Thursday, January 21, 2021

What Now, Jason?

Joe Biden has cancelled the Keystone XL pipeline. That puts Jason Kenney in a very uncomfortable spot. David Climenhaga writes:

It’s been a Biden promise from the get-go. It’s easy to do with the stroke of a pen. It’s devoutly wished for by key segments of his base. And it doesn’t cost the United States anything, fanciful arguments about the economic benefits of the Keystone XL pipeline notwithstanding.

Let it never be asked, “Who could have seen this coming?” Damn nearly everybody who’s been paying attention did.

Kenney's folly is monumental:

Kenney’s crazy bet has to be near the top of the most irresponsible things ever done in Alberta’s history. Will there be a political price to pay for his irresponsibility? Given that history, it’s hard to say.

Keystone XL might’ve had a chance if New Democrat Rachel Notley were still premier… because, social licence.

But Notley isn’t premier, is she? No, it’s Kenney, the politician who excoriated the very idea of seeking social licence for Alberta’s carbo-intensive heavy oil projects.

He called the whole concept of social licence a myth. He called it a failure. He called it a lie.

So what happens now? And what will Justin Trudeau do? The rubber has hit the road.

Image: Next Alberta


24 comments:

jrkrideau said...

I assume Kenny will be doubling down on the investment in the new buggy-whip factory.

It has been clear for the last 10 years at least that oil, particularly tar-sands bitumen was rapidly becoming a stranded asset yet Kenny seems to have been oblivious. While I tend to think of Doug Ford as a dangerous buffoon, Kenny seems delusional.

Looking at MacKay and Kenny one wonders just how tight a leash did Harper Keep on his cabinet? The Harper PMO was famous for being controlling but perhaps there were even more strings on the puppets than I could have imagined.

Lorne said...

The Americans swept out the worst president they ever had, Owen. One wonders if there is a broom in Jason Kenney's future as well.

Anonymous said...

KXL isn't needed. There's enough pipeline capacity already, and with Line 3 and Trans Mountain expansions in the works there's enough capacity to make Jason Kenney's wildest dreams come true.

The problem is price. At current prices it doesn't make sense to fill pipelines with Alberta's poor quality gunk. And while oil prices are cyclical, the major oil companies see the writing on the wall and are pulling out of Alberta as they don't foresee decent profits in future.

The big question is whether Trudeau will follow Kenney in throwing good money after bad. A century ago, as automakers ramped up production, prudent investors weren't bailing out carriage makers. Similarly, Ottawa should cut its losses on TMX, and invest heavily in renewable energy, especially in Alberta. That's the way of the future. Leave the tar to the dinosaurs.

Cap

Owen Gray said...

I get the impression, jrk, that Harper never left the building. Perhaps he set up an office in a broom closet.

Owen Gray said...

As a resident of Ontario, I won't presume to tell Albertans what to do, Lorne. But I wouldn't be surprised if they're beginning to talk about an eviction notice.

Owen Gray said...

That conclusion should be painfully obvious, Cap. The oil industry is a dinosaur.

Graham said...

It’s only commenters on news sites that I’ve heard from and so I am not sure how representative that is of the average Albertan but they aren’t listening to anyone. They all sound like Kenny and the rest of us are idiots and shouldn’t be allowed to have any products or benefits from oil or their tar sands if we aren’t fully on board with KXL and any other pipeline .
For years people have been saying that yes we have oil now but that it is being relied on less and less every year. Folks have also said that yes oil did hit some crazy high prices but now it seems unlikely to ever do that again. Many have said that it would be a good idea to start preparing for the day, rapidly approaching, when oil would not be the main economic driver of any country or province.
Most have said that when Alberta does well Canada does well, most have said they don’t want Alberta to have any financial problems and most will say they have faith in the people of Alberta to switch gears and put some plans in a couple of other baskets. Much like people have had to do on the east and west coast.
From the commenters though it sounds like they don’t want to hear it and you can’t tell them anything. If they are following Kenny’s example well they are not going to make many friends at a time when they will need them. It’s not the failure others are happy about it’s that thing when some loud mouth bully has it blow up in his face that is getting the smiles.
Alberta is ill served by the likes of Kenny. They desperately need someone to be honest with them about oil now and for the future. They also need some one with some vision that can see them doing other things to help run the economy there. Probably several things. Instead of war rooms and commissions to battle shadow enemies get working groups together of people who can help shape some ideas for a solid future for Alberta.
Canada could use that too now that I think of it.

Owen Gray said...

