Why I Am Canadian for the Great Bear

Posted by Jeff Rubin on September 6th, 2012 under SmallerWorldTags: , , ,  • 13 Comments

I’ve just returned from one of my favourite pastimes—salmon fishing off the west coast of British Columbia. But even in the remote Kyuquot Sound region, off the grid and far away from the news, it’s hard to get away from conversations about the proposed Northern Gateway pipeline that would bring a never-ending stream of tanker traffic to the region.

Although the particular coastline of Vancouver Island I was fishing this summer is not directly on the proposed tanker route, any sizeable oil spill along the north coast of British Columbia would have consequences here as well. But the most devastating impact would be in the Great Bear region itself. It was only two years ago that my son Jack and I had an opportunity to fish on Princess Royal Island, and witness the wonder of 300-foot trees in one of the world’s last remaining coastal rainforests, shrouded in primeval mists.

Of course no one has to tell me why Alberta, and its huge oil sands industry, is so desperate to build the Northern Gateway pipeline. As I wrote in my blog over a year ago, (“Oil Price Spread Costing Canadian producers big bucks ,” November 10, 2011), oil sands producers have been continually getting short-changed for their oil by refineries in Cushing, Oklahoma, where most of the product from the oil sands flows. At times the gap between West Texas Intermediate (WTI), the price at Cushing and world oil prices (Brent) has exceeded $20 a barrel.

Considering that Canada exports over 2 million barrels a day to the US market, getting shortchanged $20 per barrel is no trifling matter. It works out to some $1.2-billion a month or roughly $15-billion a year. That’s a much bigger subsidy than the one Alberta producers were forced to give Ontario and Quebec energy consumers in the 1980s when they had to accept made-in-Canada oil prices under the still reviled National Energy Plan. Today Alberta producers have to accept even more punitive terms for their oil from made-in-USA prices.

Who exactly is getting that missing $20 per barrel? US motorists certainly don’t get any break at the pumps. They’re paying the same price for their gasoline whether it is made from Canadian bitumen or any other feedstock. But the refinery making that gasoline is sure making a lot more money when it uses bitumen from Alberta than when it has to pay world oil prices for its crude.

Generally speaking, spreads between what refineries pay for feedstock (bitumen, crude) and what they charge for processed fuels have been razor thin. That’s why a new refinery hasn’t been built in decades in North America. In fact, there is a glut of refinery capacity on the Gulf Coast. But thanks to the subsidy they get from Canada, refineries in Cushing often enjoy refinery margins, or crack spreads as they’re known in the industry, that have been as much as five times what refineries on the Gulf Coast, which have to pay full world oil prices for their feedstock, operate with. That’s why it was so crucial to Alberta oil sands producers that the Obama Administration approve Transcanada’s Keystone XL pipeline extension that would have connected them that additional 450 miles to the Gulf coast and world prices.

Maybe it’s time Canadians stop simply contenting ourselves with being drawers of water and hewers of wood. That strategy has marked the approach to developing the oil sands, which the International Energy Agency pegs as the third largest oil reserve in the world. It’s time those huge refinery margins that are shortchanging Alberta producers at Cushing were captured by new refinery capacity in Canada. Instead of simply exporting unprocessed bitumen, the country should export higher value-added petroleum products like gasoline and diesel.

That would be a win for both the economy and the environment. We don’t have to risk the destruction of one of Canada’s—and the world’s—most spectacular environments to get full value from our oil sands resource.

Of course, we have to put refineries in environments that can best handle them and not in areas that can’t. The recent proposal to build a refinery in Kitimat is an example of building one in the wrong place. It would bring the risk of both pipeline ruptures and tanker spills to the extraordinary environment and rich ecosystems of the Great Bear Rainforest. But surely refinery capacity can be built in other regions that make more environmental sense.

The export of raw bitumen is simply not in Canada’s long-term economic interests. And regardless of the economics, the Great Bear is no place for oil pipelines, oil refineries, or oil tanker traffic. That’s why I’m supporting Coastal First Nations and WWF as they say “No” to the proposed Northern Gateway pipeline and I will be supporting their efforts to secure a more sustainable future for the Great Bear region.

