Friday, December 12, 2014

Wake up Canada - part 3

At the recent QUEST 2014 Conference in Vancouver one of the speakers defending the need for developing Canadian oil and gas resources used this argument in a supposedly ironical question: "Whom would you rather buy [oil and gas] from - Nigeria, Russia, Venezuela - or Canada, which is a democracy, country with a stable economy and banking system, and a reliable ally [of the US] ... ?"

Firstly, I want to ask: do we (Canada) really want to put ourselves in the company with Russia, Venezuela and Nigeria??  
Secondly, do we need to convince ourselves in what we want to believe? We should not kid ourselves - whoever wants to buy, will buy where they can find it cheaper. There are reports that ISIS is the wealthiest terrorist organization in the world. The major source of its funds comes from sales of oil on black market reaching a quarter of billion US dollars a year. Do they sell at world market prices, or do their buyers care about their vendor being a democracy? I think these are rather rhetorical questions ...    

If it weren't bad enough, there is the global oil and commodities crisis bringing Russia's oil-dependent economy to the brink of recession and hurting Latin American and other oil producers. But wait, what is it - Canadian stock market is also down as well as Canadian dollar, Alberta and other Canadian provinces relying on oil revenues are making significant cuts to their budgets. Why do we find ourselves in the same hole? Can it get worse? Yes, and it probably will. Could it be avoided? Yes - see my previous posts on the subject: Wake up call for Canada and Wake up Canada - part 2

I am actually convinced that the current "oil trough" (the opposite of the "oil peak" anticipated in 80s and 90s) is good for renewable energy. Why? Because it will squeeze out more expensive and more harmful fracking and shale oil extraction. By the time of the next rise of oil prices which will not take too long to wait for, may be a year or two, the world will become a little "greener" and hopefully we will not want to turn back to "dirt fuels". The ascent of clean alternative energy is near.

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