Meanwhile in Alberta: Trains, More Trains!

[William Edwards + 708]

2 minutes ago, Jan van Eck said:

I keep telling you guys this, and you keep ignoring it, that Canada will refuse to collectively face the "grim future" that you paint.  The idea that Canadian crude from Alberta specifically is going to get "shut in" is a scenario that NO Canadian government can allow to happen.  That oil MUST be produced and MUST be converted into fuels via distillation, and if the USA market specifically and the Asian Market generally is not going to buy the stuff, then Canada - inevitably - will turn its domestic market into a closed market, place a prohibition onto the import of oil, and require all and sundry inside Canada to burn and use only Canadian oil  (and gas, of course). 

There are serious technical problems, of course, but Canada is a sophisticated country with a deep reservoir of well educated engineers who are capable of building the refinery capacity to take the oilsands material and upgrade that oil, and then both build additional refineries on-site to produce distillates, and to ship the upgraded material to other refineries in Sarnia, Montreal, and St, ohn, New Brunswick by railcar, to be used as exclusive feedstock in those plante. 

Now, does that imply that Canadians will pay more than the world price for their gasoline and diesel  (and heating fuels)?  Of course it does.  And so what?  Think of those extra sums as a form of tax, for the "privilege of being Canadian."  Historically, all kinds of stuff are justified in terms of that special "privilege," so don't be surprised if a closed-system of only internal heavy oils ends up.  Canadians themselves don't really suffer from that, as they have historically paid little - and continue to pay very little - to support their military.  For example, right now the Canadian Navy has zero combat-capable blue-water ships, and zero operational naval supply-support vessels  (the last one conked out in the Caribbean and had to be ingloriously towed back to Halifax). 

If you don't spend tons on the military, then relatively you can spend some coin on oil refining. 

What continues to hurt Canada is the profoundly stupid governance of the Province of Ontario.  There, an entire generation has operated under the thumb of an imperious and insolent Liberal Party, so oppressive that in the end it got slaughtered in the last election, going from roughly 126 seats to 5.  It is such a rout that it is no longer even an Official Party.  It converted Ontario from a manufacturing powerhouse into a penniless province, reliant on handouts from the Federal Equalization Payments  (from rich Provinces to poor).  Once the new provincial Premier, Mr. Ford, gets manufacturing re-started, the wealth will slowly   (very slowly) start to come back.  And key to that is peace with the USA over tariffs, and access to the US market.  But it will, albeit at the cost of a chronically devalued currency exchange rate. 

I say again:  Canada will not shut in its capacity.  It will convert their entire country to run on Alberta crude.  That is my prediction.

I hear you, Jan. I just cannot buy your answer. If nothing else prevents your outlook from occurring, I think that timing will. Already Canada is being forced to shut in production by the inability to find enough buyers to take their heavily-discounted bitumen. In a year the problem suddenly magnifies five or ten fold. Your proposed workaround doesn't lend itself to "suddenly" treatment. So I expect shut in to prevail.

[Jan van Eck + 7,558]

37 minutes ago, William Edwards said:

I hear you, Jan. I just cannot buy your answer. If nothing else prevents your outlook from occurring, I think that timing will. Already Canada is being forced to shut in production by the inability to find enough buyers to take their heavily-discounted bitumen. In a year the problem suddenly magnifies five or ten fold. Your proposed workaround doesn't lend itself to "suddenly" treatment. So I expect shut in to prevail.

Timing is a problem. 

That said, WCS can be upgraded via upgrader plants, some already in the oil patch, others able to be special-purpose built next door.  The upgraded oil is then used as feedstock in refineries that would otherwise be buying Middle-East or US Gulf crude:  the Irving refinery in New Brunswick, the Valero refinery in Montreal, and whoever those two refineries are in Halifax and Newfoundland.  And that is doable,  although how fast the ungraders can be built remains a problem.    All said, I still maintain that Canadians can and will force-feed that solution, politically there is no other realistic choice.  To shut in Alberta oil is to end existence as a political party, if it is your watch where that happens. 

[William Edwards + 708]

1 hour ago, Jan van Eck said:

Timing is a problem. 

That said, WCS can be upgraded via upgrader plants, some already in the oil patch, others able to be special-purpose built next door.  The upgraded oil is then used as feedstock in refineries that would otherwise be buying Middle-East or US Gulf crude:  the Irving refinery in New Brunswick, the Valero refinery in Montreal, and whoever those two refineries are in Halifax and Newfoundland.  And that is doable,  although how fast the ungraders can be built remains a problem.    All said, I still maintain that Canadians can and will force-feed that solution, politically there is no other realistic choice.  To shut in Alberta oil is to end existence as a political party, if it is your watch where that happens. 

Ten years is a good guess as to the time it takes to build facilities to convert more bitumen into usable feedstock.

We shall watch with interest as things develop.

[Jan van Eck + 7,558]

5 minutes ago, William Edwards said:

Ten years is a good guess as to the time it takes to build facilities to convert more bitumen into usable feedstock.

We shall watch with interest as things develop.