We need leaders who will level with us, Graham. It's easy to tell people what they want to hear. Telling them what they don't want to hear -- but need to know -- takes a special kind of courage.

Toby said...

As I understand Alberta politics it is not Big Oil pushing for the pipe lines. The big outfits can see the writing on the wall and have either pulled out of Alberta or plan to. The noise that Kenny hears comes from spinoff business such as contractors who build things like pipelines and other stuff that an oil industry might need. To them it does not matter if anything goes through the pipes as long as they get to keep building more.

Owen Gray said...

The cruel truth of supply and demand can't be denied, Toby. And Alberta is in for a rough ride.

The Disaffected Lib said...

Whenever the private sector flees energy infrastructure programmes, even when they're backed by government guarantees (Trans Mountain), it's probably heading for disaster. When Kinder Morgan decided to walk away from the TMX it meant one thing - bitumen was an unfolding "stranded asset."

When government shells out billions on pipeline projects, that's a direct taxpayer subsidy of the fossil energy giants. It's a massively costly but equally futile gambit to buy time, to avoid having to wear the price of reality. Why else did Morneau give those Texas cowboys way more than TMX was worth? That wasn't a business decision. It was a political imperative. Kinder and Morgan, EnRon's unindicted alumni, must have laughed their asses off when they drove Morneau's cheque to their bank before the finance minister's plane was even airborne again.

It was a betrayal of the country, a betrayal of the environment, and so much more - the price of political expedience.

Climenhaga is right, it was a dumb cash bet on Keystone XL. Kenney too was driven by political expedience.

To find the meaning in this you have to begin with bitumen as a near future stranded asset. Everything that was done by Kenney and Trudeau must be seen in that context. And in that context they're both damned.

the salamander said...

.. Deary me, Owen.. the 'zone is flooded with shit' per Steve Bannon. I've spent the day explaining 'its complicated'. The basics don't change any more than the alphabet or gravity & we have the Google to help

Factoid - Bitumen aint 'oil'.. a pump jack, the classic nodding horse is not used to extract it. Its primarily steamed from the Alberta tar sands & 'in situ' is the term. The Bitumen is tidied up and refined 'diluent ' is added. Warm it up and you have a 'slurry' fit for pipeline that's approx 1/3rd diluent that is priced & quoted daily, hourly.. and it will be extracted first. That slurry is up a tad - almost 40/barrel last I looked.

Pipeline networks from Hardisty, Alberta run to Burnaby, BC or south into the USA networks a la 'Movin to Montana' to be a dental floss tycoon per Frank Zappa and the Koch Brothers.. one of whom is dead n buried.

They call the slurry 'dilbit'. In Burnaby its loaded into older generation supertankers - Aframax class. They must float over the Second Narrows shallows into the Salish Sea where the last southern resident Orca frolic & desperately seek wild samon at high tide - so ships only 65-70 % full. These ships are goin to Washington State or California.. Amen. The refined fluids may be sold back to Canada Eh !! At world prices

The other deliveries shipped directly south from Hardisty are segmented off where Refineries with 'coker' capability split it up, recover the valuable diluent (condensate) at world prices and sell to bidders, again.. Amen. Some may get all the way to the Texas Gulf Coast where Senator Ted Cruz blasphemes & says horrible untruths. Amen

Uh oh.. problemo ! The Alberta dilbit must compete with Venezuelan dilbit, lower in sulphur and therefore pricier. That dilbit gets a straight shot across the Carribean in newest generation deepwater supertankers and is offloaded while simultaneously loading refined petroleum for Asia or the highest bidder.. and 'spot sale'. Those are fully loaded of course and sail mucho faster direct across the Atlantic Ocean

We all know the rest of the tale.. Korea, China, India, Pakisatan.. fuels their generating plants or homes or factories if Russia charges more. The wonderful fantasy of a hungry Asia begging for 'Ethical Alberta Oil' is just that.. fantasy. It aint 'Benchmark' North Sea sweet oil, nor is it 'light sweet' WTI benchmark West Texas Intermediate. It aint offshore Newfoundland sweet oil. Its typically Alberta's 'Western Select' dilbit slurry & its foreign owned as well.

Welcome to Jason Kenney's 'Alberta Advantage' ..

Owen Gray said...

We have a more and more difficult time dealing with hard truths, Mound.

Owen Gray said...

It took a long time for Quebec to get out of the asbestos business, sal. We lived near the holes and the slag heaps. People didn't want to let go -- until the enterprise had long since expired. I suspect the same will be true in Alberta.

Anonymous said...

