Our Short Sighted Provincial Government

Wow.

For those of you who don't live in Alberta...

Welcome to the type of thinking which absorbs my current provincial government

And I quote:

"Isaac says Alberta's strengths are in the oil and gas sector and that researchers elsewhere can focus on renewable and alternative energies such as fuel cells, bio-energy and hydrogen technologies.

"We're three million people in a six billion world, and so we're not going to be able to develop all of the technologies here. So we've got to be very smart," said Isaac."

This even though setting an example for the rest of the world to follow might actually help lessen demand. This despite the fact we make more money from our oil and gas revenues than most provinces and states in the world which puts us in the best position to lead the way into renewables. This despite the fact that Iceland is composed of a population just under 300,000 and is known as the hydrogen center of the world. This despite the fact that helping keep America addicted to oil is sheer idiocy given that a terrorist attack on Saudi fields could bring oil production levels down to what they were during the OPEC embargo in the 1970s . This despite the fact we, unlike the Saudi's, do not have a global surplus production capacity which would allow us to make up for a production loss that could come from Saudi Arabia. As former CIA agent Robert Boar correctly points out in his article The Fall of the House of Saud:

Promoters of Alaskan, Mexican Gulf, Caspian, and Siberian oil all like to point out that the United States has been weaning itself from Saudi Arabian oil, for protection against the effects of just such an attack on the Saudi oil system. Saudi Arabia may sit on 25 percent of the world's known oil reserves, they argue, but it provides somewhere around 18 percent of the crude oil consumed by the United States--and that is down from 28 percent in only a decade. What these people fail to mention is that Saudi Arabia has the world's only important surplus production capacity--two million barrels a day. This keeps the world market liquid. Not only that, but because the Saudis more or less determine the price of oil globally by deciding how much oil to produce, even countries that don't buy Saudi oil would be vulnerable if the flow of that oil were disrupted.

Given all of the above, I cannot begin to describe how frustrating it is to hear such policy within this government.

The current ideology leading us, in relation to the first article posted, is this:

World oil demands are not static; they’re accelerating while production is declining, presenting “the perfect storm” for an oil showdown in the coming decades. If the world suffers a conservative 2% annual decline in oil production from existing wells, 1.7 million barrels per day of new oil production will be required to maintain even current production levels.

However, if we apply common sense, this math is simply a distortion of the facts; it isn't lying, it's just misleading. It makes you think we can make a dent a the peak oil problem when the real motive of the government, and the bussiness it supports, is simply to make buck before everything starts to fall apart. Right now, it is estimated that globally the world demands 83-85 million barrels of oil. If the peak were to be occurring right now, let us say the decline in global oil production is to occur in 2 years with an annual drop of 2% in production rates like the article says. That would mean production will drop by 1.68 million barrels, so indeed an average of approximately 1.7 million barrels would have to be produced the first year of peak oil. However, a 2% drop annually means that two years from the peak we will need to produce 4% more, thus leaving us with the responsibility of producing not just 1.7 million barrels, but 3.4 million barrels p/d. What happens the year after that? The world will need 5.1 million more barrels of oil produced to stop production from declining. After that? 6.8 million barrels. After that? You get idea. And that's only provided global demand stays at the 83-85 million range we're at right now, which admitted by everyone with any common sense, including those that make up and advise the current Alberta Government, is impossible. It is estimated by many people that global demand for oil in 2020 will be at 120 million. What will production have to be then to keep up with demand? The idea that we can and will provide the U.S with energy for the next hundred years, let alone 400, is pure fantasy. Right now, we only produce 750,000 barrels per day. Even if Iran, Nigeria, China, Russia are tapped, as some people expect them to be, it has to be taken into account how much those countries could produce altogether to make up for supply shortages. And even if they could potentially, it should be asked whether political termiol in the first two would allow for such levels of production.

Then there is the issue of Saudi Arabia.

Current research and experience indicate that this (Hubbert's Peak) is already happening, on schedule, today. Canada’s oil sands reserves are one of very few supplies (along with Saudi Arabia’s giant Ghawar field) that can grow production over many decades to come.

According to Kenneth S.Deffeyes' book Beyond Oil, on page 44:

...on March 6, 2003, the Saudi government announced that their production had maxed out at 9.2 or 9.5 million barrels per day.

Saudi Armco has already redrilled Ghwar with horizontal holes to improve both water injection and oil recovery (on page 31). You don't drill horizontal holes and increase water input for wells unless your production levels are starting to drop; you do it to keep pressure high. While it is true Saudi Arabia does indeed have over 80 working fields, half of the oil produced, as pointed out in Boar's article, comes from Ghwar. And as was just pointed out, there are questions about Ghwar's future production capacity rates.

Even if we could somehow up production rates to make up for a shortfall in oil production, an account also needs to be taken about global warming and the threat it poses. Currently people warn:it threatens to stop the Gulf Stream which keeps North America and Europe from entering into extremely harsh winters; and because of the shrinking of glaciers worldwide, it will drastically affect our water supplies.

Also in relation to that, as is pointed out in another article I posted earlier about producing oil from our oil sands:

Hot water is added to the sand, and the resulting slurry is piped to the extraction plant where it is agitated and the oil skimmed from the top.

I'm not going to speculate, but if it takes a large amount of water to do this what are we supposed to do when our water supplies start to shrink?

We have one of the most short sighted governments in the history of Canada. Klein got thrown on top of a mountain of wealth and then somehow got the credit for it being there in the first place, as if his governments good fiscal planning was and is to credit. This despite the fact that our revenue collected per barrel of oil is something like 4 dollars compared with Norway's which is around 11 dollars. Our Heritage fund only has 13 billion sequestered, where as Norway’s, which was started around the same time as ours, is now around 120 billion. And people have the audacity to claim good fiscal management? The governments energy consultants are telling them not to invest in our future, how is that a good management of resources?

Of course the usual argument comes out:

"Oh, but by keeping the revenue we earn on each barrel of oil at this price we attract more investment"

As if the oil companies would have somewhere else more profitable to go if we decide to raise the price a bit in the first place. Venezuela? Good luck getting your grubby little hands on anything over there. Iran? How about another nice Iraq war the Americans can go and induce? Elsewhere? Global crude oil production has been flat since 1998. This government is in the pockets of big oil and private business everywhere; it should come as no suprise that economics has engulfed politics here and thus any hope at all for a good balance of common sense.