William, I would doubt that.  Nobody is reinventing the wheel.  The technology is mature, the engineering well understood. It becomes a question of fabricators cutting steel, truckers and rail hauling it to the site, and riggers assembling the parts.  Don't be surprised if the Canadians take an existing design or plant, make it the basic module, and proceed to build them in a production-line format.  With the govt pushing instead of getting in the way, and everybody putting their back into it, you would be surprised just how fast this can be done.

I remind you that the South Koreans built the entire Seoul subway system, with vast amounts of tunnels under the city, some 18 stations, perhaps a hundred railcars, all the trackage, signaling system, and everything else that goes into such a vast endeavour - all in 18 months flat.   You would be surprised what people can do when they really get a mindset to do it. 

[William Edwards + 708]

13 minutes ago, Jan van Eck said:

William, I would doubt that.  Nobody is reinventing the wheel.  The technology is mature, the engineering well understood. It becomes a question of fabricators cutting steel, truckers and rail hauling it to the site, and riggers assembling the parts.  Don't be surprised if the Canadians take an existing design or plant, make it the basic module, and proceed to build them in a production-line format.  With the govt pushing instead of getting in the way, and everybody putting their back into it, you would be surprised just how fast this can be done.

I remind you that the South Koreans built the entire Seoul subway system, with vast amounts of tunnels under the city, some 18 stations, perhaps a hundred railcars, all the trackage, signaling system, and everything else that goes into such a vast endeavour - all in 18 months flat.   You would be surprised what people can do when they really get a mindset to do it. 

We shall see!

[Tom Kirkman + 8,860]

3 hours ago, Jan van Eck said:

To shut in Alberta oil is to end existence as a political party,

But Trudeau very actively wants to shut down Canada's oil industry.  Completely.

It is a deliberate, long term plan.  Trudeau is exceedingly bad news as a Globalist + Socialist + Environmental Extremist + Totalitarian who is trying to impose his world view onto the citizens of his country via legislation.

Trudeau reminds me a lot of France's Macron.

Anyway...

No-oil plan for Alberta is working, just a little early

The Liberals are managing down Alberta's industry by imposing new regulations, killing pipeline options, withdrawing tax incentives, and passing energy-hostile bills.

... It was Prime Minister Justin Trudeau himself who said in Hanuary 2017: “We can’t shut down the oilsands tomorrow. We need to phase them out. We need to manage the transition off of our dependence on fossil fuels.

“That is going to take time. And, in the meantime, we have to manage that transition.”

... Their goal isn’t to shutter Alberta’s main industry tomorrow. They see it as a multi-decade thing.

... Boxed in, increasingly reliant on overstressed rail, beset by unending hostility in B.C. and berated by U.S. competitors, the typical barrel of Alberta oil now sells for a fraction of workd prices.

We’re at the stage where some producers (not refiners) are willing to shit in their own barrels in order to drive prices back up.

And that, of course, is exactly what the anti-oilsands people want; a product so valueless that it’s simply left in the ground.

[Guillaume Albasini + 851]

2 hours ago, Tom Kirkman said:

But Trudeau very actively wants to shut down Canada's oil industry.  Completely.

It is a deliberate, long term plan.  Trudeau is exceedingly bad news as a Globalist + Socialist + Environmental Extremist + Totalitarian who is trying to impose his world view onto the citizens of his country via legislation.

Trudeau reminds me a lot of France's Macron.

Anyway...

No-oil plan for Alberta is working, just a little early

The Liberals are managing down Alberta's industry by imposing new regulations, killing pipeline options, withdrawing tax incentives, and passing energy-hostile bills.

... It was Prime Minister Justin Trudeau himself who said in Hanuary 2017: “We can’t shut down the oilsands tomorrow. We need to phase them out. We need to manage the transition off of our dependence on fossil fuels.

“That is going to take time. And, in the meantime, we have to manage that transition.”

... Their goal isn’t to shutter Alberta’s main industry tomorrow. They see it as a multi-decade thing.

... Boxed in, increasingly reliant on overstressed rail, beset by unending hostility in B.C. and berated by U.S. competitors, the typical barrel of Alberta oil now sells for a fraction of workd prices.

We’re at the stage where some producers (not refiners) are willing to shit in their own barrels in order to drive prices back up.

And that, of course, is exactly what the anti-oilsands people want; a product so valueless that it’s simply left in the ground.

 

How do you want to sustain an unsustainable industry ?

Oilsands are not environmentally sustainanble and they are not economically sustainable. The oil market is in oversupplied with US, Russia and SA pumping at record high. In this context the weakest producers (those selling with the highest discount)  are going to be wiped out of the market and, sorry to say, but Canadian oilsands are among the weakest producers.

[NickW + 2,714]

40 minutes ago, Guillaume Albasini said:

 

How do you want to sustain an unsustainable industry ?

Oilsands are not environmentally sustainanble and they are not economically sustainable. The oil market is in oversupplied with US, Russia and SA pumping at record high. In this context the weakest producers (those selling with the highest discount)  are going to be wiped out of the market and, sorry to say, but Canadian oilsands are among the weakest producers.

Not with Jan's plan. 

