Industry Warns Alberta About Managing Growth

At a recent meeting of the Alberta Chamber of Resources industry leaders articulated some sobering realities. Alberta may be the youngest, healthiest, richest, hardest working, best educated, urbanized and most resource endowed place in the county and perhaps the planet, we are not without problems and challenges…and most of them are of our own making.

Managing the growth pressures are one of the key policy priorities of the Stelmach government and that resonates with Albertans. Given the comments by ACR President Roger Thomas at the recent Annual General Meeting it looks the “marketplace” is creating ample opportunity but a correction to the hyper growth concerns in the province is on the horizon.

Here are some of Mr. Thomas’ insights around the issues of managing growth in Alberta:

“There is a strong public perception that current pace of economic growth will
continue unabated, and a growing sentiment that big industry alone should
pay the costs associated with this growth.”

“When it comes to regulation of industrial growth, there is a sentiment out there that we are
moving too fast, and there are lots of people who thing it’s time to slow
things down. We need to find the balance between growth and
sustainability….”

“There is also an element of stakeholder fatigue in activities relating to resource development these days. Everyone is extremely busy, and we don’t always have the ability to connect all the
dots when it comes to achieving balance.”

Other dose-of-reality facts stated by Mr. Thomas that are worth reflecting on, like:

• There is expected to be a $6.5 billion decrease in spending in the traditional oil and gas sector in 2007 as compared to 2006.
  
• The cost of bringing new gas to market is approaching $5/GJ, putting price pressure on the marketplace.
  
• Drilling rig utilization is at an all-time low of 18 per cent and the growth curve for the service industry in this sector is flat.
  
• Oil sands, land sales are down significantly in the first quarter of 2007.
  
• Climate change rules already in place will mean virtually every major producer in Alberta will have to pay into the Province’s technology fund – and this still does not factor in federal measures on climate change.
  
• Power demand for Alberta is expected to rise by 3,800 MW by 2016, but only 690 MW of new power development is currently approved and under construction. Power prices are expected to rise and the marginal cost nature of Alberta’s power pool structure is not set up for the flow through of these costs.
  
• The tradition frame housing market in the United States has collapsed, reducing the demand for lumber. In addition, the mountain pine beetle threatens to decimate Alberta forests at a time when forestry companies can least afford it.

Mr. Thomas was being a realist but his concluding message was encouraging when he said.

“Even in the face of these warning signs, however, the prospects for resource development in Alberta are far from doom and gloom. World energy demand will continue to increase and our long-term resource fundamentals remain sound. We need to make sure we don’t stumble on the way to prosperity. A lot will depend on what various levels of government will do in the future in terms of policy on resource development.”

So much of the future responsible stewardship and prosperity of Alberta resource development is dependent on the federal and provincial governments. As we move into the red zone of election time provincially and the perpetual red zone inherent in the federal minority government who knows what is going to happen.

CNN Gets Blitzed by Michael Moore

Here is the "interview" that has Michael Moore taking on Wolf Blitzer on CNN live, up close anda very personal.

Moore is an obvious and an accomplished propagandist. So is CNN, it is just they are not so obvious - and that is the problem.

Sicko's Michael Moore Blitzes CNN's Wolf-man

There is an info-war brewing around Michael Moore and CNN is the “theatre” for this conflict. Moore will only go on MSM television live so he does not get edited and reframed. He recently “Blitzed” CNN’s Situation Room host Wolf on July 9th over claims of misrepresentation and distortion around his “Sicko” documentary. And now Moore is demanding an apology from CNN.


This is no media stunt to my mind…it is serious stuff. This is not just a skirmish – it is a battle for who has the authoritative and trustworthy voice in media today. CNN likes t promote itself as the most trusted name in news and compared to FOX – who could argue…well Michael Moore for one.

This media event has serious implications and finally the debate is engaged. I suggest every citizen you loves freedom and democracy best pay attention.

Some Perspectives on Foreign Investment in Alberta's Oil Sands

Interesting column in The Times of India today on the wisdom of investing in oil and energy supplies in other countries and it puts some perspective on the recent China pullout of the Gateway Pipeline project.

