Sabotaging Alberta Oil

"What would become a massively disruptive intrusion into Canadian affairs would take years and a large amount of money. Enter the Rockefeller Foundation, the Hewlett Foundation, and the David and Lucile Packard Foundation."
"They, along with environmentalist charities, poured hundreds of millions of dollars into the U.S.-based Tides Foundation, a murky organization that provides cover as a legal laundering service that can funnel donations into activist groups, without revealing the source"
Gwyn Morgan, retired founding CEO, Encana Corp.

"[Payments went to the Pembina Institute to] advance ... the narrative that oil sands expansion is problematic; [to Greenpeace Canada] for events to show opposition to pipelines and tar sands expansion; [to the Living Oceans Society] to build opposition to the Kinder Morgan Pipeline; [and to Forest Ethics] to conduct education and outreach opposing the Kinder Morgan and Northern Gateway pipelines."
Vivian Krause, independent researcher, British Columbia

The Tar Sands Campaign’s agents in Ottawa: (L-R) Butts, Raynolds, Goodman, Caron.

It took a decade of intensive study and research into U.S. and Canadian tax records, along with documents and statements from those involved in this massive and controversial scheme to impact on the outcome of petroleum product extraction from Alberta's vast energy resources, but Ms. Krause kept at it until she was able to assemble all the identifying evidence linking American dollars to Canadian failures in optimizing natural resources on the world stage, where hunger for energy remains unabated.

The U.S., on the other hand, is determined to be wholly energy-independent and globally dominant in energy production and it has succeeded to an amazing degree, while absorbing Canadian oil at bargain-basement prices since no Canadian pipelines have been built to convey that oil to market abroad. The U.S. has realized a ten percent leap in energy consumption in 2018; booming natural gas extraction leading the way, according to the U.S. Energy Information Administration.

This, at a time when the U.S. 2018 National Climate Assessment report was circulated, where scientists from 13 government agencies and outside experts have given warning that climate change "presents growing challenges to human health and quality of life, the economy, and the natural systems that support us". Fossil fuels accounted for 80 percent of energy use by Americans. U.S. shale oil and gas boom is making natural gas more affordable, and more power plants are running on natural gas.

The same environmental philanthropic agencies that have poured millions into sabotaging Canadian oil and gas extraction and sales appear to be undisturbed by what is occurring in their own country, focusing instead on Canada's energy resources. This, at a time when the U.S. is in a polarizing political ferment over supposed Russian interference in American politics, with claims the U.S. President has been complicit with his Russian counterpart in a campaign to have him elected to office.

In 2008, the year Barack Obama came to the presidency, the president who kept refusing to allow a Canadian oil pipeline construction to proceed, a group of U.S. anti-fossil-fuel NGOs put together a "Tar Sands Campaign Strategy 2.1" meant "to landlock the Canadian oil sands by delaying or blocking the expansion or development of key pipelines." Key strategic targets included "educating and organizing First Nations to challenge construction of pipelines across their traditional territories", and bringing "multiple actions in Canadian federal and provincial courts".

A section for "raising the negatives" was inclusive of celebrity recruits like Leonardo DiCaprio to "lend their brand to opponents of tar sands and generating a high negative media profile for tar sands oil". This intrusion on such a massive scale into Canadian affairs took years and dedicated funding. That both U.S. and Canadian tax laws require that charities document receipt and disbursement of funds was a huge help to researcher Krause in her mission to find all the evidence of this campaign possible.

Irrefutable evidence was gathered identifying tens of millions transferred from Tides U.S. to Tides Canada, its affiliate, along with 70 covering letters indentifying recipients and indicating how the funds were put to use, going toward mobilizing First Nations against the fear instilled in them of oil spills; payments to help build "indigenous solidarity resistance to pipeline routes"; and to maintain "opposition to oil tankers" and to "provide legal support for actions constraining tar sands development".

Millions of dollars from Tides Canada to operate get-out-the-vote campaigns in the 2017 B.C. provincial election went to Dogwood Initiative. based in Victoria, to ensure the government of British Columbia would be in the hands of an NDP/Green alliance certain to battle the Trans-Mountain pipeline expansion. Funding was funnelled as well to campaign activists to help the 2015 federal election become a massive Liberal win.

