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Oil & Gas: Why ‘Keep It In The Ground’ Is A Formula For Environmental Disaster

The environmental lobby has mislead many well intentioned companies and intelligent individuals with the “keep it in the ground movement”.   That logic only applies to “western societies” and has sadly resulted in serious efforts to block even the cleanest Oil & Gas projects for the last decade.  The most recent tactic is to block the infrastructure required to make Oil & Gas functional; in particular pipelines are being opposed at every turn.

These next two points should clearly demonstrate that “keep it in the ground” is both naive and environmentally damaging.

1: OIL & GAS GROWTH THROUGH 2040

The fact is that the most scientificly trustworthy energy industry research body in the world, the International Energy Association (IEA), agrees with dozens of other government and industry analysts that Oil & Gas demand will continue to EXPAND through the year 2040.  2040-2050 is the magic decade when China and India will have moved most of their citizens into the middle class.

Before you start thinking, ‘but wait, that will change if we ‘go electric”, note that the IEA is expecting massive amounts of electrification in the next 20+ years and has already wrapped those expectations into their projections.  If we don’t have substantial electrification (solar, wind, electric cars,…) 2040 will not be the

Keep in mind the word EXPAND.  This means that at about 2040, the world will not have stopped using oil and gas; this means that consumption will have peaked.  After 2040, there will take between 100 to 200 years to cycle out of petroleum based products.

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Are Pipelines Really The Safest Way To Transport Oil & Gas?

Having worked at a few pipeline companies, I know they take safety and spills very seriously but we see pipeline bursts and their resulting spills with frequency in the news so the question lingers: Are pipelines safe?

pipeline-vs-rail-environmentLet’s start by stating an obvious fact that no-one WANTS a pipeline or any other serious infrastructure (power lines, rail lines, highways…) in their back yard but without such infrastructure our modern world would grind to a halt.  If we can agree on that as a fact, and not an opinion, we can rationally consider pipeline safety.

The factors determining the safety of any pipeline compared to rail or trucking are also obvious and visually undeniable.  Below is a simple chart outlining some of the risk factors that go into transporting liquids and gases:

 

FactorPipelinePipe ScoreTrainTrain Score
Above/Below GroundBurried1Above Ground8
VisibilityVery Low1Very High8
ConnectionsFew1Many8
Human Error LikelihoodNearly Zero1Constant6
Intentional Damage LikelihoodVery Low1Moderate5
Easy of Stopping LeakVery Easy1Very Difficult6
VolumeVery High9Low3
24 Hr MonitoringExcellent1Minimal8
16 52

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VIDEO: Former Canadian Prime Minister Brian Mulroney Tells US Senate To ‘Thanks It’s Lucky Stars For Canada’ and NAFTA

While testifying on NAFTA in front of the US Senate Foreign Relations Committee, former Canadian Prime Minister told them:

“Canada is privileged to have the United States as a neighbor and friend.  And the United States should thank its lucky stars, everyday, that they have Canada on their northern boarder.

This is is the most successful and peaceful bilateral agreement in world history”

“Canada is privileged to have the United States as a neighbor and friend.  And the United States should thank its lucky stars, everyday, that they have Canada on their northern boarder.

This is is the most successful and peaceful bilateral agreement in world history”

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10 Things Canada Is Doing Right In NAFTA Negotiations

Multinational trade negotiations are often accused being a closed door mess with a never ending series of mistakes, but Canadian negotiating strategies on NAFTA have been very successful.

Successful is a subjective word and this site aims to keep to the facts and avoid too much opinion, so let’s define success.  In the context NAFTA negotiations, success is defined as a trade agreement that is as favorable to your country as possible, with least amount of drama.

Canada, so far, has been “walking softly and carrying a big stick” with the following successful tactics:

1. Starting Negotiations With Demands: Canada laid out its criteria early in the process.  This instantly gave the Canadian negotiators important bargaining chips to potentially throw in at the end to close a deal.  Things like the dispute mechanisms and protecting the Dairy industry make great domestic politics, which bolsters your position with the other side, but are “nice to haves” and not truly critical to the success of a final deal.

2. Quietly Racking Up Negotiating Chips: In Canada’s case starting superficially unrelated proceedings, like attacking Boeing’s now demonstrably malicious claim against Bombardier, and starting a WTO claim against the US’ unfair trade practices, gives Canadian negotiators more “chips” to bargain with.  Massive deals like NAFTA often include side arrangements to terminate other proceedings.