The Chinese cited lack of Harper’s political will to pursue facilitating the pipeline project. The Chinese interest was through a state-owned company and that gives the government some pause. The other underling issue is the impact of granting access to our energy supply to other markets on Canada-US relations.

CNN reports that the Iraqi war is costing the American people $10B a month and they now have a $9Trillion dollar debt…much of it owed to the Chinese. U.S. sensitivities are inevitable and rather obvious.

That said the India Times piece adds more context and perspective on the wisdom of a nation buying foreign mineral rights instead of just paying market prices for needed commodities, even at high prices instead of investing in foreign countries to ensure supply.

It cites the historical facts that if a nation makes investment in energy supply sources abroad that do not prove large enough, they have achieved no strategic purpose. If, on the other hand, the sources are significant, then the typical approach has been for the local government to nationalize the resources.

The obvious examples quoted are, “…Russia has on bogus environmental grounds cancelled Shell's licence in the giant Sakhalin-2 oilfield, and now seeks to force British Petroleum out of the giant Kovykta gasfield. Venezuela has abrogated contracts with foreign oil companies and acquired majority rights in most oilfields. Bolivia has done the same.” This is not a new phenomenon given a 30 year old Indian example quoted, “The Rostam and Raksh oilfields that India once owned in Iran were nationalised for a pittance in 1978.”

In terms of Canada-US relations and the economic-political philosophy of Alberta being the reliable secure source of continental supply the article makes another interesting observation. “The notion of national security of supply is a largely a diplomatic fiction. Many miracle economies have proved that raw materials are always available at a price. Hence, owning foreign mines and oilfields is not more logical or profitable than buying commodities at the going price.”

It will be interesting to watch the international aspects but the national elements of Canadian and Alberta relations evolve as oil sands development, investment and market issues unfold. It has to be considered in the broader context of competing interests in North America and American security interests for energy supply and homeland security. The broad context of China and India growth and leverage will be a particularly interesting element as well. And we have not even touched on the ecological and social implications – which are just as important considerations on oil sands development these days.

China Says Au Revoir Canada - Buenos Dias Venezuela

Is China saying they would rather deal with Venezuela who is nationalizing it oil resources, than Stephen Harper? The media today is full of PetroChina’s announcement yesterday speaking of investing in Canada saying “The environment is not comfortable. We tried to come here and we can’t.”

They went further to say “We sincerely wanted to do something and open up a new market for Canadian crude…but Canada doesn’t want to open up is own markets to us.” OUCH!

So we can thank our "business friendly PM for the $4B pullout of Chinese investment in the Gateway pipeline project to the new Prince Rupert Port that was to carry 400,000 barrels per day.

This smells of bad politics. How much have Mr. Harper and his “New” government succumbed to the status quo of Canadian energy export being essentially to only one market…the American market. How is this in the long term best interest of Canada in a new globalized and interdependent world? Is Harper only interest in Canada being dependent on one market source for our energy?

I am all in favour of continental energy supply. It is a key to the Americans getting out of Iraq – which then need to do sooner than later. I wonder of the wisdom of sacrificing investment, market access and geo-political and even environmental relations with the rest of the world – particularly like China and India - as a consequence of a continental energy arrangement. We essentially have continental energy established under NAFTA – if only the Americans would honour the NAFTA accord in areas like beef and softwood.

America is Canada’s friend and neighbour. In a globalized world as an exporting nation we need many more friends and neighbours. Looks like Alberta better get be ready to go it alone with attracting foreign investment. We need the capital and the markets to optimize the opportunities before us. Mr. Harper is more interested in his relationship with the deceptive and duplicitous Bush administration than the best positioning of Canada. I am no Alberta separatist or even a Firewall supporter but boy oh boy does Harper ever given those perceptions a leg up in this province.

Stephen Harper has once again undermined Alberta, his home province, because he can take it for granted - and he does...regularly. He has not done the rest of Canada any favours with this attitude towards China either. It looks more like we will have Harper in power until November 2009 - a whole year longer than George Bush will be President. We all are astonished over how much more harm Bush has done and still can do to the States (and the planet) in the time he has left. Harper is a small player but with up to 16 months more, he can be a disaster akin to Bush if only on a Canadian scale.