UN Climate Chief: Carbon Bubble Is Now a Reality

Anastasia Pantsios  ::  Eco Watch  ::  20 January 2015 

The so-called “carbon bubble” is no longer a concept, it’s a reality, according to UN climate chief Christiana Figueres, who will oversee the crucial UN climate conference in Paris in December.

Investments in fossil fuels are becoming a losing bet as the so-called “carbon bubble” bursts.Photo credit: Shutterstock

Investors who sunk their money into the fossil fuel sector are going to come up losers, she suggested, as plummeting oil prices have made new extraction projects too costly to continue to pursue and concerns about global warming have made them too risky.

“A lot of the stranded asset conversations we’ve been having for a long time are now coming true,” she told RTCC, speaking from the World Future Energy Summit in Abu Dhabi. “Those expensive oil projects—deep sea, Arctic, tar sands—those are actually beginning to be taken off the table because of the low oil prices.”

That’s good news for the environmental groups that have long warned about “stranded assets”—coal, oil and gas that would have to be left in the ground to slow climate change—and how that was leading to an overvaluation of these reserves.

RTCC cited a number of expensive exploration and extraction projects that have already been cancelled. Chevron has delayed plans to drill in the Canadian Arctic. Norway’s Statoil has returned three licenses to explore for oil off the Greenland coast. And Shell and Qatar Petroleum announced last week they were scrapping a planned $6.5 billion petrochemical project in Qatar, saying it was “commercially unfeasible, particularly in the current economic climate prevailing in the energy industry.” Qatar’s state-controlled petrochemical company Industries Qatar abandoned plans for another $6 billion plant last September. Many of these projects were planned when oil was $100 a barrel. It’s now under $50.

In the U.S., Texas is feeling the brunt of the oil bust, as extraction companies lay off workers.The New York Times reported yesterday, “With oil prices plummeting by more than 50 percent since June, the gleeful mood of recent years has turned glum here in West Texas as the frenzy of shale oil drilling has come to a screeching halt. Every day, oil companies are decommissioning rigs and announcing layoffs. Small companies that lease equipment have fallen behind in their payments.” And the once seemingly unstoppable growing of fracking in North Dakota’s Bakken shale region has also come to a screeching halt.

Carbon Tracker Initiative, a independent nonprofit think tank that analyzes energy from both an environmental and financial standpoint, coined the term “carbon bubble” and has continuously warned investors about the risks of sinking money into fossil fuel-related businesses, due to the 2c target of limiting global warming to 2 degrees to stave off the worst impacts of climate change.

“If the 2C target is rigorously applied, then up to 80 percent of declared reserves owned by the world’s largest listed coal, oil and gas companies and their investors would be subject to impairment as these assets become stranded,” the group said in its report Unburnable Carbon.

Figueres told RTCC she believed investors and investment firms would be taking notice, opening up the possibility that investment assets might begin to shift more decisively to renewables.

“When you begin to see very specific examples of a concept that was previously only a concept, I do think it’s going to be taken much more seriously on the part of investors,” she said. “That volatility in prices is one that incrementally and gradually makes investment in oil and gas more risky than investment in renewables, where it is very predictable what the upfront cost of infrastructure is, and then the price of fuel from then on is very predictable and certain.”

Why Fossil Fuels Are Dirty Politics as Well as Dirty Energy

Carl Pope  ::  EcoWatch  ::  3 November 2014

When the Western Energy Alliance in June invited K-Street mugger Richard Berman to advise them on how to deal with public opposition to oil and gas extraction, Berman’s back-alley style can hardly have surprised those who invited him. His tactics and viciousness have been broadly reported in the media, and blasted even by his own son. CBS’s 60 Minutes called him Dr. Evil.

Richard Berman, Charles Koch and David Koch. So we need to understand that however many oil and coal companies do decide to play clean, there will be others willing to “win dirty,” and that unless we can find ways to limit their political clout both communities and the environment will continue to be devastated in the name of carbon profits.

So it should not have been a surprise when Berman summed up his philosophy by telling the industry you can either “win ugly or lose pretty.” Winning ugly includes tactics like digging up personal dirt about your opponents, discussing “how he had done detailed research on the personal histories of members of the boards of the Sierra Club and the Natural Resources Defense Council to try to find information that could be used to embarrass them.” (As far as I can tell, Berman is either inept at this tactic or environmental board members are stunningly virtuous people, because there is no public record of any serious embarrassment resulting).

What may have surprised Berman, however, was that someone in the audience not only recorded his remarks but was sufficiently appalled to leak them, so you can read it all in its ugliness. Anadarko Petroleum, to its credit, has distanced themselves from Berman, saying “Anadarko did not support Mr. Berman’s approach and did not to participate in his work because it does not align with our values.” Unfortunately, it appears that Berman may still have raised $3 million from other oil and gas companies for his latest endeavor, “Big Green Radicals.”

160 Environmental Leaders Urge Foundations to Divest From Fossil Fuels

Anastasia Pantsios  ::  EcoWatch  ::   September 15, 2014 

An international group of 160 environmental leaders issued a challenge this morning to those who hold some significant pursestrings. They urged foundations and other charitable givers with combined holdings to divest from fossil fuels and free up billions of dollars to invest in clean energy.

They asked the foundations and givers to invest in clean energy companies, divest from fossil fuels and make grants to clean energy start-ups. They said they believe the December 2015 UN Climate Summit in Paris may be the last chance to save Earth’s environment and that by redirecting their investments, foundations can help build a movement that will put pressure on the negotiators at the summit.

In their Environmental Laureates’ Declaration on Climate Change, published in the International New York Times, the group said, “We, 160 winners of the world’s environmental prizes, call on foundations and philanthropists everywhere to deploy their endowments immediately in the effort to save civilization. The world’s philanthropic foundations, given the scale of their endowments, hold the power to trigger a survival reflex in society, so greatly helping those negotiating the climate treaty.”

