Thursday, 30 June 2016

British Columbians have granted social license for oil pipelines: newest poll

By: Resource Works

Despite strenuous campaigns by some in the environmental movement, there is little public opinion pressure on the Liberal government to scrap these projects, according to Abacus Data

Even in British Columbia, where public concerns led to 93 of the 157 conditions imposed on the Kinder Morgan Trans Mountain Pipeline Expansion approval last week, most people are either supportive of, or could support, all three major Canadian oil pipeline projects that are waiting to move forward.
According to Abacus Data principal Bruce Anderson: “In a sense, social licence clearly exists. A broad cross section of voters and the large majority of Liberal voters feel uncomfortable with the anti-pipeline argument – believing instead that the best course for the country is to continue to harness the value of our oil resources, while putting increasing effort into reducing emissions and promoting other forms of energy."
Continues Anderson: "This is consistent with the blend of aspiration and pragmatism which has long marked Canadian political culture. For elected officials who believe these projects have merit, the data suggests approval of these projects, alongside efforts to minimize environmental risks and increase First Nations involvement would encounter less resistance than some may suspect."
Those findings are based on this new poll by Abacus Data released May 24. 
What it suggests is that the "and-more" philosophy, recently discussed in a speech by Stewart Muir' to a gathering of British Columbia mayors, is already where the broad public mind is at. "And-more" signifies that having more options is better when it comes to energy choices, in contrast to the limited "and-or" decision that seems to be popular at the extremes of opinion.




