National Economy

[acottawa]

Originally Posted by ToxiK

Between 40 and 45 % of oil is for cars, that is a pretty big chunk. All the other oil users will work on finding substitutions and on improving efficiency to need less oil.

There are two types of countries: those which produce oil and those that dont. Those that dont produce oil will do all they can to not need oil as must as possible to reduce their dependency on oil producing countries.

Oil production's future is not that bright.

That means central Canada still needs more than 50% of the oil refined even if there is a 100% EV switch. Meanwhile if Trump or a U.S. court gets up on the wrong side of the bed and cuts off Central Canada’s oil then Ontario and Quebec will look like Russia.

Countries that don’t produce oil will be bound by the same laws of economics and convenience as those that do. If no viable/economic alternative is available then they will still import oil.

[Airboy]

Originally Posted by acottawa

There are three refineries in the Sarnia area: Imperial Oil at 115k BD, Suncor at 85k and Shell at 72k. It is nearly all of Ontario's refining capacity. The same pipeline also feeds Line 9 to Montreal (most of the rest of Central Canada's refining capacity) and Lines 7 and 11 to the 112k Imperial refinery at Nanticoke.

Even if you think EVs will replace ICEs in the near future, the use of oil for aviation, trains, long distance trucking, buses, petrochemicals and shipping will continue much longer than that.

I agree the use of Petroleum products are not going away. There may be a shift as an energy product but there is to much else that realize on it to stop production. Even if we ship more product over seas Alberta will not see the great windfall people think will happen. As it is construction is booming in the province. Its the Consulting side that is having a hard time right now.

[ToxiK]

Originally Posted by acottawa

That means central Canada still needs more than 50% of the oil refined even if there is a 100% EV switch. Meanwhile if Trump or a U.S. court gets up on the wrong side of the bed and cuts off Central Canada’s oil then Ontario and Quebec will look like Russia.

Countries that don’t produce oil will be bound by the same laws of economics and convenience as those that do. If no viable/economic alternative is available then they will still import oil.

More pipelines will just make us more dependant on oil and delay the switch to other sources of energy. And what will happen to the pipeline after we dont need oil? It can hardly be use to move lemonade or maple syrup.

[Hackslack]

Originally Posted by ToxiK

More pipelines will just make us more dependant on oil and delay the switch to other sources of energy. And what will happen to the pipeline after we dont need oil? It can hardly be use to move lemonade or maple syrup.

Probably get decommissioned and just stay in the ground. Out of sight out of mind, as they are today.

[acottawa]

Originally Posted by ToxiK

More pipelines will just make us more dependant on oil and delay the switch to other sources of energy. And what will happen to the pipeline after we dont need oil? It can hardly be use to move lemonade or maple syrup.

“After we don’t need oil” is well beyond the lifespan of a pipeline.

[casper]

Originally Posted by YOWetal

Even if the most pessimistic predictions are correct it doesn't make that much difference. If we get out of the way and let investment flow to oil sands the pipeline will be full as it's front loaded capital expenditure and not expensive to actually produce oil $15-30 a barrel. So if private companies are stupid we get the huge economic boost from the investment the jobs and the less substantial but still significant jobs and revenue even from a cheap oil world.

The truth is the climate change folks don't believe this spin or they wouldn't be trying to keep the oil in the ground artificially.

I don't think private investors are stupid. We should not expect massive green field expansions in the oil sands. Small incremental expansions perhaps.

I think that is ok.

The pipeline to Ontario should be about "national security" ensuring that Ontario/Quebec supply is still secure as they transition off oil over the coming decades. If we can keep the existing pipeline through the US open, that is a bonus.

Climate change is obviously real. That is hard to deny. I think most people accept that. The issue is what to do about it. What Carney admitted to a few days ago is Canada was trying to transition far to quickly and it was damaging the economy. We still need to transition but much more slowly. During that transition period was going to continue to expand oil sales.

[casper]

Originally Posted by Hackslack

Probably get decommissioned and just stay in the ground. Out of sight out of mind, as they are today.

