oilsands

Attn: Andrew Nikiforuk. If you’re going to make accusations, you should back them up.

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In this article in The Tyee, Andrew Nikiforuk levels some very serious allegations with respect to the National Energy Board, suggesting that the Board has been captured (see * below for definition) by industry, that it cannot be objective because it is industry-financed, and that it does not appropriately balance the interests of energy companies with those of rural Canadians.

If you are going to level an accusation that the country’s most powerful regulatory body has been captured by industry, you would likely want to have the backup of experts in legal process, perhaps a regulatory economist (I might be biased on this one), and certainly you should be armed with a long list of citations to previous Board decisions which demonstrate your case. In this article, Nikiforuk’s primary source is Dave Core, director of federally regulated projects for the Canadian Association of Energy and Pipeline Landowner Associations (CAEPLA), described on the CAEPLA website as, “…one of Canada’s foremost and leading landowner advocates.” In other words, he works on behalf of those people who are most negatively affected by energy infrastructure – those with pipelines literally in their backyards. With that kind of backup, Mr. Nikiforuk is bringing a knife to a gunfight.

Nikiforuk’s argument that the NEB has been captured is supported with a quote from a 2000 report (which is not online) on the NEB’s effectiveness by Purvin & Gertz saying that, “there is a disturbing perception that the National Energy Board has in some sense been ‘captured’ by the western based producer and pipeline industries.”  The perception of capture does not, in and of itself, imply capture, and I am sure if that report had any more damning evidence, it would have been cited.  Further, as you will see below, Nikiforuk is not afraid to take a quote out of context.

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My latest Economy Lab Post: Emissions: Peter Kent’s 178 millon-ton challenge

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It may be his most important task, and setting Canada’s GHG policy course for the next four years will not be an easy one for Environment Minister Peter Kent. By his own admission, meeting Canada’s GHG goals will be a daunting challenge and will require stringent regulations on oil and gas, electricity generation, transportation, and … Read more

An evening with Jack

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Last night, I decided to head downtown the NDP campaign launch to hear Jack Layton speak, to local NDP candidates, and their supporters. (I was also caught on tape by Gloria Galloway of the Globe and Mail) For those of you who know my politics, you will likely be surprised to hear that went to NDP event at all. I was little surprised too.

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New Reclamation Guidelines (wonkish)

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Today, the Alberta Government announced new reclamation guidelines for oil sands mining operations and for coal mines. Reclamation liabilities associated with the activities from the oil sands should be front-of-mind for the Government, and with activity growing all the time, the liability held by the Province in excess of escrow holdings is also growing.  Pembina’s figures for the scale of the current un-funded liabilities are $15 billion (full Pembina report here), and I have to agree with them that to shift further into the future the collection of payments sufficient to provide full financial security for the Province is simply not an acceptable solution.  At first blush, it appears that this continues a disturbing trend of the Government implicitly subsidizing activity in the oilsands through either under-valued resources or through risks and liabilities borne by those who own the resource and on whose behalf our Government is supposed to be acting.  It turns out, on further investigation, that we might be better off fiscally collecting the costs later since we will end up paying for less of them in gifted bitumen through the royalty regime. However, I believe that the costs of deferring the liabilities, in terms of both the incurred risk and the signal it sends to companies doing business here, is much higher than the potential savings on royalties or the potential increase in investment.

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Time to come clean on CCS

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By now, most people with any connection to the energy sector in Alberta are familiar with carbon capture and storage (CCS) – the proposed technological solution to Alberta’s growing greenhouse gas emissions. When the Government of Alberta tabled ts Climate Change Strategy in 2008, the goals (shown in the figure below) were to achieve 200 Mt/yr of emissions reductions, relative to business-as-usual, by 2050 and CCS was tapped as the technology through which 139Mt/yr of emissions would be prevented from reaching the atmosphere, and perhaps more importantly from reaching our GHG inventories.

The Government has failed to address what I have called 4 hard truths about the implementation of CCS in Alberta. First, CCS is expensive and so the existing $2 billion CCS fund will only deliver, at best, 4Mt/yr of emissions reductions, getting us about 3% of the way to our long-term goal.  Second, technological improvement does not mean that the average cost of new CCS projects will decrease over time. Third, there is only one exit strategy for the government from long-term CCS funding, and that is the implementation of more stringent GHG emissions policies. Finally, significant changes in energy markets suggest that CCS may no longer be the most cost-effective option for significant GHG emissions reductions in the province.

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Reflections of an oil sands visionary

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Last night, I was given a wonderful opportunity by some of our students to present my views on the oil sands in front of an interested and engaged audience here at the University of Alberta as part of the Oil Sands Visionaries speaker series.  Given the flack I have taken from some of my colleagues for being labeled as such, I best stop using the title after this post.

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Globally credible GHG policy would help, not hurt, the oilsands

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While there are many environmental concerns with the oil sands, the issue of greenhouse gas emissions (GHG) has the most potential to prevent Albertans from realizing the true value of the resource. The term dirty oil has clearly resonated with environmental groups both in the US and in Europe and will continue to be used by those who seek to limit our access to important markets.  Our governments, both federal and provincial, seem to think that we face a dichotomy – either we can have an oil sands industry or we can have a globally credible GHG policy.  Industry, with a few notable exceptions, has done little to alter this perception.  I disagree entirely. I believe that a globally credible GHG policy is the only way to ensure the continued success of the oil sands industry, but I believe that we must build the policy on our own terms, not using reference points which were chosen for the benefit of other regions.  An Albertan or Canadian policy, based on 5 modifications of the current Alberta GHG regulations, would send a signal to the rest of the world that Alberta and Canada are prepared to be part of a global effort but that we are not prepared to be taken for a ride.

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The Tories bring their free market approach to climate policy

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Canada’s Environment Minister Peter Kent announced today that the Federal Government will continue to pursue a sector-by-sector, regulatory approach to meeting it’s climate change goals. This is baffling. I thought that conservatives (and even Conservatives) were supposed to believe in smaller government and the power of the market to drive innovation. If the Liberals were proposing such an approach, the Conservative economic brain-trust would be screaming that there was no need for the government to be getting involved in decisions about which type of insulation should be installed in a new gas processing facility in Peace River.

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Why Rescuing the Frog?

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Hello all,

First off, thank you for reading. I know there are many climate/energy/economy blogs out there so I am happy you have taken the time to visit mine. With this first post, let me tell you why I chose the title and what I hope this blog accomplishes.

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