CAPP Forecast Provides Some Optimism About the Future for the Canadian Oil Patch

By David Yager - Yager Management
Published: EnergyNow Media

The only things certain about any and all economic forecasts is they are wrong. Don’t know why and don’t know in which direction but be assured the published information will not be correct. There are just too many unknowns when predicting the future. The multitude of wrong predictions on oil prices in the past two years is but one example.
That said, modern commerce depends upon forecasts and therefore they proliferate. But for years economics has often been called, “the dismal science”. The old George Bernard Shaw quote goes, “If all the economists were laid end to end, they’d never reach a conclusion”.
This is in stark contrast to climate change forecasts for which “the science is settled”. It seems counterintuitive that a civilization which cannot predict the future price of oil can accurately forecast the weather with such accuracy the necessary political response is new public policy and government regulations. Perhaps the oil guys should hire some environmentalists.
And so it goes with the latest forecast on future oil production by the Canadian Association of Petroleum Producers (CAPP). In mid-June CAPP released its annual Crude Oil Forecast, Markets and Transportation study. It is actually pretty good news considering the current state of the industry because it shows continued production growth through 2030. Like previous forecasts it is most likely wrong but it does provide some optimism about the future for the Canadian oilpatch.
CAPP writes in the prelude to its supply forecast, “Crude oil is one of the most important commodities in the world. Not only is it the dominant source of transportation energy now and for the foreseeable future, it has many other uses. It is a crucial raw material for the chemical industry, and in the production of plastics, which makes possible almost every item in our daily lives. CAPP is forecasting Western Canada crude oil production to grow by over 1.1 million b/d by 2030. After blending and including imported diluent volumes, this means over 1.5 million b/d of crude oil supplies need to be transported to refining markets.”
This must be what oil producing associations feel compelled to write in the face of a loud and growing anti-oil movement, one which increasingly espouses the view hydrocarbon fuels will soon be obsolete.
Canadian Crude Oil Production 2015 - 2030
1) Total bitumen production is actually higher. The oilsands mining and in situ figures are for net bitumen production after upgrading.
2) Conventional western oil production includes light and medium crude, heavy crude and natural gas liquids such as pentanes and condensate.
3) Conventional eastern production is primarily offshore but there is a small amount of production from Ontario.
Over the 15-year period CAPP sees crude oil production rising by 1.1 million b/d from 3.852 million b/d in 2015 (actual) to 4.928 million b/d in 2030. Most of the growth will come from oilsands which will rise from 2.365 million b/d to 3.668 million b/d, an increase of about one-third. Western Canadian conventional production will fall nearly 200,000 b/d from 1.311 million b/d in 2015 to 1.167 million b/d in 2030. Eastern Canadian output will rise from 176,000 b/d last year peaking at 275,000 b/d in 2019 as new projects come on stream. Thereafter it will taper off to only 93,000 b/d by the end of the forecast period.
What is important about these numbers, if correct, is Canada will remain a significant oil producer on a global scale. The following chart shows the top ten oil producing countries in the first quarter of 2016. They have changed somewhat since March (Iran may be a bit higher) but Canada is unlikely to be removed from the world’s top ten oil producing countries anytime soon unless non-oil alternatives make considerably more progress than is currently anticipated.
World's Top 10 Oil Producing Countries
CAPP’s methodology for oilsands growth includes projects which are known or on the drawing board but which have not yet been completed. Imperial Oil, for example, has announced a couple of projects which are not yet underway. The primary source of growth will be increased production and efficiency from existing operations once the current round of major project construction is completed.
CAPP writes extensively about market access and how North America is and will remain the major market for Canadian crude. By 2017 western Canadian output will exceed existing pipeline capacity. CAPP wrote, “Canadian crude supplies (from the WCSB) are forecast to grow by 1.5 million b/d in 2030 (In this number CAPP includes bitumen diluent which is imported into Canada and must be shipped to markets as a blended commodity). Pipelines are the preferred mode of transportation to move this product but unexpected extensions in the regulatory projects have created new uncertainty around project timing. However, it remains clear that better tidewater access will be needed to reach growing global market outlets and capture full value for western Canadian supplies”.
To this end the full report carries an extensive survey of the array of crude-by-rail transloading terminals in western Canada which the report indicates must be utilized in the absence of new pipeline capacity. In previous presentations CAPP had included startup dates for various pipeline projects. Not this year.
CAPP makes no predictions on oil prices. It does, however, provide a comprehensive list of known and approved oilsands projects which are either in production or approved.
Hopefully, the future will unfold as presented above. It is great news for the oilfield services industry which provides equipment and services for all aspects of the business. Of particular interest is the size of production maintenance sector which, based on production, will be 25% larger in 14 years that it is today based on total crude oil output.
However, this forecast is somewhat tempered from that of previous years because of the realities of the oil price collapse and the absence of meaningful new low-cost pipeline takeaway capacity. Such is the inherent risk in the forecasting game. In the 2012 CAPP crude oil forecast production in 2030 was predicted to be 6.2 million b/d, the major change being oilsands output of 5 million b/d compared to this year’s estimate of 3.7 million b/d. This 1.3 million b/d decline is the negative impact of the numerous projects which have been delayed or cancelled in the past few years.
On June 27, 2016, oil and gas forecasting and analytics company IHS Energy released its own forecast for Canadian oilsands production. In a Globe and Mail report IHS sees output reaching 3.4 million b/d by 2025, about the same as CAPP’s number if upgrading volume loss is not included. This is a million b/d increase in the next nine years, not the rate of growth service and supply had hoped for but hardly a sunset industry. IHS figures that since 2014 the capital cost of a new oilsands plant has fallen by $10 a barrel and thermal operations could now break even with crude at US$50 per barrel (full cycle cost, not just operating which is lower).
Forecast or not, much of the oil output growth in the next three years from 2016 to 2018 – 520,000 b/d – will come from projects that are for the most part already underway. As challenging as this market has been – compounded by the devastation of the recent wildfires – this is a great reason for the workers and companies supporting this industry to be at least modestly optimistic about their future. Oil prices have not risen high enough to spur this sort of production growth in any of the other major crude and natural gas liquids producing regions of North America.
For conventional light, medium and heavy crude and natural gas liquids investment and activity will recover with price. After four months of almost steady price recovery recent events in Europe have set back the crude oil price recovery for the moment. But this is likely temporary. In its weekly report ARC Financial Corp. wrote about Brexit on June 28, 2016, “Brexit is unlikely to affect demand growth in a meaningful way; to the contrary it’s more likely to delay investment into new supply, which will lead to higher prices.” The thesis is turmoil in global capital markets will make it even harder for oil companies to raise capital which will, down the road, further pinch supply.
If the foregoing is even modestly correct it is all good news.
About David Yager – Yager Management Ltd.
Based in Calgary, Alberta, David Yager is a former oilfield services executive and the principle of Yager Management Ltd. Yager Management provides management consultancy services to the oilfield services industry in a number of areas including M&A, Strategic Planning, Restructuring and Marketing. He has been writing about the upstream oil and gas industry and energy policy and issues since 1979.

