Why Alberta Will Win The War Over Trans Mountain

[OilSandGeo + 3]

59 minutes ago, William Edwards said:

Your erroneous assertion that I am not familiar with the subject stems, not from my lack of knowledge, but, instead, from your limited perspective. Please raise your head up from the oil sands pit and look outward at the rest of the world. Now ask yourself the question "If I build a pipeline to transport my oil, who will purchase it at a the other end of the pipe?" Without a satisfactory answer as to how it will be processed, you may decide not to spend the money for the pipeline. You might even decide not to spend the money to produce the oil. In my humble opinion, to properly assess the outlook for Canadian oil sands production one must adopt a global perspective.

Well, Mr.Edwards, you mentioned that Alberta oil can't be processed because it is too heavy and high in sulphur. I mentioned to you that the major portion of Alberta export is sweet crude oil, that is not. My answer to your question - how SCO will be processed, is

" similar to the WTI oil":

WTI API gravity of around 39.6 and  contains about 0.24% sulfur thus is rated as a sweet crude oil (having less than 0.5% sulfur),

and CNS (syntetic crude oil produced at one of the major mines in Alberta)  has API 35.1 and sulphur 0.07%.

[Jan van Eck + 7,558]

Responding further to Mr. Edwards, who stated:

"  And, further, to do that, Canada must be able to process and deliver at a cost low enough to offset the built-in $20/B cost disadvantage for oil sands quality and location. Big challenge!  "

That probably cannot be done.  So, Canada's two solutions are:  (1)  let the currency devalue, making imports priced in US dollars more costly relative to processed tar sands crude;  (2)  insert a tariff on oil imports, again to raise the relative pricing.  There will likely be resistance given the free-trade ideas of the WTO, but as that seems to be cracking in other areas, including US tariffs against steel, aluminum, and even the 300% tariff set against the Bombardier C-Series aircraft (which failed), the re-emergence of tariffs gives Ottawa political cover to protect the Alberta industry. 

What you will end up with is a domestic market entirely supported by Alberta crude, in one form or another, and the sale of refined products probably into Europe via a reversed-flow Montreal-Portland pipeline. I would also anticipate that Alberta will get into the production of methanol as a substitute fuel. 

A devalued currency will support a lot of market manipulation. 

[William Edwards + 708]

40 minutes ago, OilSandGeo said:

Well, Mr.Edwards, you mentioned that Alberta oil can't be processed because it is too heavy and high in sulphur. I mentioned to you that the major portion of Alberta export is sweet crude oil, that is not. My answer to your question - how SCO will be processed, is

" similar to the WTI oil":

WTI API gravity of around 39.6 and  contains about 0.24% sulfur thus is rated as a sweet crude oil (having less than 0.5% sulfur),

and CNS (syntetic crude oil produced at one of the major mines in Alberta)  has API 35.1 and sulphur 0.07%.

Our difference is that I am talking about future growth and you are relating past history.

[William Edwards + 708]

32 minutes ago, Jan van Eck said:

Responding further to Mr. Edwards, who stated:

"  And, further, to do that, Canada must be able to process and deliver at a cost low enough to offset the built-in $20/B cost disadvantage for oil sands quality and location. Big challenge!  "

That probably cannot be done.  So, Canada's two solutions are:  (1)  let the currency devalue, making imports priced in US dollars more costly relative to processed tar sands crude;  (2)  insert a tariff on oil imports, again to raise the relative pricing.  There will likely be resistance given the free-trade ideas of the WTO, but as that seems to be cracking in other areas, including US tariffs against steel, aluminum, and even the 300% tariff set against the Bombardier C-Series aircraft (which failed), the re-emergence of tariffs gives Ottawa political cover to protect the Alberta industry. 

What you will end up with is a domestic market entirely supported by Alberta crude, in one form or another, and the sale of refined products probably into Europe via a reversed-flow Montreal-Portland pipeline. I would also anticipate that Alberta will get into the production of methanol as a substitute fuel. 

