[Surrealplaces]

It's not like there are just bags of money sitting there for the taking. Economies are systems. There are trade-offs if we decide to build our economy around the extraction of oil and gas. Talent and capital that gets sucked up by the oil and gas industries could flow into other sectors and generate wealth in other ways. We should be worried about how we're positioned over the long term, not how much quick money we can make before the fossil fuel party ends. That certainly didn't go well for places like West Virginia.

Anyway, I don't think this pipeline will make a difference one way or the other, but the hysteria that is gripping the province right now is really overwhelming.

I look at it as we've already built our economy around Oil and Gas, so the pipelines would be an extension or addition to the already existing industry, paid for by private enterprise. All the government needs to do is is give permission, the cost is covered by companies, so in essence there isn't really a trade off. I do understand that a booming oil economy does have its drawbacks, so, yeah, there is some trade off there, but I would rather see the economy diversify naturally by adjusting to the pace of the decline of carbon based fuels, rather than by volunteering to do it now, and letting some other jurisdictions take that money for the next 30-40 years.

 

[Silence&Motion]

Foreign investment is not the only thing that matters to economies. Canada is a rich, stable country with a population that is healthy, educated and growing. Those assets will not disappear if foreign investors decide to redirect their money into other resource economies. Plus, foreign investment can be attracted to other sectors as well. While we're chasing foreign investment for resources, we're also ceding foreign investments to other jurisdictions in other sectors (hence why tech people are so angry about Canada's trade policies, which they contend cedes advantages in intellectual property rights in exchange for access to foreign resource markets). Calgary, for example, is definitely not attractive to a lot of industries because they cannot compete with oil and gas for talent or real estate during boom times.

If we try to squeeze every last cent out of oil and gas until it’s no longer economically sustainable we’ll be left in West Virginia’s situation with an obsolete economy and all of the wreckage that comes with it: aging workers without relevant skills, abandoned and hazardous infrastructure, a bankrupted public service sector, etc. And we'll be amazed at how quickly all of that "wealth" that we think we generated in the boom times has defused back into the global economy and is no longer available to help clean up the mess.

Sometimes I think that Albertans are drawing a false equivalence between national/provincial economies and personal finances. Its fine for you as an individual to try to make your fortune in Fort McMurray during an oil boom and then retire to scenic Vancouver Island to live off your savings. But since societies cannot retire, they have to come up with sustainable systems for generating and distributing resources.

Finally, let me reiterate that I don't think this pipeline really makes a difference one way or the other. I just think Albertans need to recognize that ramping up the productive capacity of the oil sands is the exact opposite of managing a slow, controlled transition to a post-carbon economy.

 

[darwink]

^ Sure, oil and gas direct jobs will be lost, but there are a lot of transferable skills. We have already seen in this downtown that the most vulnerable to the sector's decline are low education males. Engineers, skilled people who have been working in fab yards, the economy eventually generates new opportunities for them (or they generate them for themselves). There is transition for sure, but there is little benefit to having the transition now, and not making the next 20-40 years of higher income, versus transitioning in the future. And yeah, over time the sector is shrinking as a percentage of Alberta's economy already, which is awesome.

One of the difficulties during the boom was not being able to offer competitive salaries for needed professionals for companies in other sectors like non oil and gas IT during the scale up phase. It sucked for the founders to have to move, or create second offices elsewhere to continue to grow. The solution wasn't to find a way to make them grow in Alberta then. The solution was to ensure that the province through a good business environment was continuously generating companies like that so that when the market changed, there was something to eventually pivot to. Trying to keep people poorer to diversify more was a decision that could have been made in the mid-2000s when there was discussion about limiting the number of simultaneous oil sands megaprojects. The decision was made then, and we can't undo them. Trying to direct people into lower earning industriesisn't possible - it is like using bubblegum to patch a hydrodam.

This isn't manufacturing or mining in the 70s onward, where you have a mass of unskilled or semiskilled (but with little transferable skills) workers being displaced mostly by automation and the end of high return of capital investment opportunities (self financing investments basically) following the end of the post-war boom.

 

[Beltline_B]

While I agree with many of your points is disagree with the point about the pipeline not making a difference either way. My understanding, is that it will have a twofold affect on the economy. It will increase the amount of oil we export, and it will allow us to get to world market to give us a better price. The two of those aspects come bind or huge boost to Alberta, and also to Canada.
Also I’m not sure we will be left in a position like West Virginia. West Virginia has has other issues that have affected the way it turned out. We would be left in a position more like Pittsburgh (Steel) or Denver (mining) - probably more like Denver

Foreign investment is not the only thing that matters to economies. Canada is a rich, stable country with a population that is healthy, educated and growing. Those assets will not disappear if foreign investors decide to redirect their money into other resource economies. Plus, foreign investment can be attracted to other sectors as well. While we're chasing foreign investment for resources, we're also ceding foreign investments to other jurisdictions in other sectors (hence why tech people are so angry about Canada's trade policies, which they contend cedes advantages in intellectual property rights in exchange for access to foreign resource markets). Calgary, for example, is definitely not attractive to a lot of industries because they cannot compete with oil and gas for talent or real estate during boom times.