Tuesday, 21 June 2016

End-Of-Oil Predictions Don't Match Reality: Tertzakian

By Pat Roche
Published: Daily Oil Bulletin

Headlines imply the end of the oil age is just around the corner. Public opinion surveys show many consumers believe humanity will stop consuming oil entirely within a few years.
Meanwhile, people are buying more vehicles and heavier vehicles, and they’re driving more. So oil consumption continues to rise with no slowdown in sight.
And if electric cars replaced petroleum-powered vehicles at a rate of one million a year (versus the current negligible rate), it would take 1,300 years to replace the existing global fleet of 1.3 billion gasoline- and diesel-powered vehicles.
These are among the insights Peter Tertzakian, chief energy economist and managing director of ARC Financial Corp., delivered during the American Association of Petroleum Geologists’ annual convention and exhibition in Calgary on Tuesday.
Those who casually predict the transportation industry will move entirely to non-carbon fuel sources in a few of years don’t understand the enormity of the logistical challenge, the author of A Thousand Barrels A Second told a sold-out lunch.

1.3 billion vehicles

Tertzakian isn’t disputing that change is occurring, but he said those predicting oil and gas will become stranded assets miss the practical reality of how long this would take.
A geophysicist who began his career in the upstream oil and gas industry, Tertzakian has been following news about electric cars for a quarter century.
“And I have to tell you I believe that for the first time now in my career following energy and electric cars, that I believe that they are going to take root and make ultimately a meaningful dent in the transportation complex which, of course, has impacts to oil,” he said.
He added: “We shouldn’t be in denial about the emergence of substitutes in any business, and oil and gas is no exception. But equally I would have to say that people who think that the world of our energy complex is changing quickly should not be in denial about the magnitude of the challenge.”
There are 1.3 billion petroleum-powered vehicles in the world today. Every year about 40 million of those vehicles get scrapped and roughly 90 million new vehicles are sold. So every year there’s a net increase of 50 million in the number of active vehicles in the world.
“So it’s 1.3 billion growing by 50 million internal combustion engines per year,” he said. “It’s just a staggering amount of growth. It’s like every Canadian is buying one and a half cars new every year.”
“When you look at some countries—like India, for example—almost [no vehicles] are going to the wrecker and almost all cars are brand new, and they’re largely internal combustion engine powered.”
So what’s the growth outlook for electric cars? Some predict sales of electric vehicles will hit one million a year by 2020 or 2021.
“I don’t dispute that,” Tertzakian said. “It could even be more.”
But all that would mean is the global fleet of petroleum-powered vehicles would grow by roughly 49 million vehicles a year rather than 50 million.
“It’s going to be a long time for this change-out to take place,” he said. “And there’s a lot of people who are writing headlines who are in denial in terms of the magnitude of the energy issues that are facing us [and who] have a tendency to trivialize the importance of our business here.”
To put the prediction of a million electric cars sold per year in perspective, it would take 1,300 years to replace the existing fleet of 1.3 billion petroleum-powered vehicles at that rate.
“But even then, it’s not 1.3 billion,” Tertzakian said in an interview after his presentation, referring to the net annual increase of 50 million active vehicles in the world.

