FUEL
We seem to have bet the farm, the whole town and county too, on $100 per barrel oil. Why is that? Nobody thinks this is a terrible idea? As far as I can tell everyone acknowledges that Alberta tar production is feasible only because the price of oil is so unreasonably and unsustainably high. But we’re just going to run with it? Is this how you create jobs and build a national economy? On a wish and lie?
Part of the lie is normal corporate marketing: a series of useful, for-profit half-truths that probably won’t hurt anyone if everything goes to plan. Like many tall-tales, folks eagerly and unquestioningly lap it up. These misleadings are so loved by the media and its public that they can be heard re-telling and embellishing the story all over the place and beyond all reason. Friends, relatives, and strangers on the bus all can be heard talking about Canada’s “global energy dominance” and there being “a thousand years of oil” locked up in Alberta’s Boreal. (Ignoring absolutely everything, EVERYTHING, we know about economics, politics, and technology.)
But is it just a bit of marketing or is there fraud here too? Firstly, Canada is a colony: a foreign-controlled resource cache. Just do that math. Rather than controlling or profiting from its “oil” (tar) reserves, global superpowers make the rules, create the product (and sell it back to us), and reap all of the rewards. Canada builds the infrastructure, supplies the labour, charges virtually no taxes or levees, while suffering untold damage to its environment and its flora and fauna (humans included.) In a generation all these companies will have declared bankruptcy and folded, leaving locals to clean up the mess. (This happened in living memory just one province over in Saskatchewan with the uranium industry – which was an unlimited fuel source that was going to power the whole world forever.) Secondly, Canada remains a oil powerhouse only so long as oil remains obscenely expensive. No oil company or economist can possibly think oil prices will stay as they are for long – “long” even in economic terms, nevermind in reality. And we also know that nobody knows when the collapse will come. It could be a week or a year or ten years but the crash, we can be certain, is right around the corner. (In 2007 my environmental science prof detailed how Syria and Saudi Arabia could easily get together and flood the market with so much cheap oil that, virtually over night, they’d sink every other oil producing nation on the planet and whatever oil companies they weren’t directly supporting. So at best we have inherent precariousness perched atop the turbulence of global markets.)
Yes, the “thousand years of oil” is a true statement but it conceals an obvious lie. We don’t do sustainability. There won’t even be one generation of tar sands workers, at present numbers and wages, nevermind a large sustained population built up around it. Tar itself is not in any way sustainable – unlike forestry and fishing, which are renewable at least (and yet we managed to bring both of these seemingly inexhaustible resources, and their dominant provincial and national industries, to near extinction in my lifetime.) I mean, is there any doubt that, long before anyone’s collecting a pension from their time in the tar sands, the Athabasca Chipewayan will be fighting provincial and federal governments for having allowed foreign companies to poison everything they didn’t completely destroy? (And what do you imagine the bill for that will be? Do you think there is enough money or resources in the world, even in a thousand years, to recreate what has already been lost? No.)
Further, it’s reliably predicted that when the price of oil falls, as it must, the first cost-saving measure of any greedy foreign oil company, with no loyalty to Canada or to Alberta, will be to lay off workers. The lack of work in the remote north will mean that people will be forced to walk away from their homes. Evaporating house prices will, if nothing else, migrate south into Edmonton and Calgary if things aren’t remedied swiftly. And we all know that Canadian banks and whole regional economies (and the populations they support and rely upon) are pillared by oil and real estate, and cannot withstand a simultaneous collapse on both these fronts.
Even if by some miracle the above is avoided, against all odds petroleum is still a non-renewable resource that will not survive the next generation of alternative energy platforms, nevermind their continual and exponential growth and evolution in efficiency. Period. Oil is dirty, expensive to extract, and finite. (And Alberta tar is by far the worst in the world on all these points.) Technology, like wind and solar, light bulbs and batteries, is by comparison none of the above. But you know this; we all know this. And that’s why I’m confused.
