PHOTOS: An oil tanker, floating in “tidewater” – in this case the balmy Persian Gulf. Below: Earth scientist David Hughes, and a caribou strolling along a pipeline, this one in Alaska. That’s tonight’s harvest of royalty-free photographs.

My guess is that not many partisans of any of Alberta’s NDP Government, the federal Liberals or their right-wing opposition will be all that enthusiastic about the Parkland Institute report published yesterday – Can Canada Expand Oil and Gas Production, Build Pipelines and Keep its Climate Change Commitments?

On the question asked in the study’s title, here’s the spoiler: The answer is nope!

For that knowledge we should value the Parkland all the more – unlike those right-wing, corporate-financed “think tanks” named after rivers and imagined pioneer values, it doesn’t always just write what you want it to.

For the media, the big news from yesterday’s report was that the new study by well-known earth scientist David Hughes shows Canada can’t meet its global climate commitments if it keeps ramping up oil and gas extraction and building new export pipelines.

The study suggests if Canada were to try, non-oil-and-gas sectors would have to cut back so much it would batter the economy. “The rest of the economy’s emissions would have to shrink by 52 per cent below 2014 levels.”

In other words, achieving these contradictory goals short of an economic collapse is, if you’ll pardon the expression, a pipedream. No wonder advocates of continued expansion of Bitumen extraction, especially those on the right who don’t want to match it with any carbon-reduction measures, are tempted to deny climate change is, like, a thing.

Accordingly, nobody much in Alberta and not very many people in Ottawa want to hear this kind of talk just now.

But the part of the study that’s really interesting – because the narrative that we must, simply must, have a pipeline to tidewater doesn’t seem to take into account worldwide supply and demand – was the study’s conclusion that those pipelines we just have to have aren’t going to help very much.

Ever since the days of Alison Redford’s “Bitumen Bubble” justification for austerity – which might have been more accurately called the “Baloney Bubble,” although in Ms. Redford’s defence, there really was a price differential back in 2011 – we’ve been told that if only we can get our Bitumen Sands oil to a seacoast, it will fetch a much higher price.

So the really big news from the Parkland study – which nobody around here presumably wants to hear – should be that “new pipelines with tidewater access will not significantly increase the price Canada receives for its oil.”

“Canada’s primary oil export, ‘Western Canada Select,’ is a lower quality grade of oil that requires more effort to refine and comes with higher transportation costs than the (West Texas Intermediate) benchmark, and therefore commands a lower price,” the report concludes. “This discount will occur regardless of whether the oil is sold in the U.S., or to international markets in Europe or Asia.”

In other words, when politicians say ocean access to overseas markets will magically result in a significant price jump for high-cost oil derived from Alberta’s Bitumen Sands, they are mostly feeding you a line of hooey. It’s still hooey even if they sincerely believe it themselves.

Naturally, there will be cries of, “T’ain’t so!” So it’s worth noting that others are reaching similar conclusions. A recent secret report by Ottawa’s Finance Department, the existence of which was revealed by Bloomberg News after an access-to-information filing, also concluded that the end of the U.S. ban on exporting crude last year means the reduction of the famous differential to not much.

So why are the Alberta New Democrats led by Premier Rachel Notley and even Prime Minister Justin Trudeau’s federal Liberals fighting for the approval of pipelines that didn’t even make economic sense back in the dying days of the Harper government? If you ask me, it’s all politics.

Previous Progressive Conservative governments have persuaded us that we simply had to have the pipelines – although not that long ago, as recently as when Ed Stelmach was premier, the debate in the province was more about whether we should refine more oil and not ship jobs “down the pipeline.”

At this point, for any Alberta political party to say anything different would be tantamount to committing immediate political seppuku.

The NDP has to know all this – the civil service has most certainly run all the numbers. The conservative Opposition parties have to know it too – so it is particularly unsavoury for them to pretend the pipelines are an economic necessity to the government’s disadvantage. Nobody dares say that the emperor of oil has no clothes.

So for the time being, getting approval for a pipeline will remain a political necessity for any Alberta political party that hopes to survive. Getting it sooner than later will do a lot to level the playing field among political parties of all stripes in this province by 2019, especially if the economy edges back into balance.

But getting the politically necessary approval and putting the pipe in the ground are not necessarily the same thing.

This may take a while, but if you want to know if the Parkland report is right, watch what eventually happens regardless of which party is in power in Edmonton or Ottawa now or in a decade or two.

Pipelines to tidewater may never even be built if the arithmetic doesn’t add up to a profit at the end of the line to the energy industry. That, I suspect, was President Barack Obama’s long game when he stalled the Keystone XL Pipeline into near oblivion.

It could happen to Canada’s other pipeline dreams too, no matter what the country’s political classes hope for right now.

Then again, there will be some fluctuations between now and 2020 because fluctuate is what the price of oil does. If one of those is big and long enough to get the pipeline built, well, it’s safe to say we can say goodbye to Canada’s recent commitment in Paris.

That’s why it’s useful to have an institution like the Parkland around to spell out the hard truths, whether anyone likes it or not.

