Tuesday, 31 May 2016

Message from the President By Mark Scholz

By Mark Scholz (mscholz@caodc.ca)
President of the Canadian Association of Oilwell Drilling Contractors
The Hitch - May 2016 Vol. 14 NO. 2 Edition

The Oil Respect campaign was born of the conviction that Hollywood celebrities, radical environmentalists, and misinformed politicians were misleading Canadians about the oil and gas industry. Our goal is to both correct the record and to give those Canadians who support the industry a voice. That voice is being heard. In the wake of the Fort McMurray wildfire, we are also being introduced to the real people behind this industry as they struggle to pull their lives back together. For now they need places to stay. Over the medium term they need a vibrant industry.
                Not long ago the rhetoric from provincial and federal governments favored slowing and even shutting down oil and gas development. They opposed pipelines and supported a ban on tanker traffic on British Columbia’s northern coast. Sometimes they displayed a contempt for those who thought otherwise.
                Canadians who had the temerity to defend the industry were criticized and even shouted down for not caring about the environment, for only caring about money and for being in the pockets of big oil.
                But eventually the facts matter. Thanks to the thousands of Canadians who have stood behind the Oil Respect campaign and other campaigns like Canada Action and Canada’s Energy Citizens, more and more Canadians are being introduced to the reality of Canada’s oil and gas industry.
                What is the reality? Well, 500,000 people work in the oil and gas industry, directly and indirectly. All Canadians benefit from the jobs, profits, and government revenues the industry produces. Finally and just as important as the economic benefits, Canada produces oil and gas that meets the world’s toughest climate, environmental, safety, and labour standards.
                Any time a new project is proposed, oil and gas producers and pipeline companies go through extended and detailed consultation processes to ensure communities are informed and their concerns heard. Input is gathered from thousands of people. Experts provide their insights. The final submissions contain thousands of pages of documentation, expert testimony and the views of those who would be impacted.
                Once approved, companies then provide skills training in local communities and actively help local small businesses organize themselves to serve as suppliers on the project. First Nations communities are some of the biggest beneficiaries. The oil and gas industry is Canada’s largest employer of First Nations workers.
Companies also provide hundreds of millions of dollars to community projects like hockey arenas, community centres, and playgrounds; projects that benefit communities for decades into the future.
                Given these facts it’s perhaps understandable  why supporters of the industry feel disrespected, and we have heard the frustration as we meet people in the communities who have felt the double blow of a difficult economy and hostility toward their industry from political leaders.
                But now that Canadians are coming to know the facts, politicians are also shifting their positions. The drop in the price of oil has severely hurt government revenues, underlining the arguments that oil and gas supporters have made all along.
                Canadians and those they elect are seeing the people behind the industry and are coming to understand that Canada leads the world in the environmentally responsible production of oil and gas.
                Prime Minister Trudeau’s tone has also changed which encouraging, if not nearly enough. Words and assurances ring hollow without action. The most important thing governments can do today is to state, unequivocally that building pipelines to bring Canadian oil and gas to market is a priority. In order to lend support to this flagging industry and send a clear message to Canadians and the rest of the world that we are proud to be a leader in responsible energy development, the Pacific Northwest LNG project must be approved and the reviews of the Energy East and Trans Mountain pipeline projects must be expedited.
                Canada is in a global competition to attract investment but we are sending investors the wrong message. Right now we are forcing investors who want Canadian oil and gas to look elsewhere as we slow down our already lengthy and thorough review processes. That means jobs, profits, and government revenues are lost to oil producing counties that often have few or no environmental standards. In other words their oil pushes out Canadian oil, and the environment and Canadian workers lose out.
                We need federal and provincial governments to send the right message. Once again, we call on the federal government to stand up for this 100,000 plus unemployed Canadian oil and gas workers the respect they deserve by allowing these projects to move forward without further delay.

