The US consumes 25% of the world’s oil — but as energy tycoon T. Boone Pickens points out onstage, the country has no energy policy to prepare for the inevitable. Is alternative energy our bridge to an oil-free future? After losing $150 million investing in wind energy, Pickens suggests it isn’t, not yet. What might get us there? Natural gas.
Physicist Geoffrey West has found that simple, mathematical laws govern the properties of cities — that wealth, crime rate, walking speed and many other aspects of a city can be deduced from a single number: the city’s population. In this mind-bending talk from TEDGlobal he shows how it works and how similar laws hold for organisms and corporations.
Svalbard is an archipelago high within the Arctic Circle. The largest of its islands is called Spitsbergen, meaning “pointed mountains.” In 1920 a treaty known as the Svalbard Act was signed by several nations recognizing Norwegian sovereignty over the islands, and declaring the whole region a demilitarized zone. This is a short film about how Svalbard, over the course of recent history, became increasingly linked to developments in climate science, and climate change.
Luc Ferrandez’s last bicycle was a Kona, a sturdy model with thick tires, ideal for hauling heavy loads. During his 2009 campaign as the Projet Montréal candidate for the Plateau-Mont-Royal borough, he would hook it to a trailer piled with a laptop, a projector, a collapsible screen, and (this being Montreal) a couple of bottles of rosé. After setting up his equipment next to a café terrace, he would distribute paper cups and launch a PowerPoint slide show of streets and squares in Copenhagen, Paris, and Madrid, as well as historical photos of local boulevards, all unencumbered by traffic. He figures it was these partys de trottoir, or sidewalk parties—during which he made the case that Montreal could be as clean, green, and safe as any place in Europe—that won him the mayoralty of the city’s most populous district. His mountain bike, alas, didn’t survive the campaign.
“I was having a discussion with a citizen,” recalls Ferrandez. “I left my bike against a wall, unlocked. When I came back an hour later, it was gone.” These days, his main mode of transportation is an Opus, which has the upright handlebars and broad saddle of a bike you would expect to find leaning against a canal-side railing in Amsterdam.
I like his philosophy
“I accept that some people think I’m the devil!” Ferrandez shouted over his shoulder, making a right onto rue de Brébeuf. “For them, the Plateau doesn’t exist. It is just a place to be driven through. I don’t give a shit about these people. They’ve abandoned the idea that humans can live together.”
Ferrandez’s vision of what the borough is, and could be, seems almost exalted. “The Plateau is an Italian cathedral. It’s a forest. It’s something to protect, something sacred. I don’t want it to become a place where people come to live in a condo with triple-glazed windows for a couple of years. This has to be a place where people can be comfortable walking to the bakery, walking to school, walking to the park—where they want to stay to raise a family.”
The size and density of cities confers considerable economic advantages. Denser cities are seed-beds of innovation and productivity improvement, as Jane Jacobs long ago argued. Pioneering studies of "urban metabolism" by Geoffrey West and his colleagues at the Santa Fe Institute find that as metro areas get larger their metabolic rate essentially speeds up, making them more productive and inventive
The environment benefits from density and size as well. Larger, denser cities are cleaner and more energy efficient than smaller cities, suburbs, and even small towns. Ecologists have found that by concentrating their populations in smaller areas, cities and metros decrease human encroachment on natural habitats. Denser settlement patterns yield energy savings; apartment buildings, for example, are more efficient to heat and cool than detached suburban houses. Urban households emit less carbon dioxide than their suburban and rural counterparts. In his book Green Metropolis, David Owen lauds the dense, concentrated built environment of Manhattan – where most people live in apartments and use mass transit — as the greenest place in America. When it comes to greenness, size matters; as urban regions grow their populations, the rate of growth in their emissions actually declines.
As cod collapsed we discovered crab, a valuable and harvester-friendly resource that should have sustained us for decades. Now, we are in danger of having fished that out as well. It’s in decline.
People say the state of the crab biomass in the rich area known as 3K was badly managed by Ottawa because of government response to industry pressure. Smaller cuts that should have been made all along were resisted and delayed.
Now the mistakes have caught up with the industry and harvesters and processors are sweating out this year’s 25 per cent reduction.
And it’s not just the feds who bob and weave when it comes to tough fisheries decisions. Former fisheries union president Richard Cashin did a study for the Newfoundland government in 2005 on a controversial proposal called Raw Material Sharing, a.k.a. the infamous RMS.
In his report, Cashin took a whack at former provincial fisheries Minister John Efford. Efford, he said, violated the policy of processing licence freezes ("a complete disregard for … and abdication of responsible public policy," Cashin called it), and doled out crab licenses like there was no tomorrow. More than 20 new crab processing licences in a five-year period!
Again, it was just politics.
But the price that we paid is that we are now left with enough crab plants to process the entire world’s supply. Processors scramble to keep plants running for a few weeks, plant workers scramble to get enough hours to qualify for EI.
How do you fix it?
The most pervasive argument asserts the fishery needs to be stripped of politics. In the U.S., the fishery is governed by a piece of federal law called the Magnuson-Stevens Act. It’s a non-political body that sets benchmarks and guidelines and goals for fisheries management and sticks to them. There is little or no political interference.