Canadian Oil for the Canadian proletariat!

 

[Jan van Eck + 7,558]

The underlying tacit assumption of all and sundry who think Canadian oil is going to be shut in is that Canada will simply buy its oil (and oil products) on the open world market.  And that is not likely to happen. 

Tom Kirkham (above) is convinced Justin Trudeau is a fifth columnist, marching in the background to a pre-set destruction of Canadian oil production, and quotes from some speech or speeches (presumably made to some convention of absolutist Greenies) decrying heavy oil.  Note, however, that Trudeau did NOT make a specific comment about shutting down conventional pumped oil - which is produced in both Alberta and Saskatchewan.  

And that was BEFORE the collapse of Ontario, and the need for oil production in Alberta to provide a tax revenue base for the Canadian Inter-Provincial Equalization Tax  (where money is taken from donor provinces to be paid out to the poor provinces).  Right now, only Alberta is a Donor Province; even the wheat province of Manitoba has slipped into the ranks of the Poor, and now needs (and receives) yearly bailout money from the Equalization Fund.  

Politicians make all kinds of crazy speeches.  But that was before mighty General Motors just announced that the famed and massive GM Oshawa auto plant would be shut down.  Not just furloughed or mothballed:  totally shut down.  You can assume that that plant, which was built around 1955 and has been a mighty producer of GM cars and trucks for a half century, is going to be scrapped - literally torn down and sold for scrfap metal.  I predict that GM will end up leaving Canada, and ZERO will be built there.  Mr. Trump does not even need to put his famed 25% omport tariff on Canadian auto production; it is all going to disappear on its own, taking with it 140,000 direct jobs and perhaps a half-million in indirect jobs.  Bye-bye. 

The Oshawa plant lies outside Toronto, has historically provided vast numbers of heavy autos to Canadians (historically, Canadians prefer big, full-size American cars, such as the Ford LTD and the GM Chevy Malibu), swarthy cars with big V-8s and lots of power.  GM got rich making and selling those cars.  But with the carbon tax and the hiking of gasoline to $1.13 per litre,  figure 4.50 a gallon, those cars are dropping.  In a poor country, nobody can afford it.  So, when Canadian auto plants are shuttering, is it prudent for the Prime Minister to rail against oil-sands and the source of Equalization Payments, or is it time to shush?  

Mr. Trudeau talks a good talk when he is preaching to the absolutist Greenies.  He will do a flip-flop now, with GM failing and the Ontario economy in a shambles.  Only Ontario has auto production, and with none left, Ontario remains a beggar Province. Now he needs Oil-sands, and forget about high-sounding ideas of "renewables."  Just watch:  Ottawa will be out there supporting oilsands production and massive orders for tank railcars.  A closed market is coming.  

[Tom Kirkman + 8,860]

19 minutes ago, Jan van Eck said:

Tom Kirkman (above) is convinced Justin Trudeau is a fifth columnist, marching in the background to a pre-set destruction of Canadian oil production

^ That about sums it up for me.  Pic related.

[Jan van Eck + 7,558]

7 minutes ago, Tom Kirkman said:

That about sums it up for me.

 

It is not as grim as all that.  While the Bill creates a new agency to replace the old agency to do environmental assessments, and requires this "consultation period," that hardly means NOTHING gets built. And, if the govt itself sees political oblivion as its future if a new oil sands upgrader plant or plants are Denied, do you seriously maintain that any political party would go commit politic suicide by dumping the projects?  I don't think so.  that is not the history of Canada.

https://www.prassociates.com/news-insight/what-does-bill-c69-mean-for-canadian-resource-companies/

The Liberals have been shaken to their core with the total repudiation by voters on the Provincial Levels in their historical bastions of strength: Ontario and Quebec. Are they ready to march off the cliff?  No chance. 

[Tom Kirkman + 8,860]

27 minutes ago, Jan van Eck said:

It is not as grim as all that. 

I would be exceedingly happy to be proved wrong.  But so far, I remain skeptical of a positive outcome, either in Canada or in France.

Related comment, please see the 3 minute video.  It is in no way hysterical, just ... calmly informative:

 

[William Edwards + 708]

On 12/1/2018 at 3:53 PM, Jan van Eck said:

William, I would doubt that.  Nobody is reinventing the wheel.  The technology is mature, the engineering well understood. It becomes a question of fabricators cutting steel, truckers and rail hauling it to the site, and riggers assembling the parts.  Don't be surprised if the Canadians take an existing design or plant, make it the basic module, and proceed to build them in a production-line format.  With the govt pushing instead of getting in the way, and everybody putting their back into it, you would be surprised just how fast this can be done.

I remind you that the South Koreans built the entire Seoul subway system, with vast amounts of tunnels under the city, some 18 stations, perhaps a hundred railcars, all the trackage, signaling system, and everything else that goes into such a vast endeavour - all in 18 months flat.   You would be surprised what people can do when they really get a mindset to do it. 

It didn't take long for us to learn who had it pegged correctly, Jan. 

Canada’s province of Alberta to cut crude production nearly 9% for next year

Now wait for a year when they will need to cut 25% rather than 8%.