Comments by "Neolithic Transit Revolution" (@neolithictransitrevolution427) on "Energi Media"
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@patrickburke7207 so right off the bat, 700x 100 is 70,000. Not 700,000. So let's make that 70 trains. I'm not sure where you came up with 2000 tankers. I also am not going to back check your price, but again it should actually be $6 billion.
Assuming a train moved an average of 50/km an hour, which is maybe high for a freight train, and we are taking a 1000km trip over the rockies, which is a shorter than realistic route, it will take 20h to reach port. I think it's reasonable to say that makes it a day to get there, a day to get back, and there is likely a day between unloading and reloading to tag on. Again I would say this is generous. That means for 700k a day, we will actually need 210 trains, or $18 billion.
And that is ignoring the fact we have an additional 70 trains running a day. Which is going to have a very notable impact on track requirements. We can imagine there is capacity, but in reality you are going to not only have to twin existing tracks to move all those trains back east, but also build entirely new track for that kind of capacity that allows a 100 car train to go buy 70 times a day, or every 20 minutes, alongside existing freight traffic on what is already a congested route.
So $18 billion, which I would argue is considerably more to roughly equivalent to a new pipeline Contrary to Markham's claims, for the cars alone. Making some very optimistic assumptions, and entirely ignoring the safety issues. And also ignoring that we are using much more energy to transport this way, either diesel for the train, or electrical for pumps on a pipeline..
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The oilsands does produce what you are calling ultraheavy sour crude, and what should more accurately be called bitumen, which is then mixed with diluent that is effectively lighter fluid tonflow as DilBit (CSW). And realistically bitumen is no more oil than natural gas is oil. Its steam/water/ice, NG is gasious, oil is a liquid, and bitumen is a solid, which is why you have to super heat heat it.
However, we do have around 1 million barrels a day in upgrader capacity, that turns that bitumen into light sweet crude (CSL). Around half of that is used in Alberta, which produces the RRPs for all of western Canada (give or take), and much is exported to eastern Canada. However, some is exported south, which could be sent east given a pipeline.
Additionally, most of our growth over the past few years has been conventional crude, albiet still a heavy crude. But that diluent mentioned a moment ago is shale oil from Alberta and BC, and it is light and sweet..
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@imacmill well, I love in Southern Ontario, and I don't love the all of my oil comes through the US, and that most of it comes from Line 5 which Michigan has been trying to shut down for years, and Biden was keeping open for us, and which Trump could choice to have the EPA close tomorrow. Even though I know it would cost some money and isn't directly profitable. Sometimes infrastructure does cost money, I doubt either of us take issue with Transmission lines being subsidized, for example.
But more widely as a Canadian, the US is about to collapse our exports if we are serious about fighting back. That will be expressed heavily through enormous declines in oil volume and more over price under a growing discount pushing down value. We could rapidly lose 10% of our exports via oil, alongside collapses in New Brunswick from St. John, Ontario's de industrialization, and a general commodity slump. And since Canada is a trade dependent economy, fewer exports will lower the value of the CAD value over a prolonged period, will mean inflation. And mean that Eastern Canada is exporting Capital for a good we domestically.
And on top of all that will probably see a million+ immigrants going home alongside a general Property Market and Financial crash, between bank exposure to oil sands and housing.
So I would be largely in favor of risking a financial loss on a pipeline as a hedge against a sudden drop in currency value and energy security, although I think the discount we will see in the future will more than compensate for pipeline costs, and really want to minimize the time it stays that large. And I think it's rather dishonest to quote Transmountain as a reasonable cost estimate given it was built over Covid.
Because the biggest Issue is Alberta. Which will be the center of the depression. Fort Mac will be a ghost town, because the Mines will be the first thing to close and if we lost Line 5 that's almost half the market for upgraded syncrude. Weak future prospects will end the conventional drilling even though conventional output will continue at low prices from existing wells. The Government of Alberta will lose half it's revenue, a third in oil royalties alone, because the sliding royalty scale. And have an unemployment crisis of formerly very high wage blue collar workers, again alongside other provinces.
And all the while Trump will be on Fox saying Alberta should join the US and they would be rich. With Pro American support already at 10% or higher. If we want to keep Alberta, we need to have more of their oil dependent on Canada than on the US, and right now 80% of their output goes through the US. The US, Trump, doesn't want Quebec. It doesn't want a bunch of democrats and retries. it wants the Conservative, oil rich province, full of young people and with a road to Alaska.
That is the biggest point of issue. The Federal government pays Quebec $13 billion in equalization, it can risk losing $20 billion over 20 years to make Alberta happy. It really doesn't matter if you think it's financially or economically unsound, we need to keep Alberta. And we are already in a competition with the US for it.