A devalued currency will support a lot of market manipulation. 

When you get into urgency manipulations your shoot way over my head. I cannot get my mind around the entire currency relationship area.

[Jan van Eck + 7,558]

21 minutes ago, William Edwards said:

When you get into urgency manipulations your shoot way over my head. I cannot get my mind around the entire currency relationship area.

"Currency" manipulations are perfectly straightforward.  Here is the short version:

 

COnsider Italy.  Italy has a manufacturing base consisting of a very few monster firms  (ENI Oil, Fiat) and a huge number of quite small firms, making everything from leather goods to ties to foodstuffs.  Those small manufacturers are inherently inefficient, while the sophisticated firms in say Germany have fancy machinery and long production runs, with inherently lower costs of production.  So  the firms in Italy get shut out of their markets when competing head-to-head with the Germans.  What to do?  Well, before the Euro, the Italians would devalue the Lira, and that instantly makes their goods cheaper to buy for either the American in dollars relative to the higher-priced Deutschmark, and even makes the Italian product cheaper or on a par with the German product.  

Thus, currency devaluation is a mechanism to hammer back at your international competitors who are better at production than you are. 

In the case of Canada and its oil, allowing the Loonie to devalue relative to the US Dollar makes the high-cost Canadian crude relatively cheaper, thus able to compete against US oil  (or Saudi oil, and so forth). The downside of devaluation is that the Canadians cannot buy imports of cheese from Denmark, or go on a travel vacation to Switzerland, because it gets so expensive. In that sense, devaluation impoverishes.  But you do get to sell your production against rivals.  In the "old days" of fixed exchange rates, countries would engage in exchange-rate wars precisely to gain trading advantage. 

OK, so now along comes the Euro and the Brussels bureaucrats, and now everybody uses the same currency.  The immediate result is that Italy  can no longer devalue, so that old process, of continual devaluations to stay competitive, no longer works.  For Italy to sell their handbags and ties, they now have to compete with others who have fancy machinery (the Germans) or against cheap-labor countries (the Chinese).  And the Italians are unable to do that, so the country ends up in stagflation. It got really ugly with Greece in this vise.  If Greece still had the Drachma, they would have simply devalued it against the Deutschmark, and not gotten into fiscal trouble. 

Canada has gone to a floating exchange rate, set mostly by the activities of arbitragers, corporate funds hedgers, and miscellaneous speculators.  But if Canada were to dump the float and install a fixed rate, and then devalue, then the Canadian dollar (Loonie) could be dropped to say 60 cents American, so that tar sands oil produced at say $100/bbl can be sold for $60 US with no losses. Since that oil is being produced with Canadian goods and services purchased in the Loonie, having a devalued currency allows it to be sold for US Dollars at a price that works for Canada:  $60. (And if you can make it for $50/bbl Canadian, you can sell it for $30 in the US). 

Can Canada do that and get away with it?  Sure they can.  The last time Canada had their currency float down to 60 cents, the Bombardier Corp. could sell subway cars to New York City at a discount to US manufacturers and still make a tidy profit.  Nothing like a devalued currency to give you a real market edge. 

Now to make that work for the oil sands, you would have to have a fixed and devalued Canadian dollar sitting at 60 cents for the next ten years, while those new refineries are built in Canada, probably propped up with taxpayer dollars.  Then you could go back to a float and a tariff against foreign oil, sell the tar sands stuff inside Canada exclusively, and export whatever you can of both Syncrude and regular pumped oil, either to the Europeans or even to the US.  And that is how Canada can pay the bills.  Without that, I see no hope, as Canada has these structural deficits that are sinking the place.  Big trouble ahead in Canada, especially in Ontario. 