Fuel efficiency gains offset

And that’s only part of the growth story.
While consumers may be predicting oil demand will fall, they’re significantly increasing their own consumption. For several years about half of new consumer vehicles sold in Canada and the United States were cars and half were SUVs and pick-ups.
That’s now shifted to the point where SUVs and pick-ups account for about 60 per cent of new vehicles sold to consumers. In the past six to 12 months, sales of heavier consumer vehicles rose at the fastest rate Tertzakian has seen in the 20-plus years he’s been following such trends.
“It’s absolutely staggering. I’m not moralizing, I’m just telling you the way it is. It is that people are buying heavier and heavier vehicles,” he said.
“And [that] has a tendency to cancel out any gains in vehicle fuel economy. So not only are we driving more, we’re buying bigger vehicles, and those two combined are fuelling the growth in oil consumption going forward.”
So while headline writers may predict an imminent drop in oil demand, consumption trends indicate the exact opposite.
“And even right now, just in the last three or four months, if you look at the numbers they’re really quite staggering,” Tertzakian said, noting the current U.S. summer driving season is breaking all records.
“This is not a United States or North America-only thing, this is a global thing. Oil demand is marching higher.”
He told the Bulletin: “The producers and the people who invest in production are being asked to divest. But the consumers are not divesting. There’s no indication consumers are divesting of anything related to fossil fuels. In fact, it’s going in the opposite direction.”

Megaprojects on hold

While some predict oil markets will reach a supply/demand balance by year’s end, Tertzakian is more bullish: “I actually think we’re going to get there sooner than the end of the year, but we’ll see.”
Since oil prices began falling two years ago, few new oil megaprojects have been sanctioned because of the steep drop in producer cash flow. This will affect global supply next year and in 2018.
So the good news is prices will rise, but the bad news is they will also tend to fall, Tertzakian said, referring to the volatility that is now a feature of the industry.
Given the cloudy outlook for long-term prices, producers will direct capital to projects that can deliver the quickest return, which rules out oilsands and offshore megaprojects that take years to pay out, he said.
Tertzakian’s predictions of increased volatility are based on both the big changes that have occurred within the industry—such as the shale revolution in the U.S.—and external forces such as substitution for petroleum-powered vehicles and environmental, social, geopolitical forces.
Until recently, the only way to bring large volumes of oil on production was through megaprojects. But improvements in horizontal drilling and fracturing technology opened up oil production from U.S. shales, allowing large volumes to be brought on well pad by well pad.
“This new class of oil, which has very different characteristics, is going to create more volatility,” he said. “And now we layer on top of that the demand profile we’re seeing; it creates a mismatch between how fast supply can be brought on, and how fast demand goes up.”
While Tertzakian is bullish over the longer-term, that isn’t the case for his short term outlook for the sanctioning of megaprojects in the oilsands and offshore.
“As the price rises, discretionary cash flow is first going to go to the fast-cycle projects in the United States and in Canada, and that we can expect large offshore megaprojects and oilsands projects ... investments to be dormant, relatively speaking, for quite a while,” he said in an interview.
“And how long is going to depend on how fast prices go up and sustain. Because for those big projects you need sustained [high] prices. And there’s going to be a lot of scepticism about the sustainability of prices when it goes up because of the emergence of electric vehicles and the environmental movement and pressure on fossil fuels. And there’s also going to be resistance to investing in those big megaprojects when you have a choice of the short-cycle project.”

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Friday, 17 June 2016


By: Gordon Jaremko

Former editor of Oilweek and a member of the Canadian Petroleum Hall of Fame.

Court raises respect, but not pay, for geoscientists

The Court of Queen’s Bench of Alberta says a specialty regarded for generations as a geek branch of industry – nicknamed human computers and doodlebuggers – deserves greater respect. A spring judgement declared geophysicists’ portrayals of subterranean structures worthy of copyright as creative masterpieces.

