Thursday, January 9, 2020

Alberta's propaganda centre insists 'Canadians will have to accept an increase in their own emissions for the greater good of reducing global emissions'

The ongoing theme here lately has been to really drive home that the propaganda centre's purpose is not the international investment community, the opposition, or the fence sitters. It is for the base that's already convinced, hungry for new nonsensical talking points to assure them the war efforts are underway and going well.

The Canadian Energy Centre has been focusing themselves on trying to drive home 2 main themes based on the articles and posts I've been seeing over the last few weeks.

1) INDIGENOUS PEOPLE LOVE OILSANDS! (And you should just ignore the ones that don't)


2) Increasing Canadian LNG production will "displace coal" in countries like China, and will help lower GHG emissions.

Both of these claims are clearly geared towards the Canadian base, neither of these are talking points international investors will care about. These are largely Canadian concerns, and Canada's inevitably increasing emissions and treatment of indigenous groups has been a thorn in the industries' side.

The focus on Canadians (Albertans) can be seen in the final paragraph of their latest LNG propaganda:
Findlay agrees, saying it will be difficult for countries to reach agreements to share emissions reductions and to verify that Canadian gas is truly displacing coal, but it is critical to combatting climate change at a global level. 
“Something is needed to offset the fact that the Paris Agreement is predicated on individual nation commitments, which is fundamentally incongruent with a global economy,” he says. “Without some benefit to energy exporting countries who help reduce total global emissions, Canadians will have to accept an increase in their own emissions for the greater good of reducing global emissions.”
 So in other words, if Canada can not arrange for a global basically untrackable carbon offset program (which will allow us to increase our emissions), then Canadians will just have to accept that our emissions will increase for the "greater good". Either way, the only "solution" is to increase our emissions and hence our production. How convenient for the producers.

Read that again, Canada will need to increase it's emissions to lower global emissions. This is based on the idea that because China will have access to Canadian LNG they won't need that coal. Unfortunately, that's not how the global economy works.

There is a paradox in energy economics, called Jevon's paradox. It reads like this:
In economics, the Jevons paradox (/ˈdʒɛvənz/; sometimes Jevons effect) occurs when technological progress or government policy increases the efficiency with which a resource is used (reducing the amount necessary for any one use), but the rate of consumption of that resource rises due to increasing demand.[1] The Jevons paradox is perhaps the most widely known paradox in environmental economics.[2] However, governments and environmentalists generally assume that efficiency gains will lower resource consumption, ignoring the possibility of the paradox arising
It's a paradox that is well known and conveniently ignored because it destroys most, if not all of the faux "climate concern" coming from the money powers of the infinite-growth ponzi-conomy.

Here is the UCP propagandists using this same deliberate misunderstanding of (and not to mention intentionally misleading) Jevon's paradox to promote progress when in reality there won't truly be any aside from producing even more:
Open the article in question and what it actually says is:
Canada’s Cenovus Energy on Thursday unveiled plans to reduce per-barrel greenhouse gas emissions by 30 per cent by the end of 2030, as the country’s oil industry faces growing pressure from environmental activists.
Per barrel. Not a 30% reduction, a 30% reduction per barrel, hence allowing them to produce more. Cenovus in the short term wants to increase production by 70,000 barrels per day. Also again notice the focus on "indigenous ownership", which I find pretty funny that now that the oil companies have burned through all of the good oil, and the oil booms, and are having trouble attracting investment, NOW they want indigenous ownership. More accurately I'd say they want to transfer the increasing risk from these projects to indigenous hands.
The rising focus on the financial sector and investors presents another threat to oil and gas companies. But companies are vulnerable in different ways. U.S. shale drilling, for example, may not be all that exposed to this financial bubble. The bulk of a shale well’s production occurs in just a few years, allowing them to dodge the government restrictions and demand risk that likely lie in the future. That’s not to say that shale is not littered with its own set of financial problems, but the problem of stranded assets is a deeper problem for long-lived oil and gas projects
That includes Canada’s oil sands, LNG, offshore oil drilling and pipeline projects.
“Mark Carney is a thoughtful person so I want to listen closely to what he has to say,” Michael Tims, vice-chairman of Calgary-based Matco Investments, told the Financial Post
“The harder part is to try to rationally assess what the implications are to value for longer-horizon projects.”
These projects are based on the assumption that they will stick around for decades. The problem is that many of them are unviable in a world that gets serious about climate change. So, either the world blows past climate targets and hurtles toward catastrophe, or governments crack down on oil and gas, upending assets currently worth hundreds of billions of dollars.
Handing over the risk to indigenous communities at this time would seem like the smart thing to do, wouldn't it? It has the added benefit of convincing Canadians that after decades of fighting them, destroying their land, destroying their way of life, suddenly nooooooow we care. And if they don't support the projects, we have snipers for that. Don't we?