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Why Canada Does Not Need a Dispute Mechanism in NAFTA

One of the most contentious issues between Canada and the United States on North American Free Trade Agreement (NAFTA) is chapters 11, 19 and 20 the dispute mechanisms.  Chapter 19 is the one most are fired up about:

…binational panel of five arbiters, agreed upon by both parties, who will determine whether or not the duties have merit based on U.S. domestic laws.

Source: macleans.ca/opinion/why-naftas-chapter-19-is-worth-fighting-for/ 

CANADIAN ARGUMENT FOR THE NAFTA DISPUTE MECHANISM:

Canada has politely stated that the United States is a massive economy with leadership that have inflated ego’s which are tied directly to high powered, big money, special interests.  The combination means that without a dispute mechanism, US politicians will frequently bring unfair claims of NAFTA breaches that Canada will not be able to defend against.  Canadian media and politicians (and even some American observers) have gone so far as to call this demand a ‘poison pill‘ using the logic that they know there is no-way Canada will accept a contract without a dispute process.

https://www.youtube.com/watch?v=OvrzlCFQ8eU

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How To Fix the Post Office: Alternating Day Delivery & Community Lockers

USPS-Post-Trucks-Parking-lotThe US Postal Service lost $5.6B in 2016.  Today the Liberal Canadian Federal Government announced that it would not reinstate home delivery of mail and all of the pundits cried… on both sides (see video at the bottom of this message). It is predicted that Canada Post will be loosing $700M per year in the near future.   These types of numbers are large enough that citizens just don’t understand them but rest assured, in the end, citizens are going to pay those bills, mostly through increased taxes.

Canada-Post-Trucks-Parking-lotThere are many idea’s about how to ‘fix’ the Post Office including:

Those are all great ideas and should be pursued, but there are two other idea’s that we have never heard anyone else suggest, and I think most reasonable people will get behind.

You can balance any budget shortfall by cutting costs or expanding revenue:

1: Alternating Day Delivery

Most people, even older people do not get ‘real’ mail every day, so why are we paying to have it delivered every day?  Why not cut the number of delivery workers in half, delivering mail (to the door or box) on this schedule:

Week 1: Monday Wednesday Friday
Week 2: Tuesday Thursday

With virtually no practical decrease in service, the Post Office would be able to have massive staff cut (160,000 letter carriers the US, and 12,500 letter carriers in Canada) and 33% reduction their small truck fleet.

A rough estimate of the ANNUAL labor savings would be $8.1B (16000 x $51600) in the US and $625M (12500 x $50000) in Canada.

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A Tale Of Two Cities: How Chestermere is Spending $100K More Than Lacombe To Find a New CAO

In a vacuum it is often difficult to see the value of one city’s processes over another.  There are always differences that outsiders do not understand.  However, there are unique situations in which very similar cities perform the same task at the same time but one costs radically more.  We found just such a circumstance and are comparing the search for a City Manager in Chestermere with that in Lacombe.

Let’s start by showing their similarities:

  • Both are similar size cities in Alberta
  • Both have very similar annual budgets
  • Both are located just outside major cities (Calgary & Edmonton)

WHAT IS A CAO?

manager-silver-computer-gray-hair-man

A Chief Administrative Officer (CAO) is the ONLY employee of your City Council.  Under the Alberta Municipal Government Act (MGA) those elected to Council are explicitly forbidden from giving direction to staff; only the CAO can hire, fire and direct staff.  The CAO is sometimes referred to as the City Manager and that is a good description.  CAO’s must be intimately familiar with the Alberta MGA and generally well connected in the municipal political sphere.

Put simply the CAO prevents elected officials from breaking the law and translates the will of City Council into action with city staff, so it is an important position to be sure.

The real question should be “how much is that position worth” but that is a discussion for another day.  Today, we are looking at what it costs to hire them and we think you will be startled by the numbers.  Specifically, what are the costs incurred between the time the old CAO left and the new CAO started.

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The Poor Are Getting Much Richer In Canada

In a world of ever increasing political division in which those on the ‘right’ side of the spectrum are forever vilified for cutting social programs and making tough choices to balance budgets, it was quite refreshing to see that under a Conservative federal government in Canada, the poor became much less so.