Owen, Trudeau has tried to accommodate Kenny and his base. For example overpaying for the Kinder Morgan pipeline, which is proceeding. It is a little rich for Kenny and his ilk to continue to bash Trudeau for messes of their own making. Maybe Trudeau will eventually tell him to take a hike. RG

lungta said...

jrk and owen
did you guys miss this ?
https://calgaryherald.com/business/varcoe-former-pm-stephen-harper-on-albertas-new-economic-recovery-council
add in ben harper hired as advisor to klown kenny
https://calgary.ctvnews.ca/stephen-harper-s-son-ben-hired-by-premier-jason-kenney-s-office-1.5140930
and voila
alberta economic recovery

Owen Gray said...

You can bet that Kenney will blame Trudeau, RG. I can't remember when Kenney acknowledged a mistake.

Owen Gray said...

Obviously, lungta, it's now what you know that matters. It's who you know.

jrkrideau said...

@ lungata

I had seen a note about Ben Harper a while ago but had not seen anything about the advisory council . It is nice that father and son can work together.

It is reassuring to see that Jack Mintz, the head of council, is an expert with the Frazer Institute of Economic Analysis and Creative Fantasy Writing. Beating Steve Allen in the creative writing contest is going to be tough though.

@ Owen

...Harper never left the building. Perhaps he set up an office in a broom closet.

+1

Owen Gray said...

The same old folks are pulling the strings, jrk.

e.a.f. said...

Couldn't stop laughing when Joe Biden said he was going to cancel Keystone and then reading Kenny wanted a trade war over the cancellation. Like who does Kenny think he is? He isn't important in the all over scheme of things. He's premier of a province which has all of 5M and change in population. He isn't loved by the federal Liberal party. He isn't a pleasant person.

Had Notely remained Premier, it would have been a done deal before Biden even ran. Trump was all for it.

Now to the bigger picture. We have the environment to think of and a lousy environment--climate change impacts every one in the world. We can live without oil because at one time humanity did and made gains. You die without clean air because you develop lung disease. Dirty water, it kills you. 3 minutes without air and you're dead. 3 days without water, you're dead. 3 weeks without food, you're dead.

We will always need some oil because it will be used as fuel but over time it will become less used. We will need oil for plastics, etc. but we can and will use less.

What come out of Alberta isn't oil, its tar and its a nasty product. American First Nations were not in favour of this pipeline through their land. there were massive protests a few years ago regarding that. The American First Nations were concerned that if the pipeline ruptured their water would be unuseable. When white towns didn't want the pipeline through their towns and farms because of that the American government re routed the pipeline through First nations land.

Guess money is more important to Kenny than the lives of the American First Nations.

Kenny put all his eggs in one basket. that was dumb. The Alberta economy ought to have been diversifying a couple of decades ago. They could have kept what they had while they built a new economy, perhaps in the tech industry. Alberta has had bust and boom times over the past 50 years and it has survived. Many who live in Alberta today, they and their families weren't there 50 years ago, before Leduc.

Kenny carried on like an idiot about the $100B or whatever sum he conjured up about loosing. What Kenny didn't tell people is these oil companies are mostly foreign owned. They're not Canadian. they don't pay a lot of taxes or royalties. Had Alberta implemented a small sales tax and saved their monies from oil revenues, they would be O.K. today. They had a good run at it. The party is over. Do not expect the rest of Canada to suffer a hang over because the Albertan governments since Lougheed didn't know how to manage.

Come to think of it, Alberta wasn't all that concerned when B.C. went through a huge recession back in the 70s when the forest industry collapsed or Ontario and Quebec went through very tough times because manufacturing when south after the first NAFTA or NFLD. when the cod industry collapsed. No, no trade war with the U.S.A. Kenny needs to get over himself. Whether he will be re elected, I expect he will. Albertans have never been bright enough to see the future as it really is. As a recent poll of doctors in alberta reflected 42% of their doctors wanted to leave the province but you can bet more than that voted for Kenny and his gang..

Owen Gray said...

The bottom line -- as you say, e.a.f. -- is that Kenney put all of his eggs in one basket.

jrkrideau said...

Another indication that Kenny is totolly out of touch with reality.
Arctic Wildlife Refuge Sale is a Dud
The Alaska Industrial Development and Export Authority (AIDEA) won nearly every bid, a sign that oil companies were largely uninterested in developing the pristine wildlife refuge as many major banks have refused to provide financial backing and public support for the projects has diminished.



When to banks are staying out, is suggests the entire industry is in trouble.

Owen Gray said...

The big money knows when it's being hosed, jrk.