Excited Delirium

Germany has always been known as a leader with wind and solar power collection – two of several options for renewable energies.

However, according to Germany’s Federal Environment Agency, there is a distinct possibility that Germany will have completely quit it’s reliance on carbon-based energy by the year 2050.

Here are some of details to consider:

• “A complete conversion to renewable energy by 2050 is possible from a technical and ecological point of view,” Jochen Flasbarth, president of the Federal Environment Agency, told reporters earlier this week.
• The transition would also create new jobs and increase exports of renewable energy technologies.
• The country already employs some 300,000 in the renewable energy sector and is the world’s leader in installed photovoltaic capacity and second largest generator of wind power after the US.
• Currently around 40% of Germany’s greenhouse gas emissions come from electricity generation, particularly coal-fired plants, but the Government has committed to cutting emissions 40% on 1990 levels by 2020 and 80-85% by 2050.
• Meanwhile, the German authorities have finally agreed a two-step plan to reduce feed-in tariffs by 3% later this year.
• The German Federal Network Agency says that 714 MW of solar capacity was installed in Q1 of this year, a ten-fold increase on last year. The change to the feed-in tariff is expected to calm the market but not lead to a collapse, according to media reports.

Going one step further, I started to browse the German Environment Agency web site and found that most of the articles are those that would make head-in-the-sand Conservatives and environment-deniers shriek:

• “Germany met its Kyoto Protocol Climate Protection Obligations in 2008″
• “Unecological subsidies cost 48 billion Euros in tax revenues every year”
• “How to reduce Germany’s CO2 emissions by 40%”
• “CO2 capture and storage is only an interim solution” (and not a real one, Steve)
• “Climate protection fuels employment”

All of this goes to show that ‘necessity really IS the mother of invention’.  Germany’s not known for its natural energy resources – except for coal – so they’ve got to take care of themselves some other way.  And because Canada is sitting on the world’s biggest cess pool of crap some people call ‘oil’, we don’t bother investing in technology and energy supplies that might actually be sustainable.

Despite how distressing the situation is (and how much it makes me want to move to Germany), I can’t help but laugh at the image of Merkel and Harper in a literal wrestling match and exchanging fisticuffs every time they get together for a little $1.2 billion party.  But then, I suppose Merkel’s probably thinking ahead with ideas like “we’ll be selling these trolls everything they need over the next 50 years and we’ll pretty much own Canada”.

The Star had a feature on the weekend showing the history of oil spills around the world.  They took a slight more sinister approach by suggesting that these are oil spills we haven’t heard of.

Have we?

I have to admit, most were news to me.

However, by the time BP has finally got their act together, my guess is that the estimate for oil leaked into the Gulf of Mexicoil will be 200-250 million gallons, making it the second largest ever.

While BP CEO Tony Hayward was making an early attempt to bail on BP stock and efforts to appease shareholders with a massive dividend (when maybe the money should be spent on reviving the death of sealife in the Gulf of Mexico), we know one organization is actually having fun with the whole situation:  Greenpeace.

Greenpeace UK has launched a ‘BP Behind the Logo Contest’ and has received hundreds of creative entries, including the following:

What are your favourite images?  Which would you put on a t-shirt to remind the world how utterly disgusting this situation has become?

But don’t worry:  a disaster would never happen here.  Not now that our Conservative government (ever propped up by our shameful ‘opposition’) has reduced and eliminated virtually all environmental assessment requirements in the name of the economy!!

This article reminded me of the conditions applied to Canadian Economic Action Plan programs:  no environmental review.

This will cost us all.

My hope is that sooner rather than later Canadians will have the ability to audit these programs, not just economically but also with respect to their impact on the environment.  And when we do, we’ll likely realize that Canada’s Economic (In)Action Plan will be much more costly than originally thought.

Stay tuned.

This …

Or this …

Would you believe that the Tar Sands in Alberta could pose a greater environmental risk than the drilling rigs off the coast of the Gulf of Mexico?

Certainly, if you have time to read this 96 page report from this Ceres-commissioned report authored by RiskMetrics Group.

