Hallelujah! Prime Minister Mark Carney’s Liberal Canadian government has designated Alberta’s next bitumen pipeline to the Salish Sea a project of national interest, big smiles all ’round – including, of course, Alberta Premier Danielle Smith’s.
“In a more volatile, dangerous and divided world, speed, certainty and predictability are competitive advantages,” Mr. Carney said yesterday in Fort McMurray, the city that serves as the cultural and ideological touchstone of Alberta.
“Canada will remain a country of high standards, but high standards do not require slow decisions,” the PM continued, a statement to which we Albertans can add the words, with a knowing smirk, “or necessarily apply to oil and gas extraction.”
“There’s always going to be issues where we might have some disagreement,” said Ms. Smith at the same event – a sentiment that apparently extends to open secessionist activity in her United Conservative Party Caucus. “But the approach that I’ve seen the Government of Canada take is one where they genuinely want to identify problems and genuinely solve them.”
It appears, then, that Mr. Carney has achieved something that none of former Alberta premiers Rachel Notley and Jason Kenney, former Conservative prime minister Stephen Harper, or Premier Smith herself could achieve, that is to say, create social license for the idea of major pipelines running hither and yon out of Alberta.
Those who are happy to see this happen – without question a majority of Albertans – should also acknowledge the contribution of Donald Trump, the capricious and erratic president of the United States, to creating the circumstances that not only allowed this kind of thing to happen, but arguably made it inevitable.
The new pipeline will follow the route of the two old pipelines – the original Trans Mountain Pipeline, and the Trans Mountain Expansion Pipeline. Just in case anyone should conclude that this means it is just a Trans Mountain Expansion expansion (TMXX), though, the clever marketers in Ottawa have dubbed it the Pacific Link. Indeed, it will be built by the federally owned Trans Mountain Corp.
The new pipeline is expected to cost as much as $44 billion. It will be owned 90 per cent by the federal and Alberta governments, which means we’re all paying for it, although private-sector investors are lurking in the shadows, we have been promised.
So when you crawl into bed tonight, rest easy in the knowledge that God’s in His fossil-fuelled Heaven and all’s right with the Petrosphere!
But is it? Not to rain on anyone’s parade, but what if something were to go wrong with today’s booming market for bubblin’ crude – oil, that is, black gold, Alberta absinthe?
A column in The New York Times yesterday makes a startling prediction: “Oil’s big bust is coming. The stage is set for a price crash, and not the kind that would benefit President Trump before the midterm elections.” Or Alberta separatists, either, as suspicious as they may be that Mr. Carney’s and Ms. Smith’s performance in Fort Mac was timed to derail the glorious Alberta future they keep promising us.
The author, British business journalist Philip Delves Broughton, recalls the days in the early 1980s when oil prices fell from around $30 US a barrel to $10 when Saudi Arabia flooded the market, thereby demonstrating the iron law of supply and demand.
“The combination of a U.S. slump and the fall in global oil prices took Houston into its own version of the Great Depression,” said Mr. Delves Broughton, the author of Embargo: The 1973 Oil Crisis That Changed the World (And What We Can Learn From It Now). “Pawnshops, bursting with furs and Rolexes, had to turn away consigners. In the evening, the sunlight shone through empty skyscrapers, unfiltered by people or furniture.” Something similar happened in Calgary at the same time, Alberta readers with long memories will recall.
So when the Iran War ends and the Persian Gulf reopens, the Ukraine War is over and Russian gas begins to flow to Europe again, as new oilsands come onstream in Venezuela, more countries follow China’s example to move into renewables and away from fossil fuels, and recession looms, killing demand, the possibility of a new oil price crash grows too, Mr. Delves Broughton gloomily forecasts.
“Watch out,” he warns. “When oil prices start to fall, producers race to the bottom. They increase production, which briefly sustains revenues until the additional supply forces prices down further. One by one, higher-cost producers are forced out, unable to sustain the losses.”
“Conditions are now pointing toward another oil collapse,” he concludes. “It is just a question of when.”
When? Perhaps about the time the TMXX gets finished. Maybe even before it’s halfway to Roberts Bank – the West Coast geographical feature, that is, not a financial institution.