But the decision stopped short of awarding a pay increase. Earth scientists still have to settle for their costly work being defined as public art and made available for others’ use, free of charge, to the degree that government control of natural resources includes compulsory disclosure to regulatory agencies for release to prospectors.

                Oil and gas exploration firms hung on to free access to Canadian offshore and northern geological treasure maps in the landmark court ruling.

                Federal disclosure requirements, under legislation and regulation dating back to 1950, trump copyright recognition, ruled Justice Kristine Eidsvik.

                Geophysical Service Inc. (GSI) immediately moved to overturn the verdict in the Alberta Court of Appeal.

                Eidsvik’s verdict covered 25 lawsuits that GSI launched against regulatory agencies, seismic information distributors and a roll call of producers from Encana, Devon and ExxonMobil to Husky, Statoil and Suncor.

                GSI, a private venture owned by Calgary’s Einarsson family, claimed ownership of Canada’s largest seismic data warehouse. The treasures include a multi-million dollar library of information about Atlantic seabed oil and gas prospects.

                After a lengthy trial, Eidsvik agreed that the status quo is hard on geophysical surveyors, but the case suggested that the crusade for permanent intellectual property rights, to keep results of the science confidential far into the future and always charge industry for viewing the reports, belongs in the political arena.

                “The regulatory regime has confiscated the seismic data created over the offshore and frontier lands, and the Canadian Petroleum Resources Act is not apologetic for it – indeed, it makes clear that there is no compensation for any confiscation,” said the verdict.

                The regime requires surveys to be filed with the Nationals Energy Board and the Nova Scotia and Newfoundland offshore petroleum boards. The agencies make the costly reports available for free after protected periods of five to 10 years. The system is designed to help attract industry activity, starting with requests for leases of drilling prospects. A pure copyright regime would enable survey firms to demand payment for 50 years or longer.

                Eidsvik noted that parliament heard the earth scientists’ commercial concerns while enacting the mid-1980s legislation that established the current disclosure code.

                “There is a great deal of expense, effort and risk in developing speculative seismic data for license, yet the cost of duplicating the produced data is very small,” Eidsvik observed.

                Her verdict included a quotation from a 1980s expert witness who described an early version of the property rights crusade that had its day in her courtroom 30 years later.

                “This becomes an emotional issue when upper management of a seismic survey house is approached and asked to spend so many millions of dollars on a survey, and there is an element of chance in terms of making their money back. They know full well that the government will release the a in five years and that, after three or four years, potential survey buyers will realize that in another year or two they will have free access to that information,” the expert told Parliament.

                “GSI was fully aware that some of its data would have to be summited and that it would be made public when it undertook its work on these offshore and frontier lands,” said the Queen’s Bench judge in her 74-page verdict. “It is perhaps true that the provisions for submission have become more onerous over time and that the quality of the materials submitted have become better, further encroaching on GSI’s ability to license its data to others, but the provisions have always been there. Unfair as this may seem, it is not for this Court to re-write the legislation comprising the regulatory regime.”

                GSI insisted it only filed its material with Canadian regulatory agencies after being assured its intellectual property rights would be respected.

                GSI said it has uncovered “evidence of hundreds of instances where the offshore boards were making copies for third parties, scanning data, disclosing image files, sending data to be copied on behalf of third parties and further disclosing data to third parties, undermining the commercial value.”

                The Queen’s Bench verdict assures Canadian and international gas and oil hunters that, at least for now, they are complying with the accepted status quo. It will be up to higher courts, or maybe parliament, to say otherwise about the regulatory agencies.