But also more fundamentally, I think Markham speaks in bad faith around the oil sands. Electrification and EVs will decimate demand for Gasoline, but they are having little impact on Diesel and jet fuel, or lubricants. Look at Sturgeon Falls, we can take a barrel of Bitumen and produce a barrel of Diesel. OPEC and conventional oil get like 20-30% a barrel of Diesel from a barrel of oil, and about half a barrel of Gasoline. Which means high prices for heavy RPP are going to support oil production with gasoline sold off cheap and pushing EVs out of markets. High prices we can both exploit to carve out market for value added products.
And keeping heavy RPP prices lower, and thereby reducing the profit in refining, and therefore produce less gasoline to dump on the Market. Upgraders provide an excellent industrial customer for Green Hydrogen, and alongside the insitu operations, an industrial customer for SMRs. Frankly once nuclear I would like to see Gasifiers to push out the Shale fracking to the west to feeds LNG.
And all that is besides that Fact that Markham perfectly agrees that non combustion uses should be developed. There is no reason not to use a pipeline to deliver bitumen to coastal BC where Carbon Fiber or Asphalt binder can be produced for global export. We can build a pipeline now, and develop industry as demand falls, not that I think it will for heavy oil. I completely agree with adding as much value as possible.
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TransCanada was a terrible plan, all around. Any conversation around it exporting to Europe was as BS as it powering Canadian refineries. It was a DilBit tube, meant to get bitumen to the coast to send it to the US Gulf refineries. 2M barrels a day, with no planned upgrader capacity, could never go anywhere else, Europe can't upgrade bitumen any more than we can.
It being cancelled had nothing to do with Trudeau as commonly believed, it was first and foremost because KeyStone XL was approved, making this long circuit redundant. Quebec did act to block it, but for good reason, it wasn't an oil pipeline, it was DilBit pipeline, and spills are very dangerous. The US blocked Keystone XL for the same reason.
However, today we do need an East West pipeline. It must be built with complementary upgraders, to send upgraded light crude east. We cannot continue to risk Ontario's oil coming through the US, particularly when Michigan has been trying to close the pipelines for years over environmental concerns, and we have relied on the Biden administration to overrule and keep the oil flowing.
It should be built in conversation with europe, who may be willing to provide financing or long term purchase agreements, to allow more upgrader and pipeline capacity to be built and diversify exports. While Europe had no reason to buy in long term in the past, they have now been stung by the Saudis, the Russians, and even the Americans, and may be willing to pay for security..
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@michaelenman9498 you need to understand this really isn't true. I am very frustrated at Canadians for not understanding we can in fact be hurt by these policies and Americans largely won't be.
Let's look at oil. We have seen during Covid and 2018 what happens when we do not have sufficient take away capacity. All oil is priced out of Hardisty, AB. 600k bbl/d goes south through Keystone to the Gulf Coast refineries. If a selective tariff is placed on Canada, then for our oil to sell in the Gulf where international crude is available, the purchase price, aka the price in Hardisty + the fee for the tariff, cannot be higher than the global price. We will see a discount on oil to accommodate the additional cost purchasers pay in tariff, or else we will lose the 600k bbl/d to international competition, which would be worse for prices. A discount that will be available to all purchases, including the Midwest. We literally saw price movements the day of the tariff taking off an immediate 4% relative to US WTI.
Let's look at Aluminum or Iron. What is the alternative market? We will have to ship by rail to the Pacific, and then oversea. That is significant transportation cost. So long as a Tariff does not drive down prices to the point producers are losing revenue, we will adsorb most of the cost in the form of lower profits and capital write downs.
Manufacturing and the complex supply chain will be reflected in substantially higher prices. But a new car is not an essential or regular purchase. Auto manufacturers will move production to the US over the next few years, even without a tariff, if this uncertainty continues. Do you think Trump, backed by Musk, cares if Ford goes under? If they destroy a massive private sector union? Tariffs here will increase prices in the medium term, but that will only make Tesla more competitive in the US and take manufacturing away from Canada.
And all of this is going to weaken the CAD. A weaker CAD will suppress our export prices across the board. There may be some level of higher prices on certain goods. But they did the same thing to China in 2018, and the renminbi fell to adsorb almost the entire price difference. And Canada is far more reliant on US trade, and in particular export purchases.
We cannot fight this trade war if we aren't going to acknowledge the impact. Do you honestly believe these tariffs will have nearly the impact on us it will on them? What do you think happens when our economy crashes? I don't understand how people can believe this Econ 101 nonsense is actually applicable.
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@michaelenman9498 you need to understand this really isn't true. I am very frustrated at Canadians for not understanding we can in fact be hurt by these policies and Americans largely won't be.