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  • http://www.facebook.com/walter.haugen Walter Haugen

    And you cannot build refineries in Alberta because?

  • Steve

     It is about time someone speaks to the utter insanity of Canadian oil policy.  The tar sands are a resource that should be carefully developed.  Stop the export of raw bitumen and begin refining into the higher value products. We are only making the oil companies rich and leaving a terrible legacy for future Albertans.

  • Chad

    The Tyee is currently running a great series comparing Canada’s oil industry to Norway’s oil industry.

  • http://pulse.yahoo.com/_EU4PCOXIGPWWEBE2ENIFTXS54Y John

    I commented several months ago on this very subject, saying oil companies/Canadian Energy policies were avoiding considering the value-add possiblities because of either politics, policies or corporate orders.  As Jeff is alluding to, let the market decide.

  • Michael Martin

    It is time for an export tax equal to the difference between WTI and Brent,  the market will soon sort out where to build refineries

  • AVPCA

    It strikes me that no “BIG OIL” company is going to build a refinery in Canada that will compete with refineries they already own in the USA that are not at capacity.  They would be shooting themselves in the foot.   TRP and Enbridge are following the path of least resistance …ship to the existing refineries.   Only the Federal government could swing a new refinery in Canada and get away with it.  But they would only do that if it was a slam dunk with the electorate of Canada and did not create a massive back lash from the USA. 

  • http://www.OilsandsExpert.com/ Allan MacRae

    The logical
    export point for oil or products is not Kitimat or Vancouver; it is Prince
    Rupert. Look (Google Map) at the narrow passages that tankers have to negotiate
    out of either Kitimat or Vancouver. Prince Rupert has a wide open run to the
    sea – it appears to be much safer. imo.

    Regarding
    the oil price differential: In April 2012, UK Brent crude was approx $120 per
    barrel, US West Texas Intermediate was about $100, and Edmonton Light was about
    $80 per barrel. These are similar quality crudes. April 2012 was an unusual
    month, but it demonstrates the problem of inadequate crude oil transportation and
    export capacity out of Canada.

    Regarding
    building more refineries in Canada: How are you going to ship your products, since
    Canada does not have a system of product pipelines? Mixing of various crude
    streams in pipelines by batching is established, but one cannot batch products in
    crude pipelines – the cross-contamination is too great. So you would end up shipping
    products by rail tank car, which is more likely to result in spills due to
    derailments, etc. Maybe this is an acceptable risk – I don’t know.
    http://www.api.org/oil-and-natural-gas-overview/transporting-oil-and-natural-gas/pipeline/~/media/Files/Oil-and-Natural-Gas/pipeline/Liquid-Petroleum-Products-map.ashx

    Eastern Canadian
    consumers are now paying high Brent prices for their gasoline, because our
    Alberta- Saskatchewan crude only goes as far east as Sarnia. This is changing,
    as two pipelines (9A and 9B) to Nanticoke (Hamilton) and Montreal are now being
    reversed. If BC continues to block a sensible westbound crude export pipeline route,
    then perhaps we should extend the eastbound crude line to Quebec City (Valero
    Ultramar refinery) and Saint John (Irving refinery) and thence to tidewater for
    export. It is a long shipping distance, but it also gives Eastern Canadian
    consumers access to our less expensive Canadian crude oil. We could also
    reverse the Portland (Maine) to Montreal crude pipeline for export purposes,
    but that route is being effectively blocked by environmental extremists. To
    understand their views, in their own words, see http://www.green-agenda.com/

    Canada is now
    the 6th largest oil producer in the world and the largest foreign
    supplier of oil to the USA. Canada has the strongest economy in the developed
    world, This is due to the Canadian oilsands, now the mainstay of the Canadian
    economy. To understand how we got here, see http://www.OilsandsExpert.com

     

  • A Physicist

    Allan … Just checked out your links … Your green agenda link is pure nonsense and propaganda.

  • http://www.OilsandsExpert.com/ Allan MacRae

    A Physicist says:
    “Your green agenda link is pure nonsense and propaganda.”