The effort was spearheaded by the European Environment Foundation (EEF), which raised the money for the project via crowdfunding site Indiegogo and circulated the document for signatures.

“The world’s philanthropic foundations fund work which improves the lives of millions of people around the world, but if they want that work to last they can’t afford to ignore climate change,” said EEF trustee Dr. Jeremy Leggett, who coordinated the project. “Investing in a clean energy future is the best way to safeguard their work and their finances. We hope this appeal will stimulate vital investment in a clean energy future, demonstrate support for an ambitious climate change treaty, and create space for a tipping point in climate action.”

Signees represented the U.S., virtually every European country, Australia, Chile, Argentina, Brazil, Indonesia, Canada, Haiti, China, Nepal, India, Kenya, Cameroon, South Africa, Tanzania, Kuwait, Egypt and Palestine, among others. They included climate leaders such as Sophia Prize winner and noted author Bill McKibben; Chinese Hillary Laureate and Time Magazine Hero of the Environment Peggy Liu; Australia’s Paul Gilding, winner of the Tomorrow Magazine Environmental Leadership Award; Canadian professor/researcher Paul Schindler, winner of the Tyler Prize for Environmental Achievement for his work on the destruction of freshwater lakes; and Dr. Harish Hande, whose work has focused on using sustainable technologies to eliminate poverty.

“Climate change has the capacity to overwhelm all efforts in other areas such as poverty and biodiversity,” said Gilding. “Anyone concerned about improving quality of life or protecting natural areas should know that unless they also act on climate, they are likely to waste their efforts.”
“In India, we see daily the power of sustainable energy to improve the quality of life of the poor while also reducing global warming,” said Dr. Hande. “There is so much scope for an accelerated program of investment and funding by foundations to move the dial further on these issues, leading by example. Together we could well trigger a tipping point in social change for the good, just in the nick of time!”

The EEF’s Divest-Invest initiative has already seen some successes since launching in January. It’s had commitments for 17 organizations to move nearly $2 billion from fossil fuels to clean energy investments.

NB Anti-Shale Gas Alliance takes province to court to stop shale gas

NB MEDIA CO-OP  ::  Written by Dallas MacQuarrie  ::   June 26, 2014

The threat to the lives of New Brunswickers posed by the development of unconventional shale gas and oil is so great that it is illegal, and the New Brunswick Anti-Shale Gas Alliance (NBASGA) is going to court to prove it.

“We have the science – they don’t!” NBASGA 
spokesperson Jim Emberger publicly challenges
 Energy Minister Craig Leonard to release the 
studies Leonard purportedly has
 showing shale gas is safe. Photo by Janet Hammock.

Armed with a growing number of scientific studies on shale gas and the experience of communities elsewhere with the industry, NBASGA filed a Statement of Claim in Saint John Court of Queen’s Bench on June 23.

The anti-shale gas coalition of more than 20 community groups across the province says that the actions taken by the Government of New Brunswick to develop unconventional shale gas violate their rights to life, liberty and the security of the person as guaranteed by Section 7 of the Canadian Charter of Rights and Freedoms.

It says the right of all people in Canada to the security of their person under Section 7 of the Charter presupposes the right to clean water to drink and air to breathe because both are essential to sustain life.

As well, NBASGA says it will also prove that developing and using shale gas “contributes to climate change and threatens the very existence of the Plaintiffs, their future generations and all New Brunswick people.”  The plaintiffs acting for NBASGA are its chairman Roy Ries and members Carol Ring and Jim Emberger.

The NBASGA lawsuit promises to be a landmark in Canadian jurisprudence.  It is it believed to be the first time a government in Canada has been taken to court on this issue of climate change.  As well, by asking for a moratorium on shale gas until long-term, population-based scientific studies show that it can be done safely, NBASGA is asking the courts to stop a contemplated action before it actually takes place.

“We’re taking the Province to court to protect the lives of people and their families now and in the future,” NBASGA chairman Roy Ries said at a Moncton news conference after the lawsuit was filed in Saint John on June 23.  “The scientific research that has been done to date on shale gas, and the experience of communities elsewhere with the industry, is very alarming,” he said.
“For example, a recent study by scientists from the Colorado School of Public Health and Brown University found that, as the number and nearness of wells to pregnant women’s homes went up, so did the likelihood that their babies would develop congenital heart defects.”  A similar study in Pennsylvania found close exposure to fracking increased the likelihood of low birth weight by more than 50 percent.

“We have science, they don’t”

“There are many such studies documenting the life-threatening health problems and contamination of air, water and land associated with shale gas,” Ries said.  “We will place the best available, peer-reviewed, scientific studies documenting that damage before the courts.”

Answering questions from reporters in Moncton, NBASGA spokesperson Jim Emberger said that “court action to stop shale gas is necessary because the provincial government has ignored the many dire warnings about shale gas from both independent scientists and doctors, including the recent report from The Council of Canadian Academies that said there is no scientific basis for existing shale gas regulations.”

“We have the science, and the government doesn’t,” Emberger declared while challenging New Brunswick Energy Minister Craig Leonard to produce the studies the Alward government claims to have showing that developing shale gas is safe.

The Alward government’s own “scientific report” on shale gas was exposed as a fraud after it was learned the author of that report, Louis Lapierre, did not have the scientific credentials he claimed.  Lapierre has since been stripped of the Order of Canada.

“We have tried every means we can think of to get the provincial government to take the warnings about these very obvious dangers seriously, but those warnings have simply been ignored or dismissed out of hand each and every time,” Emberger said.  “The Canadian Charter of Rights and Freedoms guarantees the right to life and security of the person for everyone in Canada.  Neither governments nor corporations are allowed to violate those guarantees by ignoring threats to them for any purpose.”