Let's look at oil. We have seen during Covid and 2018 what happens when we do not have sufficient take away capacity. All oil is priced out of Hardisty, AB. 600k bbl/d goes south through Keystone to the Gulf Coast refineries. If a selective tariff is placed on Canada, then for our oil to sell in the Gulf where international crude is available, the purchase price, aka the price in Hardisty + the fee for the tariff, cannot be higher than the global price. We will see a discount on oil to accommodate the additional cost purchasers pay in tariff, or else we will lose the 600k bbl/d to international competition, which would be worse for prices. A discount that will be available to all purchases, including the Midwest. We literally saw price movements the day of the tariff taking off an immediate 4% relative to US WTI.
Let's look at Aluminum or Iron. What is the alternative market? We will have to ship by rail to the Pacific, and then oversea. That is significant transportation cost. So long as a Tariff does not drive down prices to the point producers are losing revenue, we will adsorb most of the cost in the form of lower profits and capital write downs.
Manufacturing and the complex supply chain will be reflected in substantially higher prices. But a new car is not an essential or regular purchase. Auto manufacturers will move production to the US over the next few years, even without a tariff, if this uncertainty continues. Do you think Trump, backed by Musk, cares if Ford goes under? If they destroy a massive private sector union? Tariffs here will increase prices in the medium term, but that will only make Tesla more competitive in the US and take manufacturing away from Canada.
And all of this is going to weaken the CAD. A weaker CAD will suppress our export prices across the board. There may be some level of higher prices on certain goods. But they did the same thing to China in 2018, and the renminbi fell to adsorb almost the entire price difference. And Canada is far more reliant on US trade, and in particular export purchases.
We cannot fight this trade war if we aren't going to acknowledge the impact. Do you honestly believe these tariffs will have nearly the impact on us it will on them? What do you think happens when our economy crashes? I don't understand how people can believe this Econ 101 nonsense is actually applicable.
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@michaelenman9498 you need to understand this really isn't true. I am very frustrated at Canadians for not understanding we can in fact be hurt by these policies and Americans largely won't be.
Let's look at oil. We have seen during Covid and 2018 what happens when we do not have sufficient take away capacity. All oil is priced out of Hardisty, AB. 600k bbl/d goes south through Keystone to the Gulf Coast refineries. If a selective tariff is placed on Canada, then for our oil to sell in the Gulf where international crude is available, the purchase price, aka the price in Hardisty + the fee for the tariff, cannot be higher than the global price. We will see a discount on oil to accommodate the additional cost purchasers pay in tariff, or else we will lose the 600k bbl/d to international competition, which would be worse for prices. A discount that will be available to all purchases, including the Midwest. We literally saw price movements the day of the tariff taking off an immediate 4% relative to US WTI.
Let's look at Aluminum or Iron. What is the alternative market? We will have to ship by rail to the Pacific, and then oversea. That is significant transportation cost. So long as a Tariff does not drive down prices to the point producers are losing revenue, we will adsorb most of the cost in the form of lower profits and capital write downs.
Manufacturing and the complex supply chain will be reflected in substantially higher prices. But a new car is not an essential or regular purchase. Auto manufacturers will move production to the US over the next few years, even without a tariff, if this uncertainty continues. Do you think the guy by backed by Musk cares if GM goes under? If they destroy a massive private sector union? Tariffs here will increase prices in the medium term, but that will only make Tesla more competitive in the US and take manufacturing away from Canada.
And all of this is going to weaken the CAD. A weaker CAD will suppress our export prices across the board. There may be some level of higher prices on certain goods. But they did the same thing to China in 2018, and the renminbi fell to adsorb almost the entire price difference. And Canada is far more reliant on US trade, and in particular export purchases.
We cannot fight this trade war if we aren't going to acknowledge the impact. Do you honestly believe these tariffs will have nearly the impact on us it will on them? What do you think happens when our economy crashes? I don't understand how people can believe this Econ 101 nonsense is actually applicable.
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Areas of low carbon service I would like to see
1) Heat pump manufacturering, specializing in low tempature heat pumps. Particularly in Ontario, to help transition an automobile manufacturing sector that was already struggling and is now under attack. It's parts based equipment, not using any unusual chemistry, that can be built with steel and aluminium and tooling. We have a large domestic market, and can leverage that for building an industrial base to sell to Northern Europe, Northern areas in the US, and parts of South America.
2) Fully supply chain Battery production. We need to make mining possible again, but if we can do that, we can use entirely domestic supply chains and low cost electricity to be competitive in a growth sector.
3) Green Hydrogen, we have a number of projects on the East coast for export to Europe.
4) Data Servers, particularly in Labrador, where you are near the Intercontinental data cables, you have low tempatures, and excessive amounts of electricity.
Aluminum we already have might also be included. That's definitely not all Canada should be doing. And I would love to see an east West oil pointline and another million barrels a day to the Pacific with an upgraded complex..
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