While Canada dithers, the world shops elsewhere for energy

Gary Lamphier - Edmonton Journal
May 30, 2016

Eventually, Justin Trudeau’s Liberal government will have to stop talking out of both sides of its mouth and make some tough decisions on whether to support new oil pipelines or liquefied natural gasprojects.
Although the Selfie King’s extended political honeymoon is starting to ebb — witness the blowback over his tough guy act in Parliament two weeks ago — we’re no closer to a final decision on key energy infrastructure projects than we were when Trudeau was elected in October.
This isn’t a fresh observation, of course. Globe and Mail columnist Jeffrey Simpson, among others, has chronicled the Trudeau regime’s chronic aversion to decision-making, and its affection for seemingly endless consultation and protracted regulatory reviews.
In the meantime, with Canadian energy policy adrift, anti-capitalist, anti-fossil fuel crusaders such as Naomi Klein are only too happy to fill the vacuum, flying around the country and delivering instructions to the hoi polloi on how we need to change our evil ways to save sacred Gaia.
Klein was at it again Sunday, oh so helpfully linking the Fort McMurray wildfires and climate change while addressing a University of Calgary conference. “If we are serious about keeping warming below 1.5 C (the target set at the December climate confab in Paris), it does kind of mean the end of the fossil fuel era,” she declared.
Well, here’s the thing. You know, kind of.
While Klein never fails to draw a crowd in Canada, where she gets the celebrity treatment on college campuses and her radical views get heavy promo on the state-funded CBC (her filmmaker hubby Avi Lewis’s ex-employer), the rest of the planet seems to care not a whit.
Most energy exporting nations are simply carrying on as usual, building new pipelines and LNG projects at a furious pace. The result? While Canada’s energy resources remain largely landlocked, the U.S. and other exporters — from Saudi Arabia to Iran, Qatar, Kuwait and Russia — are only too happy to fill the void.
The U.S., for decades the world’s biggest consumer of oil and natural gas, is now busy ramping up exports of both. The U.S. government ended its 40-year ban on crude oil exports in December and in February Cheniere Energy’s Sabine Pass export terminal in Louisiana became the first in the continental U.S. to start exporting LNG.
One of the key export markets for U.S. crude oil is (you guessed it) Canada, where imports of U.S. crude soared nine-fold between 2008 and 2015, and U.S. production grew faster than in any country on Earth.
While two major Canadian oil pipeline projects to the West Coast — Enbridge’s proposed Northern Gateway pipeline to Kitimat, B.C., and Kinder Morgan’s planned TransMountain pipeline expansion to Burnaby, B.C. — have been conditionally approved by Canada’s federal energy regulator, they remain stillborn. 
Their ultimate fate rests with Trudeau and his foot-dragging cabinet.
Meanwhile, the U.S. is building new pipelines as fast as it can. In 2014, the U.S. added more than 8,000 kilometres of oil pipelines, a 9.1-per-cent jump over the previous year, according to the U.S.-based Association of Oil Pipelines. And during the 2010-14 period, the U.S. added more than 19,000 km to its oil pipeline network.
Put differently, the Association of Oil Pipelines notes, that’s roughly 12 times the length of Keystone XL pipeline the Obama government rejected after years of delay. 
With TransCanada’s proposed Energy East oil pipeline still just a gleam in the eye of its proponent, Eastern Canada’s refineries will remain a key target of U.S. producers and other foreign suppliers — including Saudi Arabia — for the foreseeable future. 
Klein’s influence on Saudi oil policy, as you might guess, seems rather limited. Perhaps that’s why she hasn’t been lecturing in Riyadh of late. Or Moscow, Tehran, or any number of other foreign oil capitals.
On the LNG side, Sabine Pass is merely the first of several U.S. export terminals that will come into service over the next few years. Several others are already under construction.
The list includes: Dominion Energy’s Cove Point LNG terminal in Maryland, which is slated to come online by the end of 2017; Cheniere Energy’s Corpus Christi LNG terminal in Texas, which is due to commence exports in 2018; Sempra Energy’s Cameron LNG terminal in Louisiana, also due to come online in 2018; and Freeport LNG’s Texas export terminal, scheduled to begin service in 2019.
Yet another LNG terminal, Southern Union’s Lake Charles facility in Louisiana, has already been approved by U.S. regulators, and several more, mainly on the Gulf Coast, are either proposed or have applications currently pending.
On the other side of the Pacific, Russia increased exports of crude oil to China, now the world’s biggest oil importer, by more than two-thirds between 2013 and 2015.
State-owned Rosneft, Russia’s key supplier to China, ships about half its oil via the East Siberia-Pacific Oceanoil pipeline. The remainder is exported by sea or through energy swaps with another major supplier, Kazakhstan, which also has major pipeline infrastructure in place with China.
In Africa, Uganda is planning a 1,400-kilometre, $4-billion-US pipeline to connect recent oil discoveries in its western region with the Tanzanian port of Tanga. The project is expected to come online in 2018, international media reports suggests.

Monday, 30 May 2016

Tying an extreme weather event to atmospheric carbon dioxide simply isn't credible

