Voodoo Economics

Repeatedly, we are seeing stories about how certain (primarily linear) projects make no economic sense (see link below). TransCanada has been dealing with lies and mis-truths on Keystone XL for some time now but this trend has come to Canada.

In this case, new BC Green MLA Andrew Weaver asserts that the LNG projects being proposed make no economic sense.  He says that a) the projects are being subsidized and that b) the projects make no sense because there are no markets for LNG.

http://ow.ly/lYSMb

But, there’s no bias involved is there? It is clear that the Greens (and other special interest groups not necessarily funded by Canadian sources) are purposely trying to delay these projects so that the Canadians are beaten to the Asian marketplace. If we lose, Canadians will not be able to develop these gas resources (and the special interests win). Those markets exist and their is a race on (ask Australia), Canada is behind and we must catch up if we want value for our resources.

http://ow.ly/lYTbD

Would Petronas be ready to invest $16 billion if they didn’t see profit at the end? And there are others…Apache/Chevron with Kitimat LNG, Shell’s project to Prince Rupert,  the Haisla are also proposing a project with partners to take advantage of their coastal position.

Nobody can see all of these projects making it to the finish line, but surely they see a path to profit!! And it definitely doesn’t rest on government subsidies.

And two or three moving forward means benefits to BC and the rest of Canada. What’s good for BC is also good for Alberta and vice versa.

On subsidies, BC has a long history of royalty credits to companies that do infrastructure work – roads, power lines, etc. These activities can benefit other projects with spin-off to the community so that is hardly a subsidy.

Of course, this trend is not confined to LNG projects. We have Robin Allan (link below) questioning all kinds of aspects of proposed oil projects. The worst is the recent reporting of the absence of a bitumen discount. It is so clearly true and so very obvious to any trader trying to sell heavy oil that its hardly worth debating. But, yet here we are seeing it in our news.

http://ow.ly/lYWQD

The extreme left does not want anyone using hydrocarbons of any kind but do we have to give every kook ‘expert’ status?

The use of hydrocarbons for affordable energy is fairly ingrained into our economy, and will be for some time. Its freaking cold most of the year in this country, nobody is turning their gas off any time soon.

That does not mean we shouldn’t respect these resources and blow them out, use them wisely. Value to Canadians means expanding existing markets and finding new ones, that is how we get the best price.