Posts Tagged ‘oilsands’

A pipeline, a pipeline, my kingdom for a pipeline

Tuesday, June 10th, 2014

by Felix von Geyer

Canada needs more pipelines to enable the country’s economy to export its land-locked energy resources and enable economic growth, Canada’s Finance Minister and former Natural Resources Minister Joe Oliver told the annual Conference de Montreal/International Economic Forum of the Americas on Monday.

“We have much to be proud of but there are many challenges,” Oliver told the opening of the 20th International Econmomic Forum of the Americas as he highlighted that Canada’s resources comprise 18% of gross domestic product (GDP) with Alberta’s oil sands proving much of that driver, he said.

That is not enough. Canada’s oil and gas must be further developed within a landlocked country to enable it access to markets, notably South-East Asia, especially as looming US energy independence has started to stifle demand for Canada’s fossil fuels. On an economic scale, uncertain US economic growth and weak European growth remain risks to Canadian economic growth. Oliver took time to point to Canada’s two largest provinces Ontario and Quebec for not proving their economic potential, particularly in terms of job increases.

In a subsequent press conference, Oliver was adamant that a market for Canada’s oil and gas existed in countries such as Japan, China and South Korea. Russia’s invasion of Crimea and the continuing threat to Ukraine’s remaining territorial sovereignty has also placed increased value on Canada’s potential as an oil and gas exporter, but now to Western Europe where countries are looking for energy independence from Vladimir Putin’s Russia.

“Europeans knew they were excessively reliant on Russian oil and gas,” Oliver told, stating that six European countries had become reliant on Russian gas due to the initial low price.

“Canada is an obvious reliable source for oil and gas,” said Oliver, “but we need pipelines that would achieve that objective – not immediately – but in the near-term.”

Canada’s oil and gas resources remain controversial, especially as Environment Canada predicts the country’s greenhouse gas emissions to reach over 800 million tonnes by 2035 through increased oil sands production, leaving the country in a rogue position amid international action to combat man-made climate change. Former Environment Minister Peter Kent withdrew Canada from the Kyoto Protocol in 2011 to avoid the country being held to account for failing to reduce its emissions 6 percent below 1990 levels by 2012. By 2035, the country is predicted to produce at least 33% more emission above 1990 levels.

International Monetary Fund Managing Director, Christine Lagarde, acknowledged Canada’s role as an energy-producing nation but asked for oil growth to be turned into green growth during her lunchtime talk at the Conference de Montreal. Her address included Oliver in the audience as well as former Canadian Prime Minister Jean Chrétien and Québec’s provincial Prime Minister Philippe Couillard. Growth needs to be balanced, she said and, while Canada’s energy potential could increase GDP by 2 percent if it developed the necessary transport infrastructure to unleash not only South-East Asian markets but also European ones; “attention is needed to take care of the environment,” she stated.

Stephen Harper’s Conservative government is scheduled to make a decison on the controversial Northern Gateway Pipeline cross the country’s Rocky Mountain range and sensitive water resources to reach the port of Kitimat in northern British Columbia where tankers would transport Canada’s energy to South-East Asia.

Approval for the Keystone XL pipeline has been suspended pending a Nebraska Supreme Court decision on the proposed route. The pipeline would cross much of the United States’ largest water aquifer, the Ogallala Aquifer. Republican Senators have recently introduced legislation to Congress to speed the approval of the pipeline that according to Congressman Ed Markey would only benefit the so-called Koch brothers, owners of Koch Industries, who own the export terminal in Alberta and the receiving refinery in Port Arthur, Texas. Port Arthur according to Markey is an enterprise zone meaning the refined petroleum products would be sent out for export, with no taxes being paid to federal or state governments in the US nor being sold to fill the gas tanks of US motorists.


Alberta’s oil sands fail Canadians on economic benefits

Monday, November 18th, 2013

by Felix von Geyer

Canada’s oil sands is a curse to its economy and not the boon Stephen Harper’s Conservative government claim it to, according to a new report released Wednesday.

The report: ‘Booms, Busts and Bitumen: The economic implications of Canadian oilsands development’ revealed the impact of the rise of the Canadian dollar – or Loonie – is proportional to the increased demand for Canada’s oil sands and other resource commodities. There is a variation in estimates however; the IMF indicated as much as 75 percent of the Loonie’s rise over the past decade is due to increased commodity prices while the Bank of Canada estimated this impact to be 50 percent. Academics such as Serge Coulombe, Professor of Economics at the University of Ottawa and author of the report’s foreword estimate have indicated the increase is 42 percent.