    Let’s examine your
    position:

    You do not post under your real name, whereas I do.

    You provide no
    supporting evidence for your claim, whereas the website you criticize (which is
    NOT mine) simply quotes prominent environmental activists, “in their own
    words”. Are you saying these enviro-activists are liars, or are their comments
    being taken “out of context”?

    Finally, you have
    provided no evidence of your predictive track record on this subject, whereas I
    have a strong predictive track record in this field*.

    I hope that readers
    of this blog can differentiate between your unsubstantiated, anonymous comments
    and my legitimate comments.

    _____________

     

    On Predictive Track
    Record:

    The
    claim that increasing CO2 is causing catastrophic global warming is being
    falsified by these facts:

    -
    there has been no net global warming for 10 to 15 years, despite increasing
    atmospheric CO2;

    -
    predictions of catastrophic global warming are the result of deeply flawed
    climate computer models that are inconsistent with actual observations;

    -
    the leading proponents of catastrophic global warming hysteria have been shown
    in the Climategate emails to be dishonest.

     

    A decade ago, we
    wrote:

    “Climate
    science does not support the theory of catastrophic human-made global warming –
    the alleged warming crisis does not exist.”

    Since
    then there has been NO net global warming.

     

    Society
    should reject the claims of the global warming alarmists, because they have a
    demonstrated track record of being wrong in ALL their major climate alarmist
    predictions.

    In
    science, such an utter failure on one’s predictive track record is a fair and
    objective measure of the falsification of one’s hypotheses.

    Repeating,
    from 2002, with ten more years of confirming data:

    “Climate
    science does not support the theory of catastrophic human-made global warming –
    the alleged warming crisis does not exist.”

    ____________

     

    There
    ARE a few successful predictions out there. Sallie Baliunas, Tim Patterson and
    I published an article in the PEGG in 2002, and here is what we predicted a
    decade ago:

    Our
    eight-point Summary* includes a number of statements that have all materialized
    in those countries in Western Europe that have adopted the full measure of
    global warming mania. Canada was foolish enough to sign the Kyoto Protocol, but
    then wise enough to ignore it.

    Summary*

    Full article at

    http://www.apegga.org/Members/Publications/peggs/WEB11_02/kyoto_pt.htm

     

    Kyoto has many
    fatal flaws, any one of which should cause this treaty to be scrapped.

    1.
    Climate science does not support the theory of catastrophic human-made global
    warming –the alleged warming crisis does not exist.

    2.
    Kyoto focuses primarily on reducing CO2, a relatively harmless gas, and does
    nothing to control real air pollution like NOx, SO2, and particulates, or
    serious pollutants in water and soil.

    3.
    Kyoto wastes enormous resources that are urgently needed to solve real
    environmental and social problems that exist today. For example, the money
    spent on Kyoto in one year would provide clean drinking water and sanitation
    for all the people of the developing world in perpetuity.

    4.
    Kyoto will destroy hundreds of thousands of jobs and damage the Canadian
    economy – the U.S., Canada’s biggest trading partner, will not ratify Kyoto,
    and developing countries are exempt.

    5.
    Kyoto will actually hurt the global environment – it will cause
    energy-intensive industries to move to exempted developing countries that do
    not control even the worst forms of pollution.

    6.
    Kyoto’s CO2 credit trading scheme punishes the most energy efficient countries
    and rewards the most wasteful. Due to the strange rules of Kyoto, Canada will
    pay the former Soviet Union billions of dollars per year for CO2 credits.

    7.
    Kyoto will be ineffective – even assuming the overstated pro-Kyoto science is
    correct, Kyoto will reduce projected warming insignificantly, and it would take
    as many as 40 such treaties to stop alleged global warming.

    8.
    The ultimate agenda of pro-Kyoto advocates is to eliminate fossil fuels, but
    this would result in a catastrophic shortfall in global energy supply – the
    wasteful, inefficient energy solutions proposed by Kyoto advocates simply
    cannot replace fossil fuels.