Edited May 23, 2018 by Jan van Eck
scrivener error

[William Edwards + 708]

3 minutes ago, Jan van Eck said:

"Currency" manipulations are perfectly straightforward.  Here is the short version:

 

COnsider Italy.  Italy has a manufacturing base consisting of a very few monster firms  (ENI Oil, Fiat) and a huge number of quite small firms, making everything from leather goods to ties to foodstuffs.  Those small manufacturers are inherently inefficient, while the sophisticated firms in say Germany have fancy machinery and long production runs, with inherently lower costs of production.  So  the firms in Italy get shut out of their markets when competing head-to-head with the Germans.  What to do?  Well, before the Euro, the Italians would devalue the Lira, and that instantly makes their goods cheaper to buy for either the American in dollars relative to the higher-priced Deutschmark, and even makes the Italian product cheaper or on a par with the German product.  

Thus, currency devaluation is a mechanism to hammer back at your international competitors who are better at production than you are. 

In the case of Canada and its oil, allowing the Loonie to devalue relative to the US Dollar makes the high-cost Canadian crude relatively cheaper, thus able to compete against US oil  (or Saudi oil, and so forth). The downside of devaluation is that the Canadians cannot buy imports of cheese from Denmark, or go on a travel vacation to Switzerland, because it gets so expensive. In that sense, devaluation impoverishes.  But you do get to sell your production against rivals.  In the "old days" of fixed exchange rates, countries would engage in exchange-rate wars precisely to gain trading advantage. 

OK, so now along comes the Euro and the Brussels bureaucrats, and now everybody uses the same currency.  The immediate result is that Italy  can no longer devalue, so that old process, of continual devaluations to stay competitive, no longer works.  For Italy to sell their handbags and ties, they now have to compete with others who have fancy machinery (the Germans) or against cheap-labor countries (the Chinese).  And the Italians are unable to do that, so the country ends up in stagflation. It got really ugly with Greece in this vise.  If Greece still had the Drachma, they would have simply devalued it against the Deutschmark, and not gotten into fiscal trouble. 

Canada has gone to a floating exchange rate, set mostly by the activities of arbitragers, corporate funds hedgers, and miscellaneous speculators.  But if Canada were to dump the float and install a fixed rate, and then devalue, then the Canadian dollar (Loonie) could be dropped to say 60 cents American, so that tar sands oil produced at say $100/bbl can be sold for $60 US with no losses. Since that oil is being produced with Canadian goods and services purchased in the Loonie, having a devalued currency allows it to be sold for US Dollars at a price that works for Canada:  $60. (And if you can make it for $50/bbl Canadian, you can sell it for $30 in the US). 

Can Canada do that and get away with it?  Sure they can.  The last time Canada had their currency float down to 60 cents, the Bombardier Corp. could sell subway cars to New York City at a discount to US manufacturers and still make a tidy profit.  Nothing like a devalued currency to give you a real market edge. 

Now to make that work for the oil sands, you would have to have a fixed and devalued Canadian dollar sitting at 60 cents for the next ten years, while those new refineries are built in Canada, probably propped up with taxpayer dollars.  Then you could go back to a float and a tariff against foreign oil, sell the tar sands stuff inside Canada exclusively, and export whatever you can of both Syncrude and regular pumped oil, either to the Europeans or even to the US.  And that is how Canada can pay the bills.  Without that, I see no hope, as Canada has these structural deficits that are sinking the place.  Big trouble ahead in Canada, especially in Ontario. 

Thanks. the explanation helps. But it leads me to the question that if Russia takes the same approach that you describe for Canada, will there not be competition in the global market for oil to see who can race to the bottom first and collapse the whole oil price system? Just asking, since I have no clue as to the answer.

[Rodent + 1,424]

@Jan van Eck, that is the bestest ever explanation of currency manipulation I have had the pleasure of reading. Thanks for sharing!!

[Jan van Eck + 7,558]

Replying to Mr. Edwards and his question as to Russia devaluation.

Yes,that is already what has happened.  The Russian Ruble has collapsed on the world exchange rates, due in large part to their invasion of Crimea and the Donbas, and sanctions placed against Russia.  Ten years ago the Ruble was worth three cents (Euro).  Today one Ruble is only worth one cent.  So you have this huge devaluation, by 2/3, in the last decade.  Most of that was after the 2014 seizure of Crimea. 