“Human Guinea Pigs”

NBASGA spokesperson Denise Melanson says people in shale gas development areas are being used as “human guinea pigs.”  Melanson notes that there are more than 600 chemicals used by the industry, and 90% of those chemicals are known to harm human health.

NBASGA spokesperson Denise Melanson 

says exposing people to New Brunswickers 

to chemicals known to be harmful 

without their informed consent is 

using people as human guineas pigs. 

Photo by Janet Hammock.

“People living near unconventional oil and gas wells are exposed to toxic and cancer-causing chemicals at various times in unknown quantities on an ongoing basis,” she said. “Purposefully exposing people in New Brunswick to hundreds of toxins and cancer-causing chemicals through the water they drink, the air they breathe, and the food they eat without their knowledge is unconscionable.”

“Exposing people to hundreds of chemicals without their informed consent violates the ethical standards governing both scientific and medical testing,” said Melanson.

NBASGA says that until research to establish the true, full and long-term health and environmental effects is actually done, the development of unconventional oil and gas is the equivalent of an uncontrolled experimental study using uninformed human subjects without their consent.

Its Statement of Claim asserts that none of the hundreds of fracking chemicals have been tested to see what their effects are when mixed in the numerous combinations of the fracking process, nor what their effects would be when fracking brings them into contact with the naturally-occurring chemicals (of which many are toxic) located within the earth.

Further, it says that “the health effects of any potentially new chemical combinations that may form under the heat and pressure conditions present during the fracking process have not been tested” and that “there has been neither evidence submitted nor any scientific basis that these new combinations are safe for human exposure.”

“Allowing an uninformed public to be exposed to the harmful chemicals used in extracting unconventional oil and gas stands in stark contrast to the carefully-controlled process governing the approval of even a single pharmaceutical compound for human use,” Melanson said. “The governments of Canada and New Brunswick have established rigorous scientific testing processes to ascertain the safety of chemical compounds like prescription drugs that are intended for human consumption.”

“Yet, in logical opposition to these sensible and universally-accepted safety precautions, the unconventional oil and gas industry will expose New Brunswickers to known toxic and cancer-causing chemicals without any required testing or the knowledge or consent of those exposed to the toxins.”

SURETTE: Fracking’s magic-bullet moment fading fast

Halifax Herald OPINION  ::  Paul Surette  ::  13 June 2014

Australian Prime Minister Tony Abbott arrives on Parliament Hill with Prime Minister Stephen Harper on Monday. A piece in Australia’s national newspaper proclaimed them “two fossils fooling no one,” reports Ralph Surette. (ADRIAN WYLD /CP)

I was cruising the Internet a couple of weeks ago when this headline in the Los Angeles Times made my eyes pop: “U.S. officials cut estimate of recoverable Monterey shale oil by 96 per cent.”

Ninety six per cent! Since the Monterey formation accounts for two-thirds of the supposed reserves available for fracking that would make the U.S. not only energy independent but a powerhouse exporter to the world, this was a big bubble bursting. Amazing that you haven’t heard of it, but such is the tenacity of the world’s built-in resistance to energy reality.

There have been other such downgrades from overblown claims, for both oil and gas, enough that that the Paris-based International Energy Agency, which in 2012 declared that the U.S. would overtake Saudi Arabia in oil production by 2020, has admitted that it, too, was fooled. Its prognosis now: the U.S. will import more from Saudi Arabia by 2020 as the fracking boom peaks and declines. So much for the mythical “100-year supply,” thanks to fracking.

In Nova Scotia as elsewhere, as we face vital energy and related economic decisions at every turn, it’s essential that we keep this big-picture stuff in mind.

For one thing, our own fracking debate has echoes of Monterey. A report of the review panel on fracking said 17 trillion to 69 trillion cubic feet of natural gas is available in the Kennetcook-

Windsor formation, while a retired government geologist calls this bunk and puts it at a dribble. In the ample history of exaggerated petroleum estimates — where a gold-rush mentality is needed to raise investment money — it’s amazing how often independent geologists have turned out to be right in questioning the big numbers.

Meanwhile, a business consortium is looking for supply to justify building an $8.3-billion liquefied natural gas terminal in Guysborough County.

Don’t count on that happening. As gas replaces oil and coal, North America could end up having little to export.

And the story doesn’t end there. You’d think that if oil is in ever shortening supply, the price would rise even more, justifying more exploration. At least, that’s what’s endlessly preached by the industry-funded think tanks.

But several other things are happening. One is that with no more easy stuff to find, exploring and developing new reserves — tar sands, the deep ocean, fracking — are becoming hideously expensive, and oil companies are cutting back, including some recently in the tar sands.

This raises my own niggling question if we ever take to fracking in Nova Scotia: far from bringing us prosperity, we might end up subsidizing it, seeing that we have a notorious fondness for white elephants thinly disguised as soaring eagles.

Indeed, the amount of investment now needed to develop new oil and gas just to keep up with declining conventional reserves is, by some accounts, straining the world financial system. In other words, we can’t afford it anymore.

Also happening is that alternatives, efficiencies and conservation are really taking off worldwide. This is especially so in the world’s sun belt where solar electricity is now competitive without subsidy, and as grid improvements and storage techniques continue developing.

Yes, pipeline spills are good for the economy

Credit: Maureen via Flickr

Energy giant Kinder Morgan was recently called insensitive for pointing out that "Pipeline spills can have both positive and negative effects on local and regional economies, both in the short- and long-term." The company wants to triple its shipping capacity from the Alberta tar sands to Burnaby, in part by twinning its current pipeline. Its National Energy Board submission states, "Spill response and cleanup creates business and employment opportunities for affected communities, regions, and cleanup service providers."