In Canada, the argument is that we also need something similar: a new Fisheries Act. An act that takes the federal minister completely out of the picture and allows the fishery to operate and flourish at arm’s length.
Maybe the province also needs to take the politics out and remove the provincial minister from decision-making.
Perhaps then people can address the problems, make the tough decisions and save what’s left of an industry that has been studied and politicized to near-extinction. Our outports, our young.
And, oh yes, the cod would all be better off.
Until 1998 the Colorado regularly flowed south along the Arizona-California border into a Mexican delta, irrigating farmlands and enriching a wealth of wildlife and flora before emptying into the Gulf of California.
But decades of population growth, climate change and damming in the American Southwest have now desiccated the river in its lowest reaches, turning a once-lush Mexican delta into a desert. The river’s demise began with the 1922 Colorado River Compact, a deal by seven western states to divide up its water. Eventually, Mexico was allotted just 10 percent of the flow.
Officials from Mexico and the United States are now talking about ways to increase the flow into the delta. With luck, someday it may reach the sea again.
It is paradoxical that the Colorado stopped running consistently through the delta at the end of the 20th century, which — according to tree-ring records — was one of the basin’s wettest centuries in 1,200 years. Now dozens of animal species are endangered; the culture of the native Cocopah (the People of the River) has been devastated; the fishing industry, once sustained by shrimp and other creatures that depend on a mixture of seawater and freshwater, has withered. In place of delta tourism, the economy of the upper Gulf of California hinges on drug smuggling operations that run opposite to the dying river.
Interesting article on how Mexico City has become so successful in reducing waste that it is closing it’s largest landfill.
Mexico City will close one of the world’s largest garbage dumps by Dec. 31 and will instead turn the garbage from millions of people into reusable materials and energy, MayorMarcelo Ebrard announced Monday.
Some 700 trucks that carry garbage to the Bordo Poniente will no longer be admitted as of Monday, and all operations will cease by the end of the year, Ebrard said.
Trucks will still enter the recycling separation plant and a composting plant already on the premises.
The city that once dumped 12,600 tons of garbage daily already has cut the amount in half this year through recycling and composting, said government undersecretary Juan Jose Garcia Ochoa.
The concrete giant Cemex SAB has agree to buy 3,000 tons daily to turn into energy, Garcia said. The city is seeking other landfills to dump the remaining garbage in smaller amounts while it institutes a new recycling program in the new year.
Built on a dry lake bed partly to handle the rubble from the devastating 1985 earthquake, Bordo Poniente has taken in more than 76 million tons of trash.
Closing the dump will reduce greenhouse gas emissions by a minimum of 2 million tons of carbon dioxide a year, according to the city government.
Ebrard said the city is implementing strict measures to stop illegal dumping at the site and to process materials into compost. It will also embark next year on a major project to harness the methane gas produced at the dump into energy, he said.
Ebrard said the city also plans to open a new plant to recycle construction waste into building material.
The Mexican capital itself has about 8.8 million residents, but its metropolitan area holds more than 20 million.
The city has been working for years to turn one of the planet’s biggest and messiest waste management systems into the greenest, at least in Latin America.
Three years ago, the city recycled only 6 percent of its garbage. Today, that number is close to 60 percent, having grown substantially in the last year, Garcia said.
The good news is that Saskatoon is on it’s way to making some of the same things come true, the bad news is that we can’t seem to get curb side recycling off the ground so it’s a long ways off.
This image shows the biomass of popularly-eaten fish in the North Atlantic Ocean in 1900 and in 2000. Popularly eaten fish include: bluefin tuna, cod, haddock, hake, halibut, herring, mackerel, pollock, salmon, sea trout, striped bass, sturgeon, turbot. Many of which are now vulnerable or endangered.
As you can see, fish stocks are not just depleted, they are gone (I posted on how it happened back in 2003). Visualizations like this are useful because…
These early accounts and data on the past abundance of fish help reveal the magnitude of today’s fish stock declines which are otherwise abstract or invisible.
They also help counter the phenomenon of "shifting environment baselines". This is when each generation views the environment they remember from their youth as "natural" and normal. Today that means our fishing policies and environmental activism is geared to restoring the oceans to the state we remember they were. That’s considered the environmental baseline.
The problem is, the sea was already heavily exploited when we were young.
So this is a kind of collective social amnesia that allows over-exploitation to creep up and increase decade-by-decade without anyone truly questioning it. Today’s fishing quotas and policies for example are attempting to reset fish stocks to the levels of ten or twenty years ago. But as you can see from the visualization, we were already plenty screwed back then.
Angelo Persichilli has a great article in today’s Toronto Star about the future of nuclear energy in this country.
While I don’t trust those who tell me that nuclear energy is completely safe, likewise I don’t trust those who say we have an alternative that can sustain our demands to run our businesses, our economy and — here’s the bottom line — the quality of life that we’re used to.
I suspect that giving up nuclear energy at present wouldn’t just be an economic decision, it would require a change in all our lives.
