‘No country would find 173 billion barrels of oil in the ground and just leave them there’
There'll be no new mega-mine in the Athabasca Tar Sands. Teck Resources will not be proceeding with the Frontier mine project that was supposed to produce 260,000 barrels of bitumen per day.
Getting an extra quarter million barrels of dilbit per day moving to markets would have demanded a big uptick in pipeline capacity. Something very much like the Trans-Mountain pipeline expansion, TMX or, as I like to call it, Trudeau's Folly. The expansion was intended to increase capacity from the current 300,000 barrels per day to a massive 800,000 barrels per day.
TMX hasn't been working out for the prime minister lately. First came news from the Parliamentary Budget Office that the Trudeau government paid way over market value when it bought the old pipeline from Kinder-Morgan. Then came news that the feds costs projections for the expansion were way off mark - about $4 billion too low. Popular support for Trudeau's Folly began to sag. Now this.
Then came rumblings that the financial markets were losing their appetite for high-carbon, low-value fossil fuels such as bitumen. Big players such as BlackRock and JP Morgan washed their hands of Tar Sands projects.
Then Teck bowed out of the overly-ambitious Frontier mine venture. It didn't seem that Teck attracted many suitors for the investment.
Boom, boom, boom, boom, bust - it's beginning to sound like an artillery barrage. This is no time for schadenfreude. High-carbon, low-value fossil fuel has been foolishly allowed to become a major component of the Canadian economy. We ignored endless warnings from people such as Mark Carney that we were playing with fire, that this was a Carbon Bubble. So who is going to wear that? Every Alberta premier since Peter Lougheed? The federal Conservatives and Liberals?
So, what's Plan B? What do we do in a post-bitumen Canada? Where are the great leaders of vision? What, we don't have any?
Let's not forget the 260 billion pound gorilla in the room - the cost of site remediation across Alberta from thousands of orphaned wells in the south to the massive tailing ponds of Athabasca. That is a more than two hundred and sixty billion dollar time bomb. That's a whisker under $7,500 for every man, woman and child in Canada. How much of that do you want to pay?
It will be interesting to see what Trudeau does with Canada's pipeline now. The government already tried to flog it once. No takers. It's a far worse deal now. Costs are way up. Athabasca's tar pits are on their way down. Would you buy a pipeline from this prime minister?