    [end
    of excerpt]

    A Physicist says:
    “Your green agenda link is pure nonsense and propaganda.”

    Let’s examine your
    position:

    You do not post under your real name, whereas I do.

    You provide no
    supporting evidence for your claim, whereas the website you criticize (which is
    NOT mine) simply quotes prominent environmental activists, “in their own
    words”. Are you saying these enviro-activists are liars, or are their comments
    being taken “out of context”?

    Finally, you have
    provided no evidence of your predictive track record on this subject, whereas I
    have a strong predictive track record in this field*.

    I hope that readers
    of this blog can differentiate between your unsubstantiated, anonymous comments
    and my legitimate comments.

    _____________

     

    On Predictive Track
    Record:

    The
    claim that increasing CO2 is causing catastrophic global warming is being
    falsified by these facts:

    -
    there has been no net global warming for 10 to 15 years, despite increasing
    atmospheric CO2;

    -
    predictions of catastrophic global warming are the result of deeply flawed
    climate computer models that are inconsistent with actual observations;

    -
    the leading proponents of catastrophic global warming hysteria have been shown
    in the Climategate emails to be dishonest.

     

    A decade ago, we
    wrote:

    “Climate
    science does not support the theory of catastrophic human-made global warming –
    the alleged warming crisis does not exist.”

    Since
    then there has been NO net global warming.

     

    Society
    should reject the claims of the global warming alarmists, because they have a
    demonstrated track record of being wrong in ALL their major climate alarmist
    predictions.

    In
    science, such an utter failure on one’s predictive track record is a fair and
    objective measure of the falsification of one’s hypotheses.

    Repeating,
    from 2002, with ten more years of confirming data:

    “Climate
    science does not support the theory of catastrophic human-made global warming –
    the alleged warming crisis does not exist.”

    ____________

     

    There
    ARE a few successful predictions out there. Sallie Baliunas, Tim Patterson and
    I published an article in the PEGG in 2002, and here is what we predicted a
    decade ago:

    Our
    eight-point Summary* includes a number of statements that have all materialized
    in those countries in Western Europe that have adopted the full measure of
    global warming mania. Canada was foolish enough to sign the Kyoto Protocol, but
    then wise enough to ignore it.

    Summary*

    Full article at

    http://www.apegga.org/Members/Publications/peggs/WEB11_02/kyoto_pt.htm

     

    Kyoto has many
    fatal flaws, any one of which should cause this treaty to be scrapped.

    1.
    Climate science does not support the theory of catastrophic human-made global
    warming –the alleged warming crisis does not exist.

    2.
    Kyoto focuses primarily on reducing CO2, a relatively harmless gas, and does
    nothing to control real air pollution like NOx, SO2, and particulates, or
    serious pollutants in water and soil.

    3.
    Kyoto wastes enormous resources that are urgently needed to solve real
    environmental and social problems that exist today. For example, the money
    spent on Kyoto in one year would provide clean drinking water and sanitation
    for all the people of the developing world in perpetuity.

    4.
    Kyoto will destroy hundreds of thousands of jobs and damage the Canadian
    economy – the U.S., Canada’s biggest trading partner, will not ratify Kyoto,
    and developing countries are exempt.

    5.
    Kyoto will actually hurt the global environment – it will cause
    energy-intensive industries to move to exempted developing countries that do
    not control even the worst forms of pollution.

    6.
    Kyoto’s CO2 credit trading scheme punishes the most energy efficient countries
    and rewards the most wasteful. Due to the strange rules of Kyoto, Canada will
    pay the former Soviet Union billions of dollars per year for CO2 credits.

    7.
    Kyoto will be ineffective – even assuming the overstated pro-Kyoto science is
    correct, Kyoto will reduce projected warming insignificantly, and it would take
    as many as 40 such treaties to stop alleged global warming.

    8.
    The ultimate agenda of pro-Kyoto advocates is to eliminate fossil fuels, but
    this would result in a catastrophic shortfall in global energy supply – the
    wasteful, inefficient energy solutions proposed by Kyoto advocates simply
    cannot replace fossil fuels.