We used coal to power our economic growth two centuries ago, then oil in the last century. We realized that the first was polluting the environment and the second will soon be in short supply.
We already complain about the skyrocketing cost of energy, but it’s going to be worse in the future when emerging economies like India and China reach their full potential.
Solar energy is not fully developed, we don’t like wind energy because those big towers ruin the scenery and we turn against governments when the cost of energy is too high.
I understand that it’s easy to criticize governments for sticking with nuclear power, but no one wants to tell voters that without nuclear energy we’d have to change our way of life.
We’d have to use fewer cars and more public transportation. We’d need to turn down our furnaces and air conditioners, tell our children that the switch at the entrance of their room can be also used to turn the lights off, reduce our use of jet aircraft to conserve fuel and get rid of some home appliances.
That’s the real debate: Are we ready to make those sacrifices?
This debate reminds me of a movie I watched some time ago, in which the family of a rich businessman was furious with him when they learned in the media he was making his money in the arms trade.
He apologized, but said that if he was going to give up the business, they had to give up their mansion in the city and their cottage on the lake, the SUVs, the Ferrari and the Armani clothes.
He told them he was supposed to make another delivery the next morning and had to leave for the airport at 5 a.m.: “I’m not setting the alarm clock. It’s up to you. If you don’t set it, I’ll miss the plane.”
The alarm rang at 3 a.m.
Growing up on a river, you never really think about water consumption outside of your water bill. That started to change when we bought our house twelve years ago. It has a boulevard out front but since we are on a corner lot, it also has a large one along the side of the house that is unbroken by a sidewalk. The entire yard was a mess and by the time I got to the boulevard, it was a couple of years later. We had fertilized it and watered but the problem was that the grass (basically a quack grass) was growing on clay which meant no top soil, shallow roots, and zero water absorption. I bet 90% to 95% of the water ran off the boulevard and went straight down the drain.
What I should have done was rotor till the entire boulevard, bring in top soil, organic matter and reseed but I didn’t have the money to do so and I am not sure you can do that to a city boulevard anyways. I took another approach in that I stopped bagging my grass with the hope that it would stop some of the evaporation of the 5% of water that was being absorbed and eventually break down and decompose to provide some organic matter. In addition to this I started to spread both some peat moss and compost down on the lawn. Finally I started to aerate the lawn and boulevard which helped out a lot. Over the next five years the well beaten path of people cutting through the lawn came back (we did over seed with a hearty mixtures from Early’s Farm and Garden) and the boulevard started to transition from rock hard to developing a spongy feel like there was actual soil underneath. Now the lawn isn’t healthy enough to be organic and I do have a vacant weed infested lot behind be which causes all sorts of problems with noxious weeds which means that I tend to use a lot of weed and feed on the boulevard on the back half of our lot but we have made a lot of progress. Last year for the first time I spread out a mixture of home brewed compost tea (recipe and instructions) after seeing how it has made a difference at Harvard (less mowing, less water, deeper roots and it absorbs wear and tear of students better). The end result of all this has been our water consumption is way down the last several years.
Now it looks like a lot of work but it was actually less work than you think. First of all, not picking up the grass after we mow saved a lot of time. There are some times when a combination of rain and schedule that I do bag up our grass, plus, I do need some grass for the compost container once in a while but most of the time, it’s a big time saver and the rest of the work needs to be done anyways. The big change has been to go to the compost tea and I am hoping that it will make a big difference over the next couple of years.
One thing that strikes me is that we don’t do a lot of talking in the city about reducing water consumption. The average Canadian uses about 120,000 litres (26,396 gallons) of water per year which is why I was happy to see that in the full report that the Saskatoon Environmental Advisory Committee presented to the Administration and Finance Committee included five recommendations related to water conservation. Here are their recommendations in summary
- amend existing bylaws to require water efficient fixtures (low-flow toilets and shower heads) for new and existing building construction and renovations in residential, commercial, industrial, and institutional sectors,
- implement a low-flow toilet rebate program similar to other Western Canadian municipalities,
- enact a bylaw implementing an outdoor water schedule,
- report back on a strategy to implement a water monitoring program, and
- promote and develop new programs and incentives for water conservation.
Number 3 is the most interesting option to me. Okotoks’s schedule works like this
Due to the increase in water consumption in town, outdoor watering is now only permitted two days a week. One hour of watering per week is adequate for established lawns.
Odd numbered addresses may water lawns: (Addresses ending in 1,3,5,7,9)
Thursdays &/or Sundays
Even numbered addresses may water lawns: (Addresses ending in 0,2,4,6,8)
Wednesdays &/or Saturdays
Watering may only occur during the following hours:
6:00 am – 9:00 am
7:00 pm – 11:00 pm
Flowerbeds and vegetable gardens may be watered by hand at any time using a watering can or hose with a trigger spray nozzle.
Please respect the specified watering days and hours, as water is a limited resource. The fines for not obeying the water regulations range from $100—$2500.