By: Gwyn Morgan
Contributed to : The Globe and Mail

The collapse of global commodity prices was sudden and severe. Workers coming off a decade of unprecedented prosperity suddenly found themselves jobless and unable to provide for their beleaguered families. For a time, they maintained hope that the downturn would be temporary, but as the first year stretched into the second, many lost hope.
Some who had come from high unemployment provinces to participate in the Alberta boom began their glum journey back. Laid-off workers saw a glimmer of hope when commodity prices appeared to bottom out. At the very least, it seemed, things wouldn’t get worse.
Then nature unleashed a crushing conflagration. Searing winds swept across drought-stricken farms and forests. A young boy comes running breathlessly into the house shouting to his mom, “There’s a big black cloud in the sky.” They hurry outside to behold a terrifying sight in the western sky that would force the family out of their home and into an uncertain future.
This is not, as it may seem, the story of the global oil price collapse combined with the Fort McMurray wildfire. The commodity price collapse in this story was caused by the economic earthquake of 1929 that launched the Great Depression. And the conflagration was the extremely hot and dry weather that turned the fertile prairie “breadbasket” into a drought-stricken wasteland.
That black cloud was caused by hundreds of millions of tonnes of topsoil being blown away by the wind. Impoverished farmers, hoping for an early end to the drought, were encouraged by a couple of years of improved weather. But it was only a temporary respite. The summers of 1936 and 1937 brought an abrupt reversal that proved even hotter, drier and windier. Tens of thousands of farms were abandoned in what is remembered as the “Dirty Thirties,” displacing 250,000 people whose only skill set was farming. Inexplicably, the devastatingly hot conditions reversed in 1940, with the arrival of a cooling period that would last until 1975.
Since the Fort McMurray disaster, some have blamed the very product the people work to produce as the cause of the hot, dry weather that nurtured the wildfires. But analysis of temperature data over the past century shows some startling facts. First, the 1930s were by far the hottest period. Of the 10 highest temperature days ever recorded in Canada, seven occurred in the 1930s. And none of those top 10 records was set during the past decade.
Yet the atmospheric concentration of carbon dioxide in the 1930s was some 25 per cent lower than today’s levels. While theories abound, scientists have not been able to explain why, during a period of such low CO2 levels, such an abrupt shift from a long period of moderate temperatures and ample rainfall to devastatingly hot and dry conditions could occur. Likewise, scientists struggle to explain the equally sudden shift in 1940 that saw a 35-year long cooling period, even as greenhouse gas emissions rapidly increased. But whatever the answer to that question might be, one thing is crystal clear: Tying any single extreme weather event to atmospheric CO2 concentrations simply isn’t historically or scientifically credible.
The Fort Mac fires took about one million barrels of oil a day out of production. But did that reduce global consumption of fossil fuels? Of course not. Countries including Saudi Arabia, Nigeria, Angola and Ivory Coast quickly filled the void. Not only do these countries have appalling human-rights records, but – as we have become painfully aware – some of the proceeds from their sales are funnelled to extremist groups that shatter the lives of people throughout the Middle East/North African region and foment terror across the West.
Here’s a note to those who celebrated the Fort Mac disaster as divine environmental justice: Shutting down the Canadian oil sands altogether would reduce global greenhouse gas emissions by a minuscule one-tenth of a per cent, only to be replaced by oil from countries whose environmental and human-rights records are vastly inferior to Canada’s.
My vote goes to the made-in-Canada oil produced by those resilient Canadians who have been forced to endure job loses, destructive wildfires and environmental extremist schadenfreude as they proudly anchor a crucial economic cornerstone of our country. I’ll take the values contained in their made-in-Canada oil over that Middle Eastern and North African stuff any day.
Gwyn Morgan is the retired founder and CEO of Encana Corp. He has been a director of five global corporations.

Tuesday, 17 May 2016

Say Goodbye to the Alberta Tax Advantage

By: Steve Lafleur and Ben Eisen, The Fraser Institute

Published in The Roughneck Buy & Sell / May 2016

                Alberta Finance Minister Joe Ceci recently told a business audience that Alberta has the “lowest taxes overall of any province or territory” in Canada. A year ago, this was unambiguously true. At that time, Alberta had the lowest overall tax burden in the country and also had by far the lowest rates on key taxes that greatly affect economic growth and competitiveness.

Now, Alberta’s once vaunted tax advantage over other Canadian provinces is no longer what it used to be, and certain key elements of the tax advantage have been erased completely because the provincial government has enacted a suite of tax increases.

When it comes to tax competitiveness, the overall tax burden imposed by a government is of course important. But the composition of the tax mix is also important, since certain taxes – such as personal income and corporate taxes – do more harm to the economy than others by discouraging work and investment. On this score, Alberta has taken major steps backwards in the past year, increasing some of its most economically harmful taxes and thereby frittering away crucial components of Alberta’s tax advantage.

Let’s start with income taxes. Up until the end of last September, Alberta had a single 10 percent personal income tax rate. Contrary to claims made by the finance minister, the system was progressive due to the high basic personal amount, and the low marginal rates didn’t unduly distort incentives for productive economic activity.

The new five-bracket income tax system increased Alberta’s top marginal income tax rate by 50 percent, which ties Alberta with Saskatchewan at 15 percent, and is slightly higher than the top rate in British Columbia (14.7 percent). While Alberta’s top rate takes effect at higher level of income, the province can no longer boast of having a uniquely straightforward and pro-growth approach to personal income taxes. Moreover, Alberta’s combined personal and federal income tax rate used to be lower than all U.S. jurisdictions including rival energy-producing states. By the time the new federal top rate takes effect, it will have one of the highest top rates in North America. This component of Alberta’s tax advantage is, simply, a thing of the past.

Next let’s consider corporate taxes. Up until June of last year, Alberta enjoyed the lowest general corporate income tax rate in Canada. In 2016, Alberta’s corporate income tax rate increased by 20 percent, moving the province into a tie with Manitoba and Saskatchewan. B.C., Ontario, and Quebec all now have lower statutory corporate income tax rates than Alberta. Alberta is no longer the lowest tax province in Canada when it comes to the corporate income tax rate.

While some argue that increasing corporate taxes is a matter of fairness, in reality the burden of corporate taxes isn’t borne just by shareholders, but also by workers through lower wages and consumers through higher prices. A recent Fraser Institute study found that increasing corporate tax rates by one percent reduces hourly wages by between 0.15 and 0.24 percent.

Finally, there is the recently announced carbon tax. While initially billed as revenue neutral, it will in fact amount to a multi-billion dollar tax increase that will be used to fund new spending initiatives.

Although Alberta’s overall tax burden may still be lower than neighbouring jurisdictions, the loss of Alberta’s advantage on key tax rates is an important blow to the province’s economic competitiveness. And it comes at a very inopportune time, as the province struggles with a weak economy and depressed commodity prices.

