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How to get Canada's oil to export markets?

Northern Light

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Even if Trudeau and his brain trust believes it - he can't say it, much less act like it will be fact without Alberta and Saskatchewan going through the roof (not to mention a chunk of the Maritimes for which this is the best thing coming since Cod.)

50% of current oil use is intended for road transportation, roughly two-thirds if you include all forms of transportation - do the math accordingly.

AoD
Maritime oil is relatively cheaper, and existing sources should be fine, I'm not sure how much prospective investment there was, price irrespective.

Really, only Nfld gets any serious oil money, but its already in deep hooey financially (forgive the technical speak) ;)

The massive dam complex under construction in Labrador is threatening to break them, it very much looks like Ottawa will have to intervene.

https://en.wikipedia.org/wiki/Lower_Churchill_Project
 

lenaitch

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I think your posts on this are excellent @kEiThZ to be fair to @lenaitch though, I don't think he was strawmanning so much as asking a sincere question, though that last line was a tad o'er the top.
It was absolutely a sincere question, and perhaps I was guilty of reductio ad absurdum. I don't assume to be the smartest person in the room, perhaps none of us should. I've observed this before. If we all had the same level of knowledge and intelligence this forum, and the world, would be a boring place.
 
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kEiThZ

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Even if Trudeau and his brain trust believes it - he can't say it, much less act like it will be fact without Alberta and Saskatchewan going through the roof (not to mention a chunk of the Maritimes for which this is the best thing coming since Cod.)

50% of current oil use is intended for road transportation, roughly two-thirds if you include all forms of transportation - do the math accordingly.

AoD
I have several frustrations with Trudeau's policies on climate change.

First, itt was always foolish not to impose a national carbon pricing regime. It's some horrible regulatory inefficiency to have ten different plans for a population of 37 million. Like so many other boneheaded regulatory devolutions this country undertakes. And now it's backfiring spectacularly. All because he didn't want to take the political hit. He should have imposed a national carbon tax and given at least half the revenue to the provinces. Provincial conservatives would have howled. But they won't turn down money. Giving them power to mess with the carbon pricing policy was his real mistake.

Next, Trudeau doesn't seem to have actually done much beyond the carbon tax. Mostly a few energy efficiency grants and normal transit funding, that now all get relabeled as fighting climate change. They haven't really bothered with anything that is even moderately expensive. No consideration of HFR yet. No tax credit for EVs at the federal level. No strategy on transport electrification. No strategy or mandate for smart grids and grid adaptation. No effort to work with the provinces on changing building codes to make things like solar water heaters, heat pumps and 50A service for EVs mandatory. Just a lot of piddling investments. Take the cancelled GreenOn. Federal commitments prior to the election were $100 million. For $1.7 billion program.

Trudeau's strategy on climate change looks a lot like the traditional Canadian strategy on defence spending: do just enough to get allies to stop yelling at you. It's okay if they grumble behind your back though.

If only he had actually spent a bit more political capital on this early in his term.
 

kEiThZ

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I think your posts on this are excellent @kEiThZ to be fair to @lenaitch though, I don't think he was strawmanning so much as asking a sincere question, though that last line was a tad o'er the top.
It was absolutely a sincere question, and perhaps I was guilty of reductio ad absurdum. I don't assume to be the smartest person in the room, perhaps none of us should. I've observed this before. If we all had the same level of knowledge and intelligence this forum, and the world, would be a boring place.
Apologies then, if I came across as harsh.

I've spent the last two years on a military education exchange in the US. Studying all kinds of emerging tech. You would wonder why the US military is interested in climate change and alternative fuels? It's cause climate change is a massive strategic threat and the US DoD is the largest purchaser of fuels in the world. So even in Donald Trump's government, there are pockets with a massive interest in combating climate change and quietly beavering away on the issue without drawing attention to themselves. So my knowledge and perspective comes from that time here.... Arguably some of the best places to see research into alternative fuels and advanced energy systems is inside NASA and the DoD.

What is frustrating to me is that it's pretty obvious to most people where this is all heading. I liken it to where computers were in 1997. Cable internet was just catching on. Dial-up was still common. If you had told somebody then, they'd have a pocket computer that was affordable to everyone, with always on high speed connectivity in 10 years, they'd have laughed at you. But most of the engineers and scientists in the telecom field, knew exactly where this was going long before that. It's the same with transport electrification today.