Canada was given an ideologically anti-oilsands Liberal government. "The controversy from the campaign (Tar Sands Campaign) contributed to political victories at the provincial and national level in 2015 and led to bold climate commitments by Canadian leaders", exulted Michael Marx, team leader from the Tar Sands Campaign.  Prime Minister Justin Trudeau brought Gerald Butts from president and CEO of World Wildlife Fund Canada into the post of principal secretary to run the prime minister's office.

Gerald Butts in turn, with the power of his new position, brought former campaigners with him. Mario Raynolds, past executive director of the Pembina Institute became chief of staff to the Environment Ministry; Zoe Caron, a former WWF Canada official became chief of staff to the Natural Resources Ministry, while Sarah Goodman, a former vice-president of Tides Canada is also on the prime minister's staff. Anti-oil activists all, doing their environmental advocacy work at the epicentre of federal power.

How're We Doing! Canada?

"Annual mean precipitation has increased, on average, in Canada, with a large percent increase in northern Canada. For Canada as a whole, observational evidence of changes in extreme precipitation is lacking. However, in the future, extreme precipitation is projected to increase in a warmer climate."
"For Canada as a whole, observational evidence of changes in extreme precipitation is lacking."
Xuebin Zhang, senior research scientist, Environment Canada

"The elephant in the room, from a climate-change perspective, is ... too much water in the wrong places."
"Flooding is the number one [insurance] cost in Canada ... due to climate change. The magnitude of the storms is increasing."
"The frequency, duration, the intensity of storms is much greater today than it was in the past."
Blair Feltmate,  Head, Intact Centre on Climate Adaptation, school of environment, enterprise and development, University of Waterloo

"The ombudsman [Guy Gendron, CBC/Radio Canada International ombudsman] has ruled in favour of the complainant [Robert Muir, Ontario municipal engineer, member of the Ontario Society of Professional Engineers]."
"Certain statements relating to rainfall amounts and the so-called 100-year events deemed to be inaccurate or irrelevant to the story have been removed and/or replaced."
"Information from Environment Canada has been added to indicate their statistics show no increase in rainfall or extreme rain events beyond 'normal' variations... These changes to the original story have been made on January 29, 2019 to comply with the ombudsman's decision."
Canadian Broadcasting Corporation correction 

CBC’s ombudsman issued a report saying flood claims by Blair Feltmate led the news network to publish stories last fall that contained “inaccurate and irrelevant” information.   Laura Pedersen/National Post files

The Insurance Bureau of Canada has been pushing provincial governments in an alert responding to flood claims, to fund green infrastructure in planning to mitigate flood damage. The Bureau plumps for 'green infrastructure' such as "natural" flood-control schemes defined including "natural heritage features" such as "street trees, urban forests,natural channels, permeable surfaces and green roots", bypassing hard infrastructure like waterways, improved sewer diversion and better urban water0management facilities.

Their version of improved green infrastructure as being more cost-effective and natural is disputed by the Ontario Society of Professional Engineers. In support of the Insurance Bureau, the Canadian broadcaster  decided to broadcast statements by the Bureau's frequent climate-change witness with claims that climate change has been responsible for triggering a surge in flood events in recent years. That resulted in a complaint to the CBC Ombudsman by an Ontario municipal engineer, Robert Muir, with the result, a CBC correction.

The thing of it is, despite Environment Canada's statement by its senior research scientist refuting those claims, there are other supporters of the climate change theory of lifetime-changing weather events, namely the Liberal government of Canada. Justin Trudeau is on record as claiming that a long-range plan to wean Canadians off current energy sources will bring Canada in line with other advanced nations pledging to curtail greenhouse gas emissions with the eventual use of alternate, 'green' energy sources.

That commitment to reducing Canada's use of conventional energy sources hasn't played out too well of late. This government has tinkered with rules and regulations on energy extraction and fine points in environmental consultation to the point where no urgently required pipelines moving oil and gas across the country, much less to shipping points benefiting Canada's exportation of both has left the country reeling with once-wealthy Alberta, the source of much of Canada's energy resources along with Saskatchewan and Newfoundland, unable to exploit those resources.