It may seem insensitive, but it's true. And that's the problem. Destroying the environment is bad for the planet and all the life it supports, including us. But it's often good for business. The 2010 BP oil spill in the Gulf of Mexico added billions to the U.S. gross domestic product! Even if a spill never occurred (a big "if", considering the records of Kinder Morgan and other pipeline companies), increasing capacity from 300,000 to 890,000 barrels a day would go hand-in-hand with rapid tar sands expansion and more wasteful, destructive burning of fossil fuels -- as would approval of Enbridge Northern Gateway and other pipeline projects, as well as increased oil shipments by rail.

The company will make money, the government will reap some tax and royalty benefits and a relatively small number of jobs will be created. But the massive costs of dealing with a pipeline or tanker spill and the resulting climate change consequences will far outweigh the benefits. Of course, under our current economic paradigm, even the costs of responding to global warming impacts show as positive growth in the GDP -- the tool we use to measure what passes for progress in this strange worldview.

And so it's full speed ahead and damn the consequences. Everything is measured in money. B.C.'s economy seems sluggish? Well, obviously, the solution is to get fracking and sell the gas to Asian markets. Never mind that a recent study, commissioned by the Canadian government, concludes we don't know enough about the practice to say it's safe, the federal government has virtually no regulations surrounding it and provincial rules "are not based on strong science and remain untested." Never mind that the more infrastructure we build for polluting, climate-disrupting fossil fuels, the longer it will take us to move away from them. There's easy money to be had -- for someone.

We need to do more than just get off fossil fuels, although that's a priority. We need to conserve, cut back and switch to cleaner energy sources. In Canada, we need a national energy strategy. And guess what? That will create lasting jobs! But we must also find better ways to run our societies than relying on rampant consumption, planned obsolescence, excessive and often-pointless work and an economic system that depends on damaging ways and an absurd measurement to convince us it somehow all amounts to progress.
It's not about going back to the Dark Ages. It's about realizing that a good life doesn't depend on owning more stuff, scoring the latest gadgets or driving bigger, faster cars. Our connections with family, friends, community and nature are vastly more important.
Yes, we need oil and gas, and will for some time. Having built our cities and infrastructure to accommodate cars rather than people, we can't turn around overnight. But we can stop wasting our precious resources. By conserving and switching to cleaner energy, we can ensure we still have oil and gas long into the future, perhaps long enough to learn to appreciate the potential of what's essentially energy from the sun, stored and compressed over millions of years. If we dig it up and sell it so it can be burned around the world, we consign ourselves to a polluted planet ravaged by global warming, with nothing to fall back on when fossil fuels are gone.

Scientists around the world have been warning us for decades about the consequences of our wasteful lifestyles, and evidence for the ever-increasing damage caused by pollution and climate change continues to grow. But we have to do more than just wean ourselves off fossil fuels. We must also look to economic systems, progress measurements and ways of living that don't depend on destroying everything the planet provides to keep us healthy and alive.

By David Suzuki with contributions from Ian Hanington, Senior Editor 

Export Delusions: Why the rush to export natural gas is a fool’s errand

by Asher Miller, originally published by Resilience.org  | May 21, 2014

See original posting of this article, photos and comments at  http://www.resilience.org/stories/2014-05-21/export-delusions-why-the-rush-to-export-natural-gas-is-a-fool-s-errand

On a sweltering day in May last year I sat dumbfounded at a US Senate Energy & Natural Resources Committee meeting. Pat Outtrim, VP of Cheniere Energy, was arguing for fast-tracking approval of Liquified Natural Gas (LNG) exports because it would benefit energy consumers… in Great Britain.

A year later and the drum beat for approving LNG export operations is reaching a crescendo. This time it’s spurred by claims that we must save Europeans from the grip of Russia, who is using its position as the primary natural gas provider in Europe to annex Crimea and assert its power in the region.

In both cases, the rationale is the same: The US has an over-supply of natural gas—thanks to an explosion of hydraulic fracturing (“fracking”) for previously inaccessible shale gas—and it’s our duty as international citizens to make sure that our friends in Europe (not to mention Asia) can benefit from our lower-cost largesse.

Ostensibly in response to the crisis in Ukraine, two bills have been introduced in Congress: Senate Bill 2274, introduced by Mark Udall (D-CO), and House Bill 6, introduced by Cory Gardner (R-CO).

Gardner’s bill is, frankly, a little nuts—calling for the Department of Energy to simply approve “without modification or delay” all LNG export terminal applications that were submitted before March 6, 2014, due diligence be damned.

Udall’s bill is a little more measured but I confess to being even more chagrined by it, considering that Udall’s late brother Randy was one of the few voices in the country who recognized that the so-called “shale revolution” is really just a short-term phenomenon.

(If you can find the time, I highly recommend watching this brilliant and expansive lecture on shale gas by Randy Udall just a few months before his death: “Halliburton is Fishing in the Mancos Sea.”)

 LNG exports have become a hot-button issue and enmeshed with the fate of an energy efficiency bill and a vote on approval of the Keystone XL pipeline. It’s pitted Democrats against one another, though interestingly the split is between those from states where drilling is taking place (export proponents) and those from manufacturing states who hope that cheap and abundant natural gas supplies can bolster their economies.

What seems to be entirely missing from the debate are a few realities that should render this debate moot:

Reality #1: The U.S. is still a net importer of natural gas. Yes, you read that right.  In 2013, we produced 24.28 trillion cubic feet (tcf) of natural gas, but consumed 26.03 tcf. Now, the gap between production and consumption has been shrinking in the last decade as shale gas drilling went into overdrive, but our storage of natural gas supplies (needed in preparation for the cold winter months) is at alarmingly low levels—more than 40% lower than it was just a year ago. The idea that we have a surplus of natural gas to export is bogus.