Quartz research released a study of Statistics Canada data titled “The American dream still exists—in Canada”.  It showed that between 2013 and 2016 poorest 20% grew TWICE as fast as Canada’s richest 20%.  Canada poorest had their incomes move up a staggering 24% in just 4 years.

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VIDEO: How The Left Plans To Win the 2019 Alberta Election

Recently I attended a Progress Alberta event titled ‘Emergency Town Hall: Why Progressives Can Win in 2019’.  This event had four notable presenters and I was very pleased that they allowed me to record the event.  Personally, I found sessions 3 and 4 (below) on how the left has to respect the United Conservative Party and Jason Kenny to be the most interesting.

The ‘Coles Notes’ version of the night would be:

  • Calgary will be the only notable battleground in the 2019 election
  • Alberta is far more left than presented in the media
  • Jason Kenny is a machine that must not be underestimated
  • The left has a natural role in governing that is not understood or accepted by the general public
  • Conservatives own the media, including social media
    • I find it amusing that every side thinks the other side controls the media
  • The center cannot consistently win elections, which could be extended to ‘people need a common enemy to rally around and that means left or right’

1: Why Progressives Can Win in 2019 Alberta: Alberta is More Progressive Than You Think – 8 mins

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7 US States Already Allow GM’s New ‘Cruise’ FULLY Autonomous Car Service

gm-cruise-autonomous-boltAutonomous cars and trucks are steaming at us at a surprisingly rapid pace.  Fully autonomous vehicles are not the stuff of 2025, they are the stuff of late 2018.  Seven US States already allow GM, Tesla, Uber and other autonomous car makers to drive limited numbers of vehicles with no driver.  In Canada, Ontario allows autonomous vehicles in approved cities and towns.

GM executives told investors in 2016 that by 2025, autonomous vehicle cost reductions and increased consumer adoption would combine to drive the price down to less than $1 per mile, or about a third of current ride-hailing prices.

In 2017 GM had more autonomous vehicles on the road that any other company in the world.  In California 20 of the autonomous cars were involved in accidents but not a single one of them was found to have the autonomous car at fault.

https://www.youtube.com/watch?v=c4y09TnE4QE

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VIDEO: Highlights of the Canadian Federal Government Carbon Tax

On January 15 2018, the Canadian Federal Government laid out the details of it plan to implement a  $50/tonne carbon tax in proposed legislation named the “Greenhouse Gas Pollution Pricing Act”.  The highlights are:

  • The Federal Tax will only apply in Provinces and Territories that do not have a comparable carbon tax already in place
    • That means, as of today, it will apply only to 20% of the Canadian population
    • Specifically those in Saskatchewan, most Atlantic provinces, NWT, Nunavut, Yukon will be subject to the Canadian Federal carbon levy
    • Newfoundland & Labrador and others are expected to announce their own carbon tax systems in the spring of 2018
  • The tax will start at $10/tonne in 2018 and will be at $50/tonne by the end of 2022
  • There are two parts to the system, a consumer gas tax and and industrial emissions tax

Consumer Gas Tax:

  • 2018 Gasoline = $0.023 / liter       2022 Gasoline = $0.115 / liter
  • 2018 Diesel = $0.027 / liter             2022 Diesel = $0.135 / liter
  • 2018 Propane = $0.015 / liter         2022 Diesel = $.075 / liter

Industrial Carbon Emissions Tax:

  • The tax is an “output based system” which means it will be charged where the carbon is released (think burning gasoline in your car vs producing gasoline)
  • Only those companies that produce more carbon than the average today will pay the carbon tax
    • Before the end of 2018 the Canadian Government will evaluate each industrial sector (think Oil & Gas, Mining, Transportation…) and determine the current average energy used per unit of output in each of those sectors
    • Companies that produce more carbon than industry average will have to buy carbon credits
    • Companies that produce less carbon than the industry average will be able to sell the difference in carbon credits

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VIDEO: The Price of Carbon

Do you want to understand Global Warming without the political hype? Dr. David Maenz has written and important book for 2018 explaining the science of global warming, it’s impacts and viable solutions. The Price of Carbon is an easy read. You don’t have to be a climate scientist to understand his clear explanations and simple charts.

The book includes a brief history of the earth, where we are today, future climate scenarios and how to fix the problems. It also covers the Paris accord without the political furor.

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