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America’s Energy Security Blanket

Ed Crooks, Financial Times
The scene of the exploitation of the developed’s world’s biggest oil resource is like some dystopian fantasy. Vast pits are carved out of the forest, where machines toil day and night taking hundred-tonne bites out of the earth. Mist rises from sluggish lakes of polluted water and great columns of steam rise into the air.

The process of turning Canada into an energy superpower is an awe-inspiring, but disturbing, sight.

In recent months there has been a renewed surge of interest in the oil sands by international companies. But campaigners are raising the alarm about the environmental damage being caused and they hope to get the issue on to the agenda of the summit of the Group of 8 leaders in Germany next month.

The resource potential of the oil sands is enormous; with 174bn barrels thought to be recoverable using existing technology, the known reserves are exceeded only by Saudi Arabia. The companies operating there have investment plans that imply a rapid increase in the rate at which that potential is realised.
(21 May 2007)
Contributor Alfred Nassim writes:
Peak oil in inferred – why else would America need a “blanket”?

Ottawa denies possible buyout of Mackenzie Valley pipeline

CBC News
Indian and Northern Affairs Minister Jim Prentice denied reports that said the federal government is eyeing a stake in the massive Mackenzie Valley natural gas pipeline project.

“No, it’s erroneous, that is not happening,” Prentice told CBC News on Friday.

“It’s not an option that I am looking at as minister. Plan A or Plan B or any plan has to be a free enterprise-based model for the Mackenzie Valley pipeline.”

Published reports Friday in the National Post, citing anonymous sources, indicated Ottawa is looking at buying out a consortium led by Imperial Oil.
(18 May 2007)

Clean water, clean hands

Mary King, Trinidad and Tobago Express
Our economic development policy should be constrained by the philosophy of having a light environmental footprint in the world and using just enough resources to ensure equity and sufficient prosperity for all. This raises the question as to what is the immediate optimum use for our natural resources. The energy sector provides both directly (earning foreign exchange) and indirectly (the on-shore multiplier) the wherewithal that supports the existing economy. The current earnings from the energy sector have to provide us with the major means to live and the finance to transform the on-shore economy.

The Government is spending earnings from high energy prices and increasing production too quickly, with the attendant pressures on inflation and the other Dutch disease symptoms. We have again been warned by the Governor of the Central Bank about this profligate spending. However, the Government and the IMF see development incorrectly as growth in our GDP, i.e. more and more spending of energy sector earnings and more rapid drawdown of our limited and depleting energy reserves.

Can we at any time close off the spigot and reduce the drawdown, control the rate at which we earn foreign exchange from the sector and also reduce our green house gas production? T&T has had little financial resources of its own in order to exploit its natural resources. Hence, it turned to foreign direct investment. The original exploration/production contracts gave these companies the sole right to do what they chose with the oil/gas they found after paying for these rights.

…An opposing view is to transfer as much of our resources as possible into foreign exchange now that the prices are high, save a substantial part of it as assets and live on the interest (Friedman Principle). However, the world is nearing Peak Oil and the days of oil at US$10 per barrel are gone for the foreseeable future. Further, the rapid drawdown of our reserves robs our progeny of this increasingly scarce heritage and violates the philosophy of having a light environmental footprint as we feed the resource hungry north.

…This approach to saving is in direct contrast to the Stabilisation and Heritage Fund in which we save the “error” that the Government makes in underestimating energy prices. The money we obtain from the energy sector is to improve our socio-economic development, to provide equity and sufficient prosperity for all. It is not to create the traffic mess we are in at the moment, aggravated by the centralisation of the Government’s buildings, or the Tarouba Stadium or the Prime Minister’s house or the dramatic waste of resources highlighted in the recent Auditor General’ report. As I wrote in my article (Express, July 17, 2006)

..our development priorities at this stage should be, clean water, clean houses, clean clothes, reliable power, good transportation and, of importance given our depreciating corruption index, clean hands

. I would add good health and reasonably priced food’.
(21 May 2007)