Reality #2: By the time these LNG export terminals are completed, the “shale revolution” may have come and gone.  As Post Carbon Institute has documented in painstaking detail, shale wells deplete at breakneck speed—on the order of 70% for a typical well in the first year and between 30-50% for entire fields. That means industry must replace nearly half of production each year just to maintain current levels. But there are only so many economically viable drilling locations. Unless drilling rates grow dramatically, it appears that all the major shale gas plays—with the exception of the Marcellus—have already peaked. It’s likely that by the end of the decade, US natural gas production will again be in decline.

Reality #3: The industry is losing its shirt at current natural gas prices—the real motivation behind the LNG export push. The shale gas drilling frenzy led to a steep decline in natural gas prices; this was great for utilities and consumers but has led to a lot of companies writing off assets and even more to rely on debt to keep the drilling treadmill going, since many of these operators are losing money. Exporting natural gas would raise prices domestically, something the industry badly needs in order to earn a profit.

Reality #4: While the benefits are fleeting, the costs will be borne for generations. There is a lot of debate about the climate and health impacts of shale gas drilling, with studies showing conflicting findings (for a great, albeit wonky, resource for peer-reviewed papers on shale gas check out this library put together by PSE Healthy Energy). But a few things are difficult to dispute:

1.    Whether or not water contamination has already occurred, well casing failure is an inevitability 100% of the time. It’s just a matter of when.

2.    The millions of gallons of fresh water that are used on average for each shale gas well drilled can’t be returned to the hydrological cycle. Whether or not industry gets better at recycling their waste water for use in other frack jobs, we’ll never again be able to drink that water or use it to grow food.

3.    The boom and bust phenomenon that comes with the shale gas (and tight oil) drilling frenzy can create huge, negative social and economic impacts—increased crime, inflation, blight, infrastructure costs, and social services that can no longer be maintained by tax revenue once the boom ends. Export advocates are essentially arguing for sending all the benefits of fracking abroad while keeping all the costs here at home. 

When you step back from the feel-good rhetoric and look more closely at these underlying—and under-reported—realities it’s clear that the rush to approve LNG export terminals is a fool’s errand. And by that I mean an errand on the part of some elected officials to fool us so that the oil & gas industry can ensure its profits.

America’s Fracking Boom Looks More Like a Blip According to European Study

Sharon Kelly  ::  DeSmogBlog  ::   March 4, 2014 

The fracking boom has progressed at breakneck speed across the U.S., with roughly one in 20 Americans now living within a mile of a well drilled since 2000.

So, how much has the economy benefitted from this drilling surge?

Not much, according to a report presented to the European Union Parliament last month, which found “no evidence that shale gas is driving an overall manufacturing renaissance in the U.S.”

Shale basins and potential shale plays in Europe.

The shale boom’s economic contributions are very narrow, inflating local economies in places where drilling is intense but generating little impact on the country’s overall economic growth, the Institute for Sustainable Development and International Relations, a French think tank, concluded.

Although natural gas prices have fallen from their highs in 2008, benefitting consumers, those low levels are unlikely to be sustained and the U.S. is still expected to remain heavily reliant on importing crude oil, the researchers found.

Even using very optimistic assumptions, the report said, the industry’s cumulative long term effect on America’s Gross Domestic Product (GDP) will be less than one percent. “Despite very low and ultimately unsustainable short-term prices of natural gas, the unconventional oil and gas revolution has had a minimal impact on the U.S. macro-economy,”

That’s not the amount that shale gas will add to the economy each year, the researchers said. Instead, the industry will make up no more than 0.84 percent of total GDP between 2012 and 2035—the years when the shale boom is projected to be at its height. To put that in context, the personal care products industry (hair styling, cosmetics and the like) contributed 1.4 percent of GDP in 2010—nearly double the impact that the EU report found the shale gas rush could have.

Although shale gas promoters have promised a rebirth of American manufacturing thanks to the drilling frenzy, the European analysts found that the benefits have mostly been felt by a small slice of the chemical industry, the petrochemicals industry.

The analysis also threw cold water on the idea that natural gas will help decrease America’s carbon dioxide emissions or help combat climate change. “Absent further policies, the U.S. shale revolution will not lead to a significant, sustained decarbonization of the U.S. energy mix nor will it assure U.S. energy security,” the researchers wrote.

Although projections showed that policy change could potentially drive a shift from coal to natural gas, such a plan also “locks the U.S. in” to a carbon-intensive infrastructure. And if current policies remain in place, emissions will be “stagnant at current levels out to 2040, clearly insufficient for a reasonable U.S. contribution to global climate change mitigation.”

The costs of the drilling boom have been well documented. State regulators have struggled to keep pace with the oil and gas industry, and the country is now dotted with sites where land or water were contaminated by spills and other accidents, where gas wells, trains or pipelines have exploded, or where locals say air and water pollution has left them with a range of health problems.

Even the CEO of ExxonMobil, Rex Tillerson, has objected to the industry’s arrival in his own neighborhood, citing traffic jams and harm to property values.

But the new and woefully under-reported European study undermines the two major upshots that proponents of drilling have put forward—economic gains and a lower carbon footprint.

The European report only focuses on one greenhouse gas, carbon dioxide, and does not touch on the impacts of a second, more potent greenhouse gas: methane.

Although natural gas produces carbon dioxide when it burns (about 50 to 60 percent as much as coal), scientists have warned that the harm to the climate done when unburned natural gas, which is primarily methane, leaks out into the atmosphere could decimate climate benefits from switching away from other fossil fuels and burning natural gas instead—especially when the effects that will be felt within our lifetimes are concerned, since methane’s global warming effects are at their strongest during the first few decades after it leaks to the atmosphere.