A brief review of the document was provided on the Ceres website, including the following observations:

• Alberta’s oil sands are already the world’s largest energy project—with $200 billion in funds committed from the world’s leading oil producers, including BP, ExxonMobil and Shell.  However, these producers face numerous environmental, production and distribution challenges that will grow as the oil sands industry pushes to boost production amid tighter regulations and resource constraints
• Oil sands companies in Alberta are already producing 1.3 million barrels a day, and their goal is to triple production by 2030.
• Ceres president Mindy Lubber:  “The energy-and water-intensive nature of oil sands, combined with climate change regulations, permitting obstacles and other challenges, are a recipe for diminishing revenues and returns if not properly managed.”
• Investors have already filed shareholder resolutions on the oil sands topic with Royal Dutch Shell, ExxonMobil, BP and ConocoPhillips. The Shell resolution will be voted on at tomorrow’s annual corporate meeting in London.  ExxonMobil’s shareholder resolution is up for a vote on May 26.
• While just over half of U.S. oil comes from overseas countries like Venezuela and Saudi Arabia, the fastest growing source is from two North American regions – the Gulf of Mexico and Canada’s vast oil sands region. Oil production from these two areas has grown to three million barrels a day in recent years, supplying more than 15 percent of total U.S. oil needs.
• Long-term risks from development in Canada’s oil sands region are arguably greater. Many of these risks stem from already-high financial costs and the environmental impacts of transforming highly viscous bitumen into synthetic crude oil – a process that requires vast amounts of energy and water.
• “Investors need to question whether this is a wise use of resources,” says Doug Cogan, a report co-author and director of climate risk management for RiskMetrics Group.  “The oil sands process takes natural gas—the cleanest-burning and lowest-carbon fossil fuel—to turn one of the dirtiest and highest-carbon fuels into a saleable product.  Large volumes of freshwater are also consumed in the process, and end up in toxic tailings ponds.  It’s like the Gulf of Mexico spill, but playing out in slow motion.  From a climate and ecological perspective, we’re really no better off.”
• “This report makes clear that oil sands companies must do more to analyze the far-reaching risks from current and future production in Alberta,” said Jack Ehnes, chief executive officer of the California State Teachers’ Retirement System (CalSTRS), the nation’s second largest public pension fund. “With nearly $1.9 billion invested in the equity securities of BP, Shell, Exxon and ConocoPhillips combined, we have quite of teachers’ money at stake here. We need to ensure these companies are properly recognizing and managing oil sand risks.”

Among the report’s key findings:

Shrinking profit margin: The costs of producing oil sands – already the world’s most expensive source of new oil -  are rising and will continue to do so due to the onset of carbon pricing, higher input commodity prices, and rising costs for water treatment and land reclamation. As a result, global oil prices will need to remain high – possibly approaching $100 per barrel – to ensure a competitive rate of return on $120 billion in planned expansion projects. Oil sand operators must also be mindful that if global oil prices get too high, between $120 and $150 a barrel, it will likely reduce global oil demand and shift markets in favor of alternative fuels.

Vulnerability to changes in U.S. Markets: Presently, the vast majority of of the 1.3 million barrels being produced every day flows to the United States. Long-term access to this market is jeopardized, however, by emerging low-carbon fuel standards in the U.S. that will require a lower carbon intensity in transportation fuels. These fuel standards, already adopted in California, will put carbon-intensive oil sands fuel at a distinct disadvantage because oil sands output will likely have to be mixed with next-generation biofuels that are not yet being produced on a commercial scale.

Other Distribution Obstacles: Transporting expanded oil sands production west to China and other Asian markets is another alternative. However, there is strong opposition to building pipelines to Canada’s West Coast from Aboriginal communities who have significant rights under the Canadian constitution.

Water and Other Resource Constraints: Oil sands production is highly water intensive, with up to four barrels of freshwater consumed for every barrel of oil produced from surface mining extraction. Water withdrawals from the Athabasca River watershed are already restricted during winter months to protect fish habitat. If oil sands production volume grows according to companies’ estimates, some oil sands mining operations could exceed their wintertime allowances as early as 2014, causing possible production interruptions. Climate change may also exacerbate this situation; glaciers feeding into the Athabasca River watershed are already shrinking.

Growing Land Reclamation Costs/Liability: After 40 years of production, no oil sand companies have yet fully reclaimed the extensive tailings ponds used for holding polluted wastewater. This is because the fine tailings in these ponds take decades to settle out. These tailing ponds, already covering an area the size of Washington D.C., pose risks of contaminating adjoining lands and water resources, and present health problems in downstream communities. Alberta’s Directive 74 requires oil sands miners to speed up remediation of existing ponds – an order that creates especially large liabilities for the industry’s legacy miners such as Suncor and Syncrude.

The report specifically recommends that oil sands producers:

• Review the lasting impact of their proposed development plans and pursue more pro-active, incremental strategies to manage environmental and social risks;
• Provide guidance for assumed oil, natural gas and carbon prices in future production forecasts.
• Do a better job of articulating to community groups and other stakeholders their strategies for land use planning, water management and carbon mitigation;
• Disclose information from these more detailed evaluations to investors;
• Develop stronger ties with the U.S. biofuels industry both for speeding up development of advanced biofuel capacity and sharing existing infrastructure, such as oil sands pipelines that already feed into the U.S. Midwest.

