Climate: LNG in B.C. vs Alberta tarsands

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https://theconversation.com/how-myths-and-tabloids-feed-on-anomalies-in-science-29337

October 1 2014, 3.43pm EDT
How myths and tabloids feed on anomalies in science

AUTHOR

Michael J. I. Brown
ARC Future Fellow and Senior Lecturer at Monash University
DISCLOSURE STATEMENT

Michael J. I. Brown receives research funding from the Australian Research Council and Monash University, and has developed space-related titles for Monash University's MWorld educational app.

Monash University
Provides funding as a Founding Partner of The Conversation.
monash.edu.au

MONASH UNIVERSITY EVENTS

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The need for caution when any anomaly is revealed in new research. Flickr/Adam Gerard, CC BY-NC-SA
UNDERSTANDING RESEARCH: What do we actually mean by research and how does it help inform our understanding of things? What if research throws up a result that calls for a new way of thinking? How do we handle that?

There are many misconceptions about science, including how science advances. One half-truth is that unexpected research findings produce crises, leading to new theories that overturn previous scientific knowledge.

Sometimes science progresses in this neat tidy fashion. But not very often. Assuming science is always so simple fuels misunderstanding of science, and provides ammunition to those who attack science, from cosmology to climate change.

Contrary to the myth, most anomalous findings have modest consequences. The vast majority of peculiar findings are usually the result of errors in data, methodology or misunderstanding the implications of existing theories.

Even when anomalies do prompt radical change, it is rare for them to completely upend large swathes of scientific knowledge.

Strange forces and Pioneers

In the 1970s, NASA’s Pioneer 10 and 11 spacecraft flew by Jupiter and Saturn before speeding towards interstellar space. As they coasted away from the sun, a strange “Pioneer Anomaly” was observed to be gently slowing the Pioneers. What was going on?

The Pioneer Anomaly has led to hundreds of papers, with many speculating on modified forms of gravity and relativity.


An artist’s impression of Pioneer 10 racing from the Solar System. NASA Ames/Donald Davis
Click to enlarge
In principle the Pioneers could measure tiny accelerations, as they cruised through space. But they were never designed for precision tests of relativity, nor were they tested (prior to launch) to see if the spacecraft themselves produced tiny accelerations.

After decades of study, it appears the Pioneer anomaly had nothing to do with new physics. The Pioneers generate heat, and thus infrared light (photons), which were subtly pushing on the spacecraft (including via reflections). The Pioneer anomaly, rather than provoking a crisis and new physics, is a triumph of century old physics.

Other anomalies have appeared and disappeared in a similar fashion. But despite this history, media reporting of anomalous results often emphasises how the laws of physics could be overturned, rather than the likelihood of anomalous results disappearing. “Einstein Wrong!” works as click-bait for headlines, but is usually not true.

A personal tale of dark matters

I measure how galaxies grow, and at the end of the 20th century something seemed very wrong with galaxy growth research.

Simulations predicted the biggest galaxies should grow rapidly, as their vast gravity dragged in gas and neighbouring galaxies. In contrast, many observational studies found massive galaxies weren’t growing at all. What happened to all that gravity?

Some speculated that the dark matter paradigm was in trouble. Perhaps galaxies were less massive than people imagined. But instead of prompting radical change, this “crisis” has slowly faded away.

In 2007, I used a vast sample of distant galaxies to detect the slow growth of massive galaxies, and others have mitigated errors that have hampered observational studies of galaxy growth. Observational evidence for dark matter also improved, including cosmic microwave background measurements and the mass distribution within colliding clusters.

As computing power improved and simulations incorporated more complicated astrophysics, including supernovae and black-holes, the growth of simulated galaxies slowed down. So the gulf between simulation and observation closed.


Not so fast big guy! The biggest galaxies don’t grow as quickly as astronomers originally expected. Sloan Digital Sky Survey/Michael Brown
Click to enlarge
The demise of this anomaly wasn’t as clean as that of the Pioneer anomaly. There were gradual improvements in both simulation and observation, and no single study tied up all the loose ends.

This gradual identification and resolution of anomalous results doesn’t always generate headlines, but it is often how science advances.

The scope for radical change

While most anomalous results fizzle and die, some do spark radical change.

The understanding of the world has been upended when scientific observations and theory have replaced pre-scientific ideas. For example, Galileo’s observations of planets resulted in heliocentric (sun-centred) models of the solar system replacing geocentric (Earth-centred) models.

Truly radical change can also happen when very limited data supports the previous hypothesis. Barry Marshall and Robin Warren won the 2005 Nobel Prize for Medicine for establishing that most stomach ulcers are caused by bacteria, not stress. While the stress causing ulcers had been widely accepted for decades, that hypothesis actually hadn’t been systematically tested.


Einstein’s theories had huge implications for physics, but didn’t upend all previous scientific knowledge. NASA
Click to enlarge
As a science becomes more mature, with a wealth of supporting data, the implications of anomalous results become more limited. An example of this is Einstein’s general theory of relatively, which was (in part) motivated by odd measurements of the speed of light and the behaviour of Mercury’s orbit.

While general relatively has had huge implications for physics, it didn’t completely upend all previous physics. Maxwell’s equations for electromagnetism are still in use and Newtonian mechanics provides a good approximation of how satellites orbit the Earth.

The apple may have fallen on Newton’s head, but Einstein didn’t make the apple fly away.

Icy anomalies and the tabloids

While anomalous scientific results may seem a curiosity, they are central to public debates about science. To see why, go south!

Temperatures have increased over the past century as a result of increasing atmospheric CO2. The evidence includes (but is not limited to) lab measurements of CO2, measurements of atmospheric CO2, the spectrum of light radiated the Earth, planetary temperatures, and the pattern of temperature increase across the globe.


Increasing sea ice around Antarctica has less implications for global warming that some imagine. Brocken Inaglory/Wikimedia Commons
Click to enlarge
As a consequence, Arctic sea ice is decreasing, Antarctica and Greenland are losing land ice and sea levels are rising, and yet sea ice area around Antarctica has increased.

The increase in Antarctic sea ice area has been the subject of numerous articles by Andrew Bolt in the Herald-Sun and David Rose in the Daily Mail, among others. Some journalists believe this increase in sea ice is a fundamental flaw in global warming. But what can we conclude from this anomalous result?

The world isn’t getting any colder, so that doesn’t explain the increase in Antarctic sea ice. While simulations didn’t predict the increase in Antarctic sea ice area, they also didn’t predict the unexpectedly rapid decrease in Arctic sea ice either.

Sea ice area depends on air temperature, winds, ocean temperatures and currents, complicating the modelling of sea ice area. A simulation correctly modelling the greenhouse effect can fail to predict sea ice area if it doesn’t correctly model polar winds and oceans. While scientists are aware of this, such nuance is often absent from the tabloid media and blogsphere.

The tabloid media and blogsphere too often falls back on the simplicity of the myth, assuming the anomalous results will upend well-established science. This approach makes for good headlines and political point scoring, but the history tells us that science is very rarely upended in the manner some are wishing for.

This article is part of a series on Understanding Research.
 