The shale boom’s marginal economic benefits come as little surprise to some analysts. “[D]ue to the size of the U.S. economy, it has always been unrealistic to expect shale gas to move the needle much,” said Bill Powers, energy investor, analyst, and author of the book, Cold, Hungry and in the Dark. “Since so much of our economy is service-related, tech, finance, healthcare and education, I have always been very skeptical of the claims of large economic impact.”

There are profound policy implications if the shale gas rush can generate only small economic benefits. The hope that the fuel could help bring back factory jobs to the U.S. has fed the Obama administration’s support for the shale gas rush. “Businesses plan to invest almost a hundred billion dollars in new factories that use natural gas,” President Obama said in his State of the Union address as he praised shale’s contributions to the economy.

But researchers from the International Monetary Fund say that chemical company investment plans have less to do with the shale gas rush, and more to do with a bounce-back from the 2008 market crash, dropping currency exchange rates and the downwards pressure on American wages. “You had so much slack in the labor market in the recession,” Prakash Loungoni, head of commodities research at the IMF told National Geographic. “Work wage demands are pretty moderate in the [United States.]“

In other words, even if shale gas does help bring back some manufacturing jobs, don’t expect those jobs to be high-paying.

Shale industry supporters often cite the sheer number of jobs created by the boom. But the estimates that politicians cite often turn out to be overblown. Gov. Corbett (R-PA) recently found himself in hot water for his claim that drilling has created 200,000 jobs in his state. A recent analysis found that only 30,000 jobs could be directly linked to his state’s Marcellus shale rush, and that despite Gov. Corbett’s drill-baby-drill policies, job growth from Marcellus development has fallen roughly a third between 2010 and 2013.

“The amount of jobs created by the gas boom has been grossly overstated,” explained Powers.

The impacts are even less striking when the ripple effects from drilling are taken into account. “[E]very gas-related job that was created in Texas, Louisiana and Pennsylvania and other states has probably resulted in a coal-related job that has been lost,” Powers added. “More importantly, the shale gas boom has greatly hampered job growth in the renewable sector.”

IMF Pegs Canada's Fossil Fuel Subsidies at $34 Billion

In such giveaways we're a world leader, a fact rarely noted when federal budgets are debated.
By Mitchell Anderson, 15 May 2014, TheTyee.ca

While Canada slashes budgets for research, education and public broadcasting, there is one part of our economy that enjoys remarkable support from the Canadian taxpayer: the energy sector.

The International Monetary Fund estimates that energy subsidies in Canada top an incredible $34 billion each year in direct support to producers and uncollected tax on externalized costs.

These figures are found in the appendix of a major report released last year estimating global energy subsidies at almost $2 trillion. The report estimated that eliminating the subsidies would reduce global carbon emissions by 13 per cent. The stunning statistics specific to this country remain almost completely unreported in Canadian media.

Contacted by The Tyee, researchers from the IMF helpfully provided a detailed breakdown of Canadian subsidies provided to petroleum, natural gas and coal consumption. The lion's share of the $34 billion are uncollected taxes on the externalized costs of burning transportation fuels like gasoline and diesel -- about $19.4 billion in 2011. These externalized costs include impacts like traffic accidents, carbon emissions, air pollution and road congestion.

The report also referenced figures sourced from the OECD showing an additional $840 million in producer support to oil companies through a constellation of provincial and federal incentives to encourage fossil fuel extraction. This brought total petroleum subsidies in Canada in 2011 to $20.23 billion -- more than 20 times the annual budget of Environment Canada.

In comparison to other countries, Canada provides more subsidies to petroleum as a proportion of government revenue than any developed nation on Earth besides the United States and Luxembourg.

Natural gas consumption also enjoys billions in subsidies in Canada. The IMF estimates that un-priced carbon emissions from burning natural gas added up to $7.3 billion per year. There's another $440 million in producer support and $360 million in other un-taxed externalities, all of which tops $8.1 billion. This tax giveaway on natural gas alone is 44 per cent more than Canada provides in international aid every year.

What about coal? Canada consumes over 30 million tonnes per year. While we currently export over half our domestic production, the IMF study only considered externalized costs within our own country. They found that the coal industry receives $4.5 billion in annual subsides -- almost all of this is un-priced carbon and sulfur dioxide emissions. This generous largesse towards the dirtiest of fuels is about four times what the CBC receives in public support every year.

Or we could spend that on...

What could Canada do with an extra $34 billion a year? Both Vancouver and Toronto are struggling with how to fund long overdue upgrades to public transportation. Subway construction comes in at about $250 million per kilometre, meaning we could build about 140 kilometres of badly-needed urban subway lines every year. Light rail transport (LRT) is about one-quarter of the cost of subways, meaning for the same money we could build about 560 kilometres of at-grade transit infrastructure.
This foregone revenue in less than two years could fully fund the Big Move transit plan for southern Ontario, providing affordable access for 80 per cent of people living from Hamilton to Oshawa. Toronto's transit system has languished for decades. This sorely needed infrastructure would save the average household thousands in wasted time sitting in traffic, and Canada's economy billions in reduced congestion costs.

The proposed Vancouver subway line to the University of British Columbia could be built using less than two months of the subsidies provided every day to the energy sector. Forty kilometres of rapid transit in Surrey could be had for about the same amount.

What about green energy infrastructure? Adding solar and wind capacity provides some of the best job-generation per dollar of any option available -- more than seven times the employment from an equivalent investment in oil and gas extraction. Extrapolating the findings from a 2012 report on green jobs, $34 billion could create 500,000 person years of employment and install more than 150,000 megawatts of clean generating capacity. Canada currently ranks 12th in the G20 on green energy investment and has been steadily falling behind our competitors.

Canada's infrastructure deficit of crumbling roads and outdated water and sewage treatment is pegged at $171 billion. This backlog could be wiped out in five years with the revenue we are subsidizing to the energy sector.