“All oil is getting dirtier and harder to produce,” said Bob Walker, vice president of sustainability at Northwest and Ethical Investment in Canada. “With Chinese investment and demand set to grow outside the U.S., oil sands production is likely to grow. Investors need to be aware of the environmental and social risks and engage oil sands companies to improve disclosure, operational performance and to make technological investments to reduce environmental and social impacts.”

“We recognize that oil companies will continue to invest in the oil sands,” continued Lubber, “but they shouldn’t do so blindly. Investors need assurances that the risks outlined in this report are being taken into account.  This includes the fact that carbon will be regulated, that water will be increasingly scarce, that tailings ponds need to be cleaned up, and that doing all this will be expensive. Companies need to build solutions in up front or they shouldn’t be building these projects at all.”

The full report is available at http://www.ceres.org/oilsandsreport and http://riskmetrics.com

About Ceres
Ceres is leading coalition of investors, environmental groups and other public interest groups working with companies to address sustainability challenges such as climate change. Ceres also directs the Investor Network on Climate Risk, a network of 90 institutional investors with $10 trillion of collective assets focused on the business impacts of climate change.

About RiskMetrics Group
RiskMetrics is a leading provider of risk management and corporate governance services.  Its ESG Analytics Group analyzes cutting edge issues like climate change, water and ecosystem services that support the global economy.

That’s right, ladies and gentlemen!  The Gulf of Mexicoil awaits you!

Imagine a future where you can simply go to the coast and dip your bucket into the Gulf waters and scoop out a pile of lovely, black goop, thick with the goodness of the end of earth and only with a few minor inconveniences like fish bones, turtles shells and dead birds.

You too can have a scoop of the future and see what we’re all in for!

Believe the spin.  We did nothing wrong and we had no idea it would be this big!  Honestly.

Just whatever you do, no matches, OK?  We’d hate to ignite the world’s biggest roman candle in waiting!

OK.  Seriously:  the only thing that we should be figuring out is how we can strip BP (and any other companies that let this disaster happen) of their corporate status.

What’s that?

Yeah … they should cease to exist.  Corporate armageddon.

Why worry about a boycott when there should be nothing to boycott?

I got the tip from Mike Soron about using Google Earth to compare the size of BP’s Deepwater Horizon spill and it’s BIG.

Here’s an overlay that I did for Ottawa (and region).

So I have a question:  we can toss a punk in jail for years for carrying a dime-bag of pot, but we can’t rack up the CEO and other stockholders of BP, Halliburton and other companies when they allow this kind of disaster to occur?

C’mon.

This is revolting.

Tony Clement announced yesterday that Industry Canada and the Government of Canada would pursue fines against anyone caught tampering with gas pumps.

Unfortunately, this is a well-timed smoke-screen that is another attempt to get gullible Canucks to side with the most scandalous leadership on the planet.

I’m not a gas pricing expert, nor am I a logistics expert, but I have done a little reading about this.  The question is whether or not certain pumps clog or get impeded and then, in most cases, unintentionally give the consumer less than what was recorded.

On the surface, this is a very noble effort, but let’s pull it apart a little:

• The potential variations are likely to be a maximum of a percent of a percent of your overall spend on gas and you may even wind up getting more gas than was recorded
• The timing is perfect for the launch of the ’summer driving’ season (the time when most Canadians start their road trips and visits across the country)
• The timing is also perfect in that the Cons desperately need a ‘good story’ to deliver to the public, hopefully diverting our attention from the massive array of scandals that are strangling this government from doing anything but choke on its own filth
• This crusade is a lot like the Con’s general goal of being ‘tough on crime’.  It makes for great marketing, but little substance
• The actual effort will likely translate to an assault on small businesses and independent gas suppliers, most of whom do their best to keep gas prices competitive
• Nothing will be done to address the overall ridiculously high price of gas given the climb in the Canadian dollar

I’ll address the last comment:  when the Canadian dollar has been rising as it has, the price of everything else should be dropping.  Over the last decade or so, we’ve seen nearly a 50% increase in the value of our currency vis-a-vis the US dollar and yet we’ve seen little to no reduction in the cost of gas, books, vegetables, fruits and other things we import on a daily basis.

Canadians are being gouged and it’s time that Tony Clement and our other so-called leaders look at what I call ‘Price Parity’ issues with imports.

As I mentioned, gas is just the tip of the iceberg, but it’s a massive portion of our disposable expenditure.  The high price of gas also has an impact on nearly ALL of our daily activities.

Of course, if pushed, I would also say that gas should be $5 per litre, but that’s more because we need to reduce our reliance on gas, but as long as we’re trying to find the cause of ‘high’ prices, let’s be sure that Tony’s tantrum doesn’t misdirect us from the true cause:  suppliers are gouging us.