The UCP and propagandists have also been using the pipeline between Russia and China as reasoning for claiming there will be increased demand and that if only Canada can get it's LNG over there we would displace coal! One then would have to wonder, if an LNG supply will displace coal why is the Russian LNG pipeline not doing that? Why is China continuing to build coal (and everything) energy infrastructure?

Refer back to Jevon's paradox for your answer.

But there is another omission in the propagandists reasoning that is quite important to understand: the Russia/China pipeline is part of their plans to dump the U.S. dollar.
Some companies, however, have begun to move away from the greenback. In 2015, Gazprom Neft announced that it settled all of its oil exports to China in renminbi. And in August this year, Rosneft announced that it would stop using the US dollar for its export contracts. 
However, Demarais said complete de-dollarization remains a “utopia” on account of the reliance of global oil exports using dollar transactions, as well as the volatility of the rouble. Additionally, as Russia represents only 2% of global GDP (gross domestic product) it also means the rouble remains unattractive for some international investors.
Additional trading costs created by de-dollarization will also represent another “major obstacle,” she said. 
Dolgin suggested that further de-dollarization of Russia’s trade and a switch of its oil export contracts to euros is possible if the EU and China upscale their own efforts to bypass the dollar
The report concluded that Russia’s Ministry of Finance may be able to de-dollarize its assets after 2020, once the liquid portion of its National Wealth Fund (NWF) reaches 7% of GDP, allowing “bigger diversification of instruments.”
Canadas/Albertas insistence that if it can just get resources to tidewater everything will be fine, the jobs will returns, and prosperity will be back, is a lie. It's an excuse and dangling carrot meant to provide hope for a population whose jobs have always been on the chopping block.

Ironically China seems to be one of the only "investors" sticking around in Canada even as the EROEI of oilsands developments looks more and more unpromising:
While some European and U.S. companies cut their exposure to the Canadian oilsands, China’s Big Three oil giants — CNOOC, PetroChina and Sinopec — seem content to let their bets ride even if the results haven’t been spectacular.

In 2018, PetroChina produced an average of just 7,300 barrels per day of bitumen from its MacKay River thermal oilsands project, although it was designed to produce 35,000 bpd. In June, its output was about 8,700 bpd. 
The Beijing-based company paid $1.9 billion in 2009 for 60 per cent interests in the proposed MacKay River and Dover oilsands projects being developed by Athabasca Oil Sands Corp. (now just Athabasca Oil Corp.), then bought out the rest of MacKay for $680 million in 2012 and Dover for $1.2 billion in 2014. 
“MacKay River is located in an area with complex geology, which creates challenges to heat up the reservoir to get the bitumen flowing,” said spokesman Davis Sheremata in an emailed statement.
The real problems with oilsands development haven't changed, they've just been papered over with the "we need pipelines" dangling carrot. Pipelines or no pipelines the jobs aren't coming back, and unless you're a China - with a long term goal and which uses the economy not as the end goal, but rather a tool - the future for Alberta is looking increasingly bleak despite the cheerleading coming from the UCP crowd.

This is why it's so important for the propaganda centre to focus on the supportive base. Without a faux war against everything to channel the anger, that anger would inevitably end up on the doorsteps of the companies that have never had any intention of fueling another job boom.

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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 CenturyLink

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.

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