Cambridge has a similar plan but will it work and be accepted here. It’s a big shift in behavior for Saskatoon, especially when much of our water consumption goes right back into the South Saskatchewan River (once treated). Mark and Oliver have grown up running through the sprinkler in the yard and Maggi takes a nap under the sprinkler on many days. To lose that or have that restricted would be a big change. It would also lead to conflicts among neighbors. Someone is always complaining about one neighbor on our street because they think his vehicles take up too much street parking (which makes no sense to me). Every summer someone from the city comes by because (probably the same neighbor that complains about the parking) is sure the maple firewood we have in the backyard is elm (and banned). Watching a recent show on Melbourne, Australia which has more severe water restrictions than what Okotoks has (Melbourne has had a drought since 1997), people put up signs saying that their gardens are being watered by excess shower water.
While we aren’t in a situation of drought, the South Saskatchewan River is under some pressure and this where I get upset. On one hand, I totally agree with the recommendations being made to Saskatoon City Council yet on the other hand, this isn’t a Saskatoon issue. Most of the water being taken from the South Saskatchewan River is from irrigation projects in Alberta.
“We know virtually nothing about actual use or consumption of water,” she says. “No one does.” Her assertion catches There are nearly 12,000 licensed users of river water and 80 percent of the water allocated under these licences is withdrawn in Alberta’s sprawling irrigation districts. Users typically meter their intake pipes, but the standards for reporting are lax, and withdrawal numbers alone cannot tell us actual water use. Some water is taken up by growing plants, some evaporates or is lost from leaking canals, and much simply flows back to the river. Since none of this is measured, actual consumption is just an estimate based on assumptions.
The article goes on to state
When it comes to water, getting the big picture is never easy. The truth can simply vanish in the details. Since the future of the river is, in the broadest sense, a supply-demand equation, I set off to the university’s department of economics to find Joel Bruneau, co-editor of a comprehensive technical report called “Climate Change and Water Resources in the South Saskatchewan River Basin.” The ponytailed professor does his part to avert a hotter, drier future climate by getting around Saskatoon by bicycle year-round. But his report suggests the challenges are here and now.
“The whole story is irrigation,” says Bruneau before I am quite seated in his office. His studies show there is sufficient river water to cope with regional population growth and worst-scenario climate change, but not if we keep irrigating at the present rate.
In fact, irrigation is still expanding. Even though Alberta stopped issuing new water licenses in the South Saskatchewan River Basin in 2006, room to grow comes from “efficiencies” — converting leaky, evaporation-prone canals to low-loss pipeworks. Trading in water allocations, which further maximizes Alberta consumption, is on the rise. The net result of such “savings” is less water in the river for downstream users.
“They are already overallocated on the Oldman and Bow rivers and borrowing from the Red Deer to pay the ‘bill’ to Saskatchewan,” says Bruneau, who can foresee a day when Alberta will want to buy some of Saskatchewan’s share. For years a poor cousin to its western neighbor, Saskatchewan has seen its economic fortunes rise meteorically, and some farmers have called on government to directly match Alberta’s irrigation investment.
Bruneau doubts new irrigation projects would make economic sense now, if they ever did, but he dismisses the idea on more fundamental grounds. “We are taking a third of the river for irrigation already,” he says. “There’s no way we can double that. The water would become warm, covered with algae. The fish would die.”
So Saskatoon gets to pay the bill because Alberta farmer’s want to grow crops that are more profitable then would be allowed by normal farm conditions. I remember seeing the dry river beds of California and the Colorado River and thinking, I am so lucky to have the South Saskatchewan River. Let’s hope enough people agree and we come up with ways to guarantee that it is always going to be there.
The US SPR is the largest emergency supply in the world with the current capacity to hold up to 727 million barrels (115,600,000 m3). The second largest emergency supply of oil is Japan’s with a 2010 reported capacity of 583 million barrels (92,700,000 m3). Also, China has begun construction and planning for an expansion of a SPR that will place their SPR at 685,000,000 barrels (108,900,000 m3) by 2020, surpassing Japan.
The United States started the petroleum reserve in 1975 after oil supplies were cut off during the 1973-74 oil embargo, to mitigate future temporary supply disruptions. According to the World Factbook, the United States imports a net 12 million barrels (1,900,000 m3) of oil a day (MMbd), so the SPR holds about a 58-day supply. However, the maximum total withdrawal capability from the SPR is only 4.4 million barrels (700,000 m3) per day, making it a 160 + day supply.
Back to Obama
Administration officials have sent mixed signals in the last several days about the possibility of opening the reserve, which is a rare step. Energy Secretary Stephen Chu said on Friday that the administration was monitoring prices, but he seemed reluctant. “We don’t want to be totally reactive so that when the price goes up everybody panics and when it goes back down everybody goes back to sleep,” he said. A few days earlier, Mr. Chu said that the administration was watching closely, but expected oil production that had been lost in Libya because of unrest there would be made up by production elsewhere.
