Category Archives: oil

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.  :)  )

Continue reading

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.

– – – – – –

[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.]

3D electricity (“Great Upload of 2013”)

(written April 13, 2012.  Part of the Great Upload of 2013…)

As a guy whose birthday falls on the 13th, it always bugged me that my 13th birthday was a Saturday… those darned leap years!

———

EROEI

One of my concerns in the past several years has been the fact that “energy-return-on-energy-invested” (EROEI) for fossil fuels has been decreasing.  This is most evident in the petroleum sector: in the good old days, all you needed to do was stick a steel straw in the ground, and you’d get oil.  (As an Algerian colleague once told me, “back home, we drill wells looking for water, but all we get is oil.  It’s like, what the hell?  Oil again??”)

In the days of yore (and lost Lenores) for each unit of energy you “invested” to get the oil, you might have gotten 50x or 100x units of energy back.  Alas, this happens “nevermore”.

EROEI has been dropping because, while we’ve become more efficient at extracting oil, difficulty-of-extraction has gone up even faster.  The oil sands are the most extreme case: for each unit of energy you invest to turn the bitumen into oil, you might get… 5x units of energy back.  So if you want to extract 100 units of oil energy, your cost is no longer 1-2 units of energy… but 20 units of energy, plus a bunch up-front!  (This is why it takes many months and mammoth money to increase oil sands production.)

And while recent developments such as North Dakota’s “tight oil” probably have a better EROEI, they won’t reverse the drainward trend.  Coal is in much the same boat, though natural gas is a different story — we only started to tap the world’s largest natural gas field in the past few years, so its EROEI will probably stay high for awhile.*  Since the hydrogen for most fuel cells comes from natural gas, that’s good news.  (Plus, it’s easier to obtain natural gas equivalents from renewable resources, than liquid fuels…)

Declining EROEI is kind of depressing from a societal perspective, because it suggests that we’ll have to work harder and harder to acquire the energy we’ve accustomed ourselves to — as anyone who’s bought gasoline recently can attest.  ;)  (As if environmental damage, converging debt crises and aging populations weren’t enough!)

EROEI for renewables

Fortunately, EROEI is increasing rapidly in the renewables sector, helping it continue its exponential growth — and that is a cause for optimism.  At the end of 2011, there was enough installed solar and wind capacity to provide 3% of the world’s electricity.  (That number already factors in the fact that it’s sometimes nighttime, and windless.)  And the growth rate is high enough that it could hit 20% by 2020.  That’s a lot of coal plant closures!  Much beyond that, though, and you start to run into realistic limits for wind power**, though solar would still have a lot of “blue sky potential”, in the business parlance.  I hope to ramble about the physical laws governing whales and wind turbines sometime soon…

In terms of solar, the main energy input in making a solar panel comes from creating ingots of 99.999 999 9% pure silicon.  These parts-per-billion impurity levels are so low, you have a better chance of winning the jackpot on a lottery ticket, than randomly picking a non-silicon atom out of an ingot!  Companies slice thin wafers off using the industrial equivalent of a deli-meat slicer, and the wafers undergo post-treatment to become the solar panels US Republicans love to hate.***

About ten years ago, solar companies would use wafers about 0.33 mm thick (330 microns), and EROEI estimates for solar panels in reasonably-sunny areas were in oil-sands range, roughly 5:1.  Today’s photovoltaics are a bit more efficient, and based on wafers about half as thick (180 microns), meaning that for roughly the same starting energy input you can get two solar panels, and thus, twice the electricity.  So in the time since George Bush won election 5 votes to 4 in the Supreme Court, solar’s EROEI has doubled to about 10:1.  The physical limit is apparently about 20 microns, which two Silicon Valley startups already claim to be able to achieve… if given enough investor money.  :)  While most startups shut down, solar panels are almost certainly going to get thinner, meaning their EROEI will get better.