A good example of what happens to pipelines that are not needed is the Portland-Montreal pipeline.

https://en.wikipedia.org/wiki/Portland%E2%80%93Montreal_pipeline

They are pressurized with nitrogen and retained in a laid up state.

Before Suncor purchased Petro Canada, there was crude came from the middle east or Africa into Montreal during the summer and Portland Maine during the winter. It flowed into Montreal and then down to Sarnia. After the Suncor purchase they decided to reverse these the flow on these pipelines and the one from Portland to Montreal become redundant. It is still there, waiting for a future use some day.

[ToxiK]

Originally Posted by Hackslack

Probably get decommissioned and just stay in the ground. Out of sight out of mind, as they are today.

Originally Posted by acottawa

“After we don’t need oil” is well beyond the lifespan of a pipeline.

Things are going to move very fast to get rid of oil, so no, the absence of need for oil will not outlive the pipeline. In fact, the demand for oil that justifies the pipeline might even outlive the construction of said pipeline.

A decommissioned pipeline is not a plus for the environment. And if the pipeline in question wasn't that needed in the first place, that makes it quite a waste.

My point is that if we have a pipeline built officially only for local demand and the demands gets lower making the pipeline unnecessary, there will be pressure to still keep using the pipeline by creating new markets, whether internationally or by delaying the energy transition locally, to preserve jobs (and profits for the pipeline). Also, the longer a pipeline is in use, the more likely a spill is to happen.

[YOWetal]

Originally Posted by acottawa

There are three refineries in the Sarnia area: Imperial Oil at 115k BD, Suncor at 85k and Shell at 72k. It is nearly all of Ontario's refining capacity. The same pipeline also feeds Line 9 to Montreal (most of the rest of Central Canada's refining capacity) and Lines 7 and 11 to the 112k Imperial refinery at Nanticoke.

Even if you think EVs will replace ICEs in the near future, the use of oil for aviation, trains, long distance trucking, buses, petrochemicals and shipping will continue much longer than that.

Yes 300k bpd. Not insignificant. But we could build a new 300k refinerey for $10 Billion thus a fraction of this cost. Now of course we won't for the same reasons we can't build a pipeline but we could.

Originally Posted by casper

I don't think private investors are stupid. We should not expect massive green field expansions in the oil sands. Small incremental expansions perhaps.

I think that is ok.

The pipeline to Ontario should be about "national security" ensuring that Ontario/Quebec supply is still secure as they transition off oil over the coming decades. If we can keep the existing pipeline through the US open, that is a bonus.

If we had access to tidewater and non looney regulation there would absolutely be green field expansion. This would be the boon that 2005-2014 was for the Canadian economy. Granted this isn't all Trudeau's fault market conditions changed but 2022 and 2026 have given us another lifeline to benefit from the flight to safe oil.

A $30 Billion pipeline for redundancy doesn't make sense.

[Truenorth00]

Originally Posted by YOWetal

Even if the most pessimistic predictions are correct it doesn't make that much difference. If we get out of the way and let investment flow to oil sands the pipeline will be full as it's front loaded capital expenditure and not expensive to actually produce oil $15-30 a barrel. So if private companies are stupid we get the huge economic boost from the investment the jobs and the less substantial but still significant jobs and revenue even from a cheap oil world.

The truth is the climate change folks don't believe this spin or they wouldn't be trying to keep the oil in the ground artificially.

Are you suggesting the oil companies will cut dividends to boost capex just because the government gets out of the way?

Lol. No.

Good luck to any board member who decides to spend billions on capex at the expense of shareholders. Hope their retirement home is ready.

Thinking this is about climate change is always going to be your blinder. Ontario had a recent power supply auction. I don't think the Ford government can be called very pro environment. They wanted gas power bids. Didn't get a single one. The bids were solar, wind and batteries. The economics have changed.

The only way oil production from Alberta increases is if the taxpayer builds the pipelines. The era of companies risking their own capital for these is quickly closing.

All that said, I fully support the pipeline to Sarnia. That's just good for our own energy security.