If we try to squeeze every last cent out of oil and gas until it’s no longer economically sustainable we’ll be left in West Virginia’s situation with an obsolete economy and all of the wreckage that comes with it: aging workers without relevant skills, abandoned and hazardous infrastructure, a bankrupted public service sector, etc. And we'll be amazed at how quickly all of that "wealth" that we think we generated in the boom times has defused back into the global economy and is no longer available to help clean up the mess.

Sometimes I think that Albertans are drawing a false equivalence between national/provincial economies and personal finances. Its fine for you as an individual to try to make your fortune in Fort McMurray during an oil boom and then retire to scenic Vancouver Island to live off your savings. But since societies cannot retire, they have to come up with sustainable systems for generating and distributing resources.

Finally, let me reiterate that I don't think this pipeline really makes a difference one way or the other. I just think Albertans need to recognize that ramping up the productive capacity of the oil sands is the exact opposite of managing a slow, controlled transition to a post-carbon economy.

 

[JonnyCanuck]

There is no reason why Alberta, with one eye, can't continue to grow oil & gas to satisfy current future demand, as well as increase our share of the global energy supply 'pie'. The other eye can be focused on renewable energy where we could become a world leader.
I suspect that most people on this forum will not be around for a post-carbon era. It makes no sense to me to 'hand cuff' our energy industry in today's economy. The world will continue to consume fossil fuels and other petroleum based products, for decades to come. Oil and gas is being discovered in new places all over the world ... places that no one expected to find it. If Canada is not prepared or has the political will, to get our share of this demand, then other countries will happily fill the void.

 

[darwink]

There is probably only one area where Alberta has potential to be a world leader in renewable and that is developing the back of office expertise and the needed technology to generate significant electricity from non-boiling water geothermal. Maybe we can also pivot our carbon capture and storage work to bio-energy with carbon capture and storage which is needed for the world to not blow the carbon budget with currently foreseeable technology.

 

[Oddball]

I've kinda been on the sideline of this whole discussion and I don't see that I can really add much to it, apart from to say that I agree with @Beltline_B in that FDI and pipelines are net positives for Alberta and with @JonnyCanuck that the "post-carbon" future is probably a long ways out.

What I do want to add, strictly as an opinion and in no way backed up by any kind of serious analysis, is that Calgary's (and Alberta's) Oil & Gas companies are going to have to see them selves more fully as "energy" companies comprising a more broadly based portfolio of resource and/or power production as times goes on. However, until the returns are stronger that transition will be slow bordering on stagnant.

 

[Silence&Motion]

Another argument I keep hearing from pro-tar sands people that I want to challenge is that the responsibility for reducing carbon should be placed primarily on the consumption end. Basically, what I keep hearing is, as long as people are burning carbon, we need to compete to supply it to them as cheaply as possible.

The problem with this argument is that it can be made on the consumption side as well. China can say: "we're simply manufacturing the products that North Americans use, and we need to burn carbon to power our factories. If we switch to more expensive renewables, someone else will just undercut us with cheaper products."

We really need to attack the problem on both sides by pulling resources (capital and human) out of carbon and redirecting it to renewables in both production and consumption.

As well, many of the politicians (and their supporters) who are most rabidly pro-tar sands are also the ones who fight any attempt to encourage reduced carbon consumption either through a carbon tax, preventing urban sprawl, or investing in carbon-free sources of energy. How many Albertans who call Canadians hypocrites for opposing tar sand expansion while also consuming oil and gas have also mocked Kathleen Wynne's green energy agenda which is intended to get Ontarians off oil and gas?

 

[darwink]

The world has that, it is called the Copenhagen and the Paris agreements, and the world can both increase oil consumption in the near term and reduce carbon emissions over the long term. Canada has carbon pricing that applies to both producers and consumers. It allows the market to decide what is the most efficient use of our collective carbon budget at a given time.

Of course despite evidence that pollution pricing works, it is one of those things that activists who care on either side can't see it working, and it doesn't deliver matter of fact results that make sense to the gut.

 

[Oddball]

There's nothing really to write home about in the April LFS numbers. The unemployment rates improved for both Calgary and Edmonton, but only marginally. 8.2% to 8.0% for Calgary and 6.7% to 6.6% for Edmonton. They both had declines in the participation rate, which in Edmonton's case it's the 6th month of consecutive declines. The bright spot for them is that they actually added employment for the first time since December, a net increase of 700. Calgary lost 1,200 on the other hand.

So it's all largely flat to negative this month for Alberta's big cities. For the province as a whole there were 2,900 net new jobs and the unemployment rate declined to 6.5%. The size of the labour force itself remained unchanged, but their was a still population growth so the participation rate declined by 0.1% to 71.9%. So a little better, but still kinda flat provincially.