Past Climate Change Was Caused by the Ocean, Not Just the Atmosphere, New Rutgers Study Finds
Anthony Watts / 1 hour ago October 24, 2014

I suspect that watts has no idea what this paper means nor does any of his followers.
It's interesting and it would be nice to read it but it's behind a pay wall.

If you really what to know what's going on down there have a look at this website.
http://www.netnebraska.org/basic-page/television/secrets-beneath-ice

Lot's of good videos that explain what science is looking for down there.
 
Just thought I would put your guys minds at ease..

They brought old walleyes up here to FSJ for Crew Energy to drill some of your LNG wells for yah..

So rest easy boys,,, I got this,, she's all good..

But darn its snowing like a bugger tonight,, looks like Jan out there..
 
Just thought I would put your guys minds at ease..

They brought old walleyes up here to FSJ for Crew Energy to drill some of your LNG wells for yah..

So rest easy boys,,, I got this,, she's all good..

But darn its snowing like a bugger tonight,, looks like Jan out there..

Thanks for the update.... stay safe and keep warm... but not to warm.....
Cumulative%20Pine%20Killed%20-%201999%20to%202020.gif
 
B.C. introduces LNG Income Tax
http://www.newsroom.gov.bc.ca/2014/...ritish-columbians-certainty-for-industry.html


VICTORIA - A comprehensive and competitive income tax applicable to the LNG industry gives proponents the certainty they need to make investment decisions while ensuring British Columbians receive the revenues they deserve from this new industry, Finance Minister Michael de Jong said with the introduction of Bill 6, the Liquefied Natural Gas Income Tax Act in the B.C. legislature today.
The LNG Income Tax framework reflects government’s announcement in February 2014 and government’s ongoing consultation with industry.
With this bill introduced in the legislature, LNG proponents will have a clear understanding of the tax framework and can begin to make final investment decisions. Currently, there are 18 potential LNG projects in British Columbia that have invested more than $7 billion to acquire natural gas assets in British Columbia. An additional $2 billion has been invested in preparation for construction of B.C. LNG infrastructure.
For British Columbians, the LNG Income Tax will help ensure that they receive a fair return on a publicly owned, non-renewable, natural resource.
The LNG Income Tax applies to the net income from liquefaction activities at LNG facilities in B.C. The tax rate on net income will be 3.5%, effective for taxation years beginning on or after Jan. 1, 2017. During the period when net operating losses and the capital investment are being deducted, a tax rate of 1.5% will apply and is creditable against the 3.5% tax.
In 2037, the LNG Income Tax rate will increase to 5%. This ensures that proponents have time to build a strong foundation in the communities in which they operate, before the full extent of the tax is applied. It also ensures guaranteed revenue flow for the next generation of British Columbians.
To encourage investment, the tax framework will see a new B.C. Corporate Income Tax Credit available to any LNG Income Taxpayer that has a permanent establishment in B.C. This credit will be calculated based on the natural gas acquired for an LNG facility. The credit will have the effect of reducing the provincial corporate income tax rate from 11% to as low as 8% for that company. This will help attract new corporate income tax revenue to B.C.
The Province’s tax framework was reviewed in February 2014 and is competitive with competing jurisdictions, including the United States and Australia. B.C.’s advantage is more than just a competitive tax rate - proponents will benefit from B.C.’s skilled workforce, geographical proximity to markets and large natural gas reserves, as well as the cool, northern climate.
In February 2014, the LNG Income Tax rate was announced to be up to 7%, based on 2013 economic assumptions and conditions. At that time, B.C. undertook to introduce the tax in October 2014. The new, reduced rate of 3.5% is the result of changes to the market since. The combination of declining LNG selling prices and increased construction costs has resulted in a lower rate that is more attractive to investors and more indicative of current market conditions.
Government has undertaken extensive discussions with LNG industry proponents over the past two years. Government has considered their input to better understand business models, cost structures and competitiveness issues in creating this new tax.
The Liquefied Natural Gas Income Tax Act is subject to the approval of the legislature.
Quotes:
British Columbia Premier Christy Clark -
“This marks an important next step in attracting an LNG industry in British Columbia. Our competitive tax framework provides certainty and stability for proponents, long-term revenues for British Columbians, and encourages high-paying jobs that will come and be generated by the establishment of this new industry.”
Finance Minister Michael de Jong -
“Developing a tax framework for a promising new industry has been a complex process. We believe this overall framework strikes the right balance between a competitive economic environment and a fair return to British Columbians.”
Quick Facts:

  • Initial LNG Income Tax rate: 1.5% while capital investment is being deducted.
  • Tax at the 1.5% rate is creditable against the higher tax rate.
  • Tax rate on net income: 3.5%, once capital investment is deducted.
  • Tax rate will increase to 5% in 2037.
  • Tax years take effect on or after Jan. 1, 2017.
  • Natural Gas Tax Credit for Corporate Income Tax can reduce the effective B.C. Corporate Income Tax rate to 8% (from current 11% rate).
  • Government revenue forecasts will depend on proponents making their investment decisions.
Learn More:
More information on the LNG Income Tax: http://www.gov.bc.ca/LNGincometax
LNG in B.C.: http://engage.gov.bc.ca/lnginbc/
Media Contacts:
Jamie Edwardson
Communications Director
Ministry of Finance
250 356-2821



So in a nutshell there are winners and losers... And governments trying to pick the winners so we know who the losers are going to be. You and me.
 
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Poles apart? Antarctic sea ice hits record high while the Arctic's keeps melting
Ice scientists say both situations result from climate change
By Janet Davison, CBC News Posted: Oct 21, 2014 5:00 AM ET Last Updated: Oct 21, 2014 11:18 AM ET.

Meanwhile, the sea ice surrounding the Antarctic continent reached its maximum extent ever on Sept. 22, coming in at 20.1 million square kilometres. That figure was 1.54 million square kilometres above the 1981-2010 average
 
With regards to the above post of yours, since you didn't supply any substantive response to my pointing out that the WhatsUp cut and paste was just plain wrong with regards to sea ice, I can assume that you've gone off to other sources of information and now agree with the assessment that the data shows sea ice decreasing?

To be clear, I've never claimed to be an expert in climate science. I have claimed to be a scientist, with a Ph.D. in Chemistry and a faculty position in Microbiology. What I have claimed in regards to climate science is a good ability to find the expert opinion and to ACTUALLY listen to it. AAAS is one such source of expert opinion but there are many others. As I've said repeatedly in this thread, the vast majority of the experts in the field of climate science (those who really study it) agree that the earth is warming and that man made CO2 in the atmosphere is a major contributing factor.

It's possible to find a small number of people in any field who write arguments about well established science. For example - the nobel prize winner Cary Mullis has long promoted his own theory that HIV is not the causative agent for AIDs. Yes he has a nobel prize and yes he really believes that HIV doesn't cause AIDs. If I chose to believe such an outlier (even though he has a Nobel prize), I might make a bad choice should I be discovered to be HIV positive. Since there's a ton of data to indicate that HIV is causal for AID AND since I've been directly involved in experiments that where this connection is clear, there's absolutely no doubt in my mind that Cary Mullis is wrong about this. But if I wasn't a faculty member in microbiology and instead had continued in my original career in physical chemistry, what would I do? I'd look at the broad scientific consensus and I'd still come to the conclusion that Cary Mullis is a whacko when it comes to HIV/AIDs denialism. It's really not that hard to do.