    [end
    of excerpt]

    Let’s examine your
    position:

    You do not post under your real name, whereas I do.

    You provide no
    supporting evidence for your claim, whereas the website you criticize (which is
    NOT mine) simply quotes prominent environmental activists, “in their own
    words”. Are you saying these enviro-activists are liars, or are their comments
    being taken “out of context”?

    Finally, you have
    provided no evidence of your predictive track record on this subject, whereas I
    have a strong predictive track record in this field*.

    I hope that readers
    of this blog can differentiate between your unsubstantiated, anonymous comments
    and my legitimate comments.

    _____________

     

    On Predictive Track
    Record:

    The
    claim that increasing CO2 is causing catastrophic global warming is being
    falsified by these facts:

    -
    there has been no net global warming for 10 to 15 years, despite increasing
    atmospheric CO2;

    -
    predictions of catastrophic global warming are the result of deeply flawed
    climate computer models that are inconsistent with actual observations;

    -
    the leading proponents of catastrophic global warming hysteria have been shown
    in the Climategate emails to be dishonest.

     

    A decade ago, we
    wrote:

    “Climate
    science does not support the theory of catastrophic human-made global warming –
    the alleged warming crisis does not exist.”

    Since
    then there has been NO net global warming.

     

    Society
    should reject the claims of the global warming alarmists, because they have a
    demonstrated track record of being wrong in ALL their major climate alarmist
    predictions.

    In
    science, such an utter failure on one’s predictive track record is a fair and
    objective measure of the falsification of one’s hypotheses.

    Repeating,
    from 2002, with ten more years of confirming data:

    “Climate
    science does not support the theory of catastrophic human-made global warming –
    the alleged warming crisis does not exist.”

    ____________

     

    There
    ARE a few successful predictions out there. Sallie Baliunas, Tim Patterson and
    I published an article in the PEGG in 2002, and here is what we predicted a
    decade ago:

    Our
    eight-point Summary* includes a number of statements that have all materialized
    in those countries in Western Europe that have adopted the full measure of
    global warming mania. Canada was foolish enough to sign the Kyoto Protocol, but
    then wise enough to ignore it.

    Summary*

    Full article at

    http://www.apegga.org/Members/Publications/peggs/WEB11_02/kyoto_pt.htm

     

    Kyoto has many
    fatal flaws, any one of which should cause this treaty to be scrapped.

    1.
    Climate science does not support the theory of catastrophic human-made global
    warming –the alleged warming crisis does not exist.

    2.
    Kyoto focuses primarily on reducing CO2, a relatively harmless gas, and does
    nothing to control real air pollution like NOx, SO2, and particulates, or
    serious pollutants in water and soil.

    3.
    Kyoto wastes enormous resources that are urgently needed to solve real
    environmental and social problems that exist today. For example, the money
    spent on Kyoto in one year would provide clean drinking water and sanitation
    for all the people of the developing world in perpetuity.

    4.
    Kyoto will destroy hundreds of thousands of jobs and damage the Canadian
    economy – the U.S., Canada’s biggest trading partner, will not ratify Kyoto,
    and developing countries are exempt.

    5.
    Kyoto will actually hurt the global environment – it will cause
    energy-intensive industries to move to exempted developing countries that do
    not control even the worst forms of pollution.

    6.
    Kyoto’s CO2 credit trading scheme punishes the most energy efficient countries
    and rewards the most wasteful. Due to the strange rules of Kyoto, Canada will
    pay the former Soviet Union billions of dollars per year for CO2 credits.

    7.
    Kyoto will be ineffective – even assuming the overstated pro-Kyoto science is
    correct, Kyoto will reduce projected warming insignificantly, and it would take
    as many as 40 such treaties to stop alleged global warming.

    8.
    The ultimate agenda of pro-Kyoto advocates is to eliminate fossil fuels, but
    this would result in a catastrophic shortfall in global energy supply – the
    wasteful, inefficient energy solutions proposed by Kyoto advocates simply
    cannot replace fossil fuels.

    [end
    of excerpt]

  • MB

    Allan, I don’t doubt your commitment to your beliefs, but I would question your sources.