There's not even a doubt any more among scientists and engineers on EVs replacing gas cars. Battery technology has caught up to the capabilities of consumer demands. And so the switch is simply a matter of time (there's a sort of "Moore's law for batteries driving it there). And that window is sometime in the next decade, with a broad consensus on that tipping point approaching. There's now brands that are talking about switching over entirely in the next few (5-10) years:

https://www.autocar.co.uk/car-news/industry/jaguar-considers-transformation-ev-only-brand

And if they aren't going full electric, they are going to hybridize substantially with lots of plug-in hybrids on the way in the next two years:

https://mashable.com/2017/10/03/electric-car-development-plans-ford-gm/#Omf8_o5jSiqZ

The economist labelled the internal combustion engine as "dead" last year:

https://www.economist.com/leaders/2017/08/12/the-death-of-the-internal-combustion-engine

It's hard for us to fathom such a drastic change because we are the outliers. Our climate and our driving patterns mean EVs are less feasible for us than they are for everybody else in the world. If you're the average European or Asian who drives half as much every year as a North American, tends to have shorter trips, lives in a milder climate, has substantially higher gas prices to deal with, a car with 200 km range (today's Chevy Bolt) that costs a fraction to fuel, looks pretty appealing. A car with 500 km range (Teslas), looks incredible.

And it's not just cars. They are electrifying everything from scooters and buses to rickshaws and pedicabs:

https://techcrunch.com/2018/04/15/o...kshaws-to-its-india-fleet-over-the-next-year/

https://www.fastcompany.com/4055400...ing-over-urban-transportation-in-asian-cities

So, the long term trend for oil and gas was pretty clear. And that was before the latest bout of climate alarmism. That's only going to throw gas on the proverbial fire, if you'll allow the pun. And when oil starts its inevitable downturn, our expensive, heavy and dirty oil will be first in the crosshairs of traders. Blows my mind that neither politicians nor a lot of private citizens understand these trends or what the implications are for our economy. And nobody even seems interested in talking about it.
 
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BurlOak

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Apologies then, if I came across as harsh.

I've spent the last two years on a military education exchange in the US. Studying all kinds of emerging tech. You would wonder why the US military is interested in climate change and alternative fuels? It's cause climate change is a massive strategic threat and the US DoD is the largest purchaser of fuels in the world. So even in Donald Trump's government, there are pockets with a massive interest in combating climate change and quietly beavering away on the issue without drawing attention to themselves. So my knowledge and perspective comes from that time here.... Arguably some of the best places to see research into alternative fuels and advanced energy systems is inside NASA and the DoD.

What is frustrating to me is that it's pretty obvious to most people where this is all heading. I liken it to where computers were in 1997. Cable internet was just catching on. Dial-up was still common. If you had told somebody then, they'd have a pocket computer that was affordable to everyone, with always on high speed connectivity in 10 years, they'd have laughed at you. But most of the engineers and scientists in the telecom field, knew exactly where this was going long before that. It's the same with transport electrification today.

There's not even a doubt any more among scientists and engineers on EVs replacing gas cars. Battery technology has caught up to the capabilities of consumer demands. And so the switch is simply a matter of time (there's a sort of "Moore's law for batteries driving it there). And that window is sometime in the next decade, with a broad consensus on that tipping point approaching. There's now brands that are talking about switching over entirely in the next few (5-10) years:

https://www.autocar.co.uk/car-news/industry/jaguar-considers-transformation-ev-only-brand

And if they aren't going full electric, they are going to hybridize substantially with lots of plug-in hybrids on the way in the next two years:

https://mashable.com/2017/10/03/electric-car-development-plans-ford-gm/#Omf8_o5jSiqZ

The economist labelled the internal combustion engine as "dead" last year:

https://www.economist.com/leaders/2017/08/12/the-death-of-the-internal-combustion-engine

It's hard for us to fathom such a drastic change because we are the outliers. Our climate and our driving patterns mean EVs are less feasible for us than they are for everybody else in the world. If you're the average European or Asian who drives half as much every year as a North American, tends to have shorter trips, lives in a milder climate, has substantially higher gas prices to deal with, a car with 200 km range (today's Chevy Bolt) that costs a fraction to fuel, looks pretty appealing. A car with 500 km range (Teslas), looks incredible.

And it's not just cars. They are electrifying everything from scooters and buses to rickshaws and pedicabs:

https://techcrunch.com/2018/04/15/o...kshaws-to-its-india-fleet-over-the-next-year/

https://www.fastcompany.com/4055400...ing-over-urban-transportation-in-asian-cities

So, the long term trend for oil and gas was pretty clear. And that was before the latest bout of climate alarmism. That's only going to throw gas on the proverbial fire, if you'll allow the pun. And when oil starts its inevitable downturn, our expensive, heavy and dirty oil will be first in the crosshairs of traders. Blows my mind that neither politicians nor a lot of private citizens understand these trends or what the implications are for our economy. And nobody even seems interested in talking about it.
Oil has gone up by about 60% since Trudeau took over. I think it's death is nowhere on the horizon.
 

kEiThZ

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Oil has gone up by about 60% since Trudeau took over. I think it's death is nowhere on the horizon.
Because yesterday’s market performance is an absolute guarantee of tomorrow’s results? I’m sure there were plenty of people paying good money for horses in 1907 too.