The finance minister is right to acknowledge the importance of tax competitiveness. However, since coming into office, his government has badly undermined Alberta’s tax advantage by increasing key tax rates. If Alberta is to remain a magnet for talent and investment, the provincial government must refocus on building Alberta’s tax advantage.

Canada Heads Down the Path to Debilitating Debt Again

By Gwyn Morgan, Columnist, Troy Media

Published in The Roughneck Buy & Sell / May 2016

                The federal government’s planned $30-billion budget deficit, to be followed by three more deficits totalling $113 billion, brings to mind former U.S. Secretary of State henry Kissinger’s observation that “It’s not often that nations learn from the past, even rarer that they draw the correct conclusions from it.”

The budget deficit is triple the “modest” and declining $10-billion deficit promised by Prime Minister Justin Trudeau during last year’s election campaign.

Likewise in 1970, Trudeau’s father Pierre forecast a “minimal” $5-billion federal deficit. That was followed by a dozen years of out-of-control spending that drove the deficit to over $32 billion and saw the national debt balloon by more than 700 per cent. Canada’s prime lending rate reached an incredible 22 percent, causing a great many personal and business bankruptcies while collapsing private investment. Sky-high interest rates drove up the cost of servicing that national debt, spawning even higher deficits.

Canada, once one of the world’s strongest nations financially, was transformed into an economic basket case.

Ottawa would implement 27 consecutive annual deficit budgets before tough spending cuts stabilized and eventually reduced our country’s debt burden.

Today, our national debt stands at $617 billion. Finance Minister Bill Morneau’s recent deficit forecast would take that to $730 billion by 2021. Even with today’s record low interest rates, debt servicing will eat up $26 billion this fiscal year. If interest rates were to rise by a modest two per cent, the cost of servicing that increased debt would rise to over $44 billion by 2021, leaving the next government with no choice but to run even higher deficits or slash program spending.

OK, so taking on more national debt is risky, but isn’t it true that deficit spending is necessary during times of economic difficulty? And doesn’t economic growth eventually make it easier to balance the budget and pay down the debt?

Answering the first question requires defining “economic difficulty.” The Conservative government of Stephen Harper, along with virtually every other government in the developed world, ran large deficits in response to the 2007-08 global financial crisis. Fortunately, a series of previous budget surpluses lowered the national debt, placing Canada in the strongest financial position of any G-7 country to implement stimulus spending.

The moral of the story is that governments should keep their financial powder dry and only run deficits when the economic need is both imperative and temporary. The current period of low growth doesn’t come anywhere close to meeting those criteria. And what if this low growth period is not a temporary situation?

There’s good reason to believe that lower growth will be the new normal for our country. Demographics alone make this highly likely. The boomer bubble is greying, with profound implications on labour force growth, the No. 1 driver of economic growth in almost every country.

Statistics Canada forecast labour force growth will slow to just 0.5 percent per year during the term of the federal government. Some 250,000 baby boomers are retiring each year. Soon that number will grow to 400,000. This will have a profound impact, as a smaller pool of working-age taxpayers must fund the rising health care and social costs of a burgeoning population of seniors.

And if the Liberals remain focused on trying to grow the economy through government spending, rather than policies that encourage private sector wealth creation, the chances of a rebound in growth will be very unlikely indeed.

Running up the national debt in the face of these realities means handing the next generation a massive debt burden. Some of that next generation are uniting to fight against the legacy. Generation Screwed is a movement made up mainly of millennials (born anywhere from the early 1980s to the mid 1990s).

Their website opens with “Past generations voted to spend more and more money expanding entitlements and the size of government. They are handing the next generation the bill.” The website includes a link to a “How screwed are you?” map the shows combined federal and provincial debt per person depending on where you live.

I met  some of these young anti-debt activists during a recent trip to Ottawa. One of them said to me, “Parents try to leave their kids some money. Governments  will leave us nothing but debt.”

Ironically, it was their millennial cohorts who helped elect the government that will make that debilitating legacy a lot larger.

Notley Mirrors Wynne’s Failed Economic Strategy

By: Ben Eisen and Charles Lammam, The Fraser Institute

Published in – The Roughneck Buy & Sell / May 2016

In her recent “kitchen table address” about the state of Alberta’s finances, Alberta Premier Rachel Notley confirmed her government will once again increase spending in 2016-17, despite the province’s deep deficit. It appears the plan is to try to reduce the deficit over time by slowing down the rate of spending increases while hoping for revenue growth to gradually fill the budget hole.

Notley’s plan closely resembles the fiscal strategy employed in Ontario in recent years by premiers Dalton McGuinty and Kathleen Wynne, which led to a string of budget deficits and a rapid run-up in provincial debt. If Alberta pursues the same approach, it will likely get the same undesirable results, particularly if oil prices stay low.

In some respects, Ontario’s fiscal situation in 2009-10mirrors Alberta’s today. The province was in the process of absorbing major economic shocks that had hobbled a major industry (manufacturing in Ontario’s case). Further, the province’s medium-term fiscal outlook was bleak and showed that without meaningful spending reform the province would rack up considerable new debt.

Unfortunately, Ontario’s government never delivered the kind of spending reform needed to put public finances on sound footing. Instead, it continued to increase spending, albeit at a slower pace than before and during the recession when spending rose markedly. It also raised taxes while hoping revenues would increase robustly and eventually close the budget shortfall.