Not question Energy Secretary Chu but who is going to pick up the slack? OPEC is planning on raising their output by one million barrels a day but that has as much to do with Saudi oilfields coming back online after maintenance than it does about an ability to raise production. According to Wikileaks and other sources, Saudi Arabia can’t and neither can anyone else. As Jeff Rubin blogs, only a recession is going to stand in the way of $200/barrel oil and as we found out last time, when oil gets to be higher than $100/barrel, the price is more than global markets can afford and oil dependent economies enter into a recession. Previous record high prices of $147 per barrel prices brought global economic growth to a halt. According to Rubin, gas is about to hit six pounds a gallon (£1.32 pounds/liter) and the British government is already considering rationing systems which could be needed by 2020.
This isn’t about rising prices rising because of Libya or Egypt. If it was that simple, releasing oil from the Strategic Petroleum Reserve would make sense, just as it did after Hurricane Katrina. The problem is that oil prices were higher than $100 per barrel before the protests started in Egypt. Global demand was already in excess of a record 87 million barrels per day. It was yet not about potential supply problems from Libya or anywhere else in the Middle East, it is just that the world is running low on oil and we haven’t been able to find the oil stocks to meet demand.
If the President of the United States admitting that the world is running low on oil in a press conference, this would cause a lot of damage to consumer confidence, create even higher price spikes and inspire Tea Party supporters to chant “Drill, Baby Drill” at Sarah Palin campaign stops, and perhaps start the painful transition to the future. Or you can just pretend it’s a temporary problem and tap the Strategic Petroleum Reserve. Leadership and getting re-elected are often two qualities that are often in tension with each other.
Closer to home energy independence isn’t an issue, Canada is an oil exporter but we do sell our oil on the open market which means as oil goes to $200/barrel on the open market, we pay $200/barrel oil. A couple of years ago when we bought the cabin, it was almost $70 to fill the tank on the Honda Accord which had an impact on how we shopped, vacationed, and lived. It was part of the reason why I drive a 1993 Ford Festiva today. At one time you have a mini-van or a SUV for long trips, the time might be coming that we have smart car’s for the same reason.
As a province, $200/barrel does wonders for the balance sheet of the Saskatchewan budget. It makes any finance minister look like a genius. Look at what Alberta oil revenues did for Stockwell Day (before he put on a wet suit). It also will generate higher food prices as more and more of the continent’s arable land is converted from wheat and corn we eat and is earmarked for ethanol production. That’s great if you are an oilman or if you are a grain farmer. Well actually since 99% of Alberta’s oil reserves are in the oil sands, it’s only great if you are a huge multinational oilman in Fort McMurray.
It’s not so great if you are a consumer, someone in England looking at $2.09/litre for gas or someone that is looking at another summer of skyrocketing food prices here in Canada. With elections on the horizon in Ontario, Saskatchewan and perhaps across the country, you don’t hear a lot about energy and food prices or creative policy solutions that are going to provide any relief to us in the future with oil or natural gas prices long term.
In fact, Canada doesn’t really have an energy policy at all, unless you consider pump it out as fast as we can as an energy policy and that’s not a sustainable policy. To break down the problem, I’ll look at it by sector. Let’s take a look at natural gas first.
According to the BP Statistical Review of World Energy, Canada is the third largest producer of natural gas but ranks only 21st in the amount of proved reserves. In Alberta, which produces 80% of Canadian gas, the average initial productivity of a gas well has declined by 72% since 1995, meaning we have to drill nearly four wells today to equal one average well in 1995.
As Stats Canada points out, Canada’s between December 2006 and December 2007, gas production is declined 8.7% with the Alberta Energy and Resources Conservation Board feels that we will see a further overall decline in Alberta natural gas production of 35% from 2009 levels by 2019.
Even the industry magazine, Oil Week says Alberta has “squandered” a lot of their natural gas.
It is not commonly known that 80 to 90 per cent of Alberta has had declining natural gas production for a number of years. In the extreme case, northeastern Alberta has seen production drop to 35 per cent of its peak 10 years ago. Even the Alberta Deep Basin, where production grew by over one billion cubic feet (bcf) per day between 2003 and 2007, has struggled to maintain production levels in the last couple of years.
Unfortunately, even the most optimistic predictions of unconventional gas drilling and production cannot mask the terminal decline that is afflicting the Alberta gas industry as a whole.
AJM Petroleum Consultants geologists estimate that raw gas production in Alberta has already dropped from peak by nearly 3 bcf per day, but at 11 bcf per day of sales gas, Alberta is still currently in third place behind Russia and the United States in worldwide daily gas production.
Alberta will not run out of gas anytime soon. But the fact is we have squandered our easily produced, low-cost natural gas resources and have very little to show for it. Without the government ensuring that Alberta is the most attractive place in the world to explore and develop natural gas, the significance of Alberta´s gas industry to the Albertan and North American economy will wane quite rapidly.
Of the major gas producers in the world, only Canada has a lower reserve to production ratio than the US. In Saskatchewan, SaskEnergy practices a policy of hedging and has done a pretty good job of protecting Saskatchewan consumers from price spikes. Despite as supplies dwindle the price will keep getting higher and higher. Because SaskPower uses natural gas for it’s peaking stations, this not only affects us keeping our houses warm in the winter but also just keeping our air conditioning and energy efficient lights on in the summer.