 

[JonnyCanuck]

Well I will be the first to comment on the TMP announcement.
It's apparent that Kinder Morgan was going to cancel the project on May 31 and the federal government stepped in the only way they could ... by buying the existing pipeline. They are going to have to build the expansion, or find a private company to do it and take a financial interest in the project. I sense we are in for a new round of delays ... further discussions with environmentalists and First Nations to try and get them on side (Trudeau will not want to hurt their feelings); tendering process to source contractors, materials etc; Supreme Court decision on B.C.'s lawsuit.
Therefore I will be very surprised if shovels are in the ground this year. In the meantime, the price of oil has stabilized and some forecasts have it approaching $100/ barrel again in 2019; and we will have the same pipeline capacity issues for the foreseeable future. The Canadian dollar is languishing probably because of still uncertainty of NAFTA. Personally, I think the Canadian auto industry is going to take a hit as a result of these negotiations. It is 'low hanging fruit' for the U.S. If the auto industry is negatively impacted in Ontario and energy continues to stumble in the west, how optimistic can we be about the Canadian economy going forward?

 

[Surrealplaces]

I'm not sure what to make of the decision to buy the pipeline. The best course of action would have been for the government to show more force and make KM confident that the project would be given the necessary approvals, and that the federal government would make it happen. Many say KM was bluffing, but given the whole process and all of the delays, I probably would have backed out too, if I was KM.
I fear the same thing as @JonnyCanuck that if the government runs the project, it'll take twice as long as it should...hopefully they hire someone knowledgeable to run the project.

 

[Oddball]

I think they'd spoiled the opportunity to hold Kinder Morgan's confidence long ago unfortunately. They combination of hostility, distrust and disinterest in other pipeline projects left them as the last men standing and it became the focal point of all of the opposition.

I think the purchase is the best of a bad situation and that the bad situation was partly of the federal government's own making. Unfortunately I agree that the government won't do as good a job with it, but that's what we're stuck with. It's better than seeing it dropped all together.

The biggest failure of the federal government isn't even economic. Their lack of action allowed the project fester to the point where it became a national unity issue. Rather than pressing their own rightful position they deferred to the courts which ultimately strengthened BC's position. Now the Feds have left themselves in the position where they have to ram it through themselves in order to prove their own authority and prove that big projects can get built in Canada. It's a mess of their own making, but we have no choice but to back them because the fate of our country is now partly tied up in it.

There's a lot of blame to go around. I think Notely took too long to figure that oil is what makes the province tick. I think the Liberals cared too much about losing a few seats in suburban Vancouver to the NDP. I think Christy Clark is partly to blame for getting BC's back up at the proposal before the NDP came to power. But most of all, I think John Horgan is a first class dick hole. Pardon my language. But he's the head of freaking minority provincial government and he knowingly jeopardized the country just to stay in power a few months longer that he might otherwise. If that guy doesn't deserve our derision, then no one does.

 

[darwink]

I'm not sure what to make of the decision to buy the pipeline. The best course of action would have been for the government to show more force and make KM confident that the project would be given the necessary approvals, and that the federal government would make it happen. Many say KM was bluffing, but given the whole process and all of the delays, I probably would have backed out too, if I was KM.
I fear the same thing as @JonnyCanuck that if the government runs the project, it'll take twice as long as it should...hopefully they hire someone knowledgeable to run the project.

They are buying the company surrounding the project and the project. This isn't a retendering situation, it is a now KM pulls the triggers on all the contracts that it has lined up already.

 

[Cowtown]

Making the best of a bad situation sums it up best, and though I feel confident that it'll go through, it's been more painful than it has needed to be. The worst part is, it's only a small vocal, minority of extremists who are opposing it. You gotta love propaganda, check out this Twitter account if you want a good chuckle
https://twitter.com/350Canada

Massive crowd of literally dozens! lol.

I think they'd spoiled the opportunity to hold Kinder Morgan's confidence long ago unfortunately. They combination of hostility, distrust and disinterest in other pipeline projects left them as the last men standing and it became the focal point of all of the opposition.

I think the purchase is the best of a bad situation and that the bad situation was partly of the federal government's own making. Unfortunately I agree that the government won't do as good a job with it, but that's what we're stuck with. It's better than seeing it dropped all together.

The biggest failure of the federal government isn't even economic. Their lack of action allow the project fester to the point where it became a national unity issue. Rather than pressing their own rightful position they deferred to the courts which ultimately strengthened BC's position. Now the Feds have left themselves in the position where they have to ram it through themselves in order to prove their own authority and prove that big projects can get built in Canada. It's a mess of their own making, but we have no choice but to back them because the fate of our country is now partly tied up in it.

There's a lot of blame to go around. I think Notely took too long to figure that oil is what makes the province tick. I think the Liberals cared too much about losing a few seats in suburban Vancouver to the NDP. I think Christy Clark is partly to blame for getting BC's back up at the proposal before the NDP came to power. But most of all, I think John Horgan is a first class dick hole. Pardon my language. But he's a freaking minority provincial government and he knowing jeopardized the country to stay in power a few months longer. If that guy doesn't deserve our derision, then no one does.