Thursday, November 23, 2017

but, the reason we import all the oil is that we don't have the pipelines! if we had the pipelines, we wouldn't import the oil!

wrong.

to begin with, i'd rather import the oil from cleaner sources, anyways, so long as we need it. i don't want to use dirty tar sands oil. i don't want to use fracked oil, either. but, i don't want to use oil at all. and, i mostly don't. if we could get a better electric rail system in place for imports, or better greenhouse systems for local production, i'd have almost no carbon footprint; my biggest sin is buying fruit from california, and i'd actually simply rather not have to do that at all.

there is, in fact, a pipeline from western canada to eastern canada.

this pipeline is run by enbridge. it goes from the oil producing regions to lake superior, and then from there to sarnia, where it can be refined and distributed to toronto, and then from there across the country. it is actually the longest pipeline in the world.

you can read about this here:
https://en.wikipedia.org/wiki/Enbridge_Pipeline_System#Mainline_system

so, why doesn't the government use this system for "energy security"?

this is a quote from wikipedia:

"The Canadian government assumed that eastern Canada could always import enough oil to meet its needs, and that imported oil would always be cheaper than domestic oil."

i believe that this statement is absolutely true. but, how? if we have the infrastructure to ship oil to sarnia, and refine it there, why is it cheaper to import it? and, surely we could build refineries in edmonton, if we had to?

because it's so expensive to refine it. that's the easy answer. but, it's partly a question of having too many hands in between; there's a lot of inefficiencies in not having a centralized network, and parasites taking money off of the top.

so, in the 1970s, the elder trudeau set up a system to increase efficiency in distribution, partly by decreasing profits to western capital. a lot of western capitalists did suffer from this, but the question of whether this was a type of justice or not has been under-analyzed; i don't have a lot of sympathy for corrupt oil barons crying in their caviar, myself. what the system did was make the process of importing oil from the west to the east economical, for the first time, by shaving down the profits. and, the sound of westen whining notwithstanding, it did actually work fairly well - until the oil from the middle east became available, again.

all the saudis have to do is put a pipe in the ground and pump the oil into barrels. their costs are a fraction of ours. it's really not even close.

in 1985, the mulroney government - under the western accord - abolished the controls that trudeau had put in place, allowing the oil industry to set the prices it wanted and to export oil freely, as well. this had the effect of pricing the west out of the market in the east, as these controls were required to refine the oil at a competitive cost. as arab oil was now plentiful and cheap, the western producers just simply got beat in the market; they wouldn't sell it at a competitive price, and they got driven out by consumers looking for cheapest prices.

there's really nothing stopping western producers from taking advantage of the existing lines except for a lack of demand for expensive oil in a region that has easy access to cheap oil.

but, while there are lines to sarnia and to toronto, there are no lines to shipping ports. that's what the new lines are needed for. and, the oil companies don't seem to want to spin these lines off of existing networks, either - probably because it would be too easy for a future politician to stop exports.

it is true that canada exports almost all of it's oil to the united states. the reasoning underlying this is actually not economic, it was a poke in the eye to eastern canada. the choice that they had was to sell to america or sell to ontario, and alberta picked america. alberta does not get a very good price from the united states, either - although it is better than what ottawa legislated. and, most of the united states would be better off buying oil from the middle east, too. the entire industry is really built on a chain of absurdity - you take an uneconomical process, and then you play it up on grounds of nationalism and it works with enough people that there's an industry. if this was purely about economics, this oil would stay in the ground.

the industry will tell you stories to confuse you. it's usuallly quite easily debunked with a google search. just make sure you do those searches.

jagmeet singh must cut his beard.