[Truenorth00]

Originally Posted by ToxiK

Things are going to move very fast to get rid of oil, so no, the absence of need for oil will not outlive the pipeline. In fact, the demand for oil that justifies the pipeline might even outlive the construction of said pipeline.

A decommissioned pipeline is not a plus for the environment. And if the pipeline in question wasn't that needed in the first place, that makes it quite a waste.

My point is that if we have a pipeline built officially only for local demand and the demands gets lower making the pipeline unnecessary, there will be pressure to still keep using the pipeline by creating new markets, whether internationally or by delaying the energy transition locally, to preserve jobs (and profits for the pipeline). Also, the longer a pipeline is in use, the more likely a spill is to happen.

I really wouldn't worry that much. This removes dependence on the US and vulnerability to their politics. We almost saw a pipeline through Michigan closed off because of their politics.

And in a world of declining demand, what's more likely is that these refineries with pipelines keep getting fed and the ones that have to import by tanker get shuttered. More likely that refineries like Valero in Levis shutdown before anything in Sarnia if this pipeline is built.

[casper]

Originally Posted by YOWetal

Yes 300k bpd. Not insignificant. But we could build a new 300k refinerey for $10 Billion thus a fraction of this cost. Now of course we won't for the same reasons we can't build a pipeline but we could.




If we had access to tidewater and non looney regulation there would absolutely be green field expansion. This would be the boon that 2005-2014 was for the Canadian economy. Granted this isn't all Trudeau's fault market conditions changed but 2022 and 2026 have given us another lifeline to benefit from the flight to safe oil.

A $30 Billion pipeline for redundancy doesn't make sense.

I would not describe it as redundancy. It is a replacement. We should assume the Americans will force the existing pipeline to be shutdown.

If the two pipelines operate in parallel for a time that is fine. Use the extra capacity for exports.

[jonny24]

Originally Posted by casper

The project is also not that well defined. Its not clear where it is going in Manitoba exactly.

First Nations have a legally mandated voice. Non-first nations also have a say. Just look at the response in Alberta to data centers and coal mining.

Neither Saskatchewan or Manitoba are saying much of anything at this stage. It is probably a bit to early.

----

I think the responsible thing to do is to also ask the question, do we need to go all the way to Sarnia? Before Line 5 was built Great Lake tankers were being used. Perhaps its time to look at that option as well. Run the pipeline as far as North Bay. Then tanker it from there to Sarnia. Sounds like the desire is also to build out a strategic oil reserve. Those could be storage tankers in North Bay that are filled over the winter and then during the summer they are transferred from there to Sarnia where you have additional storage to cover the winter months.

You love tankers when they aren't in BC ....

[casper]

Originally Posted by jonny24

You love tankers when they aren't in BC ....

Tankers are allowed on the BC South Coast. The South Coast has the spill response infrastructure in place. The North Coast does not.

Social license also exists on the south coast.

[James Bond Agent 007]

Is Quebec anticipating a new Saab Gripen factory?

Quebec announces plan to train more aerospace workers as demand surges

Quebec's economy minister is announcing a series of initiatives aimed at training more aerospace workers.

Bernard Drainville revealed the plans north of Montreal in Mirabel, which is home to a major aerospace hub.

He announced that a technical college in Longueuil, the École nationale d'aérotechnique, will increase its enrolment capacity by 70 per cent in its aircraft mechanics and avionics programs.

[kwoldtimer]

Originally Posted by James Bond Agent 007

Is Quebec anticipating a new Saab Gripen factory?

Quebec announces plan to train more aerospace workers as demand surges

Or just trying to enhance its prospects.

[Changing City]

Originally Posted by kwoldtimer

Or just trying to enhance its prospects.

Or just responding to the need that already exists. There's already a shortfall of qualified mechanics, as there was a wave of early retirements during Covid-19, and 35% of the current North America workforce is 55 to 64 years old, putting them at or near retirement. (The average retirement age for a mechanic was 62 before the pandemic). It's already an older workforce - less than 10% are under 30. Projections currently expect North America fleets to grow by about 1.8% a year, and the need for mechanics to increase by nearly as much, 1.6% per year.