The absurdity of Canada importing Saudi oil while leaving Canadian oil underground has us burning fuel extracted elsewhere, costing Canada dearly to import that oil and much more in its incapacity to move the oil that is being extracted at a fair market value price to its major importer, the United States. Jobs in the energy field have dried up, investors have moved elsewhere, revenue is down, unemployment rising along with western resentment toward central and eastern Canada.

"The next election is going to be a referendum on Justin Trudeau ... and whether or not people think he has performed", stated Darrell Bricker hard on the heels of the latest Ipsos Public Affairs poll, referencing the government's stark failure in the energy field, and its comatose attitude toward illegal migrants flooding into Canada, swamping Canadian Immigration's ability to scrutinize and process refugee claims, leaving a situation of years of backlog, impacting on the process for legitimate claimants.

Now the Parliamentary Budget Officer has released a valuation in detail of the Trans Mountain pipeline the Trudeau government bought from Kinder Morgan last year for $4.4-billion, vastly overpaying for a worn-out investment caught in the clutches of the government's own web of increasingly fraught conditions to proceed with building the pipeline and bringing it to operation. the PBO vetted construction costs and risks of delay in construction, leaving the impression that with delays and rising construction costs that pipeline just may not be built.

Pipes are seen at the Kinder Morgan Trans Mountain facility in Edmonton on April 6, 2017. Jonathan Hayward / The Canadian Press

And given the constrictions imposed by this government on any kind of energy extraction and movement, investment from abroad by energy giants looking for new projects to fund, and observing the contretemps for the past few years of immovable projects designed to fail, are intent on maintaining a safe distance. All of which adds up to punishing costs to Canadian taxpayers on the hook for a pipeline which may never be completed, and the continued need to import oil in a country that has some of the largest reserves on the planet.

"If it was a car, we would say they paid sticker price, they didn't negotiate very much, they didn't get that many deals or manufacturers rebates — quite the opposite."
"It's a very risky project to have bought something that nobody else in the private sector wanted to acquire. There are lots of retirement or pension plans that like to buy infrastructure of that nature that generate streams of revenues."
Parliamentary Budget Officer Yves Giroux

Steel pipe to be used in the oil pipeline construction of the Trans Mountain Expansion Project sits on rail cars at a stockpile site in Kamloops, B.C. A PBO report released Thursday says Ottawa may have overpaid for the project by more than $1 billion, but its value for oil producers, and in turn government coffers, is considerable. (Dennis Owen/Reuters)

Bringing Alberta Oil To Market....

"When you have a price differential that's up around $42, $50 even, that's a massive challenge to local industry, to the livelihood of a lot of Albertans. I hear that very, very clearly."
"There is no question that folks in Alberta, folks here in Calgary, are living through extremely difficult times. This is very much a crisis."
"You think there's a super-simple easy answer and there's not. There's a multi-faceted complex issue and as much as there is a tendency out there in the world to give really simple answers to really complex questions, unfortunately the world doesn't work like that."
"We need to make sure that we're moving forward in the right way and that is where actually listening to the experts is sort of the best way to make policy."
Prime Minister Justin Trudeau

"The crisis happening in this province affects the whole country but they [the federal government] are speaking a different language."
"We must get our product to tidewater and nothing today addresses that [urgency]."
Alberta Finance Minister Joe Ceci

"We need more [rail] cars. We need to order more locomotives in order to get more cars onto rail. That's the bottom line."
"In the meantime however, we need to take a close look at the tools available to us to close the differential where it's feasible."
Rachel Notley, Alberta Premier

"My sense is that we will be able to do that [get projects built, such as the Trans Mountain pipeline which the federal government used $4.5-billion in tax funding to purchase the project from Kinder Morgan Canada Limited whose shareholders were fed up with all the obstacles put in the way of completing the pipeline by the very Liberal government which swears it intends to see that Alberta oil gets transported in a timely efficient manner so that it will no longer be sold at discounted rates] in a way that will provide confidence to the sector."
"I don't accept the argument that this government has not been very, very focused on how we can deal with the challenge of getting our resources to international markets."
"We're the government that substituted action for words."
Bill Morneau, federal Finance Minister

Before he was elected in 2015 by a Canadian public that failed to appreciate the guardianship of the Canadian economy and international relations that had Canada in a healthy fiscal and global position led by Conservative Prime Minister Stephen Harper, Justin Trudeau made no secret of his long-term goal to leave Canadian petroleum products underground. First, he meant to gradually wean Canadians off their dependency on oil with alternate sourcing of energy, and then he would shutter the oil industry leaving Alberta (Saskatchewan and Newfoundland) to find other sources of income) while delivering an ostensible environmental plus under his watch.