I don't need to "believe what works for me", I need to first get the actual facts and then interpret them as best as possible AND when I'm not an expert, I'll seek the knowledge of REAL experts like those on any of the multiple different panels that have published reports on climate change and man's impact on it. Part of the problem I have with much of what you have posted is not the beliefs or interpretation of facts but in many cases the actual facts are just plain wrong (such as the sea ice example). If we can't actually agree on the data or some objective measure of reality, we have no chance of agreeing on the interpretation or appropriate response. One of my biggest fears and concerns in the past several years is that (particularly in the U.S.) there seems to be a very active narrative that not only disagrees with the expert interpretations of available data but seems designed to intentionally undermine the facts by continually publishing untruths and promoting them through a wide variety of media. We've gone from everyone is entitled to their own opinion to everyone is entitled to their own reality. I personally don't even think it's reasonable to say that everyone is entitled to their own opinion for the same reasons discussed here - http://theconversation.com/no-youre-not-entitled-to-your-opinion-9978. As stated within -
SEADNA, the reason OBD did not post any substantive reply to your post is he cannot! However, since the data you posted does not fit with his world view he will simply ignore it, like all science deniers do.
A few posts back you posted it was not possible to change anyone’s mind on climate change, especially someone like OBD. And you were right. It is not possible to change climate deniers view back to reality any more than it is possible to change a “Fundies” mind on the fact of evolution.

This article has a good section on how fruitless and time consuming the effort of correcting their fallacious arguments are.

http://scienceblogs.com/denialism/about/

These articles are good on describing the characteristics of climate change/science deniers.

http://watchingthedeniers.wordpress.com/six-aspects-of-denial/
http://www.skepticalscience.com/5-characteristics-of-scientific-denialism.html
http://www.skepticalraptor.com/skepticalraptorblog.php/identifying-science-denialism-pseudoscience/

A leading cause of their strange mindsets is of course they believe in conspiracy theories.

http://www.theguardian.com/environm...skeptics-psychology-study-conspiracy-theories

Deniers also believe every pseudoscience piece they read. Few have the scientific background and knowledge you have, and I bet OBD has nowhere near the science qualifications you do!

http://billmoyers.com/2014/05/16/eight-pseudo-scientific-climate-claims-debunked-by-real-scientists/

Deniers are also at odds with science because they are laissez faire economists (usually right wing) and they cannot abide any idea that continued growth should be limited or that economic activity should be regulated.

http://blogs.scientificamerican.com...and-conspiracy-theories-a-productive-pairing/

Fortunately the majority of humanity is rational and understands the overwhelming evidence that we have to do something about climate change. It will be slow, imperfect, two-steps-forward-and-one-back and only time will tell if substantive change comes soon enough. But change is nevertheless coming at local and at government levels across the world………
 
They brought old walleyes up here to FSJ for Crew Energy to drill some of your LNG wells for yah..

You paying your taxes in BC now? Seems to me those jobs were for our citizens not the old boy's from Alberta. Isn't that what Christy said.....
British Columbia Premier Christy Clark -
“This marks an important next step in attracting an LNG industry in British Columbia. Our competitive tax framework provides certainty and stability for proponents, long-term revenues for British Columbians, and encourages high-paying jobs that will come and be generated by the establishment of this new industry.
My mistake she did not say BC folks, she knows that they are TFW or old guy's from Alberta.
 
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Poles apart? Antarctic sea ice hits record high while the Arctic's keeps melting
Ice scientists say both situations result from climate change
By Janet Davison, CBC News Posted: Oct 21, 2014 5:00 AM ET Last Updated: Oct 21, 2014 11:18 AM ET.

Meanwhile, the sea ice surrounding the Antarctic continent reached its maximum extent ever on Sept. 22, coming in at 20.1 million square kilometres. That figure was 1.54 million square kilometres above the 1981-2010 average
Here is the link OBD.
http://www.cbc.ca/news/technology/p...gh-while-the-arctic-s-keeps-melting-1.2793963
Could you do us a favor and add links to your posts so we don't need to search the internet to see where you are getting your info.....

It's interesting that the Antarctic is gaining sea ice but the real problem is that for every 0.9 square mile of gain, there is a 4.1 square mile loss in the Arctic. That can't be good... My guess is that by 2030 there will be no summer sea ice in the Arctic. If that doesn't trouble you then you might not be a steward of our natural resources that I thought you were.

http://nsidc.org/cryosphere/seaice/characteristics/difference.html
 
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[h=1]Climate impacts on the pacific northwest: Jeremy Littell at TEDxTheEvergreenStateCollege[/h]Published on Jun 12, 2012
Jeremy Littell is a research scientist in the University of Washington's Climate Impacts Group, who studies the impacts of climate change and variability on forest ecosystems. In "Climate Impacts on the Pacific Northwest" he describes some surprising effects of climate change on the PNW.

On April 16, 2012, speakers and attendees gathered at TEDxTheEvergreenStateCollege: Hello Climate Change to reflect on the ability -- and responsibility -- of formal and informal education to inspire and empower action in this era of climate change.

[pE7N30pEFuA] http://www.youtube.com/watch?v=pE7N30pEFuA
 
You paying your taxes in BC now? Seems to me those jobs were for our citizens not the old boy's from Alberta. Isn't that what Christy said.....

My mistake she did not say BC folks, she knows that they are TFW or old guy's from Alberta.

Yes well,, mine in not a job you just pull Joe Blow off the street and have him do,, unless you want and environmental catastrophe lol.. There are plenty BC boys on these projects working. All the services that can be local are local that's just an unwritten code in this industry. In time more local boys will get experienced and be able to take over. One thing must be understood in this line of work especially on the drilling side is there are no borders in these jobs. We all move across border to border, Sask boys in AB vise versa, AB boys into BC, BC boys to AB. There just isn't enough hands trained in BC yet but it will come. There are plenty boys from BC working the rigs in AB as well. It goes without saying AB boys are sought after world wide for our experience and oilfield work attitude. It's like Canadians and hockey, AB boys and the drilling rigs.

Go into some of the big work camps in AB now and just about 25% of the work force is from BC, far more BC people working in AB right now maybe not in the professional jobs yet but it will come. You have a chance to change that if you would all just quite bucking it and work with it. But we can all see that's not the agenda of many of you. I mean money grows on trees for Socialist right lol..

Carry on with the gibberish boys,, again I got this I am here helping build your economy,, keeping that money tree full for you.
 
You have a chance to change that if you would all just quite bucking it and work with it. But we can all see that's not the agenda of many of you. I mean money grows on trees for Socialist right lol..

You know my agenda.... ramp down the carbon economy and move to renewables. We have no choice if we want an environment worth passing on to our future generations. It's not a Socialist agenda or a Capitalist agenda. It's a problem that the solution is clear and you are part of that problem. If your industry would put half the energy into solutions we would have this problem solved. At some point in time you will be held responsible in your own community or by your own family. Do you want to be known as the man that had his head in the sand? It's just a matter of time.