While I enjoy taking a drive out to the Gardiner Dam on a lazy summer afternoon every year, it only generates less than half of what the Queen Elizabeth II peaking station does, which relies on natural gas. Saskatchewan just opened the Lily Wind Farm near Moosomin which contributes 26.4 MW of energy to our grid and is only one of three wind farms in Saskatchewan (generating about 200 mw) that generates 5% of SaskPower’s needs. According to SaskPower, they have gotten almost everything they can get from wind general as it can only generate 8% of our province’s electricity needs. This is a problem because as the province grows, the need keeps increasing and according to SaskPower, they are generating as much power as they can. Saskatchewan currently consumes 3,600 megawatts on average. We are going to need to generate another 1,200 to 1,750 megawatts by 2020 because of mixture of growth and the fact that some of our coal fire plants are being decommissioned.
An even more severe problem is our oil supply. As Ralph Klein loved to point out, Alberta has the second largest supply of oil in the world, right behind Saudi Arabia (or even more than them as you never really can trust their stated oil reserves) with 174 billion barrels of recoverable oil in the oil sands. Now that part we agree with but comparing it to Saudi light crude oil isn’t a fair comparison. Oil sands recover is very energy, capital, and time-intensive to produce compared to easier conventional light oil. As Jeff Rubin wrote in his book, Your World is About to Get Smaller, the fact that we have to go after that hard to get oil proves we are running out of oil. While the Alberta economy has benefitted from the massive investment of capital and resources to extract oil from the oil sands, there is still not a lot of oil being produced. Estimates of five million barrels per day by 2025 have been toned down to three and a third, which is still nearly triple current production. This would take Canada’s total production of oil to 4.1 million barrels of oil a day which would allow us to remain energy sufficient but since oil in Canada is sold at market prices, still pay the same amount as the rest of the world in terms of price and believe me, we will need to purchase a lot of it.
Globally, finding the numbers of how much oil is left is hard to determine.
According to the Oil and Gas Journal (2009), proven reserves of oil worldwide at the end of 2009 amounted to 1,354 billion barrels — a marginally higher volume than estimated a year earlier and the highest level ever attained. Reserves have more than doubled since 1980 and have increased by one-third over the last decade. Half of the increase since 2000 is due to Canadian oil sands reserves; most of the remainder is due to revisions in OPEC countries, particularly in Iran, Venezuela and Qatar. There are continuing question-marks over the estimates for some OPEC countries and their comparability with the figures for other countries. Notwithstanding these uncertainties, OPEC countries account for about 70 per cent of the world total reserves, with Saudi Arabia holding the largest volume.”
At 2009 rates of oil demand (84 mb/d), 1,354 billion barrels is enough for a little over 44 years.
Which means that we will see rising prices from now until the oil runs out… or gets to expensive to go after. This is what will make it a rough transition for Canadians.
Canadian lifestyle isn’t the most energy efficient. Canadians are among the highest per capita consumers of energy in the world, exceeding even Americans and most nations that don’t have subsidized energy policies. We consume about five times the world average and more than 80% of this consumption is fossil fuels. Why so much? Part of it is geography based. It’s cold up here which means that we spend a lot heating our homes in the winter and a lot of energy cooling them down in the summers. The other geographical feature is we are spread out. In the last two weeks I did four trips of 827 kms from Saskatoon to Winnipeg and there isn’t a lot between them (no offense to Regina or Brandon). We have electoral districts the size of some countries that are so vast that candidates need to fly around them to campaign effectively. With much of our economic power in relatively few cities, we rely on cheap ground or air transportation to move goods throughout the country. Agriculturally many of our inputs are petroleum based and of course high fuel costs mean higher costs for farmers and producers in terms of machinery and transportation. With the elimination of the Crow Rate in the 1995, much of Saskatchewan’s train and grain handling infrastructure was eliminated or changed making it even more expensive and fuel intensive to get grain to market and then to bring that grain back to us. I can give you a hundred other examples but however you look at it, Canada is dependent on cheap energy and we love to exploit it for our own use and to drive our economic growth.
So what happens when oil hits $200/barrel? While we like to blame the banks for the current economic chaos and they have a lot of explaining to do, it was oil that hit $140/barrel that pushed the world into recession and oil prices are headed on up again. Even at today’s $118/barrel, that is enough to push us back into a global recession, even if it is not as severe as the previous one. These recessions may be a way of life. Oil prices go up, we head into recession which drives demand and oil prices back down. The cycle continues itself when there is an economic recovery as demand goes up and so does oil prices starting the cycle all over again.
Yet no government at any level seems to have any idea about what to do about this. Stephane Dion might have been correct with his Green Shift in the long haul but a carbon tax was a hard sell as any tax that encourages changed behaviour is going to be attacked. We saw this with Jack Layton wanting taxes lifted on home heating fuel. While we should be encouraging people to shift away from expensive and carbon emitting heating sources, there is a tax on home heating fuel which means that someone is going to rail against it. Every time gas taxes, opposition parties across the country call for gas taxes to be cut, as if repealing taxes will solve the problem of diminishing oil reserves.