This “wait and hope” approach to deficit reduction has proven unsuccessful.

In its 2009 budget, Ontario projected it would run Operating deficits for the next six years totalling $52.9 billion before finally balancing the budget in 2015-16. In fact, things have turned out much worse. Ontario’s budget is still not balanced, and the cumulative deficit from 2009-10 to 2015-16 has been approximately $81.9 billion – more than 50 percent more than projected in 2009.

In total, Ontario has seen its net debt (a measure that adjusts for financial assets) increase by $126.5 billion since 2008-09, a 75 percent increase in just seven years. As a share of the provincial economy, Ontario’s debt increased from 27.9 percent to 39.6 percent. Ontario’s government now boasts about its plan to finally balance the budget in 2017-18 – but only after significant damage has been done. And what’s more, the province plans to pile up more debt through debt-financed capital spending (at a rate of about $10 billion per year) for years to come after reaching a “balanced budget.”

Despite these negative outcomes, Notley more or less promised in her kitchen table address to bring Ontario’s model to Alberta. Despite the bleak fiscal outlook, she stated that her government would increase spending again in 2016-17, this time by about 2.8 percent, with further (smaller) increases promised in future years.

In other words, even as the government faces a $10 billion deficit this year, the premier refuses to take decisive action to reform and reduce provincial spending. Instead, the government will try to merely slow down the rate of spending growth.

So Alberta is largely pursuing the same “wait and hope” deficit reduction strategy Ontario pursued. One major problem with this approach is that even if it “works” and the deficit is eventually eliminated, it results in billions of dollars of new government debt that will be passed along and must be serviced and/or repaid by future generations of Albertans.

Another major problem, as Ontario’s example shows, is that the economy and thus government revenues may not grow as robustly as forecasted. In this case, the result will be even bigger deficits and even more debt. Failing to control spending means government finances will be even more vulnerable to future economic shocks.

Ontario provides a good example of how not to respond to an economic downturn leading to a large deficit. Unfortunately, the “kitchen table address” suggests Alberta may be poised to make the same mistakes.

