Are Canada and the United States Amputating their Energy Noses to Spite their Political Faces?

Read our commentary below, then comment yourself!

To our friends attending the Inuvik Petroleum Show: Enjoy the Musk Ox and Char...and safe travels!  (Enjoy our Inuvik Pix)

Comment: From our Alaska perch, we have a high opinion of Harper/Prentice policies but wonder if the oil sands export policy cuts off Canada's nose to spite her face (See news below).  We believe there is serious doubt about the truth of current, global warming group-think and still more doubt that humankind much affects its direction anyway--since the oceans produce the greatest volume of greenhouse gases.  Canada's Kyoto-copying anti-carbon tact could have that ship of state--or at least its economy and government budgets--headed for the rocks, dependent as the Federal and some provincial governments are on oil and gas exports.  Its 'green stance' could encourage 'green Americans' to oppose oil sands oil imports for other green reasons: LCFS, for example.  Furthermore, if Ottawa forces Alberta to toe the line against China exports at the expense of oil sands production, the demand for natural gas to facilitate bitumen production will diminish at a time when North American shale gas production is giving northern gas pipeline projects a run for their money, anyway.  Mackenzie or Alaska gas pipeline supporters cannot view the Harper effort as helpful in their struggle to identify gas buyers in today's competitive, crowded marketplace.  We think an adult in the room might more carefully consider the unintended consequences of using export policy to pressure international, political decision makers.  Once the genie escapes from that bottle and countries begin weaponizing energy we could learn how spite can lead to more serious troubles.  See the stories below for details.  -dh 

Canada-Dot-Com.  The federal and Alberta governments are mired in a sticky oil sands battle over exporting the resource, with Ottawa maintaining it will prohibit bitumen shipments to countries like China with lax climate-change policies.  Prime Minister Stephen Harper made the surprise policy announcement during a 2008 federal election stop in Calgary — a pledge that would stonewall the Stelmach government's plans to ship Alberta oil sands to China through the proposed Northern Gateway pipeline to Kitimat, B.C., and then by tanker to Asia.  Harper said his government would halt the flow of unprocessed oilsands and jobs to countries with greenhouse-gas emission standards weaker than Canada's....  This week, federal Environment Minister Jim Prentice (NGP Photo), a Calgary MP, said the Conservative government is holding to its promise and expects Alberta to follow Ottawa's lead.  The lucrative resource and associated jobs shouldn't be fleeing Canada if it means a loss of investment dollars to countries that are environmental laggards, he said....  Premier Ed Stelmach, who traveled to China last month as part of a trade mission to expand provincial markets, has said China and the rest of Asia are critical to Alberta's energy future. Currently, Alberta only exports its oilsands to the United States.

Alaska Dispatch by Craig Medred.  People who know oil and gas markets tend to be of the opinion that neither TransCanada Corp., a Canadian pipeline company, or Denali, a partnership of oil giants BP and ConocoPhillips, will be able to get a deal that covers the cost of construction because the owners of the gas need to structure a price for shipping that is low enough for them to make money on what they pump out of the ground.

Comment: In wake of the Gulf of Mexico oil tragedy, is the Obama Administration cutting off America's nose to spite her face as it seeks to sustain moratoria on unrelated, established and permitted exploration and production activities (See news stories below)? Yesterday, a Federal judge quashed the Administration's moratorium, but Obama vows to appeal.  Tens of thousands of direct and indirect, high paying jobs could soon be mobilizing to leave the country as the Obama moratorium lingers.  Rigs along with countless oil field service companies are identifying new homes in more inviting investment climates.  We are literally on the brink of outsourcing a whole new army of workers so that we can pay foreign exporters more for what we refuse to do here: produce domestic energy.   This sort of decision making is typical of this Administration: immature and emotionally reactive.  "Your industry spilled," Obama-Salazar seem to say, "and we will keep our 'Kleinknecht' boot on the neck of your industry until we are absolutely sure that there is not a chance, no longer any risk of anything negative happening in Federal OCS areas ever again."  The adult in the room might have said, "We will determine the precise causes of the tragedy, assure that those circumstances cannot be repeated, clean up the mess, reimburse those harmed, rehabilitate the environment to the best of our ability and then encourage a safer oil and gas industry to continue participating in a robust OCS exploration and development program to assist in America's economic recovery.  Would a sane adult cut off his nose to spite his face?

The MMS is seeking comment now, until next week (June 30), on its OCS leasing plan for the period 2012-17.  Its decision could shut down this true economic stimulus for years to come.  It could cause the economic downfall of Alaska and harm most other states in varying, significant degrees.  In large part, this decision process depends on your weighing in.  To have your opinion counted, please go to this page for an easy way to participate.

 LA Times.  “Sen. Mary Landrieu (D-La.) said she would urge the Obama administration not to appeal the ruling but to find a way to achieve its goal of ensuring safety without harming her state's fragile economy. The administration has said it would appeal. Landrieu warned that the moratorium would drive rigs from the gulf to other countries, not only costing the gulf region jobs but making the U.S. more dependent on foreign oil. "If you owned one of these rigs, would you allow your rig to sit there and lose $500,000 a day? " she said. "You have no obligation as a rig owner to produce oil for America." Rep. Bill Cassidy (R-La.) called the decision "welcome news for thousands of Louisiana welders, pipe fitters, engineers and roustabouts whose jobs were threatened by a political decision." Thomas J. Pyle, president of the Institute for Energy Research, said in a statement that the moratorium was "never about safety -- it was about politics." 

Energy Guardian.  “In his statement, Ken Salazar (NGP Photo) sounded many of the themes that could be expected in an appeal.“ 

LA Times.  Last month, Secretary Steven Chu flew to a BP command center in Houston to oversee diagnostics for the top-kill effort, which engineers scuttled after several days of pumping drilling fluid and bits of debris into the blown-out well in hopes of stopping the flow of oil. "Look, we 're not oil people. We're mostly physicists, a mechanical engineer or two."