S. A. Shelley: This week (June 10 to 12) I attended the Global Energy Show (GES) in Calgary, Alberta, Canada. There are a few things that surprised me about GES. First, that the Canadians have the gall to call it the Global Energy Show.  But then again there were more exhibitors at GES than there were at OTC (Offshore Technology Conference) in Houston last month. Secondly, that there were many Canadian politicians of all ilk speaking at the show: It’s been years since any politician of any note gave a keynote speech at OTC. Finally, that it is possible to book a dogsled with Uber in Canada. Though I had a short commute to the show from my place of stay, I did not fancy pushing through the deep snow and was very pleased that Uber Dogsled is available locally.

One of the most pressing energy concerns in Canada relates to pipelines. Canada has huge oil and gas reserves, but because of ideological roadblocks, Canada has struggled to get those resources to deepwater ports. This is no small matter. Were it not for exports of petroleum products, Canada’s trade deficit over the last decade would have been about $1 trillion as opposed to the $170 billion it was ( Fraser Institute: Energy exports continue to fuel the Canadian economy ). Without energy exports, Canada would be much poorer than it already is, and make no mistake about it, Canada is poor (see the many reports at this site Coalition for a Better Future and also some of the “Hot Charts” generated by analysts at the National Bank of Canada Hot Charts – Canada: Consumers have never felt worse )

During the recent federal election in Canada, the eventual winner, Mark Carney, while in the West spoke about the need for new pipelines to boost Canada’s economic fortunes.

During a campaign stop in B.C., he said his government would use “emergency powers” to accelerate the building of major projects, including energy infrastructure.

But the next day, in the Eastern part of the country, he said,

“It takes time,” he agreed. “We are in a crisis, we must act. We must choose a few projects, a few big projects. Not necessarily pipelines, but maybe pipelines, we’ll see,” he added in French.

(Source:  Carney says pipelines ‘not necessarily’ among major projects to prioritize ) Ergo, the rest of Canada gets only what Quebec allows.

Even though industry believes that Canada can become an energy superpower ( Bloomberg: Canada can become top LNG supplier to Asia )  the pronouncements by federal and most provincial leaders ( Eby rebuffs Ford, says he won’t be changing mind on another B.C. pipeline ) outside of Alberta and Saskatchewan are quite antagonistic against pipelines and conventional energy. On May 14 former Trudeau and current Federal Cabinet minister, Stephen Guilbeault, stated that there is no need for new pipelines until Canada maximizes current pipeline use. Guilbeault deliberately misstated pipeline usage for the transmountain pipeline at only 40% whereas countable data has capacity use at close to 75% ( Globalnews.ca: Canada must maximize existing pipeline use before building more ). The problem with Guilbeault’s statement is not that it was a deliberate lie, but that most residents in Quebec and Ontario just accept his statement as true. In Canada, the ideologically motivated politicians at all levels flood the social spectrum with deliberate misstatements (misinformation of egregious impact).

It is therefore my assertion that there will be no more new pipelines in Canada, ever. There will be pronouncements about new applications and accelerated reviews, but nothing will come of these.

There is another reason why Canada will not get any new pipelines to capitalize on the continued and growing global demand for oil and especially natural gas.: Competition.

Every major oil producer in the world, from Norway to Iraq is pushing forward with new production development, now. Even the United States is already building a pipeline in Alaska to take natural gas from the arctic slope to a new LNG terminal in the south that will then export LNG to Asia ( Alaska LNG: Pipeline ). While Canada dithers, others act. This is, unfortunately a Canadian characteristic.

Then there is still the problem with one lingering pipeline, Enbridge Line 5, a 72 year old rusting sinew of steel coursing underneath the Great Lakes. As we have discussed before ( OurWorldofEnergy 2022: Continuing the Year of Bad Government Decisions ), Line 5 is an environmental time bomb and does not benefit America in any manner. All claims by Canadian Federal officials about how valuable Line 5 is to America are deliberate misinformation. Most recently, the US Army Corps of Engineers has delayed a report that was to evaluate the structural integrity of Line 5 and the proposed “covering tunnel” to safeguard the environmental integrity going forward ( AP News: Army Corps further delays decision on Great Lakes oil tunnel ). Think about this: American politicians are bending to Canadian pressure to keep a 72 year-old, rusty pipe in operation. As one University of Michigan commentator put it, “…Michigan and the Great Lakes bear most of the risk and get few of the benefits” ( University of Michigan News: Line 5 and its risks: ‘The consequences of failure would be catastrophic.’  ).  Where is the White House outrage over this?

Canadian governments dither on all manner of critical matters and blather incessantly about matters that destroy initiative and productivity internally.  From pipelines to municipal water systems (Calgary Herald: How Calgary’s catastrophic feeder main failure was decades in making ) Canadian governments act quickly only in the face of disaster or when the self interests of the party members can be enhanced. Votes to increase representative pay and pensions always pass quickly, and highly paid post government consultancies and bureaucratic positions are distributed and awarded without concern for actual capability. At one time, Canada was known for exporting valuable goods and services, but now it excels in exporting ideology of the most malicious kind. In the recent Tariff wars, the U.S. administration was correct in targeting China and Canada: One exports under-priced meagre goods en masse, the other exports thought poison en masse. America needs to be wary of both trading partners.

Shut Down Line 5!

P.S. Just kidding, there is no Uber Dogsled in Canada.

