Saturday, November 22, 2014

Environmentalism Reconsidered - Canadian Oil V. World Oil

Letter to the New York Times - More to Come - This serves as a primer. 

Dear Editor

This letter is in response to the NYT article of May 18, titled A Black Mound of Canadian Oil Waste Is Rising Over Detroit. Firstly, please allow me to thank you for the imagery – the Canadian black monster that ate Manhattan may have been more credible.

Allow me premise my comments by offering a brief mission statement for North America oil policy, so that readers may gain their bearings in regard to what I believe to be is a rational position on Oilsands development and oil policy in general.

MISSION STATEMENT: By 2043 North America’s fossil fuel’s net impact on the environment will be reduced to nil.

This mission statement is offered as a backdrop for thought around policy and to offer a time line for contemplation that permits transition rather than the immediate annihilation of the industry that some in the environmental movement seem to view as the imperative.  

Regardless of your position on climate change, the solution to energy provision lies in a better energy source than what is presently used. There is little merit, if you are advocating against fossil fuels, in forwarding environmental solution that seriously challenges immediate economic wellbeing; there is only public rebuke on that path. 

I am dismayed at the onslaught of “bad press” the Canadian Oil Sands and our industry in general receives. The sheer mountain of excrement that has been thrown against this wall astounds and to all our folly, much has stuck.

If one assumes that the world will need oil for some time to come, that in the present world circumstance there is a given demand for oil, that there is supply for provision of the oil, that no viable alternative exists – then it is rational to believe the oil will be delivered and used. Given this reality and in choosing a supplier of oil, the question then is, which oil offers the most hope for transition, the least immediate impact and the most social benefit – you need look no further than Canada.

Where would you rather source your oil, Nigeria perhaps; a jurisdiction that still flares millions of cubic feet of natural gas as waist and considers oil in rivers as being a part of doing business. Think if you will beyond just the environment, Nigeria, it is reported, has much of it’s oil revenues syphoned off to Swiss Bank accounts while the population lives in relative squalor. Canada is a responsible oil producer, the environmental movement has access to our regulatory process and influences industry behavior – to what extent does this occur in other jurisdictions; we are in effect the victim of our own good practices in this regard, in that we provision the forum for the environment movement to “attack” our industry, undoubtedly if the environmental movement thought they could effect change in Nigeria they would be as vigorous in their rebuke of that nation’s oil. Further, the men and women in our oil industry are very well paid, Fort McMurry Alberta is home to people from all over Canada, who would be otherwise unemployed or underemployed – please note men AND WOMEN!

Your article is less than flattering toward the Oil Sands oil, associating it with growing mounds of black and positing statements like “It’s really the dirtiest residue from the dirtiest oil on earth,”. One needs to contemplate Oil Sands oil honestly, perhaps by degree these statements are true, but only by a relatively small margin.  At the tailpipe FOB New York, Oil Sands oil is only marginally higher in carbon emissions than other sourced oil, rarely more than 12% and often at par. The complexity of assessing these issues and the mass of variables makes clear communication on the subject difficult, so someone will refute that number, regardless however, the oil will be consumed.    

Canadians want to refine oil on site if possible, we see the added benefit that accrues to us by doing so. We are faced with realities the thwart this desire. Oil Refining is a very marginal business and capital intensive, generating a circumstance where shipping oil to existing plant offers superior financial benefit. The environmental review processes in Canada all but precludes new plant. Our partners in the US want to use their refining capacity in an effort to render, what amounts to, stranded capital productive again.

The US and Canada have common cause on so many fronts, the fractious nature of this debate is disturbing; it does us both well to remember we contribute to each other’s security, while many of the other US suppliers of oil do not.

The environmental movement are running, like the Dutch boy with many fingers and many holes in the dike, finding new and ingenious ways to stifle the use of, what is by all measures, a superior product. A mound of coke here, a keystone pipeline there – while they spin their tires and permit irresponsible producers of oil to prosper – they leave the solution unaddressed. Rather than flail at Canadian oil, they ought to be demanding earmarked royalties to support transition, rather than running headlong into the brick wall of economic concern, they should be harmonizing their interests with what is an overwhelming reality; the world needs oil – for now.

We're a good bunch of good friends up here, quit picking on us!

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