Of course, not all things of value can be measured by bricks and mortar. Thirty-four billion dollars each year could provide $10-a-day childcare for 5.5 million children ages 0 to 5. Canada's child care costs are currently the highest in the OECD.

No free lunch in energy costs

For all the complaining Canadians do about fuel prices, it's ironic to note the IMF essentially says we are undervaluing the true cost of gasoline by about $0.30 per litre. Compared to other nations, Canada enjoys some of the cheapest gas in the developed world. Fuel in Italy and Germany is almost double our price at the pump. Ever think it's odd that bottled water at the gas station costs more than the fuel you just put in your tank?

Consider for a moment all the costs of finding and extracting crude oil, shipping it across the globe, refining it into gasoline and trucking it to your neighbourhood. Not to mention the billions spent by some countries projecting military power into volatile oil-producing parts of the world and the very human price of those interventions. Additional un-priced costs after petroleum is burned, such as climate change, traffic congestion, road accidents and air pollution make gasoline perhaps the most subsidized substance on Earth.

Every decision based on artificially low energy prices can have years of unintended consequences. If gas is cheap, people will choose to buy cars rather than take transit, clogging both our roads and emergency rooms. Transportation accidents alone cost Canada $3.7 billion each year. Every vehicle bought based on low fuel prices will produce years of carbon emissions, and every owner over the life of that vehicle will have an interest in voting for cheaper gas.

The opposite, of course, is also true. Less than half of Vancouverites in their early twenties today have chosen to get a driver's license, down from 60 per cent 10 years ago. Better public transit and more expensive car ownership seem to be the main factors driving this remarkable demographic shift.
The IMF can hardly be accused of being a left-leaning, alarmist organization. Through this valuable research, they make the case that there is no free lunch in energy costs, and we exclude these externalized costs at our peril.

A country can be judged on what it chooses to tax and what it chooses to subsidize. And by that yardstick, this nation currently seems to care more about cheap energy than almost anything else.
Mitchell Anderson is a Vancouver based freelance writer and frequent contributor to The Tyee. He is writing a book, The Oil Vikings: What Norway can teach the world about wise resource use.
Find his Tyee series reported from Norway here and all his pieces published by The Tyee here.

Full article and related stories:
 http://thetyee.ca/Opinion/2014/05/15/Canadas-34-Billion-Fossil-Fuel-Subsidies/?utm_source=mondayheadlines&utm_medium=email&utm_campaign=190514

GNB PENSION FUND INVESTMENTS

GNB INVESTMENTS IN OIL & GAS STOCKS

This bunch of stocks totals 207,223,000 CDN dollars.  Imagine the number of businesses and jobs that could be created in New Brunswick if this money (our tax dollars) were invested in New Brunswick enterprises.  Maybe we could reduce the number of public sector jobs by creating more private sector enterprise.

ATHABASCA OIL CORP - 211,300 shares with a fair value of 1,912,265 CDN dollars. (Public Service has $1,072,000, Teachers’ has 833,781 and Judges’ has 6,394)

BONAVISTA ENERGY - 107,500 shares with a fair value of 1,611,425 CDN dollars.

(Public service has 984,001, Teachers’ has 702,037 and Judges’ has 5,387)

CDN NATURAL RESOURCES - 241,518 shares with a fair value of 7,893,556 CDN dollars.

(Public service has 4,395,404, Teachers’ has 3,471,748 and Judges’ has 26,404)

CHESAPEAKE ENERGY - 37,024 shares with a fair value of 767,448 CDN dollars.

(Public service has 434,171, Teachers’ has 330,710 and Judges’ has 2,567)

CONOCO PHILLIPS - 114,377 shares with a fair value of 6,977,808 CDN dollars.

(Public service has 3,931,738, Teachers’ has 3,022,788 and Judges’ has 23,281)

CONTACT ENERGY - 197,368 shares with a fair value of 955,411 CDN dollars.

(Public service has 534,200, Teachers’ has 418,040 and Judges’ has 3,171)

EMERA INC - 77,900 shares with a fair value of 2,724,314 CDN dollars.

(Public service has 1,530,003, Teachers’ has 1,185,201 and Judges’ has 9,110)

ENBRIDGE INC - 445,818 shares with a fair value of 21,073,817 CDN dollars.

(Public service has 11,722,066, Teachers’ has 9,281,671 and Judges’ has 70,080)

ENCANA CORPORATION - 122,028 shares with a fair value of 2,410,053 CDN dollars.

(Public service has 1,344,711, Teachers’ has 1,057,260 and Judges’ has 8,082)

EXXON MOBIL CORP - 352,319 shares with a fair value of 32,203,366 CDN dollars.

(Public service has 18,189,614, Teachers’ has 13,906,144 and Judges’ has 107,607)

HALLIBURTON - 66,301 shares with a fair value of 2,721,019 CDN dollars.

(Public service has 1,539,372, Teachers’ has 1,172,546 and Judges’ has 9,101)

MAJOR DRILLING GRP - 152,800 shares with a fair value of 1,379,784 CDN dollars.

(Public service has 769,245, Teachers’ has 605,943 and Judges’ has 4,596)

OCCIDENTAL PETE CORP - 57,357 shares with a fair value of 4,605,400 CDN dollars.

(Public service has 2,605,430, Teachers’ has 5,680,252 and Judges’ has 43,130)

PEMBINA PIPELINE - 402,185 shares with a fair value of 12,964,433 CDN dollars.

(Public service has 7,241,052, Teachers’ has 1,125,274 and Judges’ has 8,629)

PENGROWTH ENERGY - 494,710 shares with a fair value of 2,577,439 CDN dollars.

(Public service has 1,443,535, Teachers’ has 1,984,566 and Judges’ has 15,404)

PETROBAKKEN ENERGY - 133,033 shares with a fair value of 1,183,994 CDN dollars.

