Saturday, January 21, 2012

The Pipeline Debacle

First Keystone now Gateway appears to be targeted by environmental interest groups – not only Canadian ones but also those funded by foreign so-called charitable organizations. It is not that oil companies are always innocent bystanders but I would surmise neither is any other industry group.
Yet, oil companies seem these days to carry the brunt of the activists. Especially Canadian ones, not because they are polluting more than others or because Canada is a fascist dictatorship, but rather the opposite. Canada's oil industry is paying more attention to environmental regulations and  Canada is a democracy contrary to many other oil producing nations, and thus  it is an easy target. If activists tried to pull off similar tricks in say Saudi Arabia or Venezuela, they likely would not experience the end of the day, so to speak.
Many of the activist groups seem to think that by focussing on the pipelines and other Canadian mega projects they can stop consumers from using fossil fuels and that those fossil fuels in their deluded dreams are the culprits causing that elusive and difficult to prove issue of global warming.
As pointed out by many geoscientists, climate has changed as long as the earth has been turning around. Whether CO2 or another greenhouse gas released by mankind is even influencing the climate remains to be seen. The evidence is basically inconclusive. Be that as may be, that doesn’t mean that we shouldn’t strive for a sustainable economy - that is being careful and wise in the use of our resources. Ironically, that would make economic sense!
The real problem with many of those activist groups is that they are ideologically driven and that many have been involved in those games since their socialist high school days. They are frustrated by their never ending fights and continuous losses. Now they are trying to stop the world from going around – in particular they dream of fossil fuel free energy sources. Problem is, there are no fossil fuel free energy sources that are large enough. Even the much lauded electric car, and the hydrogen fuelled car before it, needs in the end a true energy source to generate hydrogen or electricity.  Unfortunately the true (main) energy source for electricity and hydrogen are once again coal, gas and oil. 
Yes, we have wind energy and solar, but it is not so easy to energize the entire world with it. In fact it is not even enough to energize the existing demand for electricity generation let be that it also could fuel the entire transportation system.  Even if you would ad, heaven forbid, nuclear energy you would not get even close. And really, would you want a hundred tower windmill farm in your back yard, or many square miles of solar panel farms to look out over?  What about nuclear waste disposal adjacent to your summer cottage?
We love to hate banks and we love to hate the oil and gas industry, but really we’re all depending on them. Even the activists drive or fly to their conventions and demonstrations using fossil fuels. Man over time has become increasingly efficient in its energy use, but simultaneously our lifestyle needs everyday energy for yet another gadget. Add to this the emerging market population who also would like to enjoy a lifestyle such as ours; top it off with a still increasing world population and you see why energy and consumption are becoming such hot buttons in spite of our efforts.
 Most oil patch geologists and engineers that I know love the outdoors; individually they are all very responsible people – however, they do tend to get swept along with the drive to do things quickly and cheaply in order to enhance the so-called bottom line. But that is the capitalist way we’re living and operating in – it is not just the oil industry that is guilty here. We all are, including investors who want ever higher quarterly earnings and consumers who want vacations in Thailand and Hawaii.  You may want to blame the overpaid execs but really the buck often stops with you – consumer, investor, whatever.
Many of today’s anti-pipeline groups are funded by billionaires such as Intel’s Moore family. Guess what? Remember the high tech boom? companies?  Ring a bell?  Wasn’t that capitalism and greed and innovation? Not only that, but a lot of manufacturing and high-tech booms of the 1990s along with the China explosion and the low inflation era of said 1990s were dependent  on cheap energy prices.
The current low gas prices in North America are an aberration due to the landlocked gas reserves on this continent combined with the success of the multi-stage fracturing technology (invented by those same ‘evil’ oil and gas companies).  But worldwide, energy is getting ever more expensive.  According to several economists, including Jeff Rubin, the 1990s boom was based on low commodity prices, in particular oil and gas. But these cheap fossil fuels are now passé and only the deeper and lower quality; more expensive hydrocarbons are now brought to market.  Jeff Rubin went so far as to state that the high oil and gas prices of the 1970s and again in the early 2000s are the real culprit of economic malaise and that the chicanery of the banking industry during the financial crisis was just a sideshow.
You may not agree with this interpretation, but with North American activists trying to interrupt the supply of affordable energy by its manipulations in B.C. and Keystone and where-ever else they can cause significant havoc the outcome will be even less energy supply . To think that alternative energy can take the place is a pipe dream for at least another decade or two. Thus it will be just a matter of time that oil and gas prices will peak once again and the economy will tank again and again.  When that happens, don’t blame the big oil conspiracy; blame the Moore Foundation and similar institutions as well as their groupies.
This does not mean that Keystone or Gateway should go ahead without a critical review of its environmental and other impacts. To the contrary, but the current approval processes have nothing to do with technical and environmental issues rather it is an ideological circus that if not stopped will leave a very sour economic taste for years to come. As with the hysteria of climate change which took on near-religious proportions, the same self-righteous crowd now aims their negativity at the oil industry while forgetting that parable about a splinter in the neighbour’s eye and the beam in their own.

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