On the glaring intellectual inconsistencies in 100% Wind Water and Sunlight

By: A Chemist in Langley

Ralph Waldo Emerson is his famous essay Self-Reliance coined the phrase “A foolish consistency is the hobgoblin of little minds”. As readers of my blog know I have spent a lot of time researching and commenting on the 100% Wind, Water and Sunlight series (100% WWS) with the latest article being 100% Clean and Renewable Wind, Water, and Sunlight (WWS) All-Sector Energy Roadmaps for 139 Countries of the World (called 100% WWS World hereafter). What I can confidently say from that research is that the champions of this approach are not small minds. Frankly the amount of effort that has gone into this project is admirable as is their goal, to achieve a 100% clean energy  future. This is a goal I share, I might add. The problem, to my mind, is that they have failed to convince and apparently do not understand economics. As I point out in my post More on 100% Wind, Water and Sunlight and the Council of Canadians “100% Clean economy” by 2050 goal the costs of this endeavour would be ruinous, especially given the suggestion that 80% of the effort [and thus the costs] would need to be accomplished by 2030. For Canada alone, that represents over 1 trillion dollars of energy infrastructure (according to 100% WWS World spreadsheets), a new power grid and upgraded energy transmission system (neither of which they have costed) all within 14 years. More problematically, from an intellectual perspective, are the glaring intellectual inconsistencies in the 100% WWS program. Now I surely can’t make such a broad statement without any supporting data so the rest of this post will address what I view as the most obvious of the glaring intellectual inconsistencies in the 100% WWS scheme.
My concern with the intellectual incoherence underlying the 100% WWS scheme is their insistence on simultaneously accepting and rejecting technologies and/or the risks associated with those energy technologies. While there are several examples of the 100% WWS team simultaneously accepting and rejecting a technology let’s start with the low-hanging fruit: the role of water in the energy program.
The 100% WWS team have a particularly odd love/hate relationship with water. When it comes to nuclear energy the 100% WWS team is clear; they eschew the technology and do not incorporate it in their calculations. Even in a country like France, that currently gets the majority of its power via nuclear, 100% WWS World requires France to be run entirely from non-nuclear sources. The same cannot be said for hydro. They go in the exact opposite direction with hydro. The 100% WWS plan does not make use of any new hydro, but retains all the existing hydro. The W.A.C Bennett dam in British Columbia is absolutely fine but the planned Grand Ethiopian Renaissance Dam is not allowed. Moreover, while they apparently do not like the technology, and apparently see it as a dead-end (since they add no more), they still expect that efficiency of the hydro will improve and thus they assume that capacity factor of the exiting hydro will increase. So the first example of their cognitive dissonance is the fact that under 100% WWS World existing hydro is good, but new hydro is supposed to be so bad that it cannot be used.
Staying with water, as described above, 100% WWS World does not include the creation of new reservoirs behind dams. Apparently for the creators of the scheme there is something inherently wrong about water reservoirs. However, in 100% WWS USA pumped hydro storage represents 5.42% of the US energy storage and pumped storage is mentioned in the other papers as an important energy storage technology. Pumped hydro storage, by its very nature, requires the use of reservoirs at both the top and the bottom of a topographic grade. So under 100% WWS hydro reservoirs are a bad thing when connected to a hydro dam but are okay when the same water is held behind a similar dam so that pumped hydro can be used as an energy storage technology?
Keeping with the inconsistencies with which 100% WWS handles water, as I described above, pumped hydro is a storage technology that makes use of the potential energy in stored water to generate electricity. There exists a similar technology used throughout the world called run-of-the-river hydro. Run-of-the river hydro is an environmentally sensitive and sustainable technology that makes use of the natural flow of a stream to generate power. As of late 2014 there were 56 independent run-of-river projects supplying electricity to BC Hydro and another 25 that are anticipated to reach operation by 2018 in British Columbia. This technology is used around the world to generate power and seems to be an obvious choice in a 100% WWS world. That being said 100% WWS does not incorporate run-of-the-river power generation. Once again I am confused. Water running downhill in a man-made sluice at a pumped hydro facility is considered a good way to generate energy in 100% WWS because the facility has the name “pumped storage”. But a virtually identical system using natural features to generate power (run-of-the-river) is bad and is excluded from use in 100% WWS, how is that for incoherence?