Thursday, 5 May 2016

Debunking the Leap Manifesto 100% Renewables by 2050 demand

By: A Chemist in Langley - Wordpress

My vocal challenges to the viability of “The Leap Manifesto” have earned me some negative feedback and as such I figure it is necessary to back up my opinions with a few numbers. In doing this I will differentiate myself from the folks at the Manifesto who appear averse to presenting any numbers to support their ideas.
Now the problem with the field of renewable energy is that there are a lot of people who love to wave their hands and make claims about the future. One of the bright lights of the field, whose light unfortunately dimmed too soon, Dr. David Mackay had an expression, “It’s not so much that I’m pro-nuclear, I’m just pro math”. In renewable energy the math counts, and as this post will show the math is against the idea that we can reach the Leap Manifesto goal of 100% Renewable Energy by 2050.
Now a lot of the info in this post is cribbed from an earlier post More on 100% Wind, Water and Sunlight and the Council of Canadians “100% Clean economy” by 2050 goal. My intention on this post is to provide a lot less detail to make it easier to read and understand.
In the Leap Manifesto they only supply two references, one is to how they will achieve a “100% renewable economy by 2050”. It is:
Ironically, that is not actually the right reference. The document they provide is the supporting document for Dr. Jacobson’s masterwork. The basis for the “100% clean economy by 2050” plan is a still-draft paper prepared by Dr. Jacobson 100% Clean and Renewable Wind, Water, and Sunlight (WWS) All-Sector Energy Roadmaps for 139 Countries of the World (called 100% WWS hereafter). As suggested, 100% WWS provides a detailed break-out of what it would take for each country in the world to achieve 100% renewable energy (excluding nuclear power and any new hydro). You note that big proviso. Dr. Jacobson is very anti-nuclear energy and does not like large reservoir or run-of-the-river hydro so he has excluded them from the mix. Since the authors’ of the Manifesto are citing Dr. Jacobson’s work I will assume for the sake of this blog post that they feel the same way.  In Table 3 of 100% WWS the breakdown of energy sources by 2050 in Canada is presented:
  • Onshore wind 37.5%
  • Offshore wind 21%
  • Solar PV plant 17.7%
  • Hydroelectric 16.5%
  • Wave energy 2%
  • Residential rooftop solar 1.5%
  • Commercial/govt rooftop solar 1.7%
  • Geothermal 1.9%
  • Tidal turbine 0.2%
At the outset the numbers look challenging, but not necessarily impossible. Being a practical guy, I thought I should dig a bit deeper to see how these numbers pan out. It ends up those numbers are presented in an associated spreadsheet. In Table 2 of the spreadsheet is the list of new units necessary by 2050 to achieve the 100% Renewable goal. These are:
  • Onshore wind: 39,263 new 5 MW units ( + 1939 units currently installed)
  • Offshore wind: 21,555 new 5 MW units (currently no units in Canada)
  • Solar PV plant: 5122 new 50 MW facilities (currently 13 similar facilities)
  • Hydroelectric: Uses currently built facilities with efficiency gains
  • Wave energy: 27,323 0.75 MW installations (currently no unit in Canada)
  • Residential rooftop solar: 4,206,934 units (currently 2% of units installed)
  • Commercial/govt rooftop solar: 248,867 units (currently 2% of units installed)
  • Geothermal: 50 new 100 MW facilities (currently no such facility in Canada)
  • Tidal turbine: 1980 new 1 MW units (currently no units in Canada)
So let’s start with the easiest ones first. According to the plan in order to meet our goal we will need 27,323 wave devices (covering a physical footprint of about 14 km2) and 1980 tidal turbines. With zero wave devices installed to date in Canada at the end of 2015 we have to install 804 of these systems per year to meet our goal. There is one hitch to this plan. No one has yet to come up with a design for a fully-functional industrial scale wave installation. There are lots of pilot projects and one unit in Australia looks promising but before we can even start the planning process a design needs to be completed. Absent even a design for a unit it is unclear how we are going to meet our goal of 804 a year starting yesterday.
As for that footprint of 14 km2 we know that environmentalists go out of their way to encourage large industrial users to cover huge swathes of their marine foreshore with industrial power plants, so that won’t be a problem either.
As for the cost, absent a design it is hard to tell. Dr. Jacobson estimates that the wave devices will cost $130 billion (all figures US dollars) plus approximately $8 billion for the tidal units. So about $140 billion dollars to meet 2.2% of our energy needs….this stuff isn’t cheap you know.
In order to achieve our 2050 goal we also need to install over 60,000 – 5 megawatt wind turbines between today and 2050. That means 1764 a year or 5 units a day between now and Jan 1, 2050. To put the scale of this challenge into perspective: as of September 2015 British Columbia had 5 onshore wind installations with a total of 217 wind turbines and an installed capacity of 489 MW. Nationally we are 5% complete in our goal for 2050.
As one of the two coasts British Columbia would be responsible for close to half of the 21,555 offshore units needed to achieve our 100% WWS goal. As of September 2015 we had zero offshore wind facilities. Getting from zero to 10,000 in 34 years, in our regulatory environment, shouldn’t be much of a problem, heck according to BC Hydro they have up to 300 potential wind energy sites being investigated for project development. Of that group offshore represents 43 project with an installed capacity of 14,688 MW. This represents 4 percent of the 368,000 MW of nameplate capacity called for in 100% WWS by 2050.
From a cost perspective wind, while not ultra-expensive, is not cheap either. Using Dr. Jacobson’s numbers the onshore wind component will cost $273 billion dollars while the offshore wind component will cost $380 billion dollars….these numbers keep adding up don’t they?
