a highly toxic, persistent chemical brew that causes oil to sink, out of sight/out of mind. And, once stuck to the bottom, which around here can be 600 feet or more below the surface, it can leach out its heavy metals, acids and carcinogens for decades, possibly generations, fouling the marine habitat.

Numero Dos - the economic case for pipelines has totally collapsed.

According to the lovestruck politicians, bitumen exports to China will make Canadians rich, and the sulfur-rich crude will miraculously command a higher dollar with marine access.

But bitumen will always require higher transportation costs and more upgrading and processing due to its appalling quality. As a consequence, it has always sold at a price differential of around $6 to $7 dollars to conventional oil.

This historic differential widened when the Alberta government rubber-stamped so many projects that industry flooded the North American market with bitumen between 2000 and 2008. The differential dropped again to historic norms as more and more refineries in the U.S. retrofitted to process heavy oil.

The Parliamentary Budget Office explained these elementary facts in 2013, but politicians beset by hydrocarbon hallucinations have trouble reading. The PBO emphasized that eliminating the discount paid for bitumen relative to conventional oil “is not realistic, as there is a significant difference in the quality of these crude oil benchmarks that is reflected in the price difference.”

Now you have to ask yourself why would oil companies keep pushing bitumen if it has become uneconomic? A corporate finance guy explained that they have to keep it going, even at a loss. That allows them to keep harvesting executive salaries and bonuses. It allows them to avoid having to tell shareholders that bitumen is no longer really viable, especially without massive government subsidies. That could lead to greater problems - a bursting of the carbon bubble foremost among them. All of those hard truths may come out, just not on their watch. Leave it to the next guy or the one after him. Let them take the heat.


Numero Tres - bitumen cannibalizes the economy.

Nearly 100 years ago, it cost but one barrel of conventional crude to find and pump another 100 barrels. Today those energy returns now average about one to 20. In the U.S., they’ve fallen to one to 10 and in the oil sands they have collapsed to one to three, or in some cases close to zero. In simple terms, bitumen doesn’t bring home the bacon.

Our world was built on easy energy returns the same way, say, grizzly bears once depended on easy salmon fishing for comfortable winter living. Abundant energy returns from cheap oil fed the growth of government, funded healthcare and encouraged much civility. Expensive energy constricts that flow and shrinks the public sphere.

Unfortunately, mined bitumen and fracked oil aren’t easy, cheap or carbon neutral. Companies extracting fracked oil from Texas and North Dakota typically spend four times more than what they make. Bitumen miners aren’t much better. They burn more energy and capital, and all to deliver fewer returns and surpluses to society. It’s like cycling backwards.

Yet no one in Alberta or Ottawa talks about declining energy returns or its political and economic implications. The consequences generally include words like collapse, ruin and volatility.

Numero Quatro - "Climate disruption and carbon anarchy aren’t a distant threat... they’re here now."

How many times must ordinary people be slapped in the face before our politicians grasp the gravity of the insult?

Climate disruption, driven by oil consumption and forest destruction, has become a global insurgency that can only be combated by rapidly changing patterns of energy consumption. That means using less energy and living locally. Pipelines and their political champions now look and behave like horsemen of the apocalypse.

The emissions math on climate change in Canada is now pretty simple. Environment Canada states it boldly: “Emissions of GHGs from the oil and gas sector have increased 79 per cent from 107 megatonnes (Mt) in 1990 to 192 Mt CO2 in 2014. This increase is mostly attributable to the increased production of crude oil and the expansion of the oil sands industry."

What this all boils down to is that Harper stuck Canada with a lousy bet on bitumen. He's gone but now the new guy, Trudeau, along with Alberta's Notley and Saskatchewan's Wall, want to double down on that same lousy bet.

From my perspective on the west coast the fact that these hucksters - Trudeau, Notley and Wall - know that there's no way to clean up a bitumen spill off our coast is enough for me to see them, not as fellow Canadians, but as a threat. They know that if they had a shred of decency and consideration for the coast and for the territory between the Tar Sands and "tidewater" they want pipelines to cross, the very least they could do to even partly reduce the catastrophic damage of an oil spill is to refine that bitumen into synthetic crude oil on site in Alberta. They won't entertain the idea and that's why we've got nothing to talk about.

From the perspective of central and eastern Canada, it's still a lousy deal. It's an economic boondoggle and an enormous waste of federal and provincial subsidies, money that could be put to something, anything useful.

In the context of climate change, it's lousy for the nation and lousy for the world. Even for today's already sullied Canada, it's a disgraceful thing for us to do.