Again, this is not about “death of oil” or some such nonsense. Nor is this about Trudeau. I’ll be truly surprised if Trudeau is still PM in 2025.

This about oil getting devalued as the acceleration of transport electrification takes hold in the next decade. Oil won’t be dead. It’ll generate smaller returns. Which for a country with expensive to produce oil is very, very problematic. This is not to say that we shouldn't be trying to get our oil to market. More that we need to understand the economic iceberg that might be heading our way and work quickly and smartly to mitigate its impact.

As a country, we've been lazy. There's no denying that. Our productivity sucks:

http://time.com/4621185/worker-productivity-countries/

We're basically a Mediterranean country. And a lot of this is because we've been able to rely on resources and a large export market to the south. What happens if that model gets disrupted substantially? Forget oil collapsing. If in 2025, oil goes down to $40-50/bbl and stays there, what do you think that will do to the economy?

This country has avoided making some tough choices and the investments necessary to boost productivity and build a high skill, high value economy. And there's a pretty good chance, we're going to pay for those choices in the 2020s.
 
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kEiThZ

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I urge everyone to read the links I’ve posted. Especially the Bloomberg and Economist articles. And the Mashable’s list of car companies transitioning. This is not some kooky nonsense. Volkswagen has just committed to buying more batteries than the entire market capitalization of Tesla:

http://fortune.com/2018/05/03/vw-tesla-electric-car-batteries/

You don’t buy $48 billion worth of batteries for some market experiment.

And if you’re in the market to buy a car. I’d wait till at least 2020 if you can. The real fun starts in 2023, when the market is due to get flooded with EVs.
 

lenaitch

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And if you’re in the market to buy a car. I’d wait till at least 2020 if you can. The real fun starts in 2023, when the market is due to get flooded with EVs.
Higher production/sales should hopefully bring the prices down.
 

SunriseChampion

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One day, there will be NASCAR-style races that only allow electric vehicles.
Please no....that dog-chasing-its-tail rubbish needs to die alongside internal combustion-powered personal vehicles.
 

AlvinofDiaspar

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Higher production/sales should hopefully bring the prices down.
Higher production and sales also creates the condition of iteration and improvements as well. And it is also important to think about how this will affect how electricity generation and distribution as well (from centralized to distributed).

AoD
 

kEiThZ

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SunriseChampion

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^Yeah, I love racing. Especially when I'm behind the wheel, don't get me wrong....but NASCAR is a joke.
 

TrickyRicky

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One issue I don't find raised much in the debate about the absence of a national consensus and national action on transportation and export infrastructure for our oil is that "our" oil is not a national resource. Basically every other country treats oil as a national resource but in Canada it's a provincial asset.

In the last oil-boom run-up basically every financial pundit was rushing in to declare that Dutch disease doesn't apply to Canada but you don't need opinion anymore, Canada unequivocally does suffer from Dutch disease when oil prices are high. Basically, when oil prices are elevated oil producing provinces are growing in the 3-5 percent range and everyone else is struggling. When oil collapsed low-and-behold Ontario, B.C., and Quebec were growing at above 3%. Hmmm.

So the basic question is, why should most Canadians care about building out that obviously important integration and export infrastructure for domestic oil supplies if it's benefits are non-tangible in their region?
 

Admiral Beez

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So the basic question is, why should most Canadians care about building out that obviously important integration and export infrastructure for domestic oil supplies if it's benefits are non-tangible in their region?
Because I am a Canadian, not an Ontarian. Oil exports benefit more than Alberta. For starters, a strong Alberta economy means more equalization transfers for laggards in Quebec and in recent times Ontario, https://en.wikipedia.org/wiki/Equalization_payments_in_Canada Meanwhile, Alberta's economic decline means repression for much of the west's economy.

And if there's anything Trump on NAFTA has shown us, it's that Canada must reduce its reliance on the USA for its export revenue. We can't sell cars anywhere else, but oil we can. IMO, a means to market for our oil is strategically as import as the trans-Canada railway.

I like the idea of selling/giving the pipeline and its rights to indigenous peoples. It's a good source of jobs and revenue for the bands.
 

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