Me .... I'm doing what I can and I have a plan with some other folks to use our skills with Capitalism to make a difference and be part of the solution. Lead, follow or get the heck out of the way.
 
... again I got this I am here helping build your economy,, keeping that money tree full for you.
Maybe, walleyes. See the next few posts. Are we receiving all what we should - as a country - or are subsidizing the corporations?
 
http://thetyee.ca/Opinion/2014/06/19/Norway-And-Northern-Gateway/
On Gateway, Harper Should've Asked: What Would Norway Do?
Again he ignores huge lessons from the world's shrewdest petro-state.
By Mitchell Anderson, 19 Jun 2014, TheTyee.ca
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Norway oil barrel
Expected to support pipelines through their province with virtually no benefits and enormous risk, British Columbians are right to envy their Nordic cousins. Barrel photo via Shutterstock.

Related
Canada Is a Lousy Oil Negotiator
We collected less than one-fifth the tax and royalty benefits Norway did in 2012. Ouch.
If Every Norwegian's a Millionaire, Why's Alberta in Hock?
Norway cut a proper deal with oil corporations. Canadians got screwed.
Secrets to Norway's Petro-Wealth: Lessons for Canada?
Read more: Aboriginal Affairs, Energy,
As many British Columbians and Canadians brace for another fight with their government over the perennial push for pipelines out of Alberta, it might be an opportune time to reflect on Norway, which enjoys almost universal public buy-in for its oil industry and has saved almost $900 billion in petroleum revenue. What did our Nordic cousins do so differently?

1. Norway built pipelines -- to Norway

Back in the early 1970s, Norwegians insisted that North Sea petroleum be processed in Norway through a pipeline controlled by their state-owned oil company Statoil. This was not just an economic advantage, but an expression of resource sovereignty. The outraged negotiators for Phillips Petroleum, who were counting on controlling the lucrative offshore pipeline themselves, called the Norwegian demand "immoral."

Building pipelines from offshore rigs to refineries on the Norwegian mainland was not merely difficult; it was considered technically impossible. Bringing petroleum ashore in the United Kingdom or continental Europe was shorter, shallower and did not require divers to descend to the bottom of the Norwegian Trench, a depth of 360 metres. But by sticking to their guns and demanding to move up the value chain, Norwegians ensured they controlled their own resource and kept the jobs and money in their own country.

The Harper government, allegedly representing Canadians, is instead insisting exactly the opposite: the only way to secure jobs in Canada is to export unprocessed and dangerous diluted bitumen off the B.C. coast or through the Keystone XL pipeline. Economist Robyn Allan has pored through Enbridge's business case and concluded that even without a bitumen spill, the project will cost the Canadian economy dearly by raising domestic energy prices, not through taxes but by increasing profits to petroleum companies.

Which worldview is right? Let's let the market decide. Forty years after both countries scaled up their petroleum sectors, Norway has about $900 billion in the bank, full employment and no national debt. Canada? We have about $600 billion in debt with billions in investments starting to flee the increasingly uncertain future of the oilsands. Harper is famously a fan of Margaret Thatcher, yet the U.K. came out $658 billion behind Norway on retained North Sea oil wealth under the reign of the Iron Lady.



2. Norway invested in social programs

What does universal daycare have to do with petroleum policy? Plenty. Norway taxes oil companies to the limits of tolerance and companies are lining up to do business there. Why? Unlike the volatile situation in Canada, oil investors know the Norwegian public supports their industry because they benefit so richly from it.

In 2012, the Norwegian government earned $46.29 per barrel of oil equivalent. In that same year, Canada and the provinces earned less than one-fifth that much. The federal government has eliminated more than 20,000 public service jobs since 2010, with more cuts planned. Alberta, which has a comparable population and petroleum production to Norway, is almost $8 billion in debt. Last year, the Fort McMurray School district voted on a proposal to shorten their work week because they couldn't afford school bus drivers five days a week. Companies investing billions in the oilsands are seeing their landlocked operations hang in the balance due to lack of public buy-in.

Meanwhile, Norway is ranked number one on both the Human Development Index and the Democracy Index, and is the second best country in the world to be a mother. (Canada ranks 11th, 12th and 18th respectively.) Norwegians enjoy free university tuition, universal daycare and 30 per cent more spending per capita on healthcare -- all of which is largely funded through public oil revenues.

British Columbians are expected to support pipelines through our province with virtually no benefits and enormous externalized costs and risks. You would think people in business would appreciate that there is no such thing as a free lunch. This will prove to be a very expensive and time-consuming mistake.

3. Norway respected First Nations

While the Sami People of the northern Norway are still subjected to considerable discrimination, they are far ahead of the deplorable situation on First Nations reserves here in Canada. The Sami have their own parliament and enjoy the same legal language rights as Norwegian speakers.

In fact, all ethnic Norwegians could be considered an unconquered First Nation, having lived in present day Norway since the end of the last ice age. Vikings, who had the same military technology and resistance to the same diseases as the rest of Europe, went on a pagan-raiding campaign throughout Christendom for 200 years. That ancient memory of land and place remains, and may be the leading reason why their country was so successful at negotiating a hard bargain with the world's most powerful industrial sector in the 1970s.

The same is true in Canada, where First Nations with their ancient cultural connection to the land are leading the resistance to pipeline proposals. Instead of respecting First Nation rights and title, Canadian governments and resource companies are finding out the hard way that indigenous culture cannot be easily bought or extinguished.

Moving forward, First Nations may lead the way in recalibrating Canada's resource economy. Certainly non-native Canada has a wretched record of extracting value from the enormous natural bounty of this country. As First Nations move toward treaty settlement and assume control over local resource use, we will hopefully see more economic benefits stay in local communities -- driven by the same cultural imperatives that allowed Norway to stand up to the oil industry 40 years ago.

Canada could be so much more prosperous and equitable than the country it has become. Rather than doubling down on the same failed policies of the Harper government, we should look to our Nordic cousins for some much needed national inspiration.
 
http://thetyee.ca/News/2014/02/19/Western-Canada-Subsidizes-Fracking/

How Much Does Western Canada Subsidize Fracking?
Compared to US gov'ts, which take home a greater percentage of revenue, quite a bit.
By Andrew Nikiforuk, 19 Feb 2014, TheTyee.ca
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Fracking trucks in Alberta
Fracking trucks in Alberta, 2013. Alberta, Saskatchewan and Manitoba governments now let industry take home more money from fracking operations for tight or heavy oil than do their U.S. counterparts. Photo: Fracking Canada.

Related
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The technique of horizontal drilling has doubled or even tripled the percentage of crude oil that industry now extracts from formerly uneconomic basins in Western Canada.

Of about 3,000 oil wells planted in Alberta in 2012, 77 per cent were horizontal wells that blasted tight rocks with multi-stage hydraulic fracturing to coax out hydrocarbons, according to the Alberta Energy Regulator.