On the financial side, the panels aren’t even the cost-prohibitive component of solar arrays anymore: installing rooftop solar in the US will cost you roughly $6/Watt up-front, of which the panel only represents $1.  (The rest is associated electronics, and labour.)  That’s about double the cost in Germany, whose feed-in tariffs allow for project financing of the rest.  This means there’s a big incentive to figure out how to capture more solar energy from a given square metre of rooftop — people with a choice of $6 per Watt or $7 per 2 Watts, are inevitably going to choose the latter, eh?

Into… the third dimension!

Part of the solution will probably be to extend solar panels into the third dimension, in the manner these MIT guys did.  It’s a bit like the moment 400 million years ago when the first Cooksonia pertoni told a friend, “I’m tired of competing with lichens and mosses for sunlight in the x-y plane; imma grow me in the z-direction!”

As such, it’s possible that instead of flat slabs, solar-panelled houses of the future will have bristly, antenna-esque solar panels protruding from their roofs — kind of like the branches of trees.  The “treeing” of photovoltaic arrays makes sense, since trees have had a zillion generations to figure out how to maximize sunlight collection.  Of course you’d figure with all that time, some of them would’ve realized the evolutionary advantage of, oh, being able to move by now…  :)

And while such a future would be aesthetically great for those of us who enjoy the look of Gothic churches or Thai wats (Buddhist temples), for minimalists like Steve Jobs on the other hand…  ;)

– – – – – –

* that is, unless something destabilizes Qatar or Iran, but c’mon, how likely is that?  ;)

** alpha nerds can peruse this link; the rest of you can shake your heads in despair…  :)

*** technically speaking, Solyndra was a thin-film solar company using glass substrates, not silicon.  But such subtleties are not the stuff of Fox News…

The US once was, but will never again be, the Saudi Arabia of oil

[Update: slight revisions to the “…join us next time” paragraphs at the very end.  :)  ]

The idea that the US might one day produce more oil than Saudi Arabia, popularized by an International Energy Agency (IEA) report, has gone viral in recent weeks.  It’s like the “Call Me Maybe” phenomenon, but for Very Serious People!  :)

Alas, the idea that the US will out-produce Saudi Arabia is a vaporous mirage.  Well, unless Saudi Arabian production falls off a cliff, that is.  The projections are built on the kind of verbal trickery that transformed “47% of Americans don’t actually earn enough money to pay federal income taxes” into the “47% of Americans are lazy takers” meme that sank Mitt Romney’s campaign.  Did those World War II veterans think they could just beat Hitler and rely on handouts in retirement?  ;)

It’s said that where there’s smoke, there’s mirrors, so let’s find that disco ball, shall we?

Continue reading

Green byelection blues

Alas, the Green Party didn’t pick any seats up in the Nov 26 Canadian federal by-elections.  While their strong showings probably count as a real moral victory, I imagine at this stage they’d prefer amoral, real victories.  ;)  As it turns out, Parliament’s composition is unchanged, “while my green heart gently weeps”.  Despite donating to the Official Opposition (whomever it’s been) since 2008, I have a soft spot for the plucky upstarts.

Chris Turner got 25% of the vote in the Calgary Centre riding; which, according to a Globe & Mail commentary from Canadian polling blog threehundredeight, could mean that he pulled a lot of the “Red Tory” voters.  Since probably only 1-2% of Canadians are dues-paying members of political parties (see p16 of this report), some of this blog’s other readers might not be up to speed, so I’ll attempt to summarize for their sake.  :)

After years in the political wilderness first as an Opposition member and then as a lobbyist, current PM Stephen Harper succeeded in uniting far-right-wing (by Canadian standards) Alliance party with right-wing (by Canadian standards) Progressive Conservative party.  And promptly positioned the new Conservative Party considerably to the right of the old Progressive Conservatives.