What are the solutions?
For some there is always the assumption that technology will bail us out. Years ago we heard about Ballard Fuel Cells and how they were going to change anything. Then they gave up because you can’t make it work at a price point that makes sense. Then it was electric cars. In Saskatchewan’s winter, a Chevrolet Volt will only drive about 25 miles before it has to switch to the motor. There is ethanol which has made a big difference in Brazil with their flex fuels but in North America, the same crops we use for food are being switched to ethanol production. This lead to some of the large increases in food prices we saw over the last couple of years. To meet his 2030 targets of 60 billion gallons of ethanol being produced, almost 400% more corn will need to be used which means even more price increases. For those of you who think that someone should challenge these goals, let me remind that the state of Iowa grows a lot of corn and has this thing called the Iowa caucuses. Iowa voters love high corn prices and high paying refinery jobs. My point is that the best technology or common sense doesn’t always win out.
The good news is that north of the border in Saskatchewan, SaskPower seems to be taking some of the steps needed. Revitalizing and expanding our electrical grids, diversifying into wind, and even offering incentives for people to produce their own power and sell the electricity back to them (an idea that doesn’t make a lot of sense right now because of the time it would take to recover your investment but it’s a step in the right direction). Saskatoon has made some noise about using the weir to generate a limited about of hydro power as well as building a test wind turbine at the landfill site. Some municipalities are taking advantage of solar power to keep the lights on in schools and places like Harry Bailey Aquatic Centre. These make a difference but in the end don’t generate/save enough megawatts to make up for the loss of coal burning plants and increased electrical needs of the province. While the decision to bring nuclear power to Saskatchewan was controversial and rejected, I can’t help but wonder if 20 years from now when Saskatchewan and much of North America is struggling with an overwhelmed grid, we will regret not forging ahead with clean energy.
With natural gas, SaskEnergy tries to make it as inexpensive as possible to upgrade to a super high efficient furnace. At the same time I can’t help but get a sick feeling in my stomach every time I hear that an energy company has been acquired whose specialty is extracting hard to get to natural gas deposits. The viability of these technologies means that we can look forward to more and more price increases in the days ahead.
What do we do about an increase of oil prices. This is going to impact Saskatchewan in many ways. Since the elimination of the Crow Rate, Saskatchewan’s rail infrastructure is diminished which is going to cause us grief in the transition into a world of scarcity. In case you forgot, Warren Buffett just bought Burlington Northern Santa Fe Railway for $34 billion because he sees the importance of rail travel in moving freight to market at a fraction of cost of ground transportation. There does seem to be some understanding of this on a federal level. In Saskatoon we are familiar with the Asia-Pacific Gateway and Corridor Initiative as it contributed $20 million to complete Circle Drive The federal rationale is that these projects will improve access to the Canadian National Railway’s rail yards south of Montgomery in Saskatoon. The other big project in Saskatchewan is $27 million to the new CPR intermodal facility west
of Regina and upgrading the road connecting highways 1 and 11. It’s a start in making it easier and cheaper for freight, fuel, and food to move to us and to our export markets.
Locally, it changes the way that tourism happens. When we go out to the lake, we tend to go out for two three day weekends a month in the summer. It costs us $30 if I take the Festiva, $70 if we take the van an of course $100 if we are taking about both vehicles. While we are out there, Wendy will run out of something or make a menu change and Mark and I will drive into Strasbourg for what we need. Other times we head down to Regina for a Rider game or because I ran out of things to read and we need to visit Chapters. It often costs us another tank of gas by the time things are all said and done. That’s fine at $30/tank or $50/tank for the Accord. It’s not fine when it is $100 tank. That will change our consumption patterns dramatically. Instead of 10 quick trips out, we may instead move to three extended trips. There won’t be any gravel road photography or quick trips into town.
Getting out to enjoy Saskatchewan or see friends may not be as easier or inexpensive as we have grown accustomed to it being. STC has been an institution in Saskatchewan for decades, even if it isn’t your preferred way to travel. I’ll be honest, bus travel is not my favourite. Body odour, drunk passengers, and stopping at every small down between hear and Edmonton has added hours to what should be a pretty quick trip. Will STC or Greyhound offer a first class bus between Saskatoon and Regina or between Saskatoon and Calgary that features free wifi, movies, and a steward? As the economics of travel change, there is going to be new opportunities. The dream is always going to be high speed rail but as the Acela’s average speed of 120/kph is only slightly higher than that would be of a bus (or my Festiva for that manner) between Saskatoon and Regina.
Oil isn’t just connected to transportation, it’s connected to the food we eat and rising costs of oil lead to higher fuel costs. Higher costs of fuel mean that input and transportation costs are higher, both from the producer to the mill and from the mill to the store. Since fuel costs are higher, we have more acreage being dedicated to ethanol production, making food crops even scarcer. Also you have China buying up vast tracts of land around the world so that their farm workers have jobs and their people have food. Food grown in Africa and is shipped to China only adds to the world food price pressures and drives up global prices.