Over the first eight months of last year, regulators licensed nearly 6,000 horizontal wells in western Canada in total or nearly 72 per cent of all wells.

More and more, the pace of such fracking activity is supported by heavy government subsidies and incentives to industry.

Saskatchewan, Alberta and Manitoba governments now let industry take home more money from fracking operations for tight or heavy oil than do their U.S. counterparts.

The National Energy Board reports that industry in Saskatchewan can walk home with the first 38,000 barrels royalty-free.



The board also notes that "Alberta imposes a five per cent royalty on the first 50,000, 60,000, or 70,000 barrels, depending on well specifics."

In contrast, most states south of the border will charge a 12 per cent royalty on unconventional hydrocarbons.

An analysis by Barry Rodgers of Barry Rodgers Oil and Gas Consulting published in 2013 confirms the scale of the giveaway.

He found that U.S. fiscal systems take home a greater percentage of revenues for tight oil requiring fracking than Canadian governments, due to higher tax and royalty rates.

The average state government takes home a 61.1 per cent share of revenue compared to 44.8 per cent for Canadian provinces.

Both Louisiana and Texas governments take home a greater share of revenue than any Canadian jurisdiction.

Alberta recorded the highest share in Canada at 50 per cent, while Saskatchewan represents the lowest overall share at 40 per cent.

"After incentives, Alberta's royalty share is about 10 percentage points lower than that of Texas, but still higher than that of the other Canadian jurisdictions," reported Rodgers.

Rodgers offered two explanations for the differences.

Unlike the U.S., where much oil and gas development takes place on private land, Canadian governments "are often concerned with maintaining or even increasing the level of industry activity and employment, thus opting for a somewhat lower share of direct revenues."

Rodgers adds that the "hard bargain" driven by private landowners combined with relatively high upfront fixed royalties "represents added incentive for U.S. producers to innovate and lower costs."

BC royalty regime 'riskier': report

British Columbia currently doesn't produce very much tight oil, but the provincial government has repeatedly lowered royalties for shale gas resources by at least 24 per cent to drive development over the last couple of years.

The B.C. government also subsidizes water consumption, geoscience, and road construction in remote areas.

Under B.C.'s Royalty Credit Program, an oil and gas company can build a $50-million pipeline or $25-million road, and then receive up to a 50 per cent break in royalties from producing shale gas wells.

Since 2004, B.C. has subsidized 1,243 miles worth of roads and 1,304 miles worth of pipelines at a cost of $840 million, while natural gas prices have fallen.

B.C.'s royalty regime is also different than most other jurisdictions in North America -- and it's much riskier than most, according to a report by Cambridge Energy Resources Associates and published by the U.S. Bureau of Ocean Energy Management in 2011.

Most governments take a greater share of resource revenue early in the producing life of gas well, because it poses the least risk to the owners of the resource in terms of price volatility and rapid depletion rates.

The report ranks fiscal regimes in North America on the basis of revenue risk on a scale of zero to five.

Governments that earned a high percentage of revenue early in the life of producing wells, such as Texas and Alaska, earned scores of higher than four.

Jurisdictions that expect to earn money at the end of a well's lifecycle earned zero. B.C. earned a score of 0.59.

IHSC chart
Due to declining gas prices and revenues last year, the government was faced with a billion-dollar deficit that resulted in severe cuts to public services.

The CERA report explains that the exception to how North American governments earn revenue from oil and gas is B.C., "which has designed a back-end loaded fiscal system for shale gas resources whereby the government undertakes a significant share of the revenue risk."

Rodgers warns in his report that Canada's general system of taking a small share of revenue for the owner for unconventional resources and giving more to industry could have a big downside.

"Jurisdictions and producers would seem well advised to plan for a time when the full environmental costs will have to be incorporated. The social license to operate may very well demand it.
 

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http://thetyee.ca/Opinion/2014/03/31/Canada-Lousy-Oil-Negotiator/

Canada Is a Lousy Oil Negotiator
We collected less than one-fifth the tax and royalty benefits Norway did in 2012. Ouch.
By Mitchell Anderson, 31 Mar 2014, TheTyee.ca
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In 2012, the Canadian taxpayer realized a benefit of about $9 per "barrel of oil equivalent" -- less than one-fifth what Norway collected in the same year. Barrel photo via Shutterstock.

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There is an old adage in business that you don't get what you deserve, you get what you negotiate. And there are few businesses bigger than Big Oil. The top 50 petroleum companies collectively have annual revenues over $5.6 trillion.

Subsurface mineral rights worldwide typically remain the property of sovereign nations, and oil companies only access that bounty through negotiated leases. You can imagine these negotiations are high stakes affairs. With potentially trillions of dollars on the table, both sides have a lot to gain and a lot to lose.

There is no doubt that some countries are blessed with easily accessible high-grade oil and can dictate more favorable terms. Others nations with low-grade or high-risk resources are in a weaker negotiating position.

That said, crude oil is what economists call a fungible commodity. With some notable exceptions, a barrel is a barrel is a barrel. Petroleum economists have also devised a convenient measure called "barrel of oil equivalent" (BOE), which includes not only crude oil but also natural gas, and a variety of other petroleum liquids.

While different nations use a variety of complicated taxation and royalty schemes to calculate future revenues, it is simpler to look backwards to see the revenue to the taxpayer per barrel of oil equivalent. This eliminates price fluctuations in a given year and also includes natural gas production, which is often a big part of petroleum production.

Canada taken to the cleaners



Norway and the U.K. are a particularly poignant example of two countries exploiting the same oil at the same time while one is clearly benefiting more than the other. Both countries also helpfully list their production and public revenues back to the 1970s, so it is simple to calculate what the taxpayer took home per barrel in any given year.

Digging through the numbers, it seems Norway is considerably more skilled at negotiation. By charging higher taxes and investing equity ownership in their own production, the Norwegian taxpayer was paid $46.29 BOE in 2012. That same year, the U.K. taxpayer realized only $20.08 per BOE -- less than half as much.

What about Canada? Much of our production is bitumen, which admittedly is a lower value (and often unprocessed) product with higher extraction costs. That said, it seems the nicest nation on earth is being taken to the cleaners. In 2012, Canada produced more than two billion BOE and collected $18 billion in provincial and federal taxes and royalties. This means that the Canadian taxpayer realized a benefit of about $9 per BOE -- less than one-fifth what Norway collected in the same year.

Canada produces 45 per cent more petroleum than Norway. Imagine for the sake of argument that Canada collected what Norwegians did between 2009 and 2012. In those four years, Canada would have enjoyed revenues of $365 billion -- enough to pay off more than half of our national debt.

Provincial race to the bottom

Instead, Canada is one of the cheapest places in the world for Big Oil to do business. A recent presentation by an international oil expert to the Alaskan government ranked Nova Scotia and Newfoundland as dead last in the world for public share of shallow water offshore oil operations. This is perhaps not surprising given the relative puny size of our provincial governments compared to the interests they sit across the table from.

Based on annual revenue, those 50 top oil companies are collectively 750 times larger than the government of Newfoundland and almost 130 times larger than the collective might of Albertan taxpayers. It's also difficult to attract talent to the public side of the table when the private sector pays so much better. The premier of Alberta brought home one per cent of the salary paid to the CEO of Suncor in 2011.