That means that Russia now only gets 1/3 as much for its oil in hard currency that it used to get. Meanwhile, if the cost of production went up by a factor of three, due to drilling in the Arctic, it could still sell the oil on the open world market, but your Ruble will buy you nothing.  So forget the idea of taking a vacation on the French Riviera, that cup of coffee is now going to cost the Russian tourist ten dollars equivalent, where before it set you back three bucks.  

Will Russia continue to devalue?  Of course it will.  And it ends up unable to import anything.  Oh, well.  Don't go invading your neighbors and get hit with sanctions if you don't like it.  

[Jan van Eck + 7,558]

3 minutes ago, Rodent said:

@Jan van Eck, that is the bestest ever explanation of currency manipulation I have had the pleasure of reading. Thanks for sharing!!

You're welcome! 

Manufacturers in Canada back around 1978 making stuff such as auto parts could do quite well with the devalued Loonie; they got a free gift of an extra 20% just for hauling the product over the Niagara Frontier.  Always nice. Then, when it went back to par, the fun went out of the exercise.  

If Canada cannot sell into the US market then the place dies.  And that is why US Tariffs are such a huge threat.  You see the start of the pain in the lumber industry, now that Trump hit Canada with a softwood lumber tariff.  As long as Canada can devalue (and it will), it makes up for the tariff with the devalued currency, comes out equal.  Cheers.

[Rodent + 1,424]

3 minutes ago, Jan van Eck said:

You're welcome! 

Manufacturers in Canada back around 1978 making stuff such as auto parts could do quite well with the devalued Loonie; they got a free gift of an extra 20% just for hauling the product over the Niagara Frontier.  Always nice. Then, when it went back to par, the fun went out of the exercise.  

If Canada cannot sell into the US market then the place dies.  And that is why US Tariffs are such a huge threat.  You see the start of the pain in the lumber industry, now that Trump hit Canada with a softwood lumber tariff.  As long as Canada can devalue (and it will), it makes up for the tariff with the devalued currency, comes out equal.  Cheers.

And too bad for the NHL, whose seven NHL teams in Canada takes in money in Canadian dollars but pays out salaries and travel expenses mainly in US dollars. And as the loonie dips, those teams will need to cut costs by cutting the roster. That's just one example of how the oil sands have widespread effects on Canada. It's make or break..

[William Edwards + 708]

1 hour ago, Rodent said:

And too bad for the NHL, whose seven NHL teams in Canada takes in money in Canadian dollars but pays out salaries and travel expenses mainly in US dollars. And as the loonie dips, those teams will need to cut costs by cutting the roster. That's just one example of how the oil sands have widespread effects on Canada. It's make or break..

This brings to mind some personal history. About five years ago I advised the then current Alberta Energy Minister, and a few top executives of Canadian producers, to adopt my "Save the Oil Sands" plan. Basically it called for cessation of spending on production increases and, instead, applying the funds to a low-coast asphaltene removal project, or projects, to enable Alberta to sell valuable oil. My suggestion was rejected. Looking back, it would have been a pretty good idea. But saying "I told you so" is not very satisfying to either of us.

[Rodent + 1,424]

8 minutes ago, William Edwards said:

This brings to mind some personal history. About five years ago I advised the then current Alberta Energy Minister, and a few top executives of Canadian producers, to adopt my "Save the Oil Sands" plan. Basically it called for cessation of spending on production increases and, instead, applying the funds to a low-coast asphaltene removal project, or projects, to enable Alberta to sell valuable oil. My suggestion was rejected. Looking back, it would have been a pretty good idea. But saying "I told you so" is not very satisfying to either of us.

The plan, meaning to remove asphaltene from the crude oil to improve the quality of the crude oil that remains? or removing the asphaltene to sell the asphaltene? (Or both?) My chemical ignorance knows no bounds.

