Tuesday, January 6, 2015

OIl #2

As previously stated - I don't understand very much about oil - I don't understand how someone decides what it is worth or how someone decides to make more available now, but not last year. But what I don't understand the most is why Canada can't figure out how to get off of the boom or bust ride.

Canada's earliest economic roots developed from the sending of a natural resource to be process in another country. The fur traders of the 15th and 16th centuries sent beaver hides to England or France to be processed into hats. There appears to have been little inclination to at least start the felting process in Canada. Later our Eastern, Central and Western forests were denuded to provide lumber for British ships of war. Later still, continuing up to the present, we have dug ore or pumped oil out of the ground and then the sent the raw product elsewhere to be process or refined. Canadians, or at least the people who control our natural resources seldom seem to want to create industries based on our natural resources. This, in part means, that our economy is control by others and that we, as Canadians do not get the full economic benefit of the resources. Even more remarkably, we seem to charge less for our raw resources than do some other countries.

Take for example oil. While West Texas Intermediate Crude was selling for $50 a barrel, our Western Select heavy oil was only worth $33 a barrel (Calgary Herald). Perhaps if we processed it before shipping it, it would be worth more? We sell the stuff as an oil that is harder to refine. No wonder people pay less for it. We are in fact subsidizing companies in other countries to process our oil. I am not a big fan of any part of oil production, but if we are going to pump/dig the stuff out of the ground, surely we should get the maximum benefit from it.

To make matters worse, we don't charge enough to the companies who are pumping/digging it from our soil. According the The Tyee (an online magazine) Canada gets only about 20% of the royalties as does Norway (needs to be stated that Norway's oil is lighter - that is it is easier and cheaper to refine). To put it another way, Norway gets for very barrel of oil - five times as much as does Canada. It boggles the imagination as to what one could do with that much money over the period of a few years. Over a four year period, if Canada collected the same level of royalties as did Norway, there would be an additional $350 billion in our bank account. (Tyee). Because Canada is a federation and provinces are in control of the natural resources, the provinces get the lion's share of royalties. In 2012 Alberta collected approximately $6 billion in royalties from oil producers. If they charged what Norway does, it would have been just over $30 billion. That is a big difference!

Does it matter? Yes!!


The Huffington Post reported just over a year ago that Norway had banked almost a trillion dollars in its oil fund. The interest alone from those investments can pay for all of its social programs. In comparison Alberta's Heritage fund, in spite of the fact that Alberta has sold more oil than Norway, has after 30 years less than $18 billion saved. Canada as a nation has no such oil generated savings plan.

Norway chose to invest the money and not use it to maintain the day to day economy. Residents of Norway still pay income and sales tax.  Alberta and Canada spend their royalty checks wooing the voters. When Norway stops producing oil it will have a significant mount of money invested to  smooth out any pumps along the way. Alberta and all of the other oil producing provinces will once again just crash.

The bust part of the oil boom or bust cycle is preventable - or at least it was. Both the voters and the politicians lacked the will, the brains and/or the courage to do what was necessary. Now,once again some Canadians will unnecessarily suffer. And complain that it is someone else's fault - in fact it is all our fault.

Resources are not endless- we need to maximize the benefits before it is too late.


















Oil

I am confused about the price of oil, or rather I am confused about why the price of oil has dropped so dramatically.

There appear to be so many contradictory bits and pieces of information about the the price of oil, why it is dropping and what it all means for Canada and the rest of the world. Quite frankly none of it make any sense to me. In fact the whole discussion, at least from my limited and uneducated perspective (at least in terms of business) sounds like a bit of silly made up talk designed (poorly) to make the pundits sound as if they know what they are talking about. These meaningless conversations also allow people to avoid dealing with the important issues of whether or not we (meaning the planet) can afford to continue to use fossil fuels.

This time last year the price of oil was high in part (or so we were told) because the demand was so high. This year we are being told that the price of oil is so low because the supply exceeds the demand. Of course the demand this year, if anything, is higher than last year if for no other reason than there are more car drivers on the roads of China and India. If there is a glut upon the market it is because a few countries, most notably Saudi Arabia, have pumped their easy to access and easy to refine oil out of the ground at a rate much higher than normal. The argument as to why the Saudis are doing this is that they want to drive the other countries/companies whose oil is more expensive to produce out of business.

