Category Archives: BC

Pondering a palatable pipeline…

I guest-hosted TWiE podcast episode 137 a few days ago, an episode devoted to the Alberta oil sands / tar sands. If you ask me (and I realize none of you have :) ) it’s well worth a listen!

The week’s guest was US energy analyst Robert Rapier, who had visited Fort McMurray on a Canadian government junket for journalists. He came back with a five-part essay on his experience, and some valuable, contextualizing factoids.

Shockingly, he showed data suggesting that the Alberta tar sands are now only slightly more greenhouse gas-intensive than “average” petroleum. (In other words, the emissions associated with turning the bitumen into usable oil, are only slightly higher than average.) Heavy oil extracted from California is actually worse!

This creates the situation where – for once – the Harper Government™ hadn’t drifted into fiction, in its years-long lobbying effort to prevent Europeans from labeling tar sands oil as a high-carbon fuel. I never saw that one coming.

Rapier spent time with the Pembina Institute as well, to try to get part of the other side of the story. For instance, though industry touts that it only uses one percent of the annual flow of the Athabasca river, seasonal variations are extreme; one percent of annual flow is equivalent to one-third of daily flow, at certain times of year. And while he wanted to visit nearby First Nations communities, that part of the visit got cancelled at the last minute. (Now, there’s the Harper Government™ I’ve come to know and love… to loathe.  :)  )

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British Columbia hits 1,000 EV’s (and gov’t drops support)

image of Tesla Model S’s at a rally, from Consumer Reports

 

British Columbians have now purchased more than 1,000 plug-in electric vehicles. Add in low-speed neighbourhood electric vehicles and owner conversions, and the number will be a bit higher.

As of Jan 31, 2014 Polk research (now a division of IHS) had tracked 912 plug-in electric vehicle registrations in BC, representing about 1/6 of all PHEV registrations in Canada to date. British Columbia has about 1/8 of Canada’s population, so the numbers are largely in line with what we’d expect from the demographics.

Polk’s data doesn’t include the Toyota Prius Plug-in, Ford C-Max Energi or Ford Fusion Energi, however. Vehicle registrations for these plug-ins, is lumped in with sales of the regular hybrid versions. And through the end of 2013, these three models enjoyed Canadian sales of 594 units.

Assuming that BC represented 1/6 of these sales (being 99 vehicles) then British Columbia’s plug-in population has hit four figures. At the end of January, sales would have been on the order of 912+99 = 1011. And that doesn’t include any Prius Plug-in, C-Max Energi or Fusion Energi sales in the province in January.

Add probable sales in February to the mix, and we should be comfortably above the 1,000-car mark.

As always, my spreadsheet tracking plug-in sales in Canada and the U.S., and other related data, is at: www.tinyurl.com/CanadaEVSales

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May 14 – British Columbia provincial election

Here’s to hoping that any and all British Columbians reading this, take their opportunity to vote.

In the broad sweep of history, with precious few examples, democracy is a fairly new phenomenon — not unlike the concept of retirement — so it would be a pity to waste the opportunity for political involvement, that almost none of one’s ancestors enjoyed.  Unless they were royals, nobles or conniving courtiers — but how likely is that, really?  Just once, I’d love to hear about a reincarnation party where everyone dressed up as subsistence farmers, existing tenuously on the precipitous edge of famine, disease or other calamity.  Indeed, that situation continues to exist for many unfortunate people, in many unfortunate parts of the world today.

 

The Vote-Signal

 

Plug-in electric car sales in Canada, January 2013 (via GreenCarReports)

My column on plug-in car sales in Canada for January 2013, is now up at GreenCarReports.  Since it’s hard to write ~600 words about sales statistics in the very small Canadian market, I discuss how Quebec — not B.C.! — is the leading province for plug-in vehicle adoption, and reasons why this might be the case.  You can think of me as being “unpaid by the word”.  ;)

For Canada as a whole, the Chevy Volt retained a narrow lead, with the Nissan LEAF and Toyota Prius plug-in a close second and third — among reporting manufacturers.  Which is to say, if we ignore Tesla, which doesn’t divulge monthly sales statistics.  (They’ll be forced to cough up some numbers on Feb 20, though, in their quarterly conference call!)

Tesla may prove to have had the best-selling plug-in car in both Canada and the U.S. in January.  They claimed to have been producing about 400 vehicles a week in January, which would’ve been good for 1600 vehicles.  If true, they very well could have overtaken the Volt in January in both the U.S. (1140) and Canada (44).