Hopefully you were also not part of Alberta's save the oil sands plan through marketing https://oilprice.com/Energy/Energy-General/Hot-Lesbian-Ad-Gets-Canadian-Oil-Sands-More-Publicity-Than-It-Deserves.html

And I disagree; I find "I told you so" entirely satisfying in most cases.

[William Edwards + 708]

25 minutes ago, Rodent said:

The plan, meaning to remove asphaltene from the crude oil to improve the quality of the crude oil that remains? or removing the asphaltene to sell the asphaltene? (Or both?) My chemical ignorance knows no bounds.

Hopefully you were also not part of Alberta's save the oil sands plan through marketing https://oilprice.com/Energy/Energy-General/Hot-Lesbian-Ad-Gets-Canadian-Oil-Sands-More-Publicity-Than-It-Deserves.html

And I disagree; I find "I told you so" entirely satisfying in most cases.

Let me overcome your supposed chemical ignorance and express it in laymen's terms. If you remove the asphaltenes from bitumen and throw them away (put them back in the ground with the rock from whence they came), the resulting oil can be readily desulfurized to make a wonderful 0.5% S bunker fuel that the "experts" say will fetch a diesel fuel price.

How satisfying would it be today to be able to buy bitumen at $30/B, spend $10/B to convert it to LSFO, and sell it for $60/B, using "free" equipment that you built with the money that you did not spend on shut-in producing capacity?

I will re-think the possibility of publishing a grand I TOLD YOU SO!

Edited May 23, 2018 by William Edwards

[OilSandGeo + 3]

2 hours ago, William Edwards said:

Our difference is that I am talking about future growth and you are relating past history.

I have difficulty understanding how does  chemical composition of oilis relates to the past history (-:

The future growth, as I mentioned already, will be acheaved by ramping up production of sytnhetic crude. SCO production for just one oil sands company increased 53% compared to the last year, while diluted bitumen production stayed the same. My point is that we, Albertans, need a pipline to export SCO, which, as you can see in my previous comment, in no way "haevy and high in sulphur" - but similar to WTI and will be processed the same way. And as for the froth from thermal oil sand producers, there is a construction of Redwater Refinery near Edmonton, that will be upgrading froth to diesel and aviation kerosene.

[William Edwards + 708]

1 minute ago, OilSandGeo said:

I have difficulty understanding how does  chemical composition of oilis relates to the past history (-:

The future growth, as I mentioned already, will be acheaved by ramping up production of sytnhetic crude. SCO production for just one oil sands company increased 53% compared to the last year, while diluted bitumen production stayed the same. My point is that we, Albertans, need a pipline to export SCO, which, as you can see in my previous comment, in no way "haevy and high in sulphur" - but similar to WTI and will be processed the same way. And as for the froth from thermal oil sand producers, there is a construction of Redwater Refinery near Edmonton, that will be upgrading froth to diesel and aviation kerosene.

The key factors that are missing from your musings are economics and timing. I am not willing to spend my time to try to educate you, but I will give you a valuable hint that you may or may not take the benefit from. Just do the arithmetic on the Northwest Upgrader and see what the amortized cost of product nets back to the wellhead. Further, you might scope out the time it would take to convince an investor to commit the funds, have the permitting and engineering done, and build the facility and determine when you you get the first product flowing. What would you do with the oil that you produced in the meantime?

You may discover that imagination is much simpler than reality.

[Guest]

3 hours ago, Jan van Eck said:

Responding further to Mr. Edwards, who stated:

"  And, further, to do that, Canada must be able to process and deliver at a cost low enough to offset the built-in $20/B cost disadvantage for oil sands quality and location. Big challenge!  "

That probably cannot be done.  So, Canada's two solutions are:  (1)  let the currency devalue, making imports priced in US dollars more costly relative to processed tar sands crude;  (2)  insert a tariff on oil imports, again to raise the relative pricing.  There will likely be resistance given the free-trade ideas of the WTO, but as that seems to be cracking in other areas, including US tariffs against steel, aluminum, and even the 300% tariff set against the Bombardier C-Series aircraft (which failed), the re-emergence of tariffs gives Ottawa political cover to protect the Alberta industry. 

