Friday, November 8, 2013

The Big Lobby by Big Oil Over Small Time Cash

The evidence continues to build that the oilsands are not only unsustainable to produce, but also unaffordable too yet Canadians just don't seem to care, or understand, I'm not sure which. So today we've discovered...
Canada’s oil industry successfully lobbied Ottawa to delay proposed climate regulations last spring, arguing Alberta’s proposed $40-a-tonne carbon tax would drive away investment while doing little to quell criticism of the emissions-heavy oil sands.

In e-mails released under Access to Information, the Canadian Association of Petroleum Producers says the proposed regulations – which would add less than $1 a barrel to oil sands production costs – would introduce “additional costs and risks” that would “make projects less competitive” as major corporations look for the most profitable places in which to invest.
 Gee, "less than a $1". It sounds so small, but when you realize that the oilsands have an EROEI ratio of 3:1 it starts to make more sense. For instance:
Quarterly production hit a record 396,400 barrels per day at its oilsands operations and the company achieved lower cash operating costs of $32.60 per barrel.
That's right, Suncor *achieved* a *lower* operating cost of $32.60 PER BARREL! Today WTI oil is going for $94.57. That's real light sweet crude by the way, not bitumen which is a completely different product at a completely different, discounted, price. Suncor has achieved a lower cost per barrel which puts them just below the 3:1 EROEI (energy returned on energy invested) ratio against WTI crude, not bitumen. This is Canada's supposed future and "economic engine".

Now don't get me wrong, I don't support a carbon tax at all, because it is complete bullshit. The idea we will just pay for our emissions with printed currency backed by nothing is about as meaningless as the foundation that currency rests on. This isn't about whether or not there should be a carbon tax, it's about the fact that the oilsands can't even absorb a $1 increase in the cost of production, whether from carbon taxes, or anything! Is it any wonder there is a "wide gap" between the government's talk and action? Meanwhile greenhouse gas emissions have hit new highs and despite the obvious economic outcomes of peak oil and climate change the economically minded don't seem to care.
WASHINGTON -- Starvation, poverty, flooding, heat waves, droughts, war and disease already lead to human tragedies. They're likely to worsen as the world warms from man-made climate change, a leaked draft of an international scientific report forecasts.

The Nobel Peace Prize-winning Intergovernmental Panel on Climate Change will issue a report next March on how global warming is already affecting the way people live and what will happen in the future, including a worldwide drop in income. A leaked copy of a draft of the summary of the report appeared online Friday on a climate skeptic's website. Governments will spend the next few months making comments about the draft.

"We've seen a lot of impacts and they've had consequences," Carnegie Institution climate scientist Chris Field, who heads the report, told The Associated Press on Saturday. "And we will see more in the future."
 Yet for some reason Alberta, who has already been hit hard by the cost of climate change for 2 years in a row and is well aware that the cost of the oilsands outweigh the return and that the required "high price" of oil is unsustainable on an ongoing basis continues to lie to it's population that this is the only way forward. That we just need new markets and everything will be ok. That the "problems can be solved" if we give them enough time and the economic benefits will one day, eventually, out weigh the negatives.

Alberta is a reactionary province, always one step behind and planning for the economic data of last quarter. Cuts? no cuts? One never knows when revenue is a gamble and honesty is a risk.

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

1 comment:

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