When the Tesla results come out, I’ll update my public-access spreadsheet of EV sales statistics, which also contains the sales stats referenced in the aforementioned GreenCarReports column.

The Black Swan’s Thanksgiving Turkey

(originally written Nov 24, 2011.  Part of Great Upload of 2013.)

It came to my attention that Naseem Nicholas Taleb, who authored The Black Swan (surprisingly, not about a ballet dancer, but about financial crises) discussed other avians in his book, among them the Thanksgiving turkey.  Per the Wikipedia page, he seems to’ve co-opted the idea from a turkey anecdote by philosopher Bertrand Russell, whose atheism doubtless led antagonists to brand him cuckoo.  ;)

The abrupt change in the turkey’s situation is part of an argument that it’s ridiculous to project present trends very far into the future, because, well, things change.  Hockey-wise, the Gretzky-led Edmonton Oilers of the 1980’s inspired a high-scoring decade for the NHL.  This was followed by a low-scoring decade inflicted on fans by the New Jersey Devils’ success with the neutral-zone trap in 1994-1995.  (As per the viral video most of you’ve doubtless seen, the Tampa Bay Lightning are going retro with their 1-3-1 system.  Lightning GM Steve Yzerman was part of the Red Wings team the Devils upset in the 1995 Stanley Cup Finals.)

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Alberta oil selling at 50% discount to world price…

…which explains why the Canadian government is Hell-and-High-Water-bent on building a pipeline, any pipeline, anywhere.

First, the stats

Over the past few months, new stories have noted that Canada’s oil sector isn’t getting full price for its heavy oil — in large part because American pipelines are well-supplied with newly-flowing tight oil (“shale oil”) from North Dakota.

As a side note, I should clarify that heavy oil — termed Western Canada Select — is a somewhat-upgraded form of bitumen.  Removing the sulfur and upgrading the oil a bit more, would turn it into the “light sweet crude” used for the world’s billion automobiles.) 

Western Canada Select is more refined, and more value-added, than the diluted bitumen that Enbridge has proposed to ship to the coast of British Columbia.  The Kalamazoo River spill in 2010 that added $750+ million in cleanup costs to the local economy, involved diluted bitumen (and Enbridge).

The discount on Alberta heavy oil is measured relative to the North American benchmark price, which is for West Texas Intermediate (WTI) crude.  And said discount has been growing faster than a pimple before prom reaching a jaw-dropping $40 per barrel this week.  [2013-01-31: historically the discount has been about $20 per barrel  – Matthew]  WTI sells for $96 per barrel, and Alberta heavy sells for … $56.

One barrel of oil is about 160 Litres, so this means that Alberta is giving up 25 cents per litre on its oil exports.  By way of comparison, the current WTI price works out to a total price of only 60 cents per litre.  We’re talking some serious discounting, here.

Western Canada Select vs. Brent crude

Of course, the world benchmark price is Brent crude, traded in London.  And for various reasons, West Texas Intermediate Crude trades at a discount to it!  I’ve taken a snapshot of the Bloomberg Energy page below; you can see that the Brent price is $112 per barrel.

Bloomberg Energy Jan 18, 2013

We see that the price of Brent crude ($112/bbl) is exactly twice as high as the price we established for Alberta heavy ($56/bbl).  Alberta heavy crude is selling for half-off — it’s like a BOGO (buy one, get one) sale!

Oh, but it gets worse (for Alberta)

I’ve previously mused about the plausibility of US oil demand falling in the coming decade.  Which means Alberta will need to find other markets.  It will probably benefit from the building of an east-west pipeline across Canada (finally!) but wouldn’t be enough added consumption to justify expanding bitumen projects.  That would mean leaner profits for Calgary head offices, less construction work in the oil patch, and lower royalties for the Alberta government.  (Tales abound of Newfoundlanders leaving Alberta in droves, to ply their trade in their home province’s newly ascendant offshore oil sector.)

It’s a far cry from the Bow River bluster of five to ten years ago, when Alberta seemed assured of sustained, stupendous wealth — and provincial surpluses which would dwarf those of the Federal government.  (Despite the highest average yearly oil price in history, the province ran a deficit in 2012!  In basic terms, the oil sector has effected a regulatory capture of Alberta’s government, which allows them to export raw goods and perform the value-added refining elsewhere.)

