Pipelines across BC

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Re: Pipelines across BC

Postby George+ » Nov 25th, 2013, 11:30 am

Actually, Norway and the other Scandinavian countries have a tax system that
provides decent services. Open your mind a little.

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Re: Pipelines across BC

Postby hobbyguy » Nov 25th, 2013, 6:41 pm

GB - dilbit doesn't get WTI price. In fact, the price for dilbit (WCS) was $31.33/bbl (USD) lower than WTI as of Nov. 21, 2013. That's the spread. $62.00 USD for WCS is the current price. You will never, not in a zillion years, get Brent price for WCS.

You might approach Brent price for Syncrude sweet, which is trading at roughly $5.00/bbl lower than WTI.

For reference: http://www.bnn.ca/News/2013/11/21/Explaining-oil-price-differentials-0.aspx

I also agree that corporations are going tailor their operations to maximize ROI, which is why they lobby, advertise and make political donations to try to influence government. That is precisely how the financial meltdown of 2008 was enabled. It is far cheaper to buy a politician and remove the rules that protect the citizenry from abuse, than it is to work within those rules.

The job of government is to protect the citizenry, and promote sustainable economic activity that will advance the society. Not to kow-tow to whomever has the most bucks.

An informed citizenry needs to weigh the risks and benefits to major changes in economic activity. That is part of being a democracy. For example, the citizenry, having been informed by Fukushima, would be difficult to convince if a proposal to build one on the shores of say, Port Alberni were to come up.

It is precisely the failure of government policies that created the situation where the ROI for Suncor's Voyager project, with the additional factor that they had refinery capacity in Montreal. (How did they propose to get the dilbit to Montreal?).

The failure of government policy led directly to Lac-Megantic. That failure of government policy is possibly one of the considerations in the Suncor ROI calculations (I don't know). But relatively cheap rail transport to Montreal could have been a factor. I would assume that future governments will be under considerable pressure to rectify the failures that led to Lac-Megantic - which changes the equation again.

And so on. Allowing the shipment of dilbit in pipelines that were not designed for it. Penalizing (taxing) carbon emissions in Alberta. Those are government policy decisions that doomed the ROI calculations for the Voyager project.

As I said before, Syncrude is very profitable in upgrading to Syncrude sweet. It commands a premium price over WCS. So there is a decent ROI available from upgrading, and if you built a southern route PROPERLY, that ROI would jump with the possibility of getting close to Brent price - which as GB pointed out, adds another $17/bbl.

All of that is circular because we will never know what assumptions went into the ROI calculations that Suncor made.

What we can do is look at the risk/benefit equation in general terms. The upgraded product is less hazardous, and mitigation efforts for a spill are more successful and less costly. That drops the risk. Still significant risk, but lower. The upgraded product creates a lot more jobs in Canada, increases the GDP further, and increases government revenue further. That increases the total benefit significantly, and importantly, it creates a lot of permanent jobs, which is the benefit that "main street" is looking for. The potential price increase toward Brent is the "icing on the cake" pushing GDP and government revenues even higher.

Couple that much better risk/benefit with a properly constructed and regulated transportation/risk mitigation system, and you might just have something there.

The Northern Gateway project is a dead duck because it does not even attempt to address any of the key issues, and really has no way to get there.

Edit: typo, Syncrude sweet is trading about $15, not $5 lower than WTI.
Last edited by hobbyguy on Nov 25th, 2013, 11:54 pm, edited 1 time in total.
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Re: Pipelines across BC

Postby twobits » Nov 25th, 2013, 8:08 pm

I "like" how the flaming socialist agrees with that load of deflection and BS
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Re: Pipelines across BC

Postby GrooveTunes » Nov 26th, 2013, 10:27 am

All posts are my opinion unless otherwise noted.
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Re: Pipelines across BC

Postby hobbyguy » Nov 26th, 2013, 10:32 am

Thank you Twobits for validating my position.
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Re: Pipelines across BC

Postby The Green Barbarian » Nov 26th, 2013, 11:01 am

George+ wrote:Actually, Norway and the other Scandinavian countries have a tax system that
provides decent services. Open your mind a little.


right - and that's because Norway has the balls to drill their reserves off-shore. I wish we had the balls that Norway has, and would start drilling right now off-shore BC. Imagine the money that the tax and spend socialists would have to waste on stupid projects then!
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Re: Pipelines across BC

Postby xjeepguy » Nov 26th, 2013, 11:15 am

hobbyguy wrote:GB - dilbit doesn't get WTI price. In fact, the price for dilbit (WCS) was $31.33/bbl (USD) lower than WTI as of Nov. 21, 2013. That's the spread. $62.00 USD for WCS is the current price. You will never, not in a zillion years, get Brent price for WCS.


They dont need to get crude numbers , not with the amount of volume that will come out of the ground here in the next 20 years. With SAGD going full bore ( everywhere now ) it should bring the extraction costs way down as well .
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Re: Pipelines across BC

Postby Merry » Nov 26th, 2013, 12:03 pm

The Green Barbarian wrote:right - and that's because Norway has the balls to drill their reserves off-shore. I wish we had the balls that Norway has, and would start drilling right now off-shore BC. Imagine the money that the tax and spend socialists would have to waste on stupid projects then!