What will the T2P Hillbillies do then? Other than blame the Liberals in Ottawa, plus the Alberta NDP, of course, who – if their usual luck holds – will have just formed the government of Alberta when the price of oil falls through the floor.
In the picture Smith looks like she is about to cry, most unhappy. Perhaps that is her normal face but it did strike me as weird Carney is giving the go ahead to an oil pipeline and she isn’t even smiling. Might be she now will have no reason to complain about Ottawa
I do remember that collapse in oil prices. Wasn’t fun at all.
It is possible all the predications may come to pass but on the other hand, perhaps not. We haven’t seen the back end of trump nor what could replace him.
A pipeline to the west coast may be a quicker trip to pick up oil and gas then having to go over to Saudi Arabia. Trump also has two more years to fxxk up all sorts of things and other to organize and play their hand. the people of Venezuela aren’t going to see any of that money trump or some other oil company. once that happens who knows what happens next
I’m not keen on oil pipelines and those tankers break up in a very bad storm, yikes. We may not be happy about the pipelines but if our economy is going to be dramatically effected by world events or a nut bar like trump we need alternatives. The world changes and we will have to adjust to survive and thrive.
I doubt this will get anywhere. Danielle Smith is still trying to divert people’s attention away from how horrible she and the UCP are governing. Had we continued to get the oil royalty rates of Peter Lougheed, this wouldn’t be necessary. These phony Conservatives and Reformers do not care.
Yes, oil prices are cyclical and a lot can happen to them over the years it will take to build a new pipeline to the Pacific, even if the pipeline happens as quickly as planned.
Oil prices rose a lot due to the war in Ukraine, but then also fell a lot as sanctions were ignored or evaded and more oil was produced by other countries. It isn’t 1973 any more, and while a lot of oil is produced still in the Middle East and other conflict prone places, production has grown a lot elsewhere. So we are not as dependant on OPEC or other traditional big oil producers. I suppose that is one logical consequence of more energy dependence.
If some of these conflict prone places can get their act together, current oil prices will probably go down. I’m not sure when that will happen, but Iran seems to want to punish Trump and see that he is constrained. So his prediction of lower oil prices soon after the US midterm elections may actually turn out to be correct.
If that happens, it will be terrible timing for Smith who may be both dealing with unhappy separatists and unable to boost spending much just before an election this time.
She benefited from high oil prices just before the last election, but the oil God’s are fickle and don’t always make things easy for Alberta conservatives. Although Canada may still be happy to find customers for its oil beyond the US, which seems to take us for granted these days, and Asian countries may prefer dealing with a country that is a more reliable supplier than the conflict prone Middle East region.
It would be ironic if the pipeline Smith has pushed so hard for ends up benefiting others more than her.
Trump says “drill, baby, drill” and Carney says “drill, baby, drill eh”. It’s like comparing frogs and backhoes. Hard to believe just how different they are.
I’m an easterner and not up on my trans mountain pipelines. The blogger’s witticisms and insights are educational and loads of fun. A real pro.
I remember all the bumper stickers, “Lord Please let there be another oil boom and I promise, not to piss it all away this time.” As I look at the hi-way and see massive trailers with all the toys, being pulled by diesel pick-ups, on their way to a special place to escape life for awhile. We’re always going to need oil, for lubrication, plastics, etc. but gas is going to fade away. As fuel becomes more expensive, people are going to move to alternative energy, hydrogen, electric, whatever, as long as it’s available and cheap. Freight companies, in order to reduce costs, will most likely move to hydrogen. Governments can’t afford to remove the fuel taxes forever. Separating is not going to miraculously save people from bankruptcy. And this TMXX, when it’s completed, probably won’t get filled as the demand for oil wanes. The winners are Smith and Carney. The losers, are the people who are going to live outside their means and the environment. But hey, “Smoke them if you got them.”
So, why no mention that Carney started this whole blather about a third pipeline stating “if the money was private”? 90% Governments of Canada and Alberta ownership is far from being private.
Would the 10% be “payments to First Nations Bands” as compensation for crossing their territories be considered by the present and future politicians “the private money Carney stipulated?
Even the best of dis-honest wordsmiths would have trouble ‘verisimilituding’ this.