The oil patch’s hopes now seem pinned on one of a few pipelines, all of which face strong opposition, and none of which can soak up the new production to which Alberta aspires.

a)  Keystone XL, by which Alberta heavy oil could be upgraded further in the US, and then exported.  Opposed by the worldwide 350.org movement.  (600,000 barrels per day)

b)  Enbridge’s Northern Gateway, by which the oil could reach the Pacific Coast.  Given the dozens of First Nations standing in the way, who have recourse to the courts and have sometimes reported dismissive treatment at the hands of Enbridge representatives, this seems unlikely.   (500,000 barrels per day)

c)  Kinder Morgan’s Trans Mountain Pipeline expansion, by which the oil would be exported via Vancouver — birthplace of Greenpeace and the David Suzuki Foundation.  (Added capacity: 600,000 barrels per day.)

Pipe dreams

CAPP, the Canadian Association of Petroleum Producers, recently projected that Alberta would produce 3.2 million barrels per day of heavy oil, by 2020.  This represents an increase of 1.6 million barrels per day.  To accommodate this increase, all three of the above pipelines would have to be approved, up and running!!  Given the opposition each pipeline will face, a Beatles reunion would seem more likely…

(Yes, Alberta could of course use a *lot* of railcars, as they’re doing in the Dakotas right now.  This is doable, but more expensive — and would again cause Alberta’s oil to sell at a discount, to reflect the added costs of rail transport.)

To sum up, it doesn’t look like Alberta will enjoy another run of euphoric boom years, for some time to come.  Their product is currently selling at a deep discount due to a surge in production of US tight oil.  Meanwhile, US oil consumption is dropping (thanks largely to more-efficient vehicles) and all three pipelines face opposition.  (A Vancouver paper recently noted that opposition to the Northern Gateway pipeline in rural British Columbia ran so high, it could prevent the Prime Minister from winning a majority in the next election.)  Industry shows no signs of wanting to locally refining the product further, meaning the province is locked out of adding further value, winning higher prices.  And perhaps most fearfully of all, the following words from the head of AIMCo, the Alberta Investment Management Company:

“The notion that oil is going to become more expensive because as Asia and India need more energy there’s going to be a demand-supply imbalance, well, it may not be as much of an imbalance as everybody thought it was.”

The bitumen barons’ triumphalism from roughly 2004 to 2008 was predicated on the belief that a rising tide of Asian oil demand would lift Alberta above its provincial peers.  If, maybe, China and India won’t need as much as everyone thought … the ebbing tide could leave them beached.  On the upside, its residents’ expertise with heavy equipment and drilling could help Alberta pivot into a wind turbine / geothermal powerhouse, if it chose to do so.

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[note: while environmental considerations — and generally, the desire not to befoul one’s nest — are also a factor in the future of oil production, I side-stepped the topic altogether, as the above factors are formidable enough on their own.]

Goodness, the biggest bull market in history is about to begin — eventually! :)

(originally written May 8, 2012.  Part of my “Great Upload of 2013”)

There was a great article in the Globe & Mail investment section about one John Maudlin’s predictions that after the stock market moves down for awhile, it will move up.  Which, I’m sure you’ll agree, is brilliant stuff — blindingly insightful.  Worth every penny!  (Mainly because his online newsletter is free.  :)  )

Alas, as much as I’d like to skewer his ideas, there’s a maddeningly good chance that he’ll be right.  If stocks actually start rising “for good” five years from now, there will have been a 17-year period where the stock indexes stayed flat, finishing at roughly the level where they started (2000-2017).  This was preceded by an 18-year period where stocks kept moving up (1982-2000) which was itself preceded by a 16-year period of relative flatness (1966-1982) which was preceded by a 17-year period… well, you get the picture: tide goes in, tide goes out.*

With this kind of self-reinforcing 17-year cycle, you would think the stock market’s mascot would be a cicada.  But no, they inexplicably chose a bull and a bear; about the only thing they have in common, is tapeworms.