Sarah Dobson an economist in the oil sands programme at environmental think-tank the Pembina Institute who produced the report in conjunction with Montreal-based environmental NGO Equiterre, said that oil was behind 20 percent of the Loonie’s value in 2002 and by 2013 75 percent of its value was attributable to oil.

While the increased dollar strength has harmed the rest of Canada’s economy, particularly the manufacturing industries of Ontario and Quebec; elsewhere the supposedly positive impacts of the oil sands again fall short of government and industry hype, according to the report.

Dobson said that 94 percent of the GDP economic benefits remain within Alberta while as much as 86 percent of jobs are confined to Alberta, she said.

Indeed the United States benefits more than the rest of Canada, added Dobson with a GDP impact of 220 percent greater than the rest of Canada and job creation worth 190 percent of job creation in the rest of Canada outside of Alberta. Furthermore, outsourcing for the industry was increasingly assigned outside of Canada, she said.

Even Albertans are not receiving the gains expected with the Provincial government racking up a C$6.2 billion shortfall in the resource revenues budgeted for 2013. Despite the warnings, more of the same has been called for by the government. President of the Board of Trade, Tony Clement has stated that if healthcare and schools are wanted, “We need these resources out of the ground,” said Dobson.

The report also sought to explode the myth that Alberta’s oil sands are a driver of so-called ‘equalization’ payments between Canada’s provinces and Territories, where receipts from richer jurisdictions are distributed by the federal government in Ottawa to poorer jurisdictions.

Ottawa only receives 1 percent of its total revenues from the oil sands, according to Dobson, mostly stemming from corporate taxes. Professor Coulombe stressed that financial disparity between provinces had increased in the decade 2001-2011 and that after taking equalization payments into consideration, a 10 percent fiscal disparity remained.

Federal Finance Minister Jim Flaherty’s cap on equalization caps in 2009 has exacerbated the trend, said Coulombe who called for the cap’s removal.

Steve Guilbeault, Co-founder and Senior Director of Equiterre called for the elimination of the $1.3 billion preferential tax treatment the industry receives from Ottawa, pointing out that Canada had signed up to the elimination of fossil-fuel subsidies at the 2009 Pittsburg meeting of the G20.

Guilbeault called for Canada to manage its one-time resource wealth and find other sources of revenue and to abandon its short-termism, especially considering the environmental degradation of the oil sands. He singled out the expansion of Shell Canada’s Jackpine oil sands mine which was given the green light for the short-term economic benefits through supposed jobs, taxes and royalties.

Guilbeault also pointed to Environment Canada’s own recent report that stated Canada would miss its 2020 emissions reduction target pledged under the 2009 Copenhagen Accord at the UN Climate Change Conference of that year by 112 million metric tons. Guilbeault reinterpreted former Environment Minister Peter Kent’s statements that Canada was halfway to meeting its 2020 target of 17 percent below 2005 levels. What he meant is that by 2020 we will be halfway towards meeting our 2020 target,” said Guilbeault.


Canada’s ‘meaningful’ climate action brought under scrutiny by report

Saturday, December 17th, 2011

Canada will likely miss its 2020 greenhouse gas emissions reductions target by almost a third according to latest analysis by Canadian environmental think-tank the Pembina Institute.

At the recent Durban UN climate change conference, Federal Environment Minister Peter Kent referred to Canada’s ‘meaningful action’ on climate change and the government’s targets to reduce its greenhouse gas emissions 17 percent below 2005 levels by 2020 as the government sought to negotiate a global climate agreement that included all major emitters.

However, Pembina’s report ‘Responsible Action’ indicates that their projected shortfall in Alberta’s provincial target would actually reduce Canada’s mitigation ambitions to 12 percent below 2005 levels by 2020, assuming the government is successful in reducing its emissions elsewhere.

Kent has frequently underlined Canada’s commitment to the Copenhagen Accord, and declared in his recent Ministerial declaration speech in Durban that “Kyoto is in the past.” On Monday, Kent announced Canada would withdraw from the Kyoto Protocol whose targets of reducing emissions 6 percent below 1990 levels by 2012 it abandoned reaching in 2007.

Under the 2009 Copenhagen Accord, world leaders agreed to limit the increase in average global temperatures to no more than 2 degrees Celsius in order to prevent serious climate change, a target that the Intergovernmental Panel on Climate Change states would require global emissions to stabilize at 450 parts per million by volume before being reduced by at least 50 percent by 2050.

Pembina’s projected emissions shortfall for Alberta would likely mean Canada’s emissions would be almost 13 percent above 1990 levels in 2020.