I do not have a blanket objection to off-shore drilling, but I do wonder whether or not such drilling would be appropriate in an earthquake prone zone. What are your views on that GB, and do you have any links you can provide to back up your position?
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Re: Pipelines across BC

Postby hobbyguy » Nov 26th, 2013, 12:35 pm

I understand that WCS producers don't need to get WTI prices. I was simply pointing out that WCS sells for a heck of a lot less than WTI or Syncrude sweet, and hugely less than Brent.

I do wonder though how SAGD production costs will be affected if GasAlberta is correct in their forecast of at least a 20% bump in natural gas prices over the next couple of years. (I do think that their price forecast is high).
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Re: Pipelines across BC

Postby flamingfingers » Dec 4th, 2013, 9:34 am

Christy's definition of 'World Class' Oil Spill Response:
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Re: Pipelines across BC

Postby Merry » Dec 4th, 2013, 10:28 am

It is far cheaper to buy a politician and remove the rules that protect the citizenry from abuse, than it is to work within those rules.

The job of government is to protect the citizenry, and promote sustainable economic activity that will advance the society. Not to kow-tow to whomever has the most bucks.


This statement of Hobbyguy's is sooooo true, and applies to far more than just this current discussion about pipelines. It is at the heart of one of the discussions in another thread, in which someone questioned the need for integrity in our politicians.
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Re: Pipelines across BC

Postby hobbyguy » Dec 4th, 2013, 11:13 am

This article http://www.cbc.ca/news/canada/british-columbia/oil-spill-risk-addressed-by-west-coast-tanker-safety-report-1.2449384 reveals an interesting point regarding spill costs.

Apparently, the current law/regulation limits liability of the operators to $161 million per spill: "Removing the current $161-million liability limit for each spill in favour of an unlimited liability for polluters."

Yikes! The estimated spill costs from a major dilbit spill start somewhere around $8 billion and rise as high as $90 billion (that high estimate may be hyperbole), something like $12-15 billion seems credible.

That makes the poor economics for Canada of these proposals even more obvious.

I had to laugh at Pipeline Joe Oliver trying to backtrack: “No project will proceed unless it is safe for Canadians and safe for the environment,” said Oliver.

Oliver has exactly zero credibility with regard to the environment, and the Cons, after Lac-Megantic, have zero credibility about concerns for the safety of Canadians.

Not noted in the article, but slipping nicely into what Harper Con plans actually are, is the announcement that they are designating Kitimat as a "public port". That gives the feds control over the port of Kitimat, and for reference just think how unresponsive the Vancouver Port Authority is to public concerns - especially environmental and health concerns.

So on one side we see the usual lip service to the concerns of the citizenry, and quietly in the background the Harper Cons take control of a key asset to weaken the clout of BC citizens.

Raitt gave me cause for a chuckle with her statement "an already robust tanker safety system." CC already said that the current system is completely inadequate, and that is as plain as the nose on your face to anyone who cares to look into it.

Meanwhile the Harper Cons spend $40 million of taxpayer money shilling for the oil and gas companies. Why on earth is the government of Canada providing this subsidy? Surely the likes of Shell, Sinopec, Exxon et al can afford their own darn advertising! http://www.cbc.ca/news/politics/oil-and-gas-ad-campaign-cost-feds-40m-at-home-and-abroad-1.2442844

It remains obvious that the Harper Con agenda is pipelines at any cost (our cost, that is), and you west coast "eco-terrorists" can shove it.
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Re: Pipelines across BC

Postby The Green Barbarian » Dec 4th, 2013, 11:16 am

hobbyguy wrote: you west coast "eco-terrorists" can shove it.


Finally, something you and I can agree with.
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Re: Pipelines across BC

Postby Merry » Dec 4th, 2013, 11:21 am

Does anyone know how much liability oil companies have for cleaning up environmental spills in the U.S.?
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Re: Pipelines across BC

Postby hobbyguy » Dec 4th, 2013, 1:14 pm

The US system is not transparent, as much of depends on the outcomes of lawsuit happy way of doing things.

Enbridge has been forced to fork out $2 billion over Kalamazoo, and that amount keeps climbing.

BP, in the Deep Water Horizon spill, has forked out $25 billion and climbing a lot more, and depending on lawsuit and fines that could rise to as much as $100 billion. http://www.bloomberg.com/news/2013-04-19/bp-still-uncertain-over-spill-cost-at-third-anniversary.html Bear in mind that the costs detailed in Bloomberg article is after actual clean costs.

By contrast: http://www.theglobeandmail.com/globe-debate/if-theres-an-oil-spill-whos-at-risk-canadian-taxpayers/article1390514/ Canada transfers the risk to the public purse and taxpayers - which is obviously wrong. No wonder so many international oil companies want to be in Canada. That is a huge subsidy when you consider that, as the article points out, one very large spill has costs equal to 1/5th of Canada's national debt.

In essence, as things stand, we have no protection from the huge costs associated with spills. Even for the costs of the relatively minor Kalamazoo spill, the Canadian public purse would wind up with a bill for something like $2 billion. A truly major spill would result result in Canadians facing a tax increase to cover the costs.

All the nonsense we are hearing from Raitt and Oliver is just that, until we see concrete steps taken to make the industry pay its own way, both for ongoing costs (like advertising and developing clean up strategies, for which we already on the hook for roughly $200 million).

As you can tell, I am not a fan of subsidies for corporations - they should pay their own way.
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