Of course, bold predictions don’t always turn out well, as gold mutual fund runner Charles Oliver found out last month.  Having bet his hair in April 2008 that gold would hit $2000 by last month, he now sports the Lex Luthor look.  Mercifully declining to go double-or-nothing, he maintains a confidence that gold would hit the big 2-0-0-0 by year’s end.  As of this morning [in May 2012], he’s “only” got $400 to go.  ;)

I’d imagine the two aforementioned predictions will interrelate, because bad times float gold’s boat, while in good times it drops like the rock it is.  (And that generally means platinum gets cheaper, so yay, fuel cells!)  Dr. Evil above foresees ongoing misery pushing gold upwards, and Mr. M sees it keeping stocks down.  But whenever we go through the looking glass to prosperous times, gold is likely to lose its allure.  So I plan to be decidedly dismissive towards the stuff from roughly 2017 to, let’s see… 2034.  ;)

Good times ’til the mid-twenty-thirties would be nice for guys like me, who would be pushing sixty; it would imply that our retirement savings could be in reasonably good shape — even if the retirement age will be something like 80 by then.  :)  (I wonder how long until London Life changes its product name to “Freedom 65”?)  Of course, this all depends on one’s being in the position of being able to save money, something that commentators often forget, because that’s generally not their problem.

Upon achieving crotchety old geezerdom, I for one am particularly looking forward to regaling young-folk with boring stories about how much better things were when I was young — once you factor out the lesser technology, widespread poverty, appalling injustice and environmental wreckage.  ;)

Of course, I’ll want to emphasize how much tougher we were as kids.  For example, we attended seismically unsound schools: the Vancouver School Board recently announced plans to raze my earthquake-vulnerable elementary-school alma mater, L’Ecole Bilingue, and replace it with something a bit less crumbly.  Of course, having been built long before bilingualism — back in 1912, when BC was led by Premier Dick McBride (seriously) — for the first few decades it went by its maiden name, “Cecil Rhodes School”.

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* there’s nothing magical about 17 years, except for the fact that since it’s happened a few times before, enough people are likely to expect it to happen again, causing a self-reinforcing cycle.  More mundanely, if the stock market is still at current levels five years from now, dividends and profits are likely to be attractive enough that “value investor” types come out of hibernation and shovel gobs of money into stocks, eventually driving them upwards.  :)

EV stats for British Columbia (2012)

The kind people at CEV for BC sent over some statistics on Clean Energy Vehicle rebates issued by the provincial government.

While the CEV rebates were available for electric, natural gas, and fuel cell vehicles, my understanding is that the rebates break down as follows:

– 308x EV’s

– 0 NGV’s

– 0 FCV’s

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Given the limited infrastructure and product offerings (apart from a natural gas Honda Civic, I’m unaware of other methane-based production vehicles) it’s unsurprising that natural gas vehicles didn’t capture any rebates.  Much the same can be said for fuel cell cars.  In contrast, almost everyone in Canada is connected to a grid, and all the major auto companies are making plug-ins, if in modest quantities.

It’s also worth noting that natural gas is becoming more common in the trucking industry (where centralized fueling depots provide sufficient infrastructure) but that the above rebates only apply to “light-duty” passenger vehicles.

More after the jump!

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Prius: a Crystal Anniversary (15 years)

A few Prius-inclined websites noted last week that Dec 10, 2012 marked the 15th anniversary of the Prius’ introduction in Japan.  With the Prius (temporarily?) becoming the world’s 3rd-best-selling car brand in 2012, the anniversary probably deserves some reflection.  :)

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Plug-in Prius press

Today’s (Oct 12, 2012) Burnaby Now has an article on how we came to purchase our Plug-in Prius.  Many thanks to Jennifer Moreau for making me sound articulate, and to Jason Lang for doing his valiant best with a not-quite-photogenic subject.  :)

The photo was taken at a bank of charging outlets at BCIT’s Burnaby campus.  Amusingly, while regular parking spots are $3 per hour, charging spots are $3.25 per hour.  So, there’s a $0.25 / hour premium for the charging service.

Since the outlets will deliver about 1 kWh per hour, that translates to an electricity price of 25 cents / kWh, about 4x BC Hydro’s standard rate.  Of course, that’s probably justified by the fact that BCIT had to do a bunch of work to install the charging posts in the first place.  :)

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We live uphill from BCIT, so driving there involved a lot of downhill driving — enough downhill driving that the brakes regenerated enough energy to give the vehicle 1.7 km of all-electric range.  Since 3 kWh is good for roughly 20 km of electric-vehicle range, that would imply the vehicle recovered about 250Wh.

So, what does 250 Wh represent?  Well, it’s about enough energy to power a hair dryer for ten minutes.  Which gives a sense of just how much energy hair dryers consume!!  :)

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Addendum: just for clarity, the line towards the end of the article should be read, “he’s done the right thing and saved money”.  The right thing isn’t the saving of money, in this particular case; rather, the saving-of-money would be a nice bonus in addition to having done the right thing.  :)