What you will end up with is a domestic market entirely supported by Alberta crude, in one form or another, and the sale of refined products probably into Europe via a reversed-flow Montreal-Portland pipeline. I would also anticipate that Alberta will get into the production of methanol as a substitute fuel. 

A devalued currency will support a lot of market manipulation. 

The Canadian dollar is trading at around 80c of the green back right now, equating to a WTI value of around $90 per barrel. 

[Guest]

4 hours ago, Ajan Bosnjacki said:

 

I think the government should form an independent body to provide the necessary cost due diligence on the business case for oil-sands oil over the next decades.

The Canadian government got out of the oil business a long time ago.

All that is left are private investors. It's up to them to decide where to invest their money, and how much to invest. If they decide to invest their money, I think we should assume that they've done their homework. I find it very hard to fathom a corporation such as Exxon not analyzing the financial aspects prior to investing billions of dollars into a long term project.

[William Edwards + 708]

1 minute ago, Fulcaneli said:

The Canadian government got out of the oil business a long time ago.

All that is left are private investors. It's up to them to decide where to invest their money, and how much to invest. If they decide to invest their money, I think we should assume that they've done their homework. I find it very hard to fathom a corporation such as Exxon not analyzing the financial aspects prior to investing billions of dollars into a long term project.

And I am sure that you expect Santa to arrive on schedule with all your wishes fulfilled. An uncluttered mind is a real blessing.

[Guest]

6 hours ago, Rodent said:

Thanks to all, for the conversations and insights that take interestingly differing opinions. Can we dumb this down a bit into a reader's digest version? To answer @William Edwards earlier question, I suspect our readers vary in their oil price/oil industry knowledge, ranging anywhere from would-be traders to industry analysts. We hope to be all-inclusive, from those wanting to glean new insights and those who want to share their well-thought out insights, and everything in between. We appreciate everyone's patience with those who see things differently. A trying task indeed for everyone on both sides.

Can everyone who has a position break it down into three bullet points or fewer? Like a bullet stating your conclusion, and one or two stating your assumptions that led to the conclusion? Is it possible to summarize it in this way? There is a lot of great information flowing here and I don't want to miss any of it.

Also, one question. Is Kinder Morgan stalling on Trans Mountain, as it has professed, because it is leery of getting stymied by the hostile political landscape, or is it worried about the viability and usefulness of this massive project? Pre-buyer's remorse?

The biggest issue facing Trans Mountain appears to be political. 

Everything is ready to go, the approvals are in place, but the province of BC recently elected a left wing minority government that is being supported by the Green Party. They campaigned on stopping the pipeline, despite it being under federal jurisdiction, and are now using obstruction tactics to try and delay it.

The federal government is still backing it, and whereas it's under federal jurisdiction I think that's what matters. I think it may get a bit ugly, but ultimately I have no doubt that it will proceed. 

[Guest]

9 minutes ago, William Edwards said:

And I am sure that you expect Santa to arrive on schedule with all your wishes fulfilled. An uncluttered mind is a real blessing.

William, I made a point of not continuing to interact with you in this thread because I think it's clear that we simply don't agree on this issue. And yet you're continuing to make rude, condecending remarks.

I respect your analysis and your opinions, as well as your history in the industry. It's just a simple difference of opinions on an Internet discussion forum, and I don't see the need to make it personal. 

I think having differences of opinion can make a discussion forum much better. It provides different points of view, which can be much more educational for everyone. And if there's anyone that wants to learn more, it's me. 

I respect you and your views, but I don't think we should be obligated to take it as gospel. Given your experience I'd certainly take it into consideration though. 

 

[William Edwards + 708]

4 minutes ago, Fulcaneli said:

William, I made a point of not continuing to interact with you in this thread because I think it's clear that we simply don't agree on this issue. And yet you're continuing to make rude, condecending remarks.

