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10 Things You Didn’t Know About The Oil & Gas Industry in 2018

The Oil & Gas industry has more than its fair share of misinformation directed at it.  This site is intended to expose and explore facts and so as part of our new series on the Oil & Gas industry we thought you would like a quick run down of some interesting facts:

      1. LNG Does Not Burn: Companies compress Natural Gas into what is known as Liquified Natural Gas (LNG) it is much easier to move and store.  However, one concern that is often heard relates to how dangerous LNG (think of an LNG tanker as a floating bomb or an LNG pipeline as scary torch), but LNG is safer than nearly any other petroleum product.  It will not burn and if it spills it LNG will quickly clean itself up.  LNG is incredibly safe.  Watch this short fun video:

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By Ian Matthews, ago

Will The New Canadian National Projects Review Mechanisms, Resolve Provincial & Municipal Disputes

At the heart of the Canadian Federal Governments announcement today about fixing the process that determines if a large scale project is in the best interest of Canada or not, is a desire to limit ability Provincial, Municipal and interest groups (like ‘First Nations’) to stall approved projects.  The idea is to:

  1. increase consultation so everyone’s voice is heard
  2. set firm and visible rules for industry so that “goal posts” are not being moved after the fact
  3. determine what is in Canada’s best interest, when that interest is at odds with local interest

These are clearly admirable goals.  To achieve those goals there are now going to be three structures that industry must pass through to get Federal Government support:

  1. A new ‘Impact Assessment Agency of Canada‘ will do the preliminary investigation to determine the environmental effects of a project
  2. The existing ‘National Energy Board’ is demoted and renamed ‘Canadian Energy Regulator‘ but still be responsible for determining the technicalities of a project
  3. The ‘Federal Minister of the Environment‘ will have the final say  if a project is viable and in Canada’s interest

So now the questions are, will these changes allow:

  1. Industry to decide that spending many millions of dollars to go through an elongated approval process that will have a definitive outcome be worth while?
  2. Provincial, Municipal and interest groups (like ‘First Nations’) to be heard and listened to?

There has been much debate over the process and all agree something big had to change:

  1. When industry works on large scale projects deemed to be in the Canadian national interest after years of consultation and vetting that are still blocked by local and regional interests, there is a big problem.
  2. When interest groups (i.e. some ‘First Nations’, Municipal governments (i.e. Vancouver) local and Provincial governments (i.e. BC) feel empowered to block large scale projects that adversely affect the rest of the country, there is an even bigger problem.

Dennis McConaghy, a former senior executive at Trans Canada Pipelines thinks these changes will not achieve the desired goals:

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By Ian Matthews, ago
iea-world-energy-demand-change-2016-2040

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.

iea-world-energy-demand-change-2016-2040

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By Ian Matthews, ago
pipeline-vs-rail-environment

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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By Ian Matthews, ago

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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By Ian Matthews, ago

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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By Ian Matthews, ago

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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By Ian Matthews, ago

Trump Brings in 30% Tariff on Solar Panels, Temporarily Killing .25M US Jobs

On Monday January 22, 2018, the Trump administration brought in a 30% tax on imported solar panels.   This new solar tax will last four years and decrease over time to 15% in its last year.

“Over the last 5 years, nearly 30 American solar manufacturers collapsed; today the President is sending a message that American innovation and manufacturing will not be bullied out of existence without a fight… This is a step forward for this high-tech solar manufacturing industry we pioneered right here in America.”
pressreleasepoint.com/trump-imposes-tariffs-solar-panels 

PUNISH CHINA?

Of the few that have heard of this new tariff, the common misconception is that it is an attempt to punish China from dumping (selling below cost, to kill competitors) panels but the US only imports 10% of its solar panels from China (see the last 30 seconds of the video below).  As you can see in the video below, the US solar industry did not ask for and does not want this tariff.

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By Ian Matthews, ago

VIDEO: Short Summary of What is Happening With Net Neutrality in the US?

First world governments around the world, including Canada  have come down on the side of Net Neutrality (the idea that internet providers can not advance or block one website or stream).  The notable exception to this is the United States under President Trump’s appointed FCC leader (and former Verizon executive) Ajit Pai, which has eliminated the Obama era rules protecting an open internet in December 2017.

The Republican / Ajit Pai / Trump argument is that the infrastructure is owned by the internet providers so they should be able to do what they want with it.  The opposing view, held by most citizens is that the internet is like electricity or a phone; charge for the service but it is not the providers concern what is or is not connected.

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By Ian Matthews, ago

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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By Ian Matthews, ago
manager-silver-computer-gray-hair-man

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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By John Roberts, ago

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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By Ian Matthews, ago

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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By Ian Matthews, ago