Wednesday, October 15, 2014

Canadian carbon bubble

Mark Carney, present Bank of England governor, former Bank of Canada governor thinks we're in a fossil energy price bubble. If the world reaches a global climate deal, fossil fuel reserves are "unburnable" and therefore pretty much valueless. Indeed, divestment is already fast catching on.

If this happens, the Tar Sands, Canada's single economic bet, becomes nothing more than icky oily sand of use to no one.

Tell me, if you're Canadian and Albertan governing party, do you think it's smart to gamble on the sustained value of your giant pile of toxic sludge? Kinda gives new meaning to the term "toxic asset".

We smugly thought we were awesome in Canada because we didn't have the over-leveraged banks due to stricter regulations when the US and much of the world shat themselves when they realised they'd invested in a US housing-debt bubble. It's how Mark Carney got his current job.  I don't know what the economists would say would happen to Canada if the price of Alberta oil fell through the floor, but I doubt it would be fun...

You know, the opposition parties could make this an election issue.


e.a.f. said...

Yes and there goes the "great economist". Really folks he is an economist. He'll even tell you. Great Warrior leader harper may find he has tied his ass to the wrong can.

Germany is making great headway with solar power. Iran is provides incentives to citizens who switch to it.

Can we be too far away from nations living at or below sea level, to start to sue the manufacturing/polluting nations of the world. Carbon off sets just won't work as an out.

If American famers could link the current drought to climate change induced by green houses gases, how far behind them will be the lawyers.

if the tar/oil sands take an economic hit, B.C. will default on their debts, because all those B.C.ers coming home with out a pay cheque will not be a pretty site. Perhaps the Cons might be better off to not give an E.I. premium holiday to business. They may need every nickel to keep the workers from having to apply for welfare. Once that happens the banks will be pulling in their mortgages and the real fun will start.

its not too far from reality.

Canada ought to have kept the tar/sands a small outfit, for use in Canada. In this manner the tar sands would not have destabilized the Canadian economy and Canadians would have had a lower price of gas/oil.

Of course we do have Christy and her cabal wanting to squander $8 on a Site C dam, all the while telling kids they can't keep their child support money and have to continue living at 50% below the poverty line.

Steve said...

Its not a debating point anymore. Sad no one is talking aboot it. PET was totally correct with his NEP. We could have been Norway on steroids but instead we are an EXXON colony.

double nickel said...

What Steve said.

Purple library guy said...

I have my doubts. First, climate deals don't seem to be coming at any particularly fast pace. Second, there remains a disconnect between electrical generation and transportation. Refined oil in various incarnations (gasoline, diesel etc.) tend to rule transportation. Coal and natural gas are important in electrical generation.
Renewables are getting cheap and effective and generally economically viable and working on flat out superior . . . which means they may soon be phasing out coal, natural gas, and hopefully nuclear. But electric cars for instance are making no headway. Same goes for shipping, planes, trains . . . there's little movement on reducing the use of oil products (yet--hopefully this will change). Meanwhile I think the real bubble is in fracking, which seems to produce plenty of stuff but only for a very short time; they're gonna start running out of that stuff way faster than the boosters want to admit.
So, oil prices may stay soft for a year or two because of fracked oil and recession, but I think they will rebound well before we really get on track to reducing their use.