I respect your analysis and your opinions, as well as your history in the industry. It's just a simple difference of opinions on an Internet discussion forum, and I don't see the need to make it personal. 

I think having differences of opinion can make a discussion forum much better. It provides different points of view, which can be much more educational for everyone. And if there's anyone that wants to learn more, it's me. 

I respect you and your views, but I don't think we should be obligated to take it as gospel. Given your experience I'd certainly take it into consideration though. 

 

I’m sorry to have offended you, but your naivity regarding major oil company management caught me completely off guard. Having had experience both within and outside of the upper management of major oil companies has given me a different perspective from that which you expressed. My knee-jerk reaction was the result.My knee-jerk reaction was the result.

[Jan van Eck + 7,558]

57 minutes ago, Fulcaneli said:

I find it very hard to fathom a corporation such as Exxon not analyzing the financial aspects prior to investing billions of dollars into a long term project.

At one time there was this oil major that invested billions in Arctic oil. They built this giant oil tanker to haul the stuff on a dedicated route to refineries in Los Angeles.  They built it with a single-bottom shell plate.  The major had nothing in place to monitor the captain and the crew. The captain allegedly was drinking on departure, the first mate took over, and ran the tanker onto the rocks.  The waters  wrecked with 250,000 tons of oil, costing more billions to fix, was named Prince William Sound.  The ship was the Exxon Valdez. 

There was another big oil major that was drilling in the Gulf off Louisiana.  Pieces of drill collar rubber (the "blowout preventer") started coming up.  The oil major had a man on board the rig as their representative; he demanded that the drill be pulled same day, instead of first isolating the "christmas tree" on the sea floor to prevent a blowout.  Well,the shutoff valve failed, and staggering amounts of oil polluted hundreds of miles of coastline.  The company was BP and they paid $25 BILLION to the US for cleanup. 

$25 Billion is a lot of money.  Tough to have to write the check because management on site does dumb things. Just because a company is an "oil major" and can throw investor dollars around like spare change does not mean that they have collective brilliance.  Those guys can screw up just like the rest of us.  The difference is that their mistakes are more costly. 

[William Edwards + 708]

6 minutes ago, Jan van Eck said:

At one time there was this oil major that invested billions in Arctic oil. They built this giant oil tanker to haul the stuff on a dedicated route to refineries in Los Angeles.  They built it with a single-bottom shell plate.  The major had nothing in place to monitor the captain and the crew. The captain allegedly was drinking on departure, the first mate took over, and ran the tanker onto the rocks.  The waters  wrecked with 250,000 tons of oil, costing more billions to fix, was named Prince William Sound.  The ship was the Exxon Valdez. 

There was another big oil major that was drilling in the Gulf off Louisiana.  Pieces of drill collar rubber (the "blowout preventer") started coming up.  The oil major had a man on board the rig as their representative; he demanded that the drill be pulled same day, instead of first isolating the "christmas tree" on the sea floor to prevent a blowout.  Well,the shutoff valve failed, and staggering amounts of oil polluted hundreds of miles of coastline.  The company was BP and they paid $25 BILLION to the US for cleanup. 

$25 Billion is a lot of money.  Tough to have to write the check because management on site does dumb things. Just because a company is an "oil major" and can throw investor dollars around like spare change does not mean that they have collective brilliance.  Those guys can screw up just like the rest of us.  The difference is that their mistakes are more costly. 

Thanks for passing on a bit of a reality.Thanks for passing on a bit of a reality.

[OilSandGeo + 3]

I think the reason mr. Williams keep responding with condecending remarks and dows not take the simple facts into account, that he just does not have anything to say on a subject matter. Instead of responding directly to comments he is switching the subject (-: 

[William Edwards + 708]

1 minute ago, OilSandGeo said:

I think the reason mr. Williams keep responding with condecending remarks and dows not take the simple facts into account, that he just does not have anything to say on a subject matter. Instead of responding directly to comments he is switching the subject (-: 

You are certainly welcome to your belief, and you do not even need to notice that you have failed to grasp the significance of the comments that I have made.