Much of what we purchase is not local but is shipped across the country. The watermelon on the shelf at Safeway or Superstore today was not grown locally, it may not have even been grown on this continent yet at the same we don’t have the infrastructure to eat locally. While the Saskatoon Farmer’s Market is a great venue and a fun place to spend a Saturday morning, it doesn’t provide the volume, variety or the frequency to make it easy or cost effective to eat local. Oddly enough Wal-Mart is leading the charge in this area as they foresee a future where fuel costs are going to alter the way we eat. Who know if Safeway, Supertore, and Sobeys will follow Walmart’s lead or be forced to drastically alter how they get food to our tables.
The Canadian Wheat Board is an export agency but it is going to need to change to allow for more locally grown and produced wheat products or it’s going to have to create a local infrastructure to allow for cheaper food production in local markets. Years ago some Manitoba farmers wanted to set up a pasta plant and sell it their own wheat. This is against the law in Canada (which still boggles my mind) as you can only only sell to the Canadian Wheat Board at a price they set so the plant idea died. In some ways it means that as consumers we are caught in the same cycle with food as we are with eat. Food shortages in China drive up international prices and we pay more in Saskatchewan for crops that we produce here.
While I don’t think we are going to run out of food, it is going to cost us more and will pay much more for the variety that we want. This is going to alter the landscape for Saskatoon’s lower class. The Bridge on 20th does almost 70,000 meals a year, the Salvation Army does 100,000 meals a year, the Saskatoon Food Bank has 15,000 visitors a month or 180,000 a year and while I can’t speak for The Bridge and the Food Bank, the Salvation Army’s increase is partially linked to rising fuel costs. These are going to be people who are least likely to have a Chevy Volt or a Toyota Prius and don’t have easy access to a neighbourhood grocery store.
The interesting thing is that it may cause a reordering of our civic lives. High fuel and food prices have hit cities before. Jeff Rubin looks at Sarajevo during the U.N. sanctions and fighting drove fuel to $6/litre. To go back even further, England spend years with fuel and food rationing from the start of WWII until 1954. Even today in some islands in the Caribbean, food and fuel prices are extremely expensive.
What happens? Cars get parked, bicycles come out an life becomes local again. Local grocery stores, corner stores, and coffee shops start to become the centre of culture rather than the malls and the big box stores. Food becomes seasonal again. We may even start to grow gardens. The city of Saskatoon is redesigning and rebuilding Mayfair Pool. Since I moved to Mayfair has been irrelevant because I can go to any pool I want in the city. Why do I need to go to my local pool when I can drive to Lawson Heights Civic Centre and enjoy the wave pool? Gas prices or as in England, gas rationing will make us think twice. In the future local spaces like Mayfair Pool will become important again, as will my local church, my local pub, and my neighbourhood coffee shop, even if it doesn’t sell Starbucks. The world will get smaller but I don’t know if it is going to be worse. It’s just going to be different.
The losers in all of this are bedroom communities or exurbs that don’t have a sustainable local economy. A friend told me that she spends $500/month in gasoline to commute into the city for work. What happens when that doubles? You either find work in your community or you do what thousands of others do, you move a lot closer to work. Some will discover that local economy but other towns will slowly go away.
We are left with two choices as a city. As Rubin puts it, fundamentally change how we live or get caught in a cycle of recession after recession. Neither choice is going to be solved by a little more oil being put on the markets by the Strategic Petroleum Reserve, Saudi Arabia, or the Alberta Oil Sands. It’s too big of a problem.
Tomorrow I’ll spend some more time looking at Saskatoon’s future in terms of peak oil.
…Mr. Husseini acknowledged Saudi production is never likely to get to Aramco’s 12.5 million barrel per day target. Instead, the country is struggling to produce even 10 million barrels a day and it may soon encounter a production peak after which flow rates will inevitably decline. Yet the International Energy Agency is counting on Saudi Arabia to produce no less than 14.6 million barrels a day by 2035.
Mr. Husseini’s revealing assessment of the Saudi oil industry goes a long way to explaining why President George W. Bush’s personal pilgrimage there in 2008 during the height of the last oil crisis was only able to elicit a token 300,000 barrel a day production increase. Other than a limited amount of heavy oil that many of the world’ s refineries can’t process, the kingdom has little more to offer today.
Chronic delays in new development and over-reporting of reserves by Aramco paint an illuminating picture of an oil industry that has struggled merely to keep up with depletion. Production is still below the levels reached in the 1970s. And thanks to the Saudi economy’s voracious appetite for its own massively subsidized oil, less of its near-peak production is available for export every year.
While the U.S. embassy cables acknowledge Saudi Arabia still has the capacity to raise prices should it withhold supply, it no longer has the capacity to prevent prices from rising because it can’t boost production sufficiently to meet world demand.
If Saudi Arabia no longer has an ability to raise production, who does?
Still, one way or another the global oil industry will have to produce six million barrels per day more oil than last year to offset the four million barrels per day that is lost to depletion each year, and the nearly two million barrels per day of new crude demand that another year of global economic growth will generate. (Last year, Chinese oil demand alone increased by almost one million barrels a day.)
Looks like the Ford Festiva was a good investment after all.