February 20, 2014
Who said the following? “First-class jobs gravitate to first-class infrastructure”
Who said the following? “First-class jobs gravitate to first-class infrastructure.”
I’ll give you a hint, SOTU.
That’s right. It was President Barack Obama in his recent State of the Union (SOTU) address.
There’s undeniable truth in the sentence, but it’s a rather astonishing statement for Mr. Obama to make, given his reluctance to approve the Keystone XL pipeline extension.
Maybe he doesn’t think pipelines are infrastructure. Plenty of other people would disagree.
The State Department has concluded that Keystone XL will not cause significant additional carbon emissions versus other means of transporting Alberta’s oilsands product to market.
Expansions to alternative delivery systems are already speeding ahead. As one example, the 2013 volume of Canadian crude shipped to California by rail jumped significantly.
I try to imagine the President standing at a podium before the media and voicing a firm yes or no to Keystone. The image refuses to come into focus.
If he gives his approval, the Republicans are sure to ask what took him so long.
If he stands opposed, then he has to defend his assertion in the opening line of this article.
Even critics of Keystone admit its approval would create many temporary jobs.
A project costing billions of dollars will generate employment through on-site construction, the building of feeder systems and the rolling and fabrication of pipe. (Large stockpiles of pipe for Keystone are already in place.)
The point of departure for critics comes after the project is finished. They assert there will be only a handful of permanent jobs.
That assertion needs putting to rest. A project that will ship 800,000 barrels of oil per day is going to contribute to employment in several ways.
There’s monitoring, maintenance and most important, the revenue stream.
TransCanada Pipelines is a publicly-traded utility that is a favourite among institutional investors in Canada, the U.S. and around the world.
Its share value and the dividends it pays support pension and mutual funds and income streams, which in turn drive consumer and business spending.
The promotion of prosperous companies is how the free enterprise system works to the benefit of all.
TransCanada also has other job-creating energy projects planned, including diversification into wind and solar power, that need financing fuelled by profits.
There is the impression the President would prefer to see Keystone simply go away.
This highlights why Canada needs energy pipelines on its own turf to its own coastal ports to facilitate sales to customers in China, India and other parts of the world.
The President has demonstrated an eager willingness to extoll how the U.S. is moving towards greater self-reliance in oil and natural gas.
Critics are quick to point out that Washington hasn’t played a big role in this turnaround. The investment has come from the private sector.
The main role of the administration has been to stand aside and let drilling and production — especially as it relates to hydraulic fracturing (a.k.a., “fracking”) — proceed largely unfettered.
The environmental movement, to date, hasn’t made much of an impact on U.S. fracking.
Concern over the possible leaching of chemicals into water tables and the potential for seismic events has caused authorities in many other countries to halt or put tight controls on fracking activity.
The industry may be most vulnerable in the U.S. in its usage of water. There are close to 40,000 wells shooting H2O under high pressure into the ground to break up shale rock.
Many towns and states, particularly in drier regions of the West, are already facing critical water shortages. The prospect of prolonged droughts, such as California is currently experiencing, heightens the stakes.
The natural gas industry has a counter argument. As reserves of the fossil fuel keep growing, more coal-fired power generating stations are being replaced with gas units.
Since turbines in coal plants rotate with steam, there is a compensating decline in the usage of water.
These issues concerning energy sector development are important not only as debating points. They come home to Canadians through foreign trade.
Three quarters of Canada’s exports are shipped across the border. Energy makes up one-quarter of our total energy exports.
Prior to the Great Recession, Canada ran a large trade surplus. Since then, the positive balance has flipped over to become a negative most months.
What can be done to fix the problem?
The Bank of Canada (BOC)’s answer has been to lower the value of the Canadian dollar.
The new Governor of the BOC has not specifically said that is his intent; but by not vehemently denying it, he has given his tacit approval.
The value of our currency, the loonie, has dropped from parity with the greenback to 90 cents.
The journey has now taken us to the crux of the matter, our standard of living.
In a matter of only a couple of months, we’ve lost international standing. While we’re not alone in this, Canada’s currency decline has been one of the sharpest among nations.
For 35 million Canadians — if they step outside their own country and travel to the U.S. today — they’ll find they’re no longer as affluent as they were only a short while ago.
Our assets have fallen in value relative to those of our U.S. friends, relatives and co-workers.
Try not to be too upset. Americans will continue to respect us. They think we’re always polite.
Have a nice day...