Now the solar side is much more advanced and given the money and the will it should be possible to achieve Dr. Jacobson’s goals. You notice I said “given the money”. By Dr. Jacobson’s calculations it will only cost $527 billion US dollars before 2050.
Looking at the total math for this project Dr. Jacobson calculated that it would cost approximately $1.340 trillion (2013 US dollars) to build the new installations necessary to meet our 2050 goal. Correcting for inflation that comes out to $ 1.4 trillion U.S. dollars. Using today’s currency conversion that comes out to $1.8 trillion Canadian dollars which needs to be spent by 2050.
Now assuming we spread the costs evenly between 2016 and 2050 (34 years) that comes out to the low-low-price of $53 billion per year to build that infrastructure. Remember we haven’t considered the infrastructure necessary to build that infrastructure (roads etc…) or the costs to do the environmental assessments on all those projects, we are simply talking about the capital costs of the actual units themselves. Talking about environmental assessments, given Canada’s history of welcoming large industrial power facilities, I am quite certain there will be no delays in initiating the construction of all these facilities…just look at how smoothly Site C has been progressing in BC. There have been no added legal costs or anything like that have there?
Now that I have covered the power sources, I will address what I view as the biggest Achilles heel in the 100% WWS goal for Canada: power transmission. As I noted when talking about the high-speed national rail line, the Manifesto writers appear to be an urban lot and seem to have forgotten that Canada is what they call a big country. Consider that to achieve 100% clean energy in 2050 virtually every community in Canada will need to be connected to a national grid since cities like Yellowknife will need to import a lot of power in order to continue to exist. Under 100% WWS the citizens of Inuvik won’t be allowed to use diesel generators during the 6 month winter, when the ice has blocked up the coast and the wind can disappear for days at a time. They will thus have to import electricity from down south. Now I admit to having picked a couple extreme cases to make my point, but recognize that Canada’s vast and challenging geography has limited our ability to create a nationally integrated power grid. Even the most optimistic view has a new grid costing $25 billion and taking a couple decades to build. A more realistic appraisal puts the cost of a national backbone of 735 kV transmission lines at around $104 billion and taking 20 years to complete.
Once the national backbone has been built can we then start work on all the feeder lines that will have to go to every city, town and hamlet. Building transmission lines in Canada can be intensely expensive. Consider that the Northwest Transmission Line project in BC is looking to cost over $2 million a kilometer to build. Yet in order to work the 100% WWS proposal requires that these lines be built. As for the costs? If your single main line is $104 billion and we will need 10’s of thousands of kms of feeder lines then even taking into account the existing infrastructure we are talking in the low trillions to connect all our communities.
As I have said more times that I would care to admit in this blog: I am a pragmatist. As a pragmatist I tend to live by the credo “moderation in all things”. The 100% WWS model pushed in the Manifesto fails because it does not believe in moderation. It places tight, and poorly supported, restrictions on a number of important baseline clean energy technologies and in doing so results in a proposal that is ruinously expensive. Looking at the numbers above, the costs would be prohibitive for Canada consuming over $100 billion a year just for this one Demand and we haven’t yet included the high-speed railway. At the Manifesto web page they have an analysis by the Canadian Centre for Policy Alternatives (CCPA) that suggests some ideas for how can pay for the Manifesto’s demands. That document uncovers almost $50 billion/year to help pay for the demands. The problem is, as I show above, just the basic installations for 100% renewable by 2050 already devours that entire total and then some. Add in the power grid and the high-speed rail and you have more than doubled the total. The CCPA suggests that we should simply borrow to pay for this infrastructure. Can you imagine the legacy of debt we would place on our children, our grand-children and our great-grandchildren if we suggested borrowing $100 billion+ a year for the foreseeable future to fund this infrastructure? Admittedly we live in an era of low interest rates but they will not last forever. Adding several trillion dollars to our national debt is simply a non-starter.
To conclude, the truth is that while the 100% WWS by 2050 plan is clearly not possible that doesn’t mean we shouldn’t work hard to achieve its underlying goal of low or no carbon energy with a strong renewable component. I believe strongly in renewable energy, but as I have written before I believe in regionally-appropriate renewables. The problem with the proposal pushed in the Manifesto is that it is hobbled by some of the personal views of its creators. It omits some pretty obvious energy solutions like further large-reservoir hydro in Quebec, Labrador, Ontario and BC, run-of-the-river hydro across Canada and, of course, further nuclear power. A country like Canada that is blessed with an abundance of hydropower opportunities should not ignore those opportunities because the urban writers of the Manifesto rely on one engineer from California who doesn’t particularly like that technology. Put simply we cannot ignore the potential of nuclear and hydro energy in a post-fossil fuel energy mix. To summarize what I have written above: when an apparently innumerate representative from the Leap Manifesto assures you that 100% WWS is possible by 2050 the correct response is: “only in your dreams…only in your dreams”.