Every provincial jurisdiction is also in direct competition with each other in a race to the bottom to attract private petroleum investment. Internal government documents accessed by the Alberta Federation of Labour found that B.C., Alberta and Saskatchewan charge lower royalty rates than any U.S. state. Bizarrely, this was framed as a public policy achievement.

Out-lousying the nation: Alberta

Since our country has an every-province-for-itself negotiating strategy, job strapped jurisdictions are not only contending with immensely powerful outside forces, but their own angry electorate every few years. It's hard to drive a hard bargain when voters can be maneuvered to take up industry's negotiating position. Nothing motivates a politician quite like the prospect of electoral defeat, and voters have become enlisted as unwitting allies in the billion-dollar brinksmanship of industry to access resources at ever-cheaper prices.

This long-term strategy is bearing some very lucrative fruit. The incumbent Conservatives almost lost the last Alberta election because they were allegedly demanding too much from the oil sector. For the record, Alberta produced about 1.5 billion barrels of oil equivalent in the calendar year 2012 and collected $6.13 billion in non-renewable royalties. That works out to a measly $4 per BOE -- less than one-tenth what Norway collected on its petroleum volume that same year.

Every indication is that the Wildrose Alliance will form the next provincial government in Alberta. The oil-friendly party promises to "create and maintain royalty and tax regimes that attract and sustain investment in our energy industries."

And that, in the negotiation business, is what you call an "end game." [Tyee]

Read more: Energy,

Mitchell Anderson is a Vancouver based freelance writer and frequent contributor to The Tyee. He is writing a book to be titled The Oil Vikings: What Norway can teach the world about wise resource use. Find his Tyee series reported from Norway here and all his pieces published by The Tyee here.
 
http://thetyee.ca/News/2012/07/25/Norway-Oil-Wealth/
Oil Wealth: Should Norway Be the Canadian Way?
How did Norwegians get so petro-smart? The Tyee sent Mitchell Anderson there to find out. First of his reports.
By Mitchell Anderson, 25 Jul 2012, TheTyee.ca
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While Canada built national debt, Norway parlayed oil proceeds into savings equal to $120,000 for each inhabitant.

Also in this series:
SECRETS TO NORWAY'S PETRO-WEALTH: LESSONS FOR CANADA?
Oil Wealth: Should Norway Be the Canadian Way?
Against Big Oil, Norway Channels Its Inner Viking
Canada Doesn't Obey Oil-Rich Norway's 'Ten Commandments'
Norway vs. Canada: Where to Draw the Line with Big Oil
Rolf Wiborg's Tough Love for Canada
Greenpeace's 'Open' Relationship with Oil-Rich Norway
Canada Next? Oil Money Drives Prices Sky High in Norway
The Mistake that Cost Norway Huge in Oil Wealth
'Canada Is Being Outplayed' at Oil Wealth Game
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Energy
Find more energy reporting on The Tyee.
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Is Canada an oil nation? While debate grows in this country about the ethics of the oil sands or the implications of Dutch Disease, there is little doubt that petroleum is a major part of our economy and certain to become more significant in the future.

Canada is sixth-largest oil-producing nation in the world. Energy exports are seven per cent of our GDP and 19 per cent of our exports. The Alberta oil sands have reserves second only to Saudi Arabia, and some analysts believe production may double by 2020, reaching six million barrels per day.

But what is the future of Canada's petroleum sector? Has our country done an adequate job negotiating resource rents that protect the interests of Canadian taxpayers? Ensuring worker safety or protecting the environment? Building a national consensus around the development of this globally important resource? Providing a lasting economic legacy for future generations?

It seems the debate in Canada has become so polarized that it is impossible to clarify these questions without looking elsewhere for answers. So The Tyee sent me to Norway to try and shed new light on our own resource economy and see what lessons could be learned.

Norway's amazing savings account

Norway produces 40 per cent less petroleum than Canada and has one-seventh our population, but has saved more than $600 billion in oil revenue and counting. This is equivalent to about 140 per cent of Norwegian GDP, or about $120,000 for every man, woman and child in the country. In contrast, every Canadian is in the red about $16,000 due to our $566-billion national debt.



While Canada is eliminating 19,000 public sector jobs in an effort to balance the budget, Norway is debt-free, enjoys full employment and has fourth highest per capita GDP in the world. Canada is twelfth.

Beyond economics, Norway is an obviously fortunate place to live. It is routinely ranked number one in the world on the Human Development Index, is the world's best-governed nation according to the Democracy Index, and is the best country in the world to be a mother.

And in spite of being the world's third largest exporter of crude oil, Norway is ranked number three in the world on the Environmental Performance Index. Canada is thirty-seventh (behind Nicaragua, Albania and Colombia).

And while some Canadian politicians dismiss Dutch Disease -- an oil-driven currency eroding manufacturing exports -- as a discredited theory, the Norwegian government has prioritized avoiding this economic malaise for decades by strictly investing their oil wealth outside of their country.

Norway's national consensus

As a Canadian accustomed to bitter regional and ideological debates, perhaps the most striking characteristic while visiting Norway was the remarkable level of national consensus around the development of their oil industry. No one I met with (including representatives from the environmental movement) were advocating scaling back or shutting down existing oil facilities. There were no ongoing protests nor the heated political rhetoric that has become so commonplace in Canada.

Such broad public support has seemingly been earned through strict oversight by Norwegian authorities, a superb safety record achieved through collaborative management, and a taxation regime that benefits every Norwegian through generous social programs.

These benefits include free university tuition, universal day care and 25 days of paid holidays per year. Per capita spending on health care is 30 per cent higher in Norway; funding for arts and culture is more than three times higher than Canada.

Norway's tough deal with foreign firms

How is all this paid for? Since the 1970s, Norway as a matter of policy has collected between 70 per cent and 80 per cent of the resource wealth generated from their oil industry through corporate taxes twice as high as Canada, and a special tax on oil profits. In Alberta, royalties collected on all oil sands production in 2010 were 10 per cent of industry revenues.

Norway also required that foreign companies train Norwegian workers, transfer proprietary technologies to their state-owned oil company Statoil, and in some cases even hand over producing oil platforms free of charge after a predetermined period.

This insistence on national participation has paid off. Companies controlled by the Norwegian taxpayer now directly own about 30 per cent of the nation's oil production, providing another significant source of income as well as technical input on how their resource is developed.

With minor exceptions, Ottawa and the provinces have no equity share whatsoever in our petroleum resources. Canada remains the only nation of the top 10 oil-producing countries (excluding the US) without a state-controlled petroleum company. National oil companies elsewhere in the world now control 52 per cent of global oil production and 88 per cent of proven reserves.

Petro-Canada was created as a wholly owned Crown Corporation in 1975 but it was regarded with suspicion in Alberta as a federal intrusion into provincial jurisdiction. Ottawa's remaining minor stake in the company was quietly sold off in 2004.

Lessons for Canada?