And that is the argument that does not make sense to me. The Saudis are losing $40-$50 a barrel by increasing the available supply of oil. I don't know how much oil is in a barrel but I suspect that they are losing millions of dollars by increasing the supply. It doesn't make any sense. The oil that was being torn from the ground in northern Alberta, while it may rest in the ground a bit longer because of the lower price - will still be there when the Saudi oil is gone and the price is back up to a $100+ a barrel. You can't drive someone out of business when they have something that eventually everyone else will want and will have no choice but to pay what ever they have to to get it. Those companies may produce less income in the short term, but I think oil production is a long term game. The Saudis can not win this game by flooding the market.

It should be noted that in the past Saudi Arabia has be quite willing to manipulate (limit) the availability of oil to raise the price.

There are only two arguments that can explain this apparent mis-management of resources on the part of the Saudis. One is that they have so much oil available to them that they can afford to earn less than anticipated; that they can afford to wait the others out until all other sources are closed down or, two that they are getting some sort of tangible reward for doing what they are doing. What would make them willing to lose national income?

Other than Saudi Arabia, Nigeria, Venezuela, Russia and Iran appear to be the countries most adversely affected by  the dramatic drop in the price of oil.

Question - how many of those countries are seen as an enemy of the USA or a threat to those large multi national companies that control the oil business?

Monday, January 5, 2015

On the Road (sort of) Again 2014 #6

It was dark by the time we left Jasper and so there was no point heading towards the Dome car for my usual seat. I would have like to see Princess Falls or some of the higher mountains but perhaps next time the train will be on time and I will get some pictures. The car was quiet, the new people quickly settled in and by just after 8:00 the lights were dimmed. I read for an hour or two and then made my "bed " .


Some helpful hints for economy class passengers - a blanket really is a necessity. The temperature on the train is inconsistent. While it was never really cold, there were times that I was glad that I had brought my sleeping bag. A pillow or in my case a rolled up fleece sweater is also a basic requirement. The window and arm rests are just too hard to lean against or to lay one's head against. But the most important thing to do before going to sleep is to put both seats back as far as they can go. This increases the seat space considerably and allows far more room to curl up. Then one arranges the foot stools That is it. On a good night I can get three- four hours of uninterrupted sleep.

The train stopped in Kamloops. It was there for a long time. I am not to sure why except I heard one of the attendants talking about the cars needing servicing. As I saw a septic truck parked by the train and there was certainly a somewhat faint but real aroma of outhouses - I think they were pumping out a tank or two. Why they didn't do it in Jasper is beyond me. However, what was exciting was the fact that in the six hours between Jasper and Kamloops the engineer had made up at least one and a half hours. Perhaps we would not be so late after all.

In fact we got into Vancouver by 11:15ish. Only an hour and half late. I guess, considering the weather and the fact that the train had travelled over 3,000 kilometers, that was not too bad. Although one does wonder why, if the train can make up the time between Jasper and Vancouver, why can't it go faster on other parts of the trip?

In the 10 or so minutes as we were getting ready to leave the train, I learned more about my fellow passengers than I had in the preceding two or three days. The middle aged couple behind me and across the aisle were moving to Vancouver from Toronto. The couple across from me were going to Vancouver and then Victoria. Then they were heading back east again. They had gotten on the train on an impulse! I am sure there were some interesting back stories behind both of these couples..... I wish I/they had been more talkative early in our trip.

I got off the train, made the Skytrain and then the bus connection without a hassle and got to the ferry with ten minutes to spare. The sun was bright and after traveling through the western provinces, it was almost balmy.
I got picked up at the terminal and a hour later I was in Duncan. Time to sleep in a real bed with my legs stretched out straight. It felt like a luxury!!!



Friday, January 2, 2015

On the Road (sort of) Again 2014 #5

We were "only" about five hours late getting into Edmonton. I debated whether or not to go out for the 20 minute break (which actually turned into 40 minutes). The weather was forecasted at being 23 degrees below 0 and the VIA station in Edmonton is particularly borinng but I was hoping to check my email etc so out I left the train. It actually was not that cold which was just as well - there was no WiFi available. While five hours is a lot of time to make up, if we don't lose more time and if the break in Jasper is reduced to 40 minutes, then perhaps we will not be too late getting into Vancouver.