Now the various examples involving water do not represent the only examples of intellectual inconsistency in the 100% WWS scheme. Prior to his blocking me on Twitter, I got to follow Dr. Jacobson’s outgoing missives. One of the technologies Dr. Jacobson regularly decries on his Twitter feed is fracking. Examples include:
“Study Links Fracking To Premature Births, High-Risk Pregnancies” Oct 9, 2015
“No fracking in NY–>1 step closer to 100% WWS” Oct 17, 2014
Now I have written a bit about fracking, including discussing the misinformation being spouted by opponents with regards to the toxicology of fracking fluids. I have also written a lot about geothermal energy. As anyone who has read my writing knows, I highly approve of the technology. Unfortunately, there are not many geologic formations that will allow for the extraction of geothermal energy at industrial scales without the use of fracking. As described in the literature, fracking of one sort or another is necessary for most large, industrial geothermal facilities. Some activists try to distinguish between “fracking” and “slipping” and claim that “hydro-shearing” is different than fracking, but the earth doesn’t care if it is being blasted by one technology or the other. If you fear that fracking will enhance geologic instability and result in earthquakes, well geology doesn’t really know the difference between these three named technologies. Put simply, enhanced geothermal is geothermal fracking and any risk posed by fracking for natural gas has comparable risks when applied to a geothermal facility.
As a final example of intellectual incoherence for this posting I will choose Dr. Jacobson’s favourite hobgoblin: nuclear power. One of the biggest complaints about 100% WWS World is the complete exclusion of nuclear power. As I have described previously, one of the major bases for eschewing this technology in 100% WWS involves the radioactive waste generated in the mining and disposal of nuclear waste. As I have described numerous times, the production of the rare earth metals necessary for 100% WWS produces a lot of radioactive waste. It has been estimate that refining one ton of rare earth elements results in approximately 75 cubic meters of acidic waste water and about one ton of radioactive waste residue. That is a one-to-one ratio for rare earth metals and radioactive waste. As I have previously noted, a single large wind turbine (rated at about 3.5 megawatts) typically contains 600 kilograms of rare earth metals which means about 600 kg of radioactive waste. According to 100% WWS World, Canada will need approximately 60,000 – 5 MW wind turbines to meet our 100% WWS goal. That works out to over 36,000 tons of radioactive waste residue. That total is only for the wind turbines needed for 100% WWS in Canada. Once you add all the rare earths needed to electrify everything, that number will sky-rocket. Could someone please explain to me why radioactive waste is bad when associated with the mining and refining for nuclear power but is not so bad when associated with wind, water and sunlight?
So to summarize, under 100% WWS World existing dams are good but any new dams are bad. Storage of water in reservoirs is bad when used in hydro energy but absolutely necessary and good when used for pumped storage. Collecting the energy of water running downhill is good when used in pumped storage but bad when it is run-of-the-river hydro. Fracking is dangerous and an unacceptable risk when used for natural gas, but the same technology is acceptable when used for geothermal energy. The presence of radioactice waste is an unacceptable by-product of the nuclear industry but is an acceptable by-product of the rare earth industry.
In his renowned book 1984 George Orwell introduced us to a number of fascinating terms/ideas that have become staples of modern intellectual thought. One of the most interesting, from my perspective, is the concept of “doublethink” which RationalWiki defines as “simultaneously accepting and rejecting a given proposition”. Doublethink is comparable to the concept of “cognitive dissonance” without all the negative clinical associations. As they put it in RationalWiki: Doublethink could be “thought of as cognitive dissonance that not only remains unresolved but is also desirable to leave unresolved”. There are few better examples of modern doublethink than the sell job associated with the 100% Wind, Water and Sunlight series.
A lot of people might suggest that I am being a bit harsh by referring to 100% WWS as “doublethink” and for this I am sorry. I attribute no ill intent to Dr. Jacobson and his team. Rather, I see them as true believers. Like evangelical Christians who will cite the Leviticus edict against homosexuality (20:13) while ignoring the edict against seafood (11:12), I see the 100% WWS supporters as simply not recognizing the level of their personal cognitive dissonance.

