Pipelines considered pointless: Big oil seems to be (finally) abandoning Canada's filthy tar sands


#1

Originally published at: http://boingboing.net/2017/02/28/keystone-jt-really.html


#2

The collapse of global oil prices cost the far-right its dominance over Canadian politics – and also produced a trumpist far-right, xenophobic political movement…

I don’t dispute this, but it looks very much like the same cause is producing two opposite effects.

Also, as oil becomes more scarce, wouldn’t it become more expensive, not less?


#3

I’m old enough to remember when “peak oil” was a thing. If the price of oil is -never- anticipated to get high enough to make the tar sands profitable, peak oil may now be an ex-thing.


#4

That’s a little bit too optimistic. It’s currently unprofitable to mine the tar sands when all costs are accounted, but it is profitable to mine given marginal costs only.

In other words, they’ll lose money if they start digging in a new place, but the money they spent building the infrastructure for existing projects is spent and gone, and oil prices aren’t low enough to stop digging in existing projects.

And @Boundegar, that’s the point. Oil isn’t scarce. Lot’s of people like to pretend it is because that might magically fix our greenhouse problem, but we have to come up with another mechanism to fix that.


#5

IIRC, they were using natural gas to make steam to bake out the tar from the sand. And at the peak of the oil sands boom, there was talk of building a nuclear reactor to provide the steam. I very much doubt they ever used oil to produce the steam to bake the sand, because the whole project was always about using a less expensive energy source (gas, or nuclear power) to extract the more valuable resource.


#6

Depends on whether it remains in demand. In those parts of the world with sane energy policies, renewables are subsidized and oil/coal/gas are taxed. As renewable energy becomes more affordable, demand for oil goes down. In theory, with luck and some governmental sanity, we will cease to use oil before it becomes so scarce that its price rises high enough to make the tar sands look economical again.


#7

I wouldn’t say “two opposite effects” so much as “weakening the corporatist far-right in favour of the xenophobic far-right.” A shift to being even more socially right-wing, and slightly less fiscally right-wing.


#8

That’s a good point. The subject is so complex.


#9

I used to think it was inevitable that we would use every bit of oil up before it was economically worthwhile to pursue alternative energy, but I think there is a point at which leaving oil in the ground (tar, frack’d) just makes more sense. We’ve already made huge inroads into alternative energy and as those come down in price and oil goes up, we will simply not need oil anymore. Of course, that will all require a huge investment in our infrastructure, both for energy production and for consumption for things like transportation, home heating, and cooking, and it will require some fincnancial incentives (and penalties), but I think we will get there.


#10

As the saying goes, the Stone Age didn’t end because we ran out of stones.


#11

The Canadian portion of KXL is already built. They said yes to Trans Mountain and no to Northern Gateway, which effectively killed Energy East. Trudeau lobbied neither Trump or Obama about their decisions.

There are other claims here that don’t make sense. Canada’s manufacturing sector has suffered from many problems, e.g. overseas competition, seems misleading to single out the artificially high petrodollar, which wasn’t high for very long.


#12

I can’t believe that the oil prices are not going to go back up: it would drive renewables and piss of the Republican Administrations and it’s base. Win win in my book…


#13

It was strange to me when I switched from assuming that oil prices would always rise because of insatiable demand and limited supply to understanding that we have found more oil and gas than can safely be used without irrevocable damage to the environment. It made me realize that it is not the supply side that will ever control the price of oil but the demand side.
The more we work to reduce the demand for oil and gas, the lower the price and the less exploration and development.
I think that it is futile to fight about pipelines because they do not tackle the actual lever. We need to reduce the demand and thus the price. If the price goes too low, nobody will want to build pipelines.


#14

Really stereotypical the guy from Toronto has a hate on for the west and blames them for its problems. A Brit to boot—history suggests the British felt the same if Canada as a colony many years ago, the attitude that ‘we should be happy just to be associated with Toronto’ is tired. Manufacturing in Canada has not been exceptionally viable for a long time (see bombardier, massive auto bailouts, China) in terms of “skilled scholastic” labour the oil sands employs the best engineers, ecologists, biologists, chemists etc. Manufacturing is mostly about using cheap as cheap a labour possible to reach an ‘acceptable’ level of quality—jobs were leaving the east already (see unions, Mexico). It has always been cheaper to make things elsewhere and we have always been a country whose fiscal success depends on exports be it grain, timber, oil, potash, uranium etc. Environmentally take a step outside yourself. Last time I checked there has been no acid rain west of Manitoba. Tightest regs in the country are in Alberta, followed by BC.


