Comment by munk-a | Hacker News Reader

Comment by munk-a | Hacker News Reader

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> On the other, other hand - more tar sands oil staying in the ground means more oil from elsewhere in the world, often from politically unstable or unfriendly regimes will replace the oil the US otherwise would have imported from Canada.

This statement has some inaccuracies in it, it is true that it will literally result in more oil from other places, but, given supply and demand, it will result in less additional oil from other sources.

Whenever a cheap source of a good is eliminated the average production price of that good is increased (assuming there is an exhaustible supply of that good at that price) so the removal, or even inconveniencing of access, to tar sands extract will cause an up-tick in prices overall and a likely unnoticeable dip in supply.

Additionally, as a Canadian myself, the Alberta oils sands have recently contributed strongly to an economic crisis in Calgary as extraction profitability has sharply declined. There is a lot of oil still left up there but Alberta needs to act now, while it has the funds to do so, to transition their economy. It is not a feasible long term revenue source.

The oil from the tar sands isn't clean, there's no great reasons for it to come from Canada (I'm Canadian too before anyone jumps on that). Sure, it's extracted under better working conditions than many places in the world, but the damage to the environment is substantial, it's a very energy intensive process and furthermore it is much worse in terms of impact and energy use than almost all other means of obtaining oil.

Alberta seems to be expecting this oil thing to keep the province going forever; it is over. Diversify, try new things, for your sake and the sake of the rest of Canada. Please stop expecting this to get better. 2015 was a warning, it's now officially ending and the time to start moving on has passed, every day not diversifying the economy of Alberta is just a day of economic procrastination.

Edit: Sure energy security, keep some for us, but let's not make it the backbone of our economy.

> there's no great reasons for it to come from Canada

Energy security, not propping up authoritarian regimes with terrible human rights records, not requiring military interventions to protect a stable supply of oil.

Maybe not good enough reasons to change the balance, but reasons nonetheless.

The US is the largest oil producer in the world.

Yet Russia is the largest oil supplier to the US

The US is the largest oil supplier to the US. You can kinda thank W for that.

I think that actually occurred under Obama.

It did, which is kind of hilarious in hindsight because he kept saying “we can’t just dig our way to lower prices”, and they had no idea that some Texan would invent fracking…

Alternative: phase out oil. Also solves those problems.

Right, while you wave your magic wand to try and accomplish that, the world will keep using oil.

Obviously, you're right long-term but it's a slow transition not a switch we can flip.

I think that economies are stubborn beasts, if they can avoid change they will. I don't think it's reasonable to expect any sort of energy transition to occur gracefully while oil is in supply. As the price goes up we'll see some industries priced out and over time we'll see early adopters convert but we're not going to see a smooth transition for the populace at large.

It really depends on what “at large” you mean and the timing. If we passed a carbon tax and told everyone that oil will never be cheaper than it is now the phase-out would be relatively smooth: people would buy smaller, fuel efficient vehicles and EVs; there’d be more carpooling and combined trips; and people would be quicker to use transit or remote work. The same is true for home heating, various trades using equipment like lawnmowers, etc. — make a clear promise and do so across the board so people have the incentive to make capital investments.

The problem there is if you need to do it quickly: if the SUV/truck trend hadn’t caught on, for example, fleet economy wouldn’t have reversed the improvements we saw in the 80s and early 90s. The longer we wait, the harder that gradual transition will be.

> Obviously, you're right long-term but it's a slow transition not a switch we can flip.

And trains lend themselves much better to slow declining transition than a new pipeline. Can be used for other cargo; are a bit more expensive so they are a mild financial disincentive; the contaminated material (tanker cars) are by definition mobile and therefore easier to deal with at EOL.

This. To me it's like being a paper form printing company when computers were just becoming mainstream. Your days are numbered, deal with it and survive or don't and you wont.