Wednesday, 15 June 2016

Here's why you need to support your local oilfield service association

By: David Yager
Published: JWN Energy

The collapse of oil and gas prices has forced oilfield service (OFS) managers to dramatically slash costs. It’s survival. The short-term impact on workers and companies is already well known. The long-term damage will be determined.
The three main OFS trade associations—Petroleum Services Association of Canada (PSAC), Canadian Association of Oilwell Drilling Contractors (CAODC) and Canadian Association of Geophysical Contractors (CAGC)—have not been spared. Revenue from membership renewals and other sources of income have fallen sharply, forcing operating budgets of about half of what they were in better times. While this is appropriate given the current economic environment for member companies, at some point these organizations must consider their own futures.
And so should the OFS as a whole. The incredibly important work OFS trade associations perform on behalf of the entire sector versus the number of OFS companies providing financial support has been a mismatch for decades. Losing these important voices would be terrible.
Although no hard numbers exist it is estimated there are as many as 10,000 OFS operations of various sizes and disciplines across the Western Canadian Sedimentary Basin. Including incorporated consultants, that number could easily double and possibly triple. They range from the well-known, publicly traded global giants to a myriad of owner-operators with a single water truck or backhoe. They are in every oil town from southwestern Manitoba to northeastern B.C., from the 49th parallel to Norman Wells, N.W.T.
They all do essentially the same thing, which is trade oil companies goods, services or expertise for money. Big or small, all OFS operators work within the same macroeconomic drivers of commodity prices, royalty rates, taxation levels, interest rates, property taxes, fuel taxes and oil company spending. They must all comply with the same federal, provincial and municipal regulations on everything from employment standards to health and safety and transportation of dangerous goods. There is only one Canadian oilpatch and only one set of government operating regulations, regardless of the size of the operator or whether management regards supporting trade associations as a worthwhile investment.
The largest single contribution these associations have made is forcing politicians and regulators to understand that Canada’s oilpatch is much larger and more complex than just the big, bad, wealthy oil companies making too much money at the expense of consumers and taxpayers. Governments have proven time and again they used to write energy policy affecting producers in a vacuum and only later discover massive collateral damage to the extensive OFS supply chain.
Today, no government makes major policy decisions regarding the oil and gas industry without consulting PSAC, CAODC and CAGC. Alberta’s recent royalty review is proof. Government today has no time to engage with hundreds of individual companies. Politicians, regulators and bureaucrats prefer working with consensus views from industry trade associations. Most of this work is done behind the scenes, fine-tuning the myriad regulations affecting the day-to-day operations of everybody in the business.
As awful as today’s mountain of rules and regulations can be, rest assured it would be much worse had these associations and their supporting member companies not been working tirelessly and quietly to educate politicians and regulators about the industry to prevent them from making business even more challenging through well-intentioned, but ultimately harmful, rules and policies.
But what is grossly unfair is the numerically small number of OFS operators that support these associations versus the number that benefit. At their peak, the total membership for all three (direct OFS operators) was only about 600 companies plus another 300 associate members, primarily sub-suppliers. Now this already-low number is down by about one-third and shrinking fast as managers conclude the short-term benefit of saving a few bucks on trade association dues is more important than the long-term implications of not having this important lobbying voice.
Which is fine for now, but just plain wrong for the future. The relatively small percentage of OFS companies that have been paying freight for decades can be proud of their contribution. But the vast majority of operators that have benefited mightily from the investment by their competitors should look in the mirror and recognize their success was not entirely the result of their own managerial genius.
In April MNP estimated even in 2016 that the OFS piece of the pie will be $67 billion. The $6 million/year required to fully fund these three associations is 9/1,000 of one per cent of revenue. An associate membership is only $1,000/year. Supporting PSAC, CAODC and CAGC is a proven value proposition nobody in his business can afford to ignore.

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