#15

It is worthwhile to remember that not so long ago shale oil was too expensive to be bothered with, until a little war in the Middle East made those holdings economically viable.

One thing I’m confused about- Exxon/Conoco wrote down their holdings, but does this mean they’ve ceded mineral rights as well? Or does this amount to an accounting trick?


#16

As an Albertan, can I ask you to please not confuse a hate on for the Harper Conservatives or for multinational oil companies as a hate on for ‘the West’. And don’t get me wrong, I cheer against the Leafs as much as anybody, but you’re the one who brought up Toronto, not Cory.

And what does acid rain have to do with anything? We are talking about climate change here, and the reality is that Alberta is the biggest emitter of GHGs in Canada. These are just facts. We can argue about whether the responsibility for that lies more with the industry, or with the end-users of the energy, but saying we have the tightest regs misses the point entirely.

I will agree with you that it’s not right to suggest oil and gas killed the manufacturing industry, though (although it’s still a more plausible explanation than trade deals and Obamacare).


#17

I agree there definitely seemed to be some vitriol there from Cory.

As with everything, reality is complicated. I live in Alberta and am employed by companies directly involved in resource extraction (forestry, oil&gas). Here in Alberta it seems like an inescapable paradigm that true wealth and prosperity only come from taking things out of nature for our use. Through that lens, all this noise is “everyone else attacking our livelihoods while directly benefiting from our work. If you stop extracting those resources, what will run the metaphorical engine of the economy?”

This is a common perspective and it drives the political landscape in the west to be very reductionist and zero sum. I really don’t think many out here straight up believe that things can continue as they are forever, but it is the “Extract or Nothing” mentality that gets in the way most often when trying to think or talk about a different future.


#18

Jesse,

In terms of plausibility of oil vs trade in would encourage you to research
the economics of both. While a strong dollar does not support manufacturing
the weak dollar does not kill it. A weak dollar also supports cheaper costs
for resource companies as well. It is a trade benefit for companies but
even at a 25% premium it is not enough to significantly impact the
outsourcing of manufacturing jobs to countries with improving education and
industrial capabilities but pennies on the dollar labour OR tech advances
reducing labour needs. As an Albertan you should recognize that it was the
first in Canada to institute a GHG program. Also recognize that coal, not
the just the oil sands, hold a great deal of responsibility. Further, you
should recognize that Ontario and Quebec are a very close #2 and #3 from a
manufacturing industry. Lastly, in terms of where oil is generated it
sounds like you are more comfortable with actual blood letting than
attempting to find an environmentally responsible way to fill the worlds
energy needs. I do not support Harper either (he was actually from Toronto)
but I surely do not support the attitude of the east ( I believe they call
themselves central Canada). Yes I sure as heck brought up Toronto. How many
subsidies from the west have propped up the east?


#19

Okay - First off, I agree with you on the decline of manufacturing (hence my comment that neither trade nor resource extraction are plausible explanations - not sure if you thought I was being sarcastic, but I wasn’t), but thank you for the encouragement.

As for Alberta being the first to institute a GHG program (which, I would argue, had become necessary in part due to the bad publicity the industry kept receiving internationally), again, this kind of misses the point. The CLIMATE is CHANGING, and it is reaching the point of being a crisis for our planet. This means reducing the amount of GHGs in the atmosphere in a dramatic way. Yes, coal is a problem too, but nationally, oil and gas represents almost 2.5 as many emissions as electricity production, and since when does it have to be one or the other that gets discussed anyways? And yes, Ontario and Quebec also emit GHGs, although it’s not as close as you are suggesting, and on a per-capita basis Alberta and Saskatchewan are in a league of their own. It’s just a reality that for Canada to do its part to solve this problem, Fort McMurray needs to be part of the conversation.

Well thank you for that straw man, but my point is actually that we need to shift away from resource extraction to fill the world’s energy needs. That means spending our time and energy (no pun intended) on renewable technologies and finding ways to actually reduce energy consumption overall. These are not easy things to do, and both will have real costs for people’s lives, but in the long term (or rather in the medium term - and getting shorter every day), that is where we need to be.

You can argue that it’s unfair to ask Albertans to carry the brunt of that economic cost, but that’s a different conversation than the one this article is having. And the answer to that isn’t to try to deflect away from the realities of the environmental impact of the oil and gas industry here. We need a national strategy (that works as part of an international strategy), and picking us-vs-them fights doesn’t do us any good.


#20

I’ve seen the Mad Max movies. I know where this is leading. Time to invest in leather and BDSM gear.