Could the Norwegian model work here? Would industry and investment flee Canada if we were to demand greater oversight and resource rents? This view seems a common refrain from many pundits and politicians, and was a central issue in the last Alberta election.

Yet capital flight has never been a problem in Norway. More foreign petroleum companies than ever are lining up to invest billions, while submitting to levels of government oversight and taxation unheard of in Canada.

In fact these conditions seem attractive to investors since from the point of view of the Norwegian population, the development their oil industry has been a consensual act. This national buy-in by the taxpayers of Norway builds investor certainty, in contrast to the unpredictable pitched battles ongoing here in Canada.

Norway is of course far from perfect and there are several contentious issues around their oil industry. Unlike their Scandinavian neighbours, Norway has made almost no investments in emerging renewable technologies such as wind or solar.

There is also public opposition to offshore oil operations moving into areas of important fish habitat off their northern coast. Many Norwegians also worry that long-standing policies meant to insulate their economy from the sheer mass of oil money are beginning to falter as prices and salaries march ever upwards.

Yet by far the largest oil-related controversy in Norway is actually about Alberta. Statoil became a minor player in the Canadian oil sands in 2007 and many Norwegians feel this investment is unethical. The Norwegian Church Council and others are calling on their government to withdraw from the project on principle.

Obviously it is easier to be critical of petroleum practices in another country but this case illustrates the comparative consensus in Norway around how their oil industry is managed. Put another way, when Greenpeace was recently handing out leaflets to workers outside a Statoil facility in Norway, the oil company graciously provided the environmentalists with hot coffee and sandwiches. Would this happen in Canada?

Coming dispatches from Norway

How has this level of national civility around resource issues been achieved? What lessons can be learned from our differences and important similarities? Can the Norwegian oil experience inform First Nations as they negotiate expanding resource development on their traditional territories?

Norway and Canada share a Northern-European heritage. We are both sparsely populated resource-based economies. We are both well-governed and well-developed democracies with strong social programs.

Yet our North Atlantic cousin has taken a different path and arrived at a very different place regarding resource development. What follows is a series of stories that seek to recast the resource debate here in Canada, and suggest transformative changes on how our own country sees and manages our unparalleled natural heritage.

The Tyee is the only media outlet in Canada to have invested in this journey of discovery. Please come along for the ride.

Next Wednesday: Viking history, and other reasons tiny Norway stood up to the world's most powerful industrial sector.
 
http://thetyee.ca/Opinion/2014/05/15/Canadas-34-Billion-Fossil-Fuel-Subsidies/


IMF Pegs Canada's Fossil Fuel Subsidies at $34 Billion
In such giveaways we're a world leader, a fact rarely noted when federal budgets are debated.
By Mitchell Anderson, 15 May 2014, TheTyee.ca
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There's a reason Canada enjoys some of the cheapest gas in the developed world. Nozzle photo via Shutterstock.

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While Canada slashes budgets for research, education and public broadcasting, there is one part of our economy that enjoys remarkable support from the Canadian taxpayer: the energy sector.

The International Monetary Fund estimates that energy subsidies in Canada top an incredible $34 billion each year in direct support to producers and uncollected tax on externalized costs.

These figures are found in the appendix of a major report released last year estimating global energy subsidies at almost $2 trillion. The report estimated that eliminating the subsidies would reduce global carbon emissions by 13 per cent. The stunning statistics specific to this country remain almost completely unreported in Canadian media.

Contacted by The Tyee, researchers from the IMF helpfully provided a detailed breakdown of Canadian subsidies provided to petroleum, natural gas and coal consumption. The lion's share of the $34 billion are uncollected taxes on the externalized costs of burning transportation fuels like gasoline and diesel -- about $19.4 billion in 2011. These externalized costs include impacts like traffic accidents, carbon emissions, air pollution and road congestion.

The report also referenced figures sourced from the OECD showing an additional $840 million in producer support to oil companies through a constellation of provincial and federal incentives to encourage fossil fuel extraction. This brought total petroleum subsidies in Canada in 2011 to $20.23 billion -- more than 20 times the annual budget of Environment Canada.

In comparison to other countries, Canada provides more subsidies to petroleum as a proportion of government revenue than any developed nation on Earth besides the United States and Luxembourg.



Natural gas consumption also enjoys billions in subsidies in Canada. The IMF estimates that un-priced carbon emissions from burning natural gas added up to $7.3 billion per year. There's another $440 million in producer support and $360 million in other un-taxed externalities, all of which tops $8.1 billion. This tax giveaway on natural gas alone is 44 per cent more than Canada provides in international aid every year.

What about coal? Canada consumes over 30 million tonnes per year. While we currently export over half our domestic production, the IMF study only considered externalized costs within our own country. They found that the coal industry receives $4.5 billion in annual subsides -- almost all of this is un-priced carbon and sulfur dioxide emissions. This generous largesse towards the dirtiest of fuels is about four times what the CBC receives in public support every year.

Or we could spend that on...

What could Canada do with an extra $34 billion a year? Both Vancouver and Toronto are struggling with how to fund long overdue upgrades to public transportation. Subway construction comes in at about $250 million per kilometre, meaning we could build about 140 kilometres of badly-needed urban subway lines every year. Light rail transport (LRT) is about one-quarter of the cost of subways, meaning for the same money we could build about 560 kilometres of at-grade transit infrastructure.

This foregone revenue in less than two years could fully fund the Big Move transit plan for southern Ontario, providing affordable access for 80 per cent of people living from Hamilton to Oshawa. Toronto's transit system has languished for decades. This sorely needed infrastructure would save the average household thousands in wasted time sitting in traffic, and Canada's economy billions in reduced congestion costs.

The proposed Vancouver subway line to the University of British Columbia could be built using less than two months of the subsidies provided every day to the energy sector. Forty kilometres of rapid transit in Surrey could be had for about the same amount.

What about green energy infrastructure? Adding solar and wind capacity provides some of the best job-generation per dollar of any option available -- more than seven times the employment from an equivalent investment in oil and gas extraction. Extrapolating the findings from a 2012 report on green jobs, $34 billion could create 500,000 person years of employment and install more than 150,000 megawatts of clean generating capacity. Canada currently ranks 12th in the G20 on green energy investment and has been steadily falling behind our competitors.

Canada's infrastructure deficit of crumbling roads and outdated water and sewage treatment is pegged at $171 billion. This backlog could be wiped out in five years with the revenue we are subsidizing to the energy sector.

Of course, not all things of value can be measured by bricks and mortar. Thirty-four billion dollars each year could provide $10-a-day childcare for 5.5 million children ages 0 to 5. Canada's child care costs are currently the highest in the OECD.

No free lunch in energy costs

For all the complaining Canadians do about fuel prices, it's ironic to note the IMF essentially says we are undervaluing the true cost of gasoline by about $0.30 per litre. Compared to other nations, Canada enjoys some of the cheapest gas in the developed world. Fuel in Italy and Germany is almost double our price at the pump. Ever think it's odd that bottled water at the gas station costs more than the fuel you just put in your tank?