On forest fires climate activist aren't just insensitive, they are also wrong

By: A Chemist in Langley - Wordpress
As anyone with any awareness of Canadian events knows, the City of Fort McMurray has undergone a complete evacuation because of an out-of-control wildfire. The news has kept me with one eye locked on my media feed as I have marveled at the resilience and dignity of the people of Alberta in this hour of need. As many have suggested, this is not a time to worry about the politics, but rather one to worry about and pray for the people displaced by this natural disaster. From a political perspective our leaders have shown admirable gravitas with Prime Minster Trudeau treading the cautious line dealing directly with the wildfire without using it for political advantage. At one point in the day, it looked like Green Party Leader Elizabeth May might have decided to attempt to make political hay from the fire, but she quickly issued a correction and has since shown the calm and restraint we expect from our leaders in times like these.
Unfortunately, while Canadian political leaders have performed well, many climate activists out there have tried to use this natural disaster to score points. As I noted  above, Ms. May’s first press conference sought to link the fire to climate change although she later prepared a press release saying:
“No credible climate scientist would make this claim, and neither do I make this claim. Rather, we must turn our minds in the coming days to the impact of increased extreme climate events, and what we can do collectively to respond to these events.” 
The claim in question being that the fire was directly related to climate change. That being said some far less socially aware people have decided that a human disaster is exactly the right time to push their political agendas. The most obvious case being a post at Slate written by Mr. Eric Holthaus titles: Wildfire Rips Through Canadian City, Forcing 80,000 to Flee. This Is Climate Change which I have seen re-tweeted more times than I can count.
Before I go any deeper into this discussion, I’d like to clear up a few points. As anyone familiar with Alberta geography knows, the City of Fort McMurray is located in the southern edge of the Canadian boreal forest. As any forester will tell you the boreal forests  are hard-wired for fire. As Natural Resources Canada puts it forest fire:
is as crucial to forest renewal as the sun and rain. Forest fires release valuable nutrients stored in the litter on the forest floor. They open the forest canopy to sunlight, which stimulates new growth. They allow some tree species, like lodgepole and jack pine, to reproduce, opening their cones and freeing their seeds. 
Forest fires are simply a way of life in the boreal forests and interface fires (fires that jump from wild lands into neighbouring communities) are a particular concern for any town that has been carved out of the boreal forest.
As for climate change, the science on that topic appears to be equally clear. The climate change models tend to agree that climate change will likely result in increasing severity and intensity of future forest fire regimes. The problem lies when activists, not satisfied with what the models project; decide instead to over-egg the sauce in order to score petty political points. As an example, let’s consider Mr. Holthaus’ article in Slate.
The first section of the article is nondescript as it repeats what has been reported in any number of articles elsewhere. Climate change is not mentioned until almost half-way though the article. This seems odd to me since the title of the report specifically insists that “This is Climate Change”. One would expect a lot of meat justifying this rather definitive statement. In actuality rather than meat all Mr. Holthaus provides is some very weak tea. The only paragraph that has anything to do with climate change appears right in the middle where he writes:
One thing that is certain is that this fire has a clear link to climate change. Canada’s northern forests have been burning more frequently over recent decades as temperatures there are rising at twice the rate of the global average. A 2013 analysis showed that the boreal forests of Alaska and northern Canada are now burning at a rate unseen in at least the past 10,000 years. The extreme weather of recent months is also closely linked with the ongoing record-setting El NiƱo conditions in the Pacific Ocean, which tends to bring a warmer and drier winter to this part of Canada. Last month, Canadian officials mentioned the possibility of “large fires” after over-winter snowpack was 60 to 85 percent below normal and drought conditions worsened.
Now the first sentence is unreferenced and frankly unsupported. The second sentence presents a statement that confusingly, is directly contradicted by the reference provided in the text presumably to support it. The citation leads to a Natural Resources Canada (NRC) page that says the following:
This complex combination of influences makes it difficult to identify clearly whether any measurable changes in the patterns of wildland fire over the last few decades can be linked directly to climate change. Nevertheless, pattern changes do appear to be underway.
In Canada’s northwestern boreal regions, for example, the annual amount of forest area burned by wildland fires rose steadily over the second half of the 20th century. Some of this increase has been attributed to climate change.
By contrast, in Canada’s southern boreal forest, the annual amount of area burned seems to have decreased during the 20th century. This trend might be the result of climate change causing greater amounts of precipitation over time in these regions.
However, analyses of fire history suggest that it is the effect of climate variability on precipitation regimes that is the primary reason for the decreasing fire activity in southern regions.
The NRC statement clearly says that it is difficult to identify whether climate change is to blame. Yet Mr. Holthaus states the opposite that “there is a clear link”. I’m not sure how Mr. Holthaus squares that circle. Moreover, the NRC clearly points out that in the southern boreal forest (i.e. where Fort McMurray is situated) the annual amount of area burned seems to have decreased and then attributes that decrease to climate change? But Mr. Holthaus uses that same citation to support a completely different (and contradictory) claim.
At this point I can only guess that maybe Mr. Holthaus is unfamiliar with Canadian geography. My suspicion is further reinforced by reading his next sentence about the 2013 study. Now being a scientist I am prone to linking to the actual study in question  rather than a ThinkProgress.org  (Climate Progress) report on the study. Looking that the actual study (and not the slanted reporting of it), I discover that it deals exclusively with the upper northwestern portion of the sub-arctic boreal forest (in Alaska). This would represent the “Northwestern Boreal region” in the NRC quote above. It has absolutely nothing to do with the boreal forest around Fort McMurray, it is irrelevant to the discussion at hand. You see people forget that the boreal forests are huge covering up to55% of Canada’s land mass and that this land area cannot be treated as if it was one singleunit.Put another way, central Alberta and central Alaska are a long ways apart and experience very different climatic conditions.
The final few paragraphs of this section of the article further link the forest fire to the recent El Nino. This is a fair comment as one clearly understood downside of El Nino is reduced precipitation and an early fire season for Northern Alberta and the BC Peace District.
Looking at the supporting information provided with his article, it is clear that Mr. Holthaus failed to link the fire to climate change. Rather, the references he provides in his piece actually make it clear that climate change is not a likely major contributor to this fire. Rather the fire is a natural occurrence that may have been hastened by the effects of the recent El Nino. It is hard how anyone could realistically read those references and conclude: “This is Climate Change”.
Now I suppose I could end this piece here, but as I indicated above, I firmly believe that climate change will eventually result in increased incidence and size of wildfires in the west and so I was wondering if any signal was yet evident of that trend. Being a scientist, I decided to get the data and see what it had to say. Specifically, I downloaded the NRCNational Forest Database, Forest Fires Tables- Statistics by Province. Because the files are not spreadsheet ready I had to fix them up and then I ran them through a statistical software package for environmental applications (called Pro-UCL) that I happen to have on my computer. Specifically, I looked at the data for area burned (in hectares or ha) in the Province of Alberta from 1990 through 2015. What I found was a dataset with a lot of variation.
The mean area burned for the 26 year period was 170,961 ha while the standard deviation was 229,086 ha. Any statistician looking at those numbers would recognize that we have a messy set of data with a huge difference between the lowest value (1961 ha in 1996) and the highest value (806,055 ha in 2011). Looking at that information, the 2015 value (491,768 ha) isn’t even particularly high for this dataset. To see if any trends existed in the data I ran some Mann-Kendall tests on the data. A Mann-Kendall is a test used to try and identify trends in data where you have no basis for believing the data fits a known distribution. The results of the Mann-Kendall analysis was that the number of hectares burned does not show any evidence of a significant increasing or decreasing trend over the time period covered (1990-2015). When I shortened the time period covered to start at  year 2000 the p-value actually got worse (approximate p-value of 0.482). That p-value represent is pretty definitive indication that no trend exists in the recent data.
So what is the take-way from this blog post? Well the climate models indicate that in the long-term (by the 2091-2100 fire regimes) climate change, if it continues unabated, should result in increased number and severity of fires in the boreal forest. However, what the data says is that right now this signal is not yet evident. While some increases may be occurring in the sub-arctic boreal forests of northern Alaska, similar effects are not yet evident in the southern boreal forests around Fort McMurray. As for Mr. Holthaus, I would recommend that he edit his article to better reflect the citations he provides since he certainly does not do them justice in his article’s current iteration.
My final word is for the activists who are seeking to take advantage of Albertans’ misfortunes to advance their political agendas. Not only have you shown yourselves to be callous and insensitive at a time where you could have been civilized and sensitive but you cannot even comfort yourself by hiding under the cloak of truth since, as I have shown above, the data does not support your case.