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Opinion ~ Using bad ideas to power other really bad ideas doesn't make one whole smart idea.
Dancing around the modern economics of fossil fuels is a harsh, and shameless, reality for Canada's last remaining cheerleaders — nobody said marketing obsolete solutions was easy but seems that lobbying some Canadian politicians is still a no-brainer. The province once marketed as the new global energy superpower is now revealing the magical stuperpowers of marketing, not science. Science says fossil fuels are obsolete. The kicks are always highest and cheers are loudest when thermodynamics turns up the heat.
All science aside, with the known human rights issues of Site C, oil sands operations, and the Northern Gateway pipeline, it's interesting to see how these freshly minted proposals to "save the oil sands" ignore the same basic human rights issues that delivered its original failures.
We know that any spill has lasting toxic impacts, fish deformities in Lac Megantic are a visible result — most toxic pollution is invisible. We know that oil sands processing has links to cancer and consumes massive amounts of groundwater and energy. We know that building hydroelectric dams is no longer a wise use of lands, not to mention the toxic impacts of mercury from flooding such lands. We know that building a safe pipeline in Canada simply can't be delivered with the current administration.
Aside from the obvious moral implications, which most media coverage seems to ignore, getting mired in traditional "linear" economic analysis of fossil fuels is a big risk for Canada. Aside from the human rights issues, what most analysis fails to include is the future competition. How many analysts fully understand what energy markets will look like in 10, 20 and 50 years? It's late in the oil sands conversation and we still can't have an adult conversation on oil sands, site C, or the Northern Gateway pipeline.
Listening to "experts" discussing the return of traditional oil markets takes a special kind of blindness, one that is predictable — in the past, markets have recovered. As a manufacturing specialist, I see markets perish all the time — innovation has victims. A successful new design survives and flourishes — evolution never sleeps. Green is growing faster and is cheaper than dirty energy, so when you read a market analysis that doesn't include the competition, you best continue your due diligence.
The energy rules have changed and history typically delivers the well-blinded bean counters the memos, and technical updates, after the market implosions — Greenspan was speaking English, but who was hearing him? I have seen a few analysis reiterating and expanding on my market observations — pipelines and oil sands are done — throwing good money after bad isn't a long-term foundation for success. If there is a fossil fuels market in 2040, a date soothsayered* that oil will break $100 / barrel, it will be about 1/10th the market capitalization that currently exists. Oil is no longer mainstream, as such, the market will contract.
The greening of our economy will be done in concurrent fashion — each independent producer optimizing and innovating its process to exclude dirty and carbon costly inputs and outputs. Green energy is much more stable and predictable than the fluctuating prices of fossil fuels, if and when oil does return to the $100 / barrel range, that support's "Alberta ideology", one must remember that green manufacturing and businesses won't spend more for fossil fuels. Oil is now a victim at both high and low prices. The lower the price, the faster oil will become obsolete. Explore that thought for a moment.
With current rates of innovation, the cost of some green energy will be 1/10th the current cost it is now, in the year 2025. Who will pay 10 times as much for fossil fuels in 2025? The lobbyists? No, even the Koch Brothers have relocated to a green LEED building. Saving money is a driving force, so, who will be paying more money for this more expensive and dirtier energy? Well, the taxpayer will, every loonie.
Big projects like Site C and Northern Gateway may create short-term mega bonuses for executives, but the long-term profitability and market competitiveness seem to indicate that the tools of yesterday are never the smart investments for tomorrow. I have yet to see a credible analysis of 2040 energy markets by oil soothsayers and cheerleaders.
When one performs the vertical cost analysis and applies the Second Law of Thermodynamics to this complex problem simplicity wins — green is better, more stable, cleaner and costs less — something the fossil fuels cheerleaders just can't seem to cheer about.
Enjoy!
* — soothsayered — what an oil soothsayer soothsays if an oil soothsayer could sooth future oil markets.