I was speaking to a woman who is heading towards Victoria and we were both sharing concern for the amount of energy it takes to get from the train station to the island. I am trying to remain optimistic about arrival times if for no other reason than there is nothing I can do about it. We were late getting into Jasper last summer and yet we arrived on time in Vancouver. 

For quite a few people, including at least two of the families and three of the chronic "coughers"  Edmonton was their destination. While some new folks got on, the car feels quieter than it was. I think quite a few folks are getting off at Jasper. Apparently Jasper is a destination to go to celebrate New Years Eve. Perhaps I should get out there and party with the young people.

It is interesting to note that while there was relatively little snow across much of the Prairies, certainly west of Edmonton there is a bit more. I would imagine that there will be a lot more by the time we get to Jasper.

By the time we got to Jasper, it was past 4:30. There were still some glorious looking mountains to take pictures of. People were rushing back and forth between the left and right side of the train looking for the best views. In spite of the fact that this is my third trip across in the last six months and probably my fifteenth trip in the last eight or nine years, I still marvel at the mountains. However by the time we were in the station it was dark and for the people who were new to Jasper, they did not get the full sense of the gloriousness of being in the mountains.  We were told very clearly that the train would be leaving at 6:00.

I made my usual run to Subway - bought two six inch subs, went to a coffee shop/bakery and picked up a couple of muffins and was back at the station by 5:30ish. we didn't get back o the train until almost 6:30. They had to move the train back and forth to get water. I wondered out loud  why they didn't get a longer hose. Some one else who was standing near me wondered if they couldn't afford to buy two hoses.


What ever the reason for the delay - it was blody cold outside. The waiting room was jammed with people including those who had been waiting for five or more hours. People were starting to become a wee bit unhappy. When we were finally allowed to load, the economy seat folks had to walk what felt like miles (I am only slighty exaggerating) against a strong and cold wind to get to our car. The upper class folks had to walk a far shorter distance with the wind at their backs and could get a ride if needed. Life sometimes feels a bit unfair.

On the Road (sort of) Again 2014 # 1

It is just after 6:00 AM.  I just got on the train to Vancouver. The train arrived and left Sudbury on time (surely a first for this train and me).  I am excited to be making this trip. While I would have preferred to have my granddad's dream of seeing all four of my grandchildren the same day come true at least one more time, it was nice to have a more relaxed Christmas (and a few days after) in Sudbury.

The really neat thing about travelling by train is that I will be able to see the same parts of Canada as I did last June and again in August but this time in the full grasp of winter. I am curious to know how much the views will be changed when there are no leaves on the hardwoods; how different will some  of the valleys and lakes look when frozen and covered with snow; if the land between Winnipeg and Edmonton is covered by snow, will it just be miles and miles of unchanging landscape or will it present itself visually as a brand new land; and perhaps most exciting - how neat will the mountains look covered in snow. I think I am looking forward the most to our stop in Jasper. I have passed through the various mountain ranges that most Easterners lump together as the Rockies a number of times  but to see them covered in snow will be truly different.

Of course all  of the above possibilities will be shaped by the difference in light. In June, by 6:30 it is light outside and there is a lot to see. At 6:30 at the end of December it is still dark outside and unless the train is passing through a town, there is nothing that can be seen.

I have never seen the Sudbury Junction train station as busy as it was today. In fact it was so busy that there were two staff on duty. I was surprised. Who in their right mind would want to travel by train this time of year? I guess I am not the only crazy one. I could not see how long the train was but my sense that it was not as long as usual. On the other hand there are as many "cheap seats" cars as usual. There is however no dining car for economy class. When I asked the conductor about a dinning car, he said that there was one six cars back that I could use but it was a really long walk . They were clearly encouraging the economy class people to use the takeout kitchen.  As I have said before, travel in Canada is one place at least where social classes are still separated and no more than on the train. However it appears as if this time, as opposed to just handing prepared snacks, one can order a meal so I might be able to get hot food which would be nice.

While we left Sudbury Junction on time we have been sitting a few miles outside of the city for thirty minutes......perhaps I was being too optimistic about being on time. On the  other hand I would rather be sitting in the train than in the waiting room.