Will the seppies shut the hell up?
Or, better yet, pack up and head south to cross the border at Coutts.
If they want to be Yanks, align their actions with their mouths!
So, it seems tax dollars will be used to finance this pipeline after all, just as I suspected. If this pipeline had been financially needed or viable, the private sector would have jumped in and financed most of it. Alas, the fact that it’s 90% paid for by the public is proof that it has no economic reason to go ahead. God forbid those Alberta tax dollars should be used to provide citizens with better education or health care.
But for Trump, Carney would not even be PM.
Carney has cynically used Trump’s threats as political cover for a tsunami of neoliberal disaster capitalism.
In this instance, Carney has taken advantage of Trumpian chaos and extortionist threats from Alberta (the Premier, separatists, and the O&G industry) to ram another pipeline through — in the national interest, no less. (Making it unpatriotic to oppose the largely foreign-owned O&G industry’s expansionist agenda.) In a climate emergency.
Disaster capitalism.
Did Carney create social license for the rapid dismantling of Canada’s climate policy framework and rollback of environmental protections? Defunding of environmental science? Extensive cuts to Canada’s agricultural research program, while allowing use of banned pesticides including strychnine?
Carney has given Corporate Canada (and Corporate U.S.) just about everything on its wish list. The neoliberals’ wet dream.
PM Carnage, the “Values” guy, now beats the drum for “decarbonized barrels”. He tells us it’s too “expensive” to fight climate change.
Yeah? Tell that to the residents of Jasper, Lytton, Fort Mac, Slave Lake, etc. Tell it to the 600+ BC residents who lost their lives in 2021’s heatwave.
No, it’s Carney who is too expensive. We can’t afford his dystopian future.
When Trump doubles down on fossil fuels, obstructs renewables, defunds science, and dismantles environmental protections, we can all agree that Trump is a climate criminal, doing the fossil-fuel industry’s dirty work.
When Carney doubles down on fossil fuels, defunds science, and dismantles environmental protections — putting communities, lives and livelihoods, public health, the economy, ecosystems and species at risk — that’s in our national interest.
No redemption for Carney’s fossil-fuel expansion policies.
Trump is a short-term phenomenon. Once major fossil-fuel infrastructure is built, it runs for decades. The damage cannot be undone.
Mark Carney will go down in history as a climate criminal. One of the most egregious examples of Liberal duplicity.
Carney is stealing your grandkids’ future.
Carney leaves many Conservatives smiling. So much so that they want to join him.
Carney’s agenda borrows liberally from the Conservative agenda, and not just on energy and climate.
Paving the way for red Tories to cross the floor.
Creating a coalition of Liberals and Conservatives.
Progressives should not applaud Mark Carney.
Or vote for him.
Hear hear, although I recognize Carney might be the right man for the time and I would have been no fan of Churchill either. What really chaps my hide about this pipeline is that we’re paying for it. We should be investing majorly in energy to avert the climate crisis. When the magical market that my whole life I’ve been told knows best and tells us why we can’t have nice things, when that market is not interested in a pipeline then what in the actual f*** are we doing?
Amusing to see that progs are going to have to face the music with the Carny Banker. He fills the role of a Ronald Reagan but, hats off to his handlers, sold to the silly people of Canada on terms that they’re happy to accept. Progs remain incapable of grasping the simple fact that the Drumpf does not cook up any of these schemes. He is the equivalent of a Somoza or Mobutu or Kagame. Installed to unleash hell and entirely disposable. The ’73 shock had nothing to do with magical free market supply and demand. The US went broke paying for the abomination conducted in Southeast Asia and lost control of the Bretton Woods recycling racket with Germany. They free-floated the dollar and Kissinger set OPEC and Stern Gang Nation in Palestine down the road hand-in-hand. The Saudi oil flood in 1980 was a strategic move against the Soviet Union, which was completely dependent upon oil exports to raise foreign exchange. There is no predicting oil crashes because they are entirely the result of political machinations. The current US policy was cooked up by Cheney and Co., and will not disappear when Drumpf finally drops dead with his face in a pile of McChickens. The Obama-bot attacked seven Muslim countries as a function of US hegemony and its energy control policy: Iraq, Syria, Afghanistan, Libya, Yemen, Somalia and Pakistan. Biden, or his wife, finally cut and ran from the NATO crime scene in Afghanistan, but only as a strategic redeployment, just as the flight from Iraq is a repositioning of assets. The US is depriving China of hydrocarbons in a desperate attempt to maintain the hegemony of ol’ Elbows Up’s chums as China drives to move beyond oil, gas and coal. Currently their demands are enormous and growing, but they have saved the globe from an economic collapse brought about by US efforts to bomb or coup their way to total energy domination by drastically and temporarily reducing their demand. The current US wars on Russia and Iran produced the greatest oil shock in history. By 1980 the scumbag monterarists had cut loose with their interest rate rip-off, which smashed demand just as the Saudis opened the floodgates on behalf of their masters. It looks as though the interest rate cudgel may be brought down on everyone’s skulls again as the bonds are rescued, again, and austerity rules, but there’s no predicting when or what will happen. Can’t wait to see what kind of superyachts are purchased by the people who are given Canada’s airports to operate.