In the struggle to build pipelines, he compromised by promising the Trans Mountain pipeline would be built, but the Northern Gateway pipeline would be abandoned, at a time when Canada desperately needs to move its petroleum extraction industry forward both for domestic and trade purposes, rather than rely on oil sourced from Saudi Arabia. The Liberal government has focused on its pet project of empowering women, LGBTQ-2, Aboriginals in every sphere of public life, while ignoring the realities of the country's finances teetering vulnerably with a deficit far higher than anticipated and a growing debt, costly to the country's future.

Ontario along with Alberta were considered the nation's two power-house economies that kept the country strumming along, providing billions in equalization payments to the other provinces to ensure that social programs throughout the country were equally distributed. Ontario lost manufacturing jobs to cheap-labour countries and its wheels of commerce and production groaned to a downward spiral, while Alberta has had to struggle with opposition from the very provinces that benefit from its financial support, while they pursue an environmental agenda hostile to the very source of its wealth.

The Canadian Association of Petroleum Producers estimates the price discount ("differential") that affects heavy oil and has spread to light oil is costing Canada dearly. The impact for the first ten months of this year was a loss of $13-billion in revenue. In October the difference between what U.S. crude sold for a barrel and Alberta crude was a whopping $50-million daily. "The differential has blown out to such an extreme level for two reasons, the lack of access to markets and the fact we really have only one customer (The United States)", explained Tim McMillan, CEO of the Canadian Association of Petroleum Producers.


"If Northern Gateway had come on as planned, we wouldn't be in this situation", he said. "If this keeps up and we start to see either a lack of growth or more shutting in some of this production ... you're losing jobs and even personal income tax as well", noted Kent Fellows, research associate at the School of Public Policy, University of Calgary, who estimated the differential would translate into a $13-billion economic loss if it persisted for a year; $7.2 billion for the Alberta government, $5.3 billion to industry and $800 million to the federal government.

Discounted Canadian Crude -- Boosting China's Welfare

"The policy of boosting infrastructure investment has been bullish for bitumen."
"The supply of the Merey grade has been disrupted since May, pushing refiners to look elsewhere. As late-September and October is traditionally the peak season for construction projects in China, demand will be further supported."
Li Haining, analyist, industry consultant SC199, Shandong province, China

"On the demand side, there are expectations for bitumen growth in China due to a boost in infrastructure spending."
"With traditional heavy oil shipments shrinking globally, trade flows are being reshaped and alternative heavy oil supplies from countries such as Canada are becoming sought after."
Sophie Shi, analyst, industry consultant IHS Markit, Beijing, China

"The gap between Canadian and U.S. oil is nudging US$50 a barrel, while West Texas Intermediate is in the neighbourhood of US$72. The discount is so juicy that China has started switching away from Venezuela toward Bargain-basement Canada."
"That tells you something -- even claptrap, broken-down, corruption-riddled Venezuela can't undersell Canada's sadsack inability to peddle its oil."
Kelly McParland, National Post

"...Large emitters such as China, the United States, the European Union, India, Russia and Japan [collectively accounting for approximately 2/3s of total global emissions] matter the most."
"...The United Nations has sounded the alarm, releasing a report in early October suggesting a carbon tax of up to US$5,500 per ton [$7,183Cdn] may be necessary to limit temperature increases to 1.5 degrees."
"The UN report suggests that a global emissions reduction of 45 percent by 2030 is needed, amounting to approximately 24 billion tons. Canada's share would represent around 200 million tons -- or just 0.8 percent of world emissions."
"This is the argument Canadian carbon taxers are making; that securing 0.8 percent of global reductions is worth punishing millions of Canadians and destroying Canada's economic competitiveness. They are asking Canadians to make massive, tangible sacrifices in their everyday lives...meaningless in the highly probable event that most other countries don't also follow."
Aaron Wudrick, federal director, Canadian Taxpayers Federation

Bloomberg via Getty Images

Steam rises from the Syncrude Canada Ltd. upgrader plant in the Athabasca oilsands near Fort McMurray, Alta., Mon. Sept. 10, 2018. Canadian oil is selling at the largest discount to global oil prices ever.

