Trudeau's Dilemma

Canadian federal elections in October may be interesting for Mr. Trudeau.

Trudeau seems to have painted Canadian oil & gas industry into a lose / lose corner by making it dang near impossible to construct new pipelines due to deliberate red tape.

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6 hours ago, Marina Schwarz said:

Canada set to approve hotly-debated pipeline expansion, Trudeau unlikely to benefit

Yes, Trans Mountain is one of may favourite discussion topics here and yes, I'm amused when people paint themselves into a corner trying to please everyone. Trudeau is a virtuoso in this respect, I believe.

What you are looking at is a classically Canadian screw-up, based not on the economics but on the politics.  To quote from the article:

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Canadian governments have exceptional talents at this.  It reminds me of Aristotle Onassis, the Greek shipping magnate, who wanted to go find a really big boat that he could convert into a luxury mega-yacht.  He found an anti-submarine frigate, 325 feet long, owned by the Canadian Government and set out to buy it for peanuts, which he did, . It started out as the HMCS Stormont, launched July 1943, built for convoy escort duty during WWII.   Then he had the frigate, which had a perfectly sound hull and engines, and had it rebuilt into the Yacht Christina.  BIngo - instant mega-yacht, at less than half price.  Did the Canadian Government learn anything from this?  Of course not: they proceeded a half-century later to go pay top dollar for some obsolete pipeline that Kinder Morgan was delighted to unload.

What was and is the real value of the K-M pipe?  I suggest it is zero.  And the reason is that the pipe is built on the idea that oilsands oil can be shipped, heavily diluted with (expensive) diluent oil (naphtha), to the Port of Vancouver and then sold to China.  Except that Chine is not a customer for Canadian WCS and is not going to be in the future, and the idea that Canadian heavy sour crude is going to be favored over oil from the Middle East, which is cheaper to produce and ship, is a non-starter. So the whole project is a Field of Dreams, a failure right out of the box. 

Tripling that pipe is pointless. That oil is rapidly becoming unsalable.  Canada would be much better off spending their coin on upgraders and refineries right out there in Alberta, then using that pipe to ship both diesel and gasoline to port and market.  But logger-headed government thinking is preventing this obvious solution.  Thus what will happen is that that crude is going to be locked in the ground for the foreseeable future. 

Now, what else could that Government do?  What it could do, if it were motivated, is to build a parallel rail track across the Ontario Shield into the mining districts, places such as Timmins and Sudbury, where more rail exists to the ports on the St. Lawrence and Atlantic.  Oil by Rail is a perfectly logical solution to shipping crude in Canada, where very cold temperatures hinder oil by pipe.  An oil train is a pipe on wheels, ten feet in diameter and travelling at 50 miles an hour.  You cannot move oil at that speed, and whatever you do move, takes vastly more energy to pump. And you can build twinning rail cheaply enough; all you do is dump that ballast gravel and lay the ties and track, using heavily automated machines. Will Canada do any of that?  Of course not. 

Approving a Western pipeline goes nowhere.  The aboriginal Indians will block that, and you need Agreements with over one hundred tribes to get the Go.  I predict that will never happen. 

 

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If you want more evidence that trudeau just has an irrational hate on for Alberta's oil industry, and I mean a viscous loathing hatred that only evil villains possess, look into the CP rail canapux pilot project.

 

CP rail plans to collaborate with indigenous groups in alberta and build a plant that produces solid bitumen bricks by mixing bitumen with recycled plastic polymers and then ship them by rail. with open top hopper cars to various markets. There would also be a plastic recycling plant as part of the infastructure needed.  

As we know canada has a bit of a plastic problem right now as we are a third world country that doesnt have enough recycling Infastructure and a dysfunctional government not capable of making decisions In the countries interest such as building needed recycling infrastructure.

So CP rail a private corporation has the solution requiring no federal tax dollars. CP announced that the proposed full scale canapux plant would gobble.up all of the plastic waste of the entire province of alberta. 

So what is trudeau to do? He cant let evil corporations solve canadas problems without government involvement. And benefiting the oil industry too?

OH HELL NO BAN PLASTIC SHUT IT DOWN!!! 

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