    Even James Hansen regards climate models only as reliable as their inputs, which are exceedingly complex with respect to climate variables.  He, in fact, prefers something far more reliable: the actual record.  That is, the record from actual instrument readings dating as far back at the mid-19th Century, and the paleoclimate record datig back hundreds ot thousands of years as found in ice cores, and millions of years in comparitive studies of isotopes of oxygen and carbon in calcium and other minerals from current seabeds, ancient seabeds and rock formations, which are part of the carbon cycle.

    Nothing compares to the instananeous (in relation to geological time) release of vast quantities of CO2 and other GHGs into the atmosphere of the last 200 years, and the fact that the last 50 years have been the warmest for at least a millennium.

    Remember, these facts stem from the actual record, not from models.  To disbelieve them is to disbelieve thermometers.

    Moreover, Hansen puts to bed your uncited, unreferenced conjecture that “pro-Kyoto advocates” want to eliminate fossil fuels and lead us to a “shortfall in global energy supply” because FFs “cannot be replaced.”  He advocates only to stop burning coal, and to move into fourth generation nuclear power, which uses the waste currently stockpiled at today’s first and second generation nuclear power plants as fuel, and in turn produces very little waste of its own, and at low-levels of radiation at that.  He makes other recommendations, of course, notably about conservation, but these are where he starts.

    I may choose to remain anonymous (for now) on this topic because I don’t care to be inundated by the flak produced by climate denialists and contrarian charlatans, but my source is Hansen’s 2009 book, “Storms of my Grandchildren.”  If you have issues with this, then please take it up with the man himself: 

    http://www.columbia.edu/~jeh1/

    I urge you to share that conversation with the rest of us.

    Regarding Gateway, I live in Vancouver and I find it highly ironic that BC is expected by the federal and Alberta governments to be a doormat for Alberta bitumen by accepting the vast majority of risks, especially to the pristine marine environment of the North Coast, for little benefit.  Enbridge’s Gateway (now with major Chinese government investment) has already garnered 56% majority opposition in this province to ANY pipeline and supertanker traffic in the north irrespective of any upping of the benefits package.

    Why do I find this ironic? Because the potential power generation from upgrading the hydroelectric capacity at existing hydo facilities by merely upgrading the ageing generators, from offshore wind using current technology, from the huge tidal rips of the Salish Sea (estimated at 10 gigawatts right there), the shallow geothermal potential of the many volcanic areas on the coast, and of course, with conservation and energy efficiency, vastly exceeds the energy of the tar sands.  BC doesn’t need the tar sands and in fact has the potential to power much of Western Canada with clean renewables in perpetuity.

  • Michael_barkusky

    Well stated, Jeff.

    We welcome you to the ranks of “ecological economists” – economists who understand that there can be no “value” in a world in which natural ecosystems are in a state of steady decline. GDP growth is quite pointless if significant, but unmeasured, costs are rising sufficiently fast that the aggregate of visible and invisible costs exceed the almost certainly overstated benefits captured in the GDP statistic.  

    There is a growing interest in ecological economics globally, and also in Canada. Vancouver and Victoria in particular, but also Northwest BC and the East Kootenay are  places where ecological economics is becoming much better and much more widely understood.

    Michael Barkusky
    Vancouver BC

  • Canadian

    How’s this for an idea. Expand existing refineries in Ontario or build new ones .Ontario has been switching more and more of it’s electricity to none fossil based generation for years now. Nuclear plants are already built so less overall CO2 emissions. Just a thought!

  • Lessisalwaysthebettermore

    Good to hear you support the efforts of mitigating the NGPL I too hope with all of my heart the NGPL does not happen. I am all for economic growth but prefer we choose wise economic growth. We absolutely know better so it would only be utterly foolish for this to go forward. I listened to all the the Apple Salon talks and I must say it’s so damn refreshing to hear someone speak the truth about our current economic conundrum. I would say that many of us ( especially those of us in certain age groups ) have all known this for sometime but have not been able to embrace. As you suggest the 12 course dinners are to tempting. Best wishes in your book tours.