(Public service has 663,754, Teachers’ has 516,280 and Judges’ has 3,960)

PRECISION DRILLING - 351,456 shares with a fair value of 3,293,143 CDN dollars.

(Public service has 1,839,983, Teachers’ has 1,442,152 and Judges’ has 11,007)

RANGE RESOURCES CORP - 11,611 shares with a fair value of 955,516 CDN dollars.

(Public service has 540,568, Teachers’ has 411,753 and Judges’ has 3,196)

ROYAL DUTCH SHELL - 658,901 shares with a fair value of 21,874,080 CDN dollars.

(Public service has 12,452,996, Teachers’ has 9,347,632 and Judges’ has 73,453)

SCHLUMBERGER LTD - 94,464 shares with a fair value of 7,211,660 CDN dollars.

(Public service has 4,079,879, Teachers’ has 3,107,659 and Judges’ has 24,121)

SEMPRA ENERGY - 55,060 shares with a fair value of 4,504,829 CDN dollars.

(Public service has 2,518,401, Teachers’ has 1,971,470 and Judges’ has 14,958)

SOUTHWESTERN ENERGY (SWN) - 24,971 shares with a fair value of 944,934 CDN dollars.

(Public service has 534,581, Teachers’ has 407,192 and Judges’ has 3,161)

SPECTRA ENERGY CORP - 147,812 shares with a fair value of 4,614,623 CDN dollars.

(Public service has 2,581,078, Teachers’ has 2,018,218 and Judges’ has 15,327)

STANTEC INC - 38,604 shares with a fair value of 1,735,740 CDN dollars.

(Public service has 971,755, Teachers’ has 758,186 and Judges’ has 5,800)

STATOIL ASA - 115,503 shares with a fair value of 2,839,092 CDN dollars.

(Public service has 1,616,306, Teachers’ has 1,213,253 and Judges’ has 9,534)

SUNCOR ENERGY INC - 460,812 shares with a fair value of 14,022,509 CDN dollars.

(Public service has 7,812,479, Teachers’ has 6,163,127 and Judges’ has 46,903)

SUNCOR GROUP LTD - 128,259 shares with a fair value of 1,592,464 CDN dollars.

(Public service has 906,596, Teachers’ has 680,521 and Judges’ has 5,347)

TALISMAN ENERGY INC - 238,557 shares with a fair value of 2,962,878 CDN dollars.

(Public service has 1,651,059, Teachers’ has 1,301,899 and Judges’ has 9,921)

TOTAL SA - 219,749 shares with a fair value of 10,708,262 CDN dollars.

(Public service has 6,096,254, Teachers’ has 4,576,050 and Judges’ has 35,958)

TRANSCANADA CORP - 273,605 shares with a fair value of 13,395,701 CDN dollars.

(Public service has 7,455,656, Teachers’ has 5,895,397 and Judges’ has 44,648)

TRICAN WELL SERVICE - 200,000 shares with a fair value of 2,978,000 CDN dollars.

(Public service has 1,664,917, Teachers’ has 1,303,124 and Judges’ has 9,960)

VALERO ENERGY CORP - 39,301 shares with a fair value of 1,815,692 CDN dollars.

(Public service has 1,027,198, Teachers’ has 782,421 and Judges’ has 6,073)

VERMILION ENERGY INC - 79,600 shares with a fair value of 4,202,084 CDN dollars.

(Public service has 2,354,748, Teachers’ has 1,833,274 and Judges’ has 14,062)

WHITECAP RESOURCES - 113,800 shares with a fair value of 1,104,683 CDN dollars.

(Public service has 617,854, Teachers’ has 483,139 and Judges’ has 3,691)

WOODSIDE PETROLEUM - 66,532 shares with a fair value of 2,523,998 CDN dollars.

(Public service has 1,436,922, Teachers’ has 1,078,601 and Judges’ has 8,476)

GNB INVESTMENTS IN BIG BOX RETAIL & FOOD STORES

FORTIS - 766,200 shares with a fair value of 26,579,478 CDN dollars.

(Public service has 14,785,875, Teachers’ has 11,705,564 and Judges’ has 88,038)

RIOCAN - 1,877,787 shares with a fair value of 52,044,181 CDN dollars.

(Public service has 28,979,980, Teachers’ has 22,891,545 and Judges’ has 172,656)

SHOPPERS DRUG MART - 166,083 shares with a fair value of 7,258,658 CDN dollars.

(Public service has 4,037,402, Teachers’ has 3,197,156 and Judges’ has 24,100)

TARGET CORPORATION - 93,836 shares with a fair value of 6,522,321 CDN dollars.

(Public service has 3,658,719, Teachers’ has 2,841,901 and Judges’ has 21,702)

WALMART STORES INC - 160,491 shares with a fair value of 12,267,148 CDN dollars.

(Public service has 6,909,997, Teachers’ has 5,316,230 and Judges’ has 40,922)

WALGREEN CO - 61,157 shares with a fair value of 2,959,591 CDN dollars.

(Public service has 1,674,341, Teachers’ has 1,275,352 and Judges’ has 9,899)

GNB INVESTMENTS IN COMPANIES IN WHICH FRANK MCKENNA HAS A BIG ROLE AND INVESTMENT

BROOKFIELD ASSET MGT - 266,548 shares with a fair value of 9,864,941 CDN dollars.

(Public service has 5,488,071, Teachers’ has 4,344,053 and Judges’ has 32,818)

BROOKFIELD OFFICE PT - 552,300 shares with a fair value of 9,597,707 CDN dollars.

(Public service has 5,341,028, Teachers’ has 4,206,846 and Judges’ has 31,833)

CDN NATURAL RESOURCES (see above)  -  7,893,556 CDN dollars.

TORONTO DOMINION BANK - 30,440,173 CDN dollars.