What was announced on Thursday was the idea of a pipeline. Doubtful one will ever be built. It does remove one of the separatist talking points. Although with the separatists, as with all whiny babies, they always want more. You give them a rattle, they’re happy for a few minutes. Then, they’re screaming because they want the plushie. If you look at Thursday’s announcement in the context of federal politics, it’s even more interesting. I’d say it’s a signal that Carney has launched a full assault on the Blue Wall. His approval ratings in Alberta are incredible – anywhere from 53% to 59%. PP sits at 44%. A Liberal Prime Minister with a 59% approval rating in Alberta! Riding on his popularity, the Liberals could undermine that Blue Wall in not just Alberta, but also Saskatchewan and parts of Manitoba and BC. A few more Liberal MP’s here and a few more there. Within a decade – no more Blue Wall. Separatism? Phhhht!
As countries discover hardships this winter due to supply shortages caused by wars, they will begin a grand push to stabilize energy supply from sources that are not subject to wars. Who can stop the sun and wind?
Meanwhile the “drill baby drill” crowd will sell into a falling market in an attempt to get whatever profit they can before they get nothing. It won’t happen tomorrow but it’s coming. Then Albertans will learn why the best way to pay is with cash. You see, the brilliant leaders of Alberta decided to take oil royalties in kind. If we don’t sell what’s sitting in those tank farms before the bottom falls out, how will an independent Alberta pay for schools, health care and fantasy railroads? T2P hillbillies? We’ll all be hunting squirrels when that day comes. Maybe we’ll move to a nice place beside the Salish Sea, despite the fog at certain times of the year. The fog in Alberta is metaphorical and year-round. Maybe it’s the smoke from the T2C landfill fire.
The carefully constructed PR facade/charade/masquerade has always been promoted in the interest of further convincing the dummies, the gullible, the true believers, and the cheerleaders that the myth is reality, that is, the one that states that:
“Alberta is entrepreneurial in the truest sense, as described by Austrian economist Joseph Schumpeter who coined the term creative destruction. We do not spend a lot of time thinking about how government should intervene to protect legacy industries.”
That is why 90% of the investment needs to be state sponsored, because when things head south for the private stakeholders, the bag holders of choice (the state and its taxpayers) will be there to fully assume the debts and losses, as it was always meant to be.
Further noting that, An “all day sucker” is an informal slang term used primarily in American English to refer to a person who is perceived as extremely gullible or easily deceived, often throughout an entire day or consistently over time. It implies a lack of wisdom in recognizing schemes or deception.”
All this talk of speeding up approvals leaves out an important question: what if a the right answer to a proposal has to be ‘No’? Will this new process get to ‘No’ just as quickly?
The old Northern Gateway proposal was cancelled after the courts found that it could not proceed. But it took forever to get to that answer, when — due to the ecological sensitivity of the waters off the north coast — it should never have been approved in the first place. The answer should always have been ‘No’.
Then there’s Energy East, which was cancelled in part due to vociferous and vehement opposition from the government of Québec, led by that radical lefty (/s), CAQ Premier François Legault. The only way that pipeline could ever have been pushed through would have had to be under military escort, and we all know that.
