A big decision awaits the Trudeau government. Will it approve the Teck Mine? Andrew Nikiforuk believes Trudeau should green light the project -- with stipulations. He writes:
Given Alberta’s belligerent confidence in holes, let’s agree. Canada’s federal cabinet should rubber stamp the permit for Teck’s oilsands mine.
At the same time, it must also declare that Canada will quantify and phase out $43 billion in annual fossil fuel subsidies as identified by the International Monetary Fund.
That means if the Teck mine fails, Canadian taxpayers will not support the boondoggle in any shape or form.
Alberta says it doesn’t want any federal handouts, so that shouldn’t be a problem. Now give the province what it wants. Let Nixon and Kenney defy the reality of low global oil prices and the commodity’s increasing volatility, and dig themselves a deeper hole to hell, unemployment and debt.
Every petrostate should have the freedom to build its own financial scaffold, knot its own fiscal noose and hang itself economically. It is what they do best.
Kenney has a really severe case of tunnel vision. And there's only one cure for it -- financial disaster:
Oil makes blind its dependents, regardless of their political hue. It encourages governments to overspend and undersave. It centralizes political power. It widens inequality. It replaces domestic taxes with hydrocarbon revenues, thereby breaking the bonds of representation. It erodes statecraft and rewards profligate government. The commodity’s busts and booms produce a vicious circle of bad policies that cement the state’s addiction to oil. It discourages diversification. In the end, it aggressively puts the needs of the oil and gas industry above everything else.
If Albertans wanted to regain their self-determination, they would not make digging the Teck mine their litmus test. But Kenney and company, despite the punishing downturn in prices, still don’t understand the Law of Holes.
The Law of Holes is elegant, proverbial and nearly a century old. It goes like this: If you find yourself in a moral and fiscal hole, you should stop digging.
And Alberta refuses to stop digging.
Image: Mindat.org
10 comments:
" . . . phase out $43 billion in annual fossil fuel subsidies . . . "
Trudeau promised to phase out subsidies in his first campaign. So far he has added to the subsidies. Pipeline anyone? If the subsidies were removed many of the fossil fuel miners would go out of business. I strongly suspect that many companies are more interested in the subsidies than coal, oil or gas, the subsidies being more reliable on the world market.
Precisely, Toby. The wealthy complain about welfare -- unless they benefit from the welfare.
Well played, Andrew! Perhaps Trudeau could also demand that Teck make monthly installments on the remediation costs to avoid worsening Alberta's $230 billion black hole for the cost of Tar Sands tailing ponds and thousands of orphan wells. A real, polluter pays/pay as you go stipulation would seem eminently sound except to those who believe in socialism for the rich.
There was an item in the Globe suggesting that Teck might not be all that keen on this mine. Teck's total market cap is just $10 billion. That's for everything. Even if Teck could put a gun to its own head and borrow that $10 billion (it can't) it would still need a major investor willing to take a flyer for the rest.
Now that BlackRock has proclaimed the Tar Sands a financial plague zone it's unclear where that investment could be found. Alberta is broke. Ottawa wouldn't dare fund this dodgy deal. I just checked and I'm not good for it either.
As time goes on, the numbers don't add up, Mound. No one wants to fund a sinking ship.
I so agree with this ironic summation of the dying petro-problem
PGC
I'm all for the elimination of that $43B in subsidies. We could balance the budget at some future date. We could spend it on covering dental and prescriptions. Much better use.
All we get out of these digging hole projects is a few dollars for the workers. It would be better all round to just send them the amount of their salaries and have them do something more useful, like build hospitals, schools, affordable housing
I am so tired of all these corporate welfare scams.
Yes, give Kenny a shovel and let him have at it. No money from Ottawa though and no new pipelines through B.C. Get rid of the $43B subsidies, enough is enough.
Oil is on the way out, PGC. But lots of people still don't see that.
This is crunch time, e.a.f.
Oil is used for some many things, its use will not be discontinued, but reduced. We need to find more sustainable methods of extracting and refining it. these pipelines usually wind up leaking and that needs to end. Tankers sink or spill and that needs to end. We can use oil and gas, but we need to do it very, very carefully. Its the careful part corporations aren't interested in because careful usually means spending money and that decreases their profits. Governments have subsidized oil and gas for far too long and that needs to end. $43B a year???? a government prescription plan for all would most likely only cost $4 or $5B. Lot better use of tax dollars. Add in a dental plan, perhaps a similar amount, so we're still further ahead and I'm sure voters would like prescription and dental a whole lot more than oil/gas subsidies. A lot of employers would favour a government plan for prescriptions and dental because they won't have to provide the plans as part of the pay package. Prescription and dental plans from the government would result in better health out comes for voters, gee its a win all round. Perhaps the Green Party can get on the scrape the $43B subsidy. the workers who loose their jobs can be re employed cleaning up wells in Alberta etc. at their previous wages.
We're still left with the problem of emissions from oil, e.a.f. It's those emissions which are causing the planet to heat up.
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