On the Road (sort of) Again 2014 # 4

It is 7:30 local time and here we are stuck on yet another siding somewhere between Saskatoon and  Edmonton. At some point last night (I think it was around 4:00 AM) I remember being stopped at Saskatoon for quite awhile as there were a surprisingly large number of people wanting to get on. It must be hard to get on the train in the middle of the night especially when it is so cold and one has been waiting in an uncomfortable waiting room for at least five hours. On the other hand perhaps they were so tired of waiting that they were happy - perhaps even grateful for the chaos of having to get themselves organized in the dark.

The VIA attendants are surprisingly well organized in terms of finding seats for everyone especially the family groups. And there are a lot of families on the train  - more than I have ever seen.  In fact the train is far more crowded than I would have anticipated. The  fact that the waiting room at Sudbury Junction was so crowded should have been my first clue that it was going to be a busy train.  I really thought it would be a near empty train. While I still have both seats to myself, there was a point last night where it looked as if I might have a seat mate.

It has been a strange trip in that I have not really spoken to anyone. Lots of chit chat about the weather and the lateness of the train- but I have not had the opportunity for a longer conversation. Part of that may be due to my laziness and generally contentment to listen to music and read, but some of it is due, I think, to who is on the train. As noted above, there are a lot of families with young children. Some of these families have taken over the dome car. It is a great place for kid to play and if I had kids I were certainly take them there to colour etc. But it has meant that I have not hung out there at all. Secondly there are quite a few couples travelling -couples who seem quite content to just talk to their mates. Thirdly, at least in this car, there are almost no young single travellers looking for a conversation. And finally, because there is only take out - most of the people get their food and take it back to their seats so that there is no chit chat possible over breakfast.

While I occasionally have flashes of concern about arriving really late into Vancouver and being stuck there on New Years Eve, I am not complaining - it is just a different trip than I had envisioned.

On the Road (sort of) Again 2014 #3

34 degrees Celsius below 0... that is what the attendant announced before we disembarked for our layover in Winnipeg. That was a bit colder than I planned on. But it had been a long night and I was ready for a change of scenery and of people. At some points during the night it sounded as if there were four or five people close to me who were coughing almost non-stop. Deep throaty sick type coughs. One would start and like a well trained chorus the rest would join in.  I wanted them to stop coughing or failing that to find some sort of mask so that I would not inhale one of the viruses that were drifting in droplets along the aisles.

I had had quite a few cat naps throughout the day and so I was not that tired, but the lights were dimmed by 8:00 and most of the people seemed to be getting ready for sleep. I suppose with nothing to see out the window most (including me) were bored. while I may be slowly shrinking, it is still difficult for me to fold my body into any sort of configuration that is truly comfortable. I can find positions that are good for an hour or two, but as soon as I move a limb or my head a few inches, I need to sit up and go through the whole process again of rearranging my limbs. My wrist had also gotten quite sore since my fall and kept me awake until I took a pill.

There were at least three families in my car. The kids generally behaved well all day and except for the occasional cry during the night, I think they slept well Once again I admire parents who can travel well with their kids. Even the ones who bring crafts and activities to do, it is still a boring trip for the kids. Their natural energy could exhaust a saint. - that energy needs to get directed somewhere and there are not a lot of places on a train for it go.

While in Winnipeg, after psyching myself up to face the cold I waked across the road the the Forks , a collection of small stores, restaurants and takeout places. It was a bit early but fortunately a few restaurants were open. For less than $8.00  I had great breakfast. I then went to a sandwich place and bought a few sandwiches for lunch and perhaps supper. Shopping done I headed back to train station. While it had not felt that cold on my five minute walk over to the mall, the wind was against me on the way back. It was so cold that even with a hat pulled down over my ears my forehead was almost numbed in the five minute walk back. It is not surprising that as I look out the window heading through the outskirts of Winnipeg that there are few people out and about.

On previous trips the WiFi has been slow to non-existent in the Winnipeg train station. This time it worked well and I managed to check my email, Facebook, send a few messages and post two blogs. I got back on the train just before 10:00. I could have waited in the train station but the seats in the train are more comfortable and there was no way I was going to go for a walk again outside.

The train left 15 minutes late and then we sat outside for another 15 or so minutes. I don't understand why the schedule is so hard to follow.

The heating system in the train is a bit inconsistent. While it is warm enough for me to walk around in sandals, there are times when it is almost too warm and I want to take of a layer of clothing and other times when it is just a bit cool. I suppose it is hard to keep the consistent in such a large vehicle.

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