In future blogs, I’ll address two things:

1. How to address our addiction to gas (and how to end it)
2. Price Parity Policies that will put more money in the hands of Canadians

Like clockwork, the Goebbels-like Conservative propoganda machine will be kicking into high gear over the next few days.

As Canadians are watching the Olympics (something I wish more of us would boycott), they’ll be pounded with ads from the Cons, err, ‘Canada’s New Government’.  The Cons effectively own CTV, given the volume of manipulative taxpayer-funded ads they run, and the CTV will be the source of most of the tracking of events for the Olympics.

(As a side note, as Canadians, we should all be demanding a stake in CTV given the millions of taxpayer dollars wasted on TV ads with this media monopoly).

When the ads come out, don’t expect any negative attack ads.

These ads will be all about touchy feely stuff, particularly the massive (and ridiculously unintelligent) tax savings being thrown around like silver dollars at a US bicentennial birthday party (believe me … it happened).

They’ll talk about Canada’s massive action plan that’s taking place across the country, even though most of it is repaving roads and changing a few doorknobs.

They’ll talk about how Canada needs to support our troops and how we need to encourage a safe, secure land free of terrorists.

They’ll talk about economic stability and their only hint of attack will be that we don’t want to use something as inconvenient as democracy to destabilize the country.

I’ll tell you what’s destabilizing:  Conservatives.

The province of Ontario and all of its municipalities are STILL dealing with financial shortfalls because of the Harris Conservatives, most of whom have been bounced out of provincial politics and who somehow stupidly got into federal politics.

What’s destabilizing is slashing a progressive and productive tax on consumption (the GST) by more than 30% from 7% to 5%.  Is it any wonder that we’re encountering structural deficits?  Jim Flaherty is entitled to run our country’s finances as much as Shamu should be running a sushi bar.

Think about it:  Conservatives have never been able to balance the books even though they claim they’re the ones for stability in rough economic times.  In the US, Americans acquired more debt under George Bush Jr. than all US presidents combined.  In the 1980s, the Mulroney government introduced the GST in order to finally stabilize the finances from fiscal recklessness.

But back to the ads.  I’ll tell you what they won’t talk about:

• What they won’t talk about is how democracy is just a little inconvenience on their way to theocracy.
• What they won’t talk about is how most Canadians can’t even benefit from these tax ‘incentives’ because you need an income before you can claim a deduction.
• What they won’t talk about are the proto-Fascist knuckle-dragging Christian evangelists that are being parachuted into every single government department in the country, poisoning the public well for decades to come.
• What they won’t talk about is how they saw the US coming and how they dropped the pants of all Canadians with their recent ‘trade break-through’ with the Americans.
• What they won’t talk about is how they could care less about human rights if you’re brown, red, yellow, progressive or speak any other language than ‘Carbonish’.
• What they won’t talk about is how world leaders won’t even shake Stephen Harper’s hand because he’s a massive liability to any politician.

But if you insist on watching, enjoy the games.

And get ready for the BIG BOO.

Zero Hedge put together some comments on the CIBC research in “The Next Leg of the Housing Crisis in Five Simple Charts“.

Short version:  we’re all f**ked.

Longer version:  there are so many layers to this crisis that throwing cash at just won’t solve.  Two decades of Republican fiscal irresponsibility, creating structural deficits and hiding behind international crises like fabricated wars have driven the US to the bottom.

Clashing with this level of ineptitude in the US is the increasing bulk of retiring baby boomers, many of whom have started to sell off their real estate as they enter retirement and more of whom will do anything they can to preserve what few assets they have left after spending a life-time of pursuing economic bubble (gas prices in the 70s, interest rates in the early 80s) after economic disaster (the dot-com heist, the recent financial crisis).

Grind all of this together with a generation of youth that are no longer interested in unwieldy and impotent governments all the while deciding that they cannot live with themselves while consuming more and more Made-in-China / Bank of WalMart crap and you have the perfect storm.

The fall of 2008 was just the start of a very long, very deep structural economic adjustment that we will all have to work our way through.

One of the few solutions is to finally address the deepening divide between the haves and the have nots.  Tax policy, social engineering and economic incentives will all have to be drastically overhauled in order to improve upon this situation.

In Canada, this means reversing the ridiculous decision of the Cons to reduce corporate and individual tax rates, along with increasing the GST.  While I would prefer that the GST be increased to a much more realistic level like 12%, I’ll at least accept the 7% that we used to pay.

I would also recommend that we cease to allow companies and organizations to deduct expenses that are killing us, starting with gas and fuel allowances.  For too long, we’ve been subsidizing the ownership of carbon-burning fossils and this needs to change.