Consider for a moment all the costs of finding and extracting crude oil, shipping it across the globe, refining it into gasoline and trucking it to your neighbourhood. Not to mention the billions spent by some countries projecting military power into volatile oil-producing parts of the world and the very human price of those interventions. Additional un-priced costs after petroleum is burned, such as climate change, traffic congestion, road accidents and air pollution make gasoline perhaps the most subsidized substance on Earth.

Every decision based on artificially low energy prices can have years of unintended consequences. If gas is cheap, people will choose to buy cars rather than take transit, clogging both our roads and emergency rooms. Transportation accidents alone cost Canada $3.7 billion each year. Every vehicle bought based on low fuel prices will produce years of carbon emissions, and every owner over the life of that vehicle will have an interest in voting for cheaper gas.

The opposite, of course, is also true. Less than half of Vancouverites in their early twenties today have chosen to get a driver's license, down from 60 per cent 10 years ago. Better public transit and more expensive car ownership seem to be the main factors driving this remarkable demographic shift.

The IMF can hardly be accused of being a left-leaning, alarmist organization. Through this valuable research, they make the case that there is no free lunch in energy costs, and we exclude these externalized costs at our peril.

A country can be judged on what it chooses to tax and what it chooses to subsidize. And by that yardstick, this nation currently seems to care more about cheap energy than almost anything else. [Tyee]

Read more: Energy,

Mitchell Anderson is a Vancouver based freelance writer and frequent contributor to The Tyee. He is writing a book, The Oil Vikings: What Norway can teach the world about wise resource use.

Find his Tyee series reported from Norway here and all his pieces published by The Tyee here.
 
http://thetyee.ca/Mediacheck/2014/06/13/Financial-Post-Defends-Big-Oil/

Look Who Financial Post Found to Defend Canada's Gifts to Big Oil
Think tanker scorns IMF, World Bank economists (and my Tyee piece).
By Mitchell Anderson, 13 Jun 2014, TheTyee.ca
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Youri Chassin and Nicholas Stern
Youri Chassin (left) of the Montreal Economic Institute dismisses the basic idea of externalities, widely accepted by, among others, former World Bank chief economist Nicholas Stern.

Related
IMF Pegs Canada's Fossil Fuel Subsidies at $34 Billion
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Global Shift to Clean Energy No Longer 'Theoretical'
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The Financial Post took issue with my recent article on fossil fuel subsidies in Canada, which the IMF estimates top $34 billion per year. Youri Chassin of the Montreal Economic Institute (MEI) wrote in the Post:

"The vast bulk of The Tyee's ludicrous figure falls under the rubric of negative 'externalities,' that is, societal costs presumably caused by a particular economic activity. According to the wonks at the IMF, fossil fuels are not sufficiently taxed to make up for externalities like air pollution, carbon emissions, and even traffic congestion and traffic accidents."

It is amusing to see someone who self-identifies as an economist refer to externalities as if they were something from another planet. Sir Nicholas Stern, the former chief economist at the World Bank seems less flummoxed by the term. In 2006 he authored the famous Stern Review that estimated the externalized costs of burning fossil fuels will impact the world economy by five per cent to 20 per cent of global GDP, which would work out to between $2.3 trillion and $9.1 trillion each year.

Of course the fossil fuel sector would like to enjoy feasting on this free lunch by continuing to use to use the atmosphere as a free dumping ground for carbon dioxide. The constellation of right wing "think tanks" with anonymous donors such as the MEI will continue to lobby that the petroleum industry is not too heavily subsidized. The MEI, which is Quebec's version of B.C.'s Fraser Institute, put out a report to that effect just last month.

Externalities exist

The fact is that externalized costs are real costs. Someone has to pay them. Sir Nicholas stated bluntly in his report that "Climate change is the greatest market failure the world has ever seen..." In the intervening years since 2006 he has since admitted, "I got it wrong on climate change -- it's far, far worse."



Still the fossil fuel lobby whines that somehow they are the victim in this unfolding global catastrophe. The Obama Administration makes efforts to rein in climate costs from burning the world's dirtiest fuel, and industry apologists call that the "war on coal."

Even China recently announced a carbon-pricing scheme to include externalized costs of greenhouse gas emissions. Scheduled to come into effect in 2018, this national carbon market would put the world's largest emitter ahead of the U.S. on climate policy, which failed to pass carbon pricing legislation in 2009. The world's second largest economy is also rapidly ramping up green energy generation.

Carbon pricing in China would be a global game changer and open the door to a truly international carbon market, something being encouraged by the World Bank. It might also renew efforts for a world-wide climate agreement by removing one of the main rationales for inaction.

All of this is an unfolding disaster for Stephen Harper's dream of Canada becoming a fossil fuel super power, explaining why he and Australian Prime Minister Tony Abbott were both posturing this week in opposition to international climate efforts.

Back in the real world, things are not looking promising for Canada's carbon sector. Plunging world prices have shelved plans by Tech Resources to revive the Quintette coal mine in B.C. The $11 billion Joslyn North bitumen project has just been axed by Total SA. This is on the heels of another oil sands cancellation by Royal Dutch Shell for their 200,000 barrel per day Pierre River project. B.C.'s LNG ambitions are in doubt as China has just signed a long-term deal with Russia at prices far below what Asia currently pays. Canada's main oil lobby group just became somewhat more pessimistic on long-term petroleum production. Can you say "stranded assets"? Posteriors may be puckering throughout the oil patch.

Canada: World class subsidizer

With the fossil fuel capital costs reaching a tipping point, it's no wonder the oil industry is touchy about itemizing the externalized costs of their dangerous product. Other costs considered by the IMF such as traffic accidents, air pollution and lost productivity due to gridlock are very real, conservatively estimated at $20 billion, $6 billion, and $8 billion respectively each year.

If these were included in the retail price of fossil fuels then the market could make informed choices rather than continuing to privatize profits and socialize costs. As it stands these real impacts to our economy are paid for by individual taxpayers, whether they directly benefit from our myopic focus on cheap gas or not.

For all the complaining that Canadians do about fuel prices, we enjoy some of the cheapest gas in the developed world. According to the IMF, Canada subsidizes petroleum as a percentage of government revenues more than any other nation on Earth with the exception of the U.S. and Luxembourg.

The sad fact is that Canada collects a pittance of royalties compared to other countries -- less than one-tenth what Norway collected per barrel of oil equivalent in 2012. Canada's direct tax breaks, grants and other give aways to the fossil fuel sector top $2 billion each year and result in lower government revenues, higher emissions and negligible increase in employment. Investing that money in renewable generation would create seven times as many jobs.

There may be no jurisdiction in the world so slavishly accommodating to the oil sector than Stephen Harper's Canada. This is costing us a great deal of money -- $34 billion each year according to the IMF. Rather than internalizing these costs and investing that money in green infrastructure, Canada is being left behind both morally and economically as China and the U.S begin a tectonic shift towards a low carbon future. [Tyee]

Read more: Energy,

Mitchell Anderson is a Vancouver based freelance writer and frequent contributor to The Tyee. He is writing a book, The Oil Vikings: What Norway can teach the world about wise resource use. Find his Tyee series reported from Norway here and all his pieces published by The Tyee here.
 
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