There it is, the politics in this country leaning every-which-way to broadcast we're so open for business that we labour to extract heavy oil at great cost and effort and it can be had for wholesale prices which may or may not cover the cost of extraction. Alberta's oilsands extraction attracted huge interest from giant international oil developers but this government gets stomach pains imagining the potential of fouling the atmosphere, the ground, the oceans in achieving pipeline construction, so looks the other way when industry makes do instead with tanker trains moving it overland to port.

The U.S. administration of Barak Obama, Justin Trudeau's inspiration in environmental protection, nixed the Keystone XL line, even while the U.S. was polluting the environment extracting and burning immense volumes of dirty coal because energy is energy and the U.S. needs and uses plenty of it. Somehow, fracking is A-OK despite that it may cause surface quakes and no one knows exactly the long term effect of forcing chemicals and water below bedrock for extraction that may affect deep-seated aquifers.

British Columbia is on its environmental high horse, rejecting Alberta oil pipelines but enthusing that a $40-billion liquefied natural gas plant is slated for Kitimat which had refused to allow the Kinder Morgan oil pipeline to pollute the town with its presence. The B.C. government moans that a pipeline through B.C. is environmentally offensive, that it won't stand for the potential of leaks yet it's fine with hosting the largest coal export terminal in North America.

Heavy haulers are seen at the Suncor Energy Inc. Fort Hills mine in this aerial photograph taken above the Athabasca oil sands near Fort McMurray, Alberta.   Ben Nelms/Bloomberg

Oil shipped by rail has gone from 30,000 barrels a day to 200,000 barrels daily from 2012 onward to the present. The chances of spills in rail transport are so much greater and present far more serious consequences than spills from pipelines, but never fear, an environment virtuous commitment by the Trudeau government to imposing a carbon tax will serve to stifle fears of ignoring the threat of climate change, even if the U.S. is responsible for 15 percent of global emissions and China with its 25 percent emissions globally, fail to hold up their substantial end of the international strategy.

And don't forget how important it is to Justin Trudeau to see Canada in the news, particularly highlighting his progressive policies. He likes being admired and having Canada considered a well-run and prosperous, fully-employed nation, generous to its struggling peer-nations, steadily growing the national deficit in the process, but not yet prepared to commit definitively to steaming ahead in supporting multiple pipelines to tidewater to enable Alberta oil to ship at full price, prepared to forfeit the crown of most-disinterested-in-filthy-profit purveyors of energy.

Meanwhile, Canada's cut-rate crude is making China happy, and whether that will help lead to a seat on the UN Security Council is yet to be seen in the future. China's spending on infrastructure in the last half of 2018 is accelerating five times the first half of the year with expectations that bitumen demand will only increase and refiners producing residue from cheap Canadian oil may consequently look forward to heftier profit margins. China profits from Canada's sacrifice, losing billions in the transaction of discounted Canadian crude.

China has alternative producers like Brazil since heavy crude is high in demand among the independent refiners in China, known as teapots. Facing competition from mega refineries these China teapots, small independents, process heavy crude as residential fuel oil. The demand for bitumen and cheaper Canadian oil aids them in capitalizing on demand. So there we are, Canada doing good things for the Chinese oil processing industry, allowing them to approach better profit margins.

Not only a source of fuel, however, Alberta crude is as well as 60 percent cheaper than West Texas Intermediate, but is also rich in bitumen, the black residue used in the building of roads, runways and roofs. As Venezuela's Merey oil varieties shrinks, Canada's crude looks ever more appealing to China's refiners, responding to their nation's building boom. Who needs free trade with China when Canada can give oil virtually free to that huge Asian nation?