In the recent provincial elections in Alberta, the federal Conservatives openly supported the far-right (by Canadian standards) Wildrose Party, infuriating many Albertans who vote Conservative federally, but vote Progressive Conservative, provincially.  These folks are called “Red Tories” because they’re on the progressive side of the conservative spectrum, and globally, red tends to be the colour of progressive parties, and blue is the colour of conservative parties.

The main exception is the US, where the red party — the Republicans — are the conservatives.  (And wow, are they ever!)  This is because they actually used to be the progressives, and the Democrats used to be the conservatives, with a hammerlock on the white vote in the southern US.  This all changed in the 1960’s when the Democratic Party embraced the Civil Rights movement.  The Republicans went after the white southerner vote, which is why the US has a progressive (by American standards) “Blue” Party and a conservative (by any standard) “Red” Party.

But back to Alberta, these so-called “Red Tories” appear to have defected en masse to the Green Party in this byelection, in displeasure at the Conservatives’ “as-right-wing-as-the-Wildrose-Party” candidate.

 >

Continue reading

Plug-in Prius payback period…

I’ll start with a preamble, expressing hope that the tragedies and suffering from Hurricane Sandy can be limited to a minimum.  And, recognizing that there are undoubtedly other tragedies I’m unaware of, whose victims are just as deserving of such hopes — I wish them the best as well.

I’ll also note that the Red Cross has a variety of apps available for emergency situations, including an earthquake app where you can sign in after a disaster, so that concerned friends and relatives visiting the Red Cross website can find out if you’re safe.  (The chances of them reaching you by phone are slim, given how phone lines overload in emergencies.)

——-

The inevitable question was asked about the payback for our Plug-in Prius purchase (versus a different vehicle), using time-value-of-money, assumed electric and gasoline costs, and so forth.

>

1.  I’m going to argue that this is the wrong question.  The Plug-in Prius isn’t an attempt to save money, it’s the end result of having saved money.  By “delaying gratification” for various things (most specifically, the gratification of owning a house) we were lucky to wind up able to afford the vehicle.  (We also contented ourselves with a very old car, and managed to avoid acquiring a taste for cigarettes, alcohol, or fancy cuisine.)

Consider that many couples go out for a fancy dinner on their anniversary: perhaps they go to a nice steakhouse, order three courses, and enjoy some red wine as well.  From a purely financial perspective, that’s nuts because McDonald’s is way cheaper, and there’s no way to achieve net savings on the fancy dinner.  Well, unless one considers the certainty of divorce by a spouse who realizes they’ve married someone who sees relationships as an accounting entry:

 “Honey, by eating at McDonald’s instead of a fancy restaurant for our anniversary for the next twenty-seven years, and investing the roughly-$100 difference in a no-fee mutual fund compounding at 8% per year… we’d have $10,000!”

In a similar way, we could have purchased a nice used car, or even a new but much less expensive non-hybrid vehicle.  But since we could afford it, we chose a car which would benefit our son, in much the same way that married couples who can afford it, spend a bit more money to celebrate their anniversary — which presumably benefits their relationship.

As a side note, here’s a recent study arguing that small-battery PHEV’s (such as the Plug-in Prius) and regular hybrids (such as the regular Prius) are the most cost-effective way of reducing societal gasoline consumption… and by extension, of reducing transportation-related GHG emissions.

All of which is to say that the Plug-in Prius wasn’t bought as a cost-saving measure so much as a conscience-saving one; and it was paid for by previous cost-saving measures.  :)

>

2.  Payback questions are highly influenced by one’s assumptions about the (uncertain) future

In the article, I estimated that the Plug-in Prius would prove cheaper than the regular Prius, after about 150,000 electric-mode km.  This was based on several assumptions:

– the Plug-in Prius’ premium over the regular Prius was $8000     (safe assumption, I checked it)

– electric prices of roughly 7 cents / kWh from BC Hydro       (reasonably safe assumption: BC Hydro has a record of keeping rates low, despite the fact that raising rates would spur conservation.)