And, as often is the case, what’s true in Canada is even more exaggerated in America. Recently, John Mauldin (world-renowned analyst and financial writer; author of one of the most widely distributed investment newsletters in the world and of the New York Times best-selling investment books; Chairman of Mauldin Economics, and President at Millennium Wave Investments) predicted “[America] will be energy independent … a net energy exporter in the next three or four years.”
Bullshit of this sort has been popping up everywhere over the last few years. Mauldin and others note the massive deregulation of the energy sector since the start of the Bush administration and significant investments in shale gas (and other crimes against humanity and nature and all that is good and holy...) These pro-corporate, pro-petro, pro-death propagandists deliver headlines to their media pawns that read things like: “15.4 billion barrels, 2.8 million new jobs, and $25 billion in taxes for California.” What doesn’t make the news is that the recoverable poison from the famed Monterey/Santos shale formation (that 15.4 billion barrel figure) was almost immediately revised downward, after publication, to something closer to 600 million barrels (or just 4% of the original headline pronouncement). Yet this is in reality a much bigger drop than the simple number suggests. The original Monterey/Santos estimate, 15.4 billion barrels, made up 64% of all recoverable shale gas reserves in America – much of their gleeful self-sufficiency picture. ...so this wasn’t actually millions of new jobs and billions in new tax dollars. No, all of that was essentially fraudulent smoke and mirrors.
But it doesn’t stop there. Look at Dr George Friedman (yet another New York Times bestseller; Chairman of Stratfor, the geopolitical and global intelligence outfit; a keynote speaker to many Fortune 500 companies; frequent expert guest on television; with articles in TIME, The Wall Street Journal, Fortune, Newsweek, The Financial Times, and more), he recently came on the air and touted that “All the assumptions about energy in the world have been turned on their heads. The United States is now a major producer.” He explained that America just had to sort out the logistics of exporting its massive amounts of gas to Asia and Europe.
Again, bullshit! And again, just do the math. Shale gas currently sits at $4.60/mmbtu (million British thermal units) in America. In Asia and Europe it’s somewhere around $15. The price is low in the U.S. because production is virtually nonexistent and demand is even less. (This is Econ 101, no?) And, as stated earlier, there’s hardly any recoverable gas in the U.S. to meet domestic demand, nevermind foreign. And there are unlikely to be hidden reserves yet to discover. (We can be sure of this because geophysicists know very well what’s going on below the soils of the U.S., and they are already desperately exploring, drilling, and mining state and national parks and even protected wildlife reserves – changing laws and permitting the destruction of heritage sites to get at the few resources they can find...)
Even if there are hidden pockets of gas, the U.S. would still have to significantly ramp up extraction and pipeline production, as well as build new processing facilities, and a massive new fleet of mega-tankers. And then they’d still have to get that fleet to market. Do you think all this very costly new activity helps cut the price of American shale gas? (Maybe. I mean, I’ll grant that I know less about business or economics than Friedman or Mauldin; but it would seem to me like nothing short of otherworldly Rowlingian wizardry if gas actually got cheaper as it becomes more scarce and in ever-less demand. How would this be possible without massive new government subsidies, which are already extreme and unreasonable?) And then, on top of everything, would the American people, those unemployed and underemployed throngs (100 million now living in cars, too poor to rent an apartment or even to shop at Wal-mart), then opt to compete with Chinese consumers for their own Yankee gas – a public resource extracted from publicly owned lands? No freaking way! All of this, seems to me, is a bold fiction.
And you cannot help but notice that all of this (devastation, precariousness, lies) is taking place here at home while major global industrial and economic centres are already getting much of their power from fossil fuel alternatives. China, India, Brazil, and Germany will all be running on solar and wind and we’re going to be begging them to take our dirty gas for pennies on the dollar. But they won’t be able to even if they wanted, because environmental policy they themselves penned will establish sanctions and penalties against its purchase or use.
No, these jokers are buying up global reserves of lead paint and asbestos and then peddling them, claiming that these commodities are essential to life and the future of our economy. No. Hell no.
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