A lot of innocent people are going to feel a lot of pain when that happens (along with completely guilty people of course) - I don't think it's avoidable myself but I can definitely sympathize with the people fighting to try and cushion the transition.

We will be using petroleum products long after everyone on this forum is dead. Might still be 60-70% of current demand as well, maybe higher.

You're probably right, but i hope you're not.

I think it will change faster than that. The acceleration to electric vehicles has gone far gayer than I ever imagined possible thanks largely to Tesla. Solar and wind have also taken off in a way I would have never expected a decade ago.

All very good reasons to invest in a domestic refinery and let Canada enjoy its own riches.

USA cutting off one of the most ethical jurisdictions in the world. Sacrificing energy independence and for what? Endless war and military expense propping up authoritarian governments with ongoing human rights abuses.

Do you trust the Kenney government to diversify properly? All we've seen so far is them waste a bunch of money on Hydrogen.

Not as far as I can throw them.

I trust them more than I trusted Clark, but that's not saying much.

The economy of Alberta depends less on revenues from oil and gas than the economy of neighboring British Colombia depends on real estate (aka flipping houses), and is roughly as diversified as Ontario (in terms of % of economy coming from various sectors) which is the other heavy weight economy in Canada.

People keep saying that Alberta needs to diversify as though this is some sort of epiphany that the province refuses to have, but it honestly just reveals the ignorance of the person making that claim regarding the current economic state of Canadian provinces.

Yet Alberta is feeling economic pain in a way that Ontario and BC do not seem to share.

They aren't diversified enough.

Yeah because housing hasn't crashed (yet). Also Alberta is feeling economic pain only in comparison to the crazy boom years prior. It is still literally the highest GDP/capita of any province, its unemployment rate ranks it 5th amongst Canadian provinces, its government is still the least indebted on a per-capita basis of any province, it has the highest labor force participation rate of any province, etc, etc. The fact that Alberta is still paying federal transfer payments to the rest of Canada should be sufficient shorthand to convince you that the economy is not as dire as you would think when viewing it from the outside.

> This statement has some inaccuracies in it, it is true that it will literally result in more oil from other places, but, given supply and demand, it will result in less additional oil from other sources.

Given strongly inelastic demand, I would say very marginally less.

> Whenever a cheap source of a good is eliminated the average production price of that good is increased (assuming there is an exhaustible supply of that good at that price) so the removal, or even inconveniencing of access, to tar sands extract will cause an up-tick in prices overall and a likely unnoticeable dip in supply.

I think we're saying the same thing?

> Additionally, as a Canadian myself, the Alberta oils sands have recently contributed strongly to an economic crisis in Calgary as extraction profitability has sharply declined. There is a lot of oil still left up there but Alberta needs to act now, while it has the funds to do so, to transition their economy. It is not a feasible long term revenue source.

Yes, they had better get serious about transitioning the economy away from oil before Calgary becomes a ghost town. People sure aren't there for the weather.

Hrm, my wording might have been a bit off itself but I mostly just wanted to highlight and rebut what could be worded in your original statement as a sort of fatalist "Even if we reduce what's coming from Canada it won't effect overall production". I do agree that the impact won't solve global warming or potentially cause a reflection in gas pump prices, but the supply is definitely elastic and while the demand is inelastic in the long term short term price fluctuations do actually cause short term fluctuations in demand so there is a fair bit of elasticity there as well.

People will find ways to reduce their car commute when prices spike and, especially, oil power plants will defer operation to cheaper (possibly less clean :sigh:) alternatives.

Given how large the oil market is and how generally inelastic the demand is, I would wager any overall reduction in demand will be marginal. There won't be no effect, but I don't see there being a large effect either.

Not much else they can do with the same amount of inbound value. They are trying to go hydrogen but they have a small population, pretty right leaning and only a handful of schools. They should have tried to change their policies back in 2009 during that boom but the politicians in Alberta aren’t very forward thinking. That and they don’t play well with the rest of populated country (read BC, Ontario, Quebec)

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