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  1. Welcome back to reality David.
    You, me and all your readers will never see another inter-provincial or continental pipeline in our lifetimes.
    Your vaunted civil service has never been in possession of “all the numbers”, not least because of the great number of deniers parked there and have absolutely no capacity to manage or profit from them, even if they did.
    Finally, the Emporer’s clothes. Klein and harper were lousy rulers not because they didn’t take care of their people, obviously they did and many people loved them for it. No, they were lousy rulers because they were blind to reality.
    Now you maintain that the Notley gang rule despite them knowing, you claim, of the reality of our world today.
    The Emporer’s new clothes are non-existent, despite which fashion designer you say crafted them.
    It’s long past time to, collectively, pull our heads out of that warm, dark, comfortable place and look up at the world as it exists today.

  2. Have other countries cut pipeline construction and suggested curtailing their production? The US has built almost 20000 Kim’s of pipelines since Obama came to power. There is the Uganda- Kenya pipeline in the works. Worldwide 38 million barrels of oil is consumed daily with on road transportation. Then at the other extreme in some third world countries food is still cooked by burning animal dung.

    My point is we could shut down one of the worlds best regulated and monitored oil producers, that being Canada but the oil would still be produced and consumed.

    Do you think that a solar panel installer will be payed as well? There will be no royalties from solar power but in fact it will be subsidized. The implications for Alberta’s government and Alberta’s workers of a future without oil production are staggering. Have a good day:-)

    1. So, basically your answer is keep doing what we have been doing for decades, but with more pipelines and more tarsand producion. Who cares if we are killing the planet. It’s not like future generations need drinkable water, or breathable air. Besides all that global warming science is just someone’s opinion right?

      Have a good day too Farmer B.

      1. The point I attempted to make is that oil will continue to be our main source of energy probably for another 30-40 years minumum without the discovery of a new energy source. So why turn all the oil production over to countries with lax enviromental standards. This will be worse for the environment.

    2. You say, in essence, that we should build pipelines because everyone else is. But, that’s like saying we should go into debt because everyone else is, something that conservatives (like yourself?) abhor. Sure, these are two separate issues, but the political logic is quite similar – to wit, conserving our today for the benefit of our tomorrow (whether it be our financial or environmental well-being).

      I agree with your assessment about an Alberta without oil – it wouldn’t be a pretty picture as long as the province’s economy continues to be the one-trick pony it is. Sooner or later nobody will want Alberta’s bitumen (and judging from the massive technological changes going on all over the world, it might be sooner rather than later). For it’s own good, Alberta has to get on board the renewable train or be run over by it. Perhaps not in our generation, but likely the next.


      1. Expat, one car on the renewable train is windmills. A 1.5 megawatt GE windmill weighs 164 tons. To set this up in a field it requires a base of concrete and rebar weighing over 1000 tons. It requires a service road and of course a power line to take away the power. It also requires the equivelent amount of natural gas generation as back up for days of no wind. I think windmills are a good source of power but they still have an enviromental footprint. Nothing is free. That’ve a good day:-)

        1. Wind does not require the equivalent amount of natural gas as back-up. The daily production patterns for wind and solar are complementary; as are the seasonal patterns with hydro. Throw in some regional diversity (i.e., don’t build everything in one place, so the wind blows at different times) and strong interconnections with neighbouring provinces, a little bit of storage here and there (using existing technology) and you have an electricity supply mix without any fossil fuels.

  3. All of the environmental risks and zero net benefits to Canada. Makes a ton of sense doesn’t it? Maybe if you are a foreign shareholder who won’t/can’t be held responsible for the aftermath. Some people would have us slit our own throats for the sake of a select few and their lifestyle they’ve become accustomed to.

  4. And existing pipelines and rail are sufficient in terms of pure volume of production…no bottle-neck limit on production like industry claims..

    Thye report points out that enough pipelines and rail currently exist to meet AB oilsands needs the under NDP climate plan, which permits the 45% increase in oilsands output to the 100MT GHG emission’s cap climate plan.

    Excerpt on this below (at the link to the report in the post above).

    This whole story points up how it really is difficult to have an evidence-based democratic system in the face of the domination of AB by RW ideology from most media, the RW political parties/thinktanks and the huge propaganda that BigOil has been running in this province for decades.

    Our politics has been somewhat akin to reality shows, as divorced from evidence as it’s been and continues to be.

    page 7

    excerpt: New pipelines are not needed under Alberta’s cap on oil sands emissions.
    Although current pipeline and rail capacity is not sufficient to transport
    the near-doubling in bitumen production forecast in the
    NEB reference case, it is sufficient under the Alberta government’s announced cap on oil sands emissions at 100 Mt per year.
    Under Alberta’s emissions cap, growth in oil sands production would be
    limited to 45 per cent over 2014 levels.

    Although there is insufficient pipeline capacity alone to move a 45 per cent ramp up in the oil sands, there is enough existing rail and pipeline capacity to handle it (including a 15 per
    cent surplus to allow for maintenance and outages).

    The additional pipelines being lobbied for by industry and governments
    are therefore not necessary (see Figure A).

  5. Dare we say that support for pipelines in Alberta is nothing more than…political correctness, Alberta style? Oh, but I forgot, PC is only a left-wing thing.

    Reading the right-wing media, it’s clear that a lot of pipeline supporters are confused about the reasons for having another pipeline to tidewater (there are already several, despite what people say). One day, someone in the Edmonton Sun will say that it’s because we want to keep jobs in Canada by refining the stuff in Canada. Another day, someone in the National Post will say it’s all about getting Brent Crude prices for oil by having direct access to non-U.S. markets. The next day, someone in the letters section of the Calgary Sun will say it’s all about avoiding buying oil from the nasty Saudis. I wish they would make up their minds, already, which line they are feeding us and stick with it.

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