OWOE Editor: At this time of year OWOE likes to share with its readers some of the interesting and often offbeat energy stories that haven’t gotten much media attention over the past year. Unfortunately, this year one of our main contributors, a troublesome Canadian, who often blogged on controversial energy topics, was warned that he was on a list of possible foreign provocateurs to be rounded up and sent to El Salvador. He has since disappeared and was last seen diving in the Baltic in the vicinity of various undersea infrastructure. Therefore, we are only able to bring you one story this year…

Human Biodiesel

The Center for Sustainable Oil (CFSO) in Lincoln, Nebraska, recently announced a new product they are calling Human Biodiesel. The head of their research laboratory, Dr. C. Heston says that he got the idea after watching the classic movie Soylent Green. His lab has perfected the science of extracting subcutaneous and visceral fat from deceased humans. The process is to extract as much pure fat as possible using a liposuction technique. Then the rest of the body is then boiled, causing the remaining fat to rise to the surface where it is collected.

S. A. Shelley: Over the last couple of months there has been a lot of discussion about tariffs. The Trump administration is keen to apply tariffs on Mexico and Canada, and a host of other nations (except maybe China?). In terms of the percentage of GDP that international trade contributes to their economies, it is obvious that the US can sustain a trade war quite well compared to other nations or regions (Fig. 1).

S. A. Shelley: After the fall of the Berlin Wall, the global trade order allowed for unprecedented bounties of consumer goods to flow to more and more people while lifting hundreds of millions out of poverty.  But it also allowed the political class of the West to become self-deceived and inured to the continued dangers to our way of life.  I’m not a Marxist, but I will definitely agree that society has been a constant struggle for power across all spectrums since antiquity. Consequently, in the west we built institutions around law, order and good governance to assuage that struggle, while in the East they went the authoritarian route to hammer that struggle into remission. But while Western politicians splurged on largesse for the masses, the more authoritarian ones did not forget to splurge on defense. We did and we will pay dearly for it shortly.

S. A. Shelley: In a recent article in The Telegraph, Norway is a Cautionary Tale, the author argues that Europe as a whole has made itself energy insecure because of adding renewables to the energy mix. I agree somewhat mostly with that conclusion about energy insecurity, but I do not agree that this is because of renewables. It is true that the wind doesn’t always blow and that the sun doesn’t always shine. But, over time, technologies will arise that can compensate for such variance. Thus, I believe that the energy insecurity in which most Western states find themselves is a result of the mad dash to renewables foisted upon us by somewhat well meaning, but technically and fiscally clueless politicians (a common refrain of OWOE staff). Politicians always promise things faster than can be delivered by reality. Politicians have put us into this precarious position by building wind farms without sufficient energy storage or grid improvements to support such a rapid build out.

S. A. Shelley: For those of you too young to remember, in the late nineties and early naughts (naughties?), there was a super major company called Enron. Enron was a darling of Wall Street and was hugely profitable in trading energy. It was an inventive company, too, in that it developed things such as weather derivatives and dubious accounting schemes. But it was mostly a scam, a fraud undertaken on a massive scale. The company eventually collapsed, and from time to time in Houston, you can still meet a former Enron employee in a pub who, after a beer or two, will tell you wonderful tales of excess at that company.

S. A. Shelley: At OWOE, we have repeatedly advocated for a North American Energy Alliance of some kind to ensure cheap and robust energy supplies at reasonable costs and with minimal geopolitical risk. In some forms, it already exists when you consider how the Northeast is supplied by cheap Newfoundland hydropower via Quebec (after a huge markup), or how the overwhelming majority of Alberta Oil is shipped to the Gulf refineries.

OWOE Staff: This month, the American Petroleum Institute (API) presented its “5 Point Policy Roadmap to Secure American Energy Leadership and Help Reduce Inflation” to President-elect Donald Trump and the 119th US Congress. Given that the API is an organization that was created by the oil industry, is supported by the oil industry, and is funded by the oil industry, it is no surprise that it is a blatantly self-serving plan whose primary purpose is to ensure income and maintain shareholder value for the fossil fuel industry. However, OWOE has reviewed the plan and concluded that it is a not unreasonable plan in many ways. With that in mind, OWOE has done some minor editing to address several serious problems that will negatively impact our planet over the long term and hereby presents its own “5 Point Policy Roadmap to Secure American Energy Leadership and Ensure the Planet is Protected for Future Generations”.

Guest blog by S. A. Shelley: When it comes to energy matters, as in all matters that affect our health or fiscal wellbeing, we tend to be our own worst enemies. There are two components to the global warming surge:  greenhouse gases, which insulate the planet and prevent heat energy from radiating into space, and heat exhaust generated by human activity. The latter is often overlooked and forgotten by most people but is just as critical a factor in global warming. We wrote a blog a few years back highlighting the thermal inefficiency of internal combustion engines (ICEs) which on aggregate pump out a heck of a lot of waste thermal energy compared to their transport energy use (Throwing Away 3 of every 4 Gallons of Gasoline Bought). This is one area in which electric vehicles (EVs) crush ICEs:  EVs use a much greater proportion of their energy to move people and stuff and emit far, far less waste thermal energy. Point to EVs. But there is a myriad of other personal choices that people can make today, without switching to EVs, that will on aggregate reduce the rate of global warming.

Guest blog by S. A. Shelley: As is usual every spring, many large entities ranging from super major oil producers to large Wall Street firms and global organizations release annual energy statistics, reports and forecasts about the world’s energy state. Invariably discussed are subjects like energy mix, demand or supply projections. Often these entities will venture into discussing oil prices and associated forecasts. All those entities have big research budgets and teams of analysts, statisticians and economists pouring over mountains of data. However, even with all those highly paid personnel, and I suspect some added AI, those big entities are at best equal to the analysis undertaken by OWOE staffers, but more often than not, much worse. Apparently, nobody can beat curiosity, whisky and voodoo.