– all-electric distance of 20 km for 3 kWh, or about 20 cents, of charge    (safe assumption, based on personal experience)

– gasoline consumption of 1 L per 20 km    (reasonably safe, based on personal experience; there’re a lot of hills where we live)

– gas prices of roughly $1.40 per L     (extraordinarily risky assumption, given how the price of oil has fluctuated over the past decade!)

The calculation therefore works out to a savings of $1.20 per 20 km (6 cents per km) in electric mode, so the number of electric km required to save $8000 equals:  (8000/ 0.06) = 133,333 electric km.  Since I was being quoted, I added a safety factor to come up with the 150,000 km.  Which is probably the equivalent of about ten years’ driving.  Good thing we plan to own it for twenty!  ;)

>

I could get very different numbers, depending how I chose my gas price assumption!  And choice-of-assumption is often how people on different parts of the political spectrum can come up with wildly-diverging results on various issues.  As an example, supporters of Public-Private Partnerships (P3’s) claim they’re cheaper than government projects.  Opponents argue that this is due to flimsy assumptions (here’s a paper a Canadian union wrote up) and that other arrangements are more economical.  I don’t know enough about the nuances to know which is more correct, but given how the fantastically wrong assumptions of the right-wing deregulation faction caused the 2008-on-and-lingering financial crisis, I doubt the benefits are quite as extensive as proponents claim!

Similarly, there’s been noise about how the US could surpass Saudi Arabia in the carefully-chosen category of “liquid hydrocarbons” production.   I want to devote a separate blog entry to this fallacy, but suffice to say that Saudi oil production is about 10 million barrels per day, and American oil production is… 6 million barrels per day, and barely climbing.  The balance largely consists of about 1 million barrels per day of biofuels (a ridiculously roundabout way of turning natural gas based fertilizer and coal-based electricity into a liquid fuel) … and natural gas liquids and condensate, none of which are practical for running vehicles.  True, they could be refined into gasoline — but you’d have to build or retrofit an existing refinery first!  Here, the silly assumption is that all liquid hydrocarbons are equivalent to oil.  They’re not.

All of which is to say that payback calculations often give a false certainty to decisions built on a foundation of fluid variables.

>

3.  Opportunity cost for companies is different than opportunity cost for individuals

It’s common in industry to assign a time-value-of-money, when deciding whether to move forward with capital expenditures.  This is tied in with the opportunity cost of a spending decision: the lost benefit of not doing a different project which would have also saved money in the long run.  A related metric is the payback period, being the time it takes for the savings to offset the up-front cost.  That’s the easiest to discuss without getting into detailed math, so I’ll focus on that.

A chemical plant has a zillion ways of reducing processing costs, so it’s not uncommon for spending decisions to have to pay for themselves in two years.  Other businesses might be a bit more lenient, but from what I’ve seen, three years seems to be a common cutoff.  Companies can’t afford to spend money on a project with a ten-year payback, because there are so many other projects which are more cost-effective.

Unfortunately for Mitt Romney, corporations aren’t people.  Unless a person is speculating in real estate or fad collectibles, there aren’t many purchases they can make, which will pay themselves off in a two- or three-year period!  As for the time-value-of-money, ING’s high-interest savings account currently offers a whopping 1.35%.  As for those who might be tempted to use the stock market’s historical average of 8%-per-year as a time-value-of-money metric… that hasn’t really (or should that be, “really hasn’t?”) worked for the past decade.

All of which is to say that business-type financial measures lose their meaning when applied to personal spending decisions.  Transposing them from the business context to the personal-finance context, is one of the dubious assumptions noted in (2) above.  :)

The to-may-to, to-mah-to of economic statistics

(written June 28, uploaded July 16)

There was an alarming report out a couple weeks ago alleging that China was vastly underreporting its emissions, because the coal consumption reported by the Chinese national government was smaller than the sum of consumption totals reported by various Chinese provinces. Purportedly, the Communist Party didn’t want to reveal to the outside world just how much pollution it’s emitting, trying to raise the country’s standard of living.

