SoylentNews is people
SoylentNews
Royal Dutch Shell announced its third-quarter earnings of $1.8 billion. The figure includes $2 billion in losses because of the company's decision, announced at the same time, to stop construction of its Carmon Creek tar sands plant, near the town of Peace River, Alberta. It cited inadequate pipeline capacity as the reason for the stoppage. The facility was designed to extract 80,000 barrels of oil per day. The company is retaining its lease and hence the ability to resume construction. The company also announced a $2.6 billion write-off resulting from its activities, now ended, off the Alaskan coast (earlier story).
Coverage:
The announcement comes shortly after the release of a white paper, "Lockdown: the End of Growth in the Tar Sands", by Oil Change International, a group critical of the oil industry. However, the Conference Board of Canada recently predicted (summary) that "Canadian crude oil production is expected to expand significantly over the medium term."
(Score: 2, Insightful) by khallow on Saturday October 31 2015, @08:03PM
With the current low oil prices, tar sand production is not viable as it is expensive to extract.
Current low prices are not future low prices.
The companies still producing synthetic oil from tar are doing it at a lose, based on it's better to have some income then none and the hope that things will improve.
What changed Shell's mind? What made them give up hope on the project? They say lack of pipelines. That looks credible to me.
As for efficient infrastructure, the only pipeline that seems to be going ahead, the Kinder Morgan expansion, means a lot of tankers moving through the Port of Vancouver, through Burrard Inlet, a shitty route made all the shittier due to the previous government shutting down the local Coast Guard (to sell the land to help balance the budget) and oil spill response team. Vancouverites really don't want increased tanker traffic through one of the busier N. American harbours.
The revenue flowing through that pipeline would be more than ample to fund the local Coast Guard. With all that traffic, they would need to fund the Coast Guard just to protect the heavy traffic going through the area. Two birds one stone.
Vancouverites really don't want increased tanker traffic through one of the busier N. American harbours.
But I bet they'll like the money they get in return just fine. And what's wrong with a busier harbor anyway?
And besides, being over dependent on oil revenues hasn't done Canada much good as it is not stable and wipes out too much other industry.
Oil industry doesn't "wipe out" other industries. This isn't just some single Canadian dude doing all the work. There isn't some magical resource that oil takes away that other industries need.
There's a reason that Canada is the only G7 country coming out of another recession. (0.1% growth this quarter so technically we're out of recession)
Oil revenue is one of those reasons.
(Score: 2) by dry on Sunday November 01 2015, @06:52AM
Perhaps a change in government? Previous government considered global warming to be non-existent, considered the fisheries a waste, considered the environment itself as inconsequential. Also used Revenue Canada to attack any opposition, added all environmental groups to the terrorist list and gave a lot of money to the oil companies.
Funny enough new government will probably get some pipelines built by not being so confrontational.
What revenue? Harbour fees? Judging by the number of ships anchored in English bay waiting their turn I don't see it. I guess there will be a couple of new jobs at the terminus but as I remember (used to play around there as a kid), there was only a small parking lot for the employees as it doesn't take much manpower to load a tanker. It is not like we're going to benefit from the bitumen, as it is the refinery a mile along the inlet has to import crude as Kinder Morgan makes more money shipping to China, at least with their contracts.
Alberta might benefit and allow them to pay off a bit of their deficit (6.7 Billion this year) from 30 years of right wing government.
It's already clogged. That's like suggesting that the freeway that is barely moving could use double the traffic.
And what money?
What it does is turn the CDN$ into a petrol currency, worth more then the US$ and all the stuff that the Americans (our principal trading partner) and others purchase from us into too expensive stuff.
Now with the CDN$ worth about 0.75US$, manufacturing is once again taking off, along with agriculture and various other things. It's not oil revenues that have got us out of the recent recession.
(Score: 1) by khallow on Sunday November 01 2015, @02:16PM
What revenue? Harbour fees?
There probably will be plenty of other taxes than just that. Property taxes on the pipeline and income taxes on the extra people working either on the pipeline or harbor.
What it does is turn the CDN$ into a petrol currency, worth more then the US$ and all the stuff that the Americans (our principal trading partner) and others purchase from us into too expensive stuff.
How about investing that in something productive and non-oil related? Presto! your petrol currency becomes a non-petrol currency.
Now with the CDN$ worth about 0.75US$, manufacturing is once again taking off, along with agriculture and various other things. It's not oil revenues that have got us out of the recent recession.
But it could have helped, if there had been those pipelines.
(Score: 0) by Anonymous Coward on Monday November 02 2015, @02:38AM
I toured a manufacturing plant for a crane safety company in Edmonton (CraneSmart). I was told that they had to set up their own company to manufacture the hardened steel that they needed.
The reason was that the oil industry produces a boom and bust economy. When oil prices are up, all the oil companies push the smaller companies to that back of the line when it comes to specialized manufacturing (they shout louder, have more money).
(Score: 1) by khallow on Monday November 02 2015, @03:04AM
And dynamic changes in your economy through sudden wealth creation is better than dynamic changes in your economy through recessions (particularly those from public policy or economics failures). And maybe when this oil boom really does go bust, it'll be time to get off the petroleum economy. In that case, Canada will have more wealth with which to make that transition to the next sort of energy economy.
My point here is that even short term booms of genuine wealth creation can have benefits far beyond just what gets done or dug out of the ground. Sure, they cause disruptions which can be very unpleasant or difficult to work around. But to obstruct or negate them merely because they are disruptive to the economy is IMHO counterproductive. There will always be disruptions and sudden changes in the economy. It is better to have an economy used to these changes than to commit massive resources to trying to make it more stable than it should be.
(Score: 0) by Anonymous Coward on Monday November 02 2015, @05:31PM
Wages up north are insane during boom times, as is the housing shortage.
The environmental degradation is substantial. While petroleum is important (even my bicycle uses some). I fear we may be over-invested in it.
Historically, the government provided large incentives to develop the tar sands because it is so expensive to get the actual oil out. Now that the (still expensive) technology has matured, oil royalties for oilsand oil are still lower than from convectional oil. This distorts the economy: hurting diversification.
Yes, I get that innovation often involves fast iteration. However, I think the world economy may be over-invested in transient crap. Continued economic growth is unsustainable. If we want a livable planet, we need to move to a stable economy at some point.
(Score: 1) by khallow on Monday November 02 2015, @09:32PM
Yes, I get that innovation often involves fast iteration. However, I think the world economy may be over-invested in transient crap. Continued economic growth is unsustainable. If we want a livable planet, we need to move to a stable economy at some point.
Everything is transient. Whether continued economic growth is possible depends on what is growing. Here, it's ultimately knowledge and technology development which is driving this economic growth and there's a lot of room to grow. For example, what is your expected lifespan again and your ability to change your environment? How hard is it to turn an idea into a mass-produced product? Where are humans living versus where they could be living? How hard is it for you to learn new things? There's plenty of limitations on us which we can improve.
If we want a livable planet, we need to move to a stable economy at some point.
In how many thousands of years? We're not in that much of a hurry to get to a "stable economy".