WexitAGoGo
LougheedDoesn'tLiveHereAnymoreVille
Why do the titans of the resource extraction bund who provide the programming for people like the good Mr. Kenney of the Albertalands need to fabricate faux enviro enemies for no good reason at all?
Well.
It would appear that it is because they, themselves, have come to understand that real end is nigh.
Mitchell Anderson, writing yesterday in the The Tyee, has a solid take on this POV:
...The market value of the U.S. energy sector is down almost nine per centthis year. The entire sector is now worth less than Apple. Exxon Mobil’s credit rating was just downgraded by Moody’s due to concerns of “substantial cash burn.” Fracking giant Chesapeake has shed 98 per cent of its stock value since 2008 and recently warned investors it may not be able to make scheduled payments on its crushing $10-billion debt.
Here in Canada, we hear a lot about the value of pipelines, but the economics of oil infrastructure elsewhere are collapsing. A recent reportpredicted the $160-billion global oil tanker fleet could lose 30 per cent of its value as the world shifts away from fossil fuels. “Shipowners and people that finance these ships could see their market is sinking,” said Stuart Nicoll, a director at Maritime Strategies that authored the study. “This just hasn’t had any attention.”
An ultra-deep water drilling platform worth $683 million in 2011 was just sold for scrap at two cents on the dollar after receiving no bids at auction, driven by diving investor interest in expensive offshore projects.
Even the Bank of Canada recently warned that some global oil reserves will become worthless in the future. “Maintaining the warming below 2.0 degrees Celsius implies that some of the existing fossil fuel reserves will become stranded assets,” wrote bank senior research director Miguel Molico in a recent report...
Gosh.
Does this mean that the massive debt transfers and asset bleeding will soon begin in earnest?
And when it does will this stratergy be backed with even greater government subsidies* for said bund?
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*Paid for by the draining of public pension funds, perhaps?
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Links 11/24/24
1 hour ago
6 comments:
And in the move away from fossil fuels....
https://www.hurtigruten.com/our-ships/ms-roald-amundsen/setting-the-standard-in-sustainable-technology/
https://globalnews.ca/news/6236692/harbour-air-electric-aircraft-test/
Thanks Keith!
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Interesting article. Explaines why Kenny is so desperate. He fired 90 government lawyers, is planning on firing thousands of health care workers, and cut taxes for corporations. None of this will provide the jobs Alberta needs. A lack of decent health care will cause corporations to not invest in Alberta. Kenny sold the voters on the "idea" he could bring jobs back if only Ottawa would co operate. Between the declining oil market and his cuts, he won't have to worry about sending money to Quebec.
With the up tick in electric cars and trucks including 18 wheelers, the writing is on the wall. Corporations understand voters are scared about he future which doesn't bring pollution and climate change under control.
No wonder Kenny is talking about starting an Alberta pension plan. He wants his hands on the money, Ottawa now holds. of course it might result in Albertans not only not having jobs they could also not have any pensions because Kenny isn't a smart person. He may be a political animal, but smarts on how to run an economy, not so much. Private pension funds are going to have to make some quick moves because there could be a lot of very poor old people, if things aren't done well.
Agree with you E.A.F. Kenny is desperate for money and if he does get his hands on it, and he doesn't give a hoot from where the play will be the same as most “conservative” govts. Transfer it to the private sector to keep the illusion of a functioning economy, as per the Alberta Heritage fund, he’ll bail and leave a complete mess behind him, as per Jim Prentiss and the proceeding fiscally responsible crowds, with Albertans still trying to go back to 1963.
But still not coming to terms, along with other parts of natural resource Canada, that much of their respective economies are the result of what happens outside of their borders and country beyond their control.
The bitumen industry, like all mining ventures, is extremely front-end capital-expensive. We hear a lot about attracting investors into Canada, but capital intensive industries don’t much brag about the subsidies they expect in return for risking their investments. Ideally public subsidy of is tapered off as operating revenues take over recovering that investment. But the stranding of natural resource assets— not being able to remove them to more profitable climes—while truly not industries’ fault, cannot found a claim for compensation: to begin with, these are Crown assets and do not become private property until purchased by way of benefits to their public owners—jobs, taxes, etc.—the fabled “spinoffs” of which profiteering magnates claim to be a service for which the public owes. What else can explain the continuation of public subsidy after the venture has started making money and paying its shareholders dividends, writing-off depreciations against taxes otherwise owed the whole way?
In addition to claiming a sort of ownership over Crown assets it does not really own, and demanding compensation for spinoffs and wages citizens get from selling their own resources, Big Bitumen would also like to get subsidies for retreating from the public resource asset in good order, leaving abandoned private assets like settling ponds, leaking gas well-heads and fracked aquifers (natural gas used for smelting bitumen) and permanent environmental pollution in downstream water and air sheds.
Subsidies to attract industry investment in, subsidies to keep it here while it profits, and subsidies to cover the cost of winding down its operations before they become unprofitable on its way out.
As the price of a barrel of dilbit shows, as Kinder Morgan’s conspicuously brisk acceptance of the Canadian government’s offer to purchase TMX shows, as thousands of layoffs show, Big Bitumen would like to retire from this field because, without subsidy, it’s a dog. Yet it’s content for now to let its UCP political proxy slash social welfare spending which it has always condemned as a distortion of laissez-faire, invisible-hand economic principles— while accepting corporate welfare from the public purse. It’s not the only bubble of hypocrisy about to be burst in the accelerating precipitation of global climate change. It’s already, as the French say, “raining nails”.
If truth be acknowledged, this teetering house of cards would have inscribed on each one list-items like these: there is no greener pasture just over the mountains in Burnaby (to date, no fabled Asian buyers have committed to paying anything, much less a premium price, for shipped dilbit); no fabled ‘business cycle’ will bring prosperity back around to the bitumen mines (which puts paid to rationalization of bitumen industry expansion); the Canadian economy continues to grow while bitumen tanks—meaning it’s not beholden to bitumen as industry says it is (it’s the same as saying Albetar, whose voters have long elected governments which have broken their treasury to appease the corporate bitumen bums, is not Canada); Big Bitumen’s (and JKKK’s) admission that, yes, while fossil fuel is in decline, it would be dangerous to to switch to alternatives too quickly (industry’s ‘kinder, more compassionate’ climate-change denial— denial of the rapidly accelerating rate of change); investment knows no patriotism and if we demand much (of anything) of it, it will leave for better opportunities (heh, heh,... Big Bitumen only wishes it could get the hell out of Albetar— like, yesterday —without precipitating a more serious rout of stock values than is already happening). Big Bitumen, already knowing all of this, should already be long gone.
It’s only the subsidies keeps them here, ‘profitably’, too long—that and the barrels and barrels of JKKK gin to keep the thick bitumen promise dilute enough to flow in the hearts and minds of Albetarians.
Scotty!
'...without subsidy, it's a dog...'
Indeed it is.
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