This was followed the other day by a report that coal inventories in Chinese ports are at record highs (in other words, it’s not being burnt as fast as it’s being imported). The theory is that Chinese provinces have been overreporting electricity production to meet national targets for economic growth. If this is the case, then the national government is correct to apply a “fudge factor” and report lower production totals than the sum total of the numbers they’re given!

In light of the high coal inventories, I’d side with the national government on this one, and assume China is slowing down. And since China consumes so much of everything (urbanizing thirty million people per year takes a lot of material!) a slowdown there would drag down prices of most of the resources Canada is so good at exporting raw and unfinished — lumber, metal ores, bitumen, and so forth. Sigh — it’s as if we suffer from a lingering “economic colony complex”…

>

A Chinese slowdown would exacerbate the problems our Albertan friends are facing: the price of oil is already sagging to levels which threaten the economic viability of (some) new tar sands projects. This Globe article lists a consultant study saying $80 per barrel is needed for a variety of projects to break even. As I write this, the price of the West Texas Intermediate Crude (“WTIC”) benchmark is $79. And as the Globe article notes, our countrymen aren’t even getting this much, since oil from North Dakota is clogging south-flowing pipelines in the US, forcing Albertans (who are upstream) to sell at a discount. Selling unrefined bitumen would incur a further discount.

And it just gets worse for our Calgarian cousins/rivals: US oil consumption peaked six years ago, and is set to keep falling. Not only are fewer teens getting licenses, and fewer total miles being driven per year, but those miles are being driven in more fuel-efficient vehicles, as the gas guzzlers of the cheap-oil-era early 2000’s get traded in for more fuel efficient ones. And while electric cars won’t displace much oil demand in the near term, some truck fleets are beginning to switch to natural gas — and trucking represents a huge 12% of US oil consumption! Not all of them will switch, and natural gas will get more expensive again, but the net effect will be that US oil consumption is likely to keep… on… falling, like a Japanese stock market index. (Incidentally, kudos to our friends at Westport for persisting in that natural-gas-vehicle market long enough to get to this tipping point; it’s a good lesson for us fuel-cell folks to learn from.)

Without a path to Asia, Alberta would be stuck selling its oil into a declining market — and that would make it impossible for them to shift the heart of Canadian power westwards, as has been their dream for decades. It’s a 180-degree turn from the message everyone has told our neighbours for the past several years, namely that they faced unprecedented wealth. With stagnant US and European demand, the only way for the oil patch to keep those dreams alive is to force pipelines through BC. Which is what the Prime Minister is agitating for, with the determination you’d expect from the son of an Exxon accountant. (Harper’s dad worked for Exxon’s Canadian arm, Imperial Oil / Esso.)

If we assume those coal mountains in China mean the country is slowing down, the oil price is likely to drift lower in 2013 (commodity trader group-think suggests a bounce up in the near term; not sure what Nostradamus’ take is). A lower oil price would probably mean further gnashing of teeth and scapegoating of “BC radicals” in Calgary* though the root cause would of course be that the market is a fickle god: it giveth, and it taketh away. Not infrequently taking its cues from those godless communists. ;)

—————

* Misplaced anger also applies to the 1970s’ National Energy Policy. While Trudeau reduced the oilpatch boom, he didn’t actually cause the bust; in fact, when oil prices dropped in the early 80’s, Alberta got more-than-market-rates for its oil. The guys who caused the real pain in Calgary were the Saudis, who turned the spigots on enough to drive the price of oil so low, they were basically the only ones making money. (They were punishing other OPEC members for exceeding their production quotas. Every other oil producer in the world, became collateral damage.) More recently, Alberta’s Wildrose Party seems convinced that over-regulation is what caused a slowdown in bitumen development in the past few years, neatly overlooking the Massive Financial Crisis of 2008/09 that caused the oil to drop to about $40 per barrel, before gradually floating back to the low $100’s, from which it has resumed sagging.