So, what of it? Will these new processes only give ‘Yes’ answers to every proposal put before them? If so, why bother with an approvals process at all? How about I just grab a shovel and rent a backhoe, and start digging a ditch for a pipeline from my back yard to my neighbour’s? I’m sure no one would mind …
David, you seem to have hit a tender nerve. You really primed the pump.
The commentary is solid and sensible. Not a single seppie at the time of my reaction. Plenty to mull about. Good work on all sides.
I think it is wonderful that Carney is doing well for Canada. If Trump loses political backing in November, things could be better still.
However, when I contact the Liberal Party about the social contract—the plight of vulnerable people and the lack of care they receive—I am stunned by the silence.
Maybe Carney is planning a federal disability program. Maybe he has some grand vision for carbon capture. But I would like to hear what he intends to do for people who are struggling to survive.
I want to know that Carney is not turning the Liberal Party into Stephen Harper’s Conservative Party. Too much of the political right serves oligarchs while neglecting the public it was elected to represent.
The left must challenge that concentration of power, tax the kleptocrats, and restore a social contract that protects people instead of leaving them behind.
“Mr. Carney said yesterday in Fort McMurray, the city that serves as the cultural and ideological touchstone of Alberta.”
You know, Fort McMurray, the city that almost burned to the ground.
Talk about a “sign”.
Marc Carney is, is without a doubt, a smart man but we have to remember that even Einstein made many mistakes. Aligning with MAGA to increase economic development and pretend that environmental catastrophe is secondary issue is a major error of judgement. I am disappointed and now concerned with the future of our country. Moreover, appeasing a bully is no strategy at all. If this is a conscious decision, he has lost my confidence.
After spending 32 years as a banker with ties to the oil industry I am convinced that Carney is playing Smith and these Reformers as fools and knows that there will be no chance of getting this pipeline built, while retired oilmen tell us there is absolutely no reason to waste all this money on building another pipeline when what they need is proper oil and corporate taxes being collected on what we are presently producing like Alaska and Norway are doing and Lougheed did.
Cutting royalties down from 35% to 3% and a progressive corporate tax of 16% to 8% has put us in financial ruin with the loss of $1.4 trillion in revenue for Albertans.
I have not read the piece our humble blogger is referencing, so I may be speaking out of turn. However, if the coming oil crash (before the midterms?) is based on the cessation of hostilities in both ukraine and Iran, and the subsequent (one assumes no longer sanctioned) flows of oil resuming immediately, this bird is calling BS.
For one, this totally ignores the Houthi dominance over the Red Sea shipping lanes, and they’re not going anywhere. Two, even if the illegal* war with Iran was to stop tomorrow, there’s still the question of all the oil and gas infrastructure that has been blown up. You can’t just turn it back on, and conservative estimates are in the 12-16 month range for repair. being that they’ll all be trying to rebuild it at once and there’s only so many parts and labour, that’s not going to happen.
The war in ukraine could end sooner than that, but it’s not like Russia hasn’t been selling great amounts of oil this whole time, they recently adopted an export ban on diesel, but only after the Iranian war began. They’re still getting a lot of product to market, and they have open trade corridors with their biggest partners. Additionally, Russian victory is the only one that looks likely, I fail to see why or how that would result in the dismissal of sanctions on russian oil.
Sounds like hopium pitched at the investment class to me, the midterms are in like a month. Mark my words, this is going to get A LOT WORSE before it gets any better, and no one is going to rebuild anything until they’re sure it’s not going to just get blown up again.
This is interesting. There is no mention of the demand side of the equation for oil, and the rising substitution of renewable energy. This will also crash demand for oil and gas. So does this explain the private investors cold feet as well? Also Danni doesn’t look too happy.
I have never forgotten the huge financial mess the oil industry crash created in the 1980s for us bankers, while MLAs and oilman pointed out what had happened. When the war in Vietnam ended in 1975 the oil industries didn’t bother to cut back production and we ended up with huge surpluses, in fact Russia actually increased production in a competition with Saudi Arabia, and it made the situation even worse.
It happened again when the wars in Iraq and Afghanistan ended and they continued to produce too much.
David is right it will happen again when this Russian war with the Ukrainians ends and the war Trump has created with Iran.