Trans Canada Pipeline wants to put $7B of capital to work. Build a pipeline from Hardisty to Houston. 

Is that the best use of the capital?  From what I've read, the pipe line will end a distribution blockage at Cushing, Oklahoma, in the short-term.

In the mid-term, it will create over capacity, in the  pipeline system. That will be taken up over time by more production, in Alberta. And elsewhere, if the price of oil stays high. That's a reasonable expectation.  Except, oil use for gasoline, in the US is declining. High prices are a contributing factor.

So if that was your $7B, some of it is. Your pension fund is likely  vested in Trans Canada, would you make that bet?

So what if, love the what if game, Keystone isn't built. What then?  Alberta Energy Minister, Ron Liepert, might need resuscitation. He's has quite the gift for influencing people .

By the time the KeyStone XL decision is made, Alberta will have a new premier. Perhaps a new government. Who knows who will be running the provincial  energy department in January 2012.

With no KeystoneXL, oilsands oil gets to market, as it does now. Though major players including ConocoPhillips, Royal Dutch Shell PLC, Cenovus Energy Inc., Valero Energy Corp., Canadian Natural Resources Ltd., won't be too pleased.

We take a 20$/b haircut on the raw stalk because of the glut in Cushing and decreasing American demand.  That's $45M a day!

"There is enough spare pipeline capacity in markets outside the U.S. Gulf Coast and Canada’s West Coast to absorb oil sands growth, until near the end of the decade, but new capacity would have to be available after that" Greg Stringham, vice-president, oil sands and markets at the Canadian Association of Petroleum Producers.

Without Keystone XL, the pace of the oilsands development slows. Is that bad? Would it be 'better' if there was time to create extraction efficiency.  Eighty percent of the resource is too deep for mining. SAGD needs to be better than it is now.

With more time can the industry walk its' efficiency talk. Be more efficient? Live its' social licence to operate. Use less water, less natural gas in the SAGD process. Well, use less of everything.  Doesn't that drive costs down? Create better balance sheets? 

Does no Keystone XL make local upgrading economic? Right now, apparently it isn't . The existing up-grader capacity is cheaper to run.  Wonder why it was such a good idea to build locally, a few years back, and now not so much? Perhaps we need to look beyond just the business economics. Consider some social ones, as well.

Like long-term community prosperity.  Not just dig it .Extract it. Ship it. We aren't going to replace that oil. We can mitigate the extraction by creating some long-term community value, not just hedge fund and CEO bonus value. Norway seems to have captured some. We have a deficit. Norwegians have $500B in the bank!

Now my understanding is, the industry doesn't like Alberta's Bitumen in Kind program. Distorts the market the industry says. The proposed North-West Refinery gets a deal on the bitumen. Gee this guys don't like royalties. Don't like BRIK. Not much long-term community prosperity, in those positions.

If, still playing the what if game, if there is no Keystone XL, then up-grading locally may-be economic. Up-grade here, use existing pipelines.  Ship to refineries that can take the upgraded stock. Not all refineries are bitumen able.  And there are no plans, anywhere, to increase refinery capacity.

Except may-be right here, in Alberta's Industrial Heartland. Perhaps, there is value added product we can sell. Like bio-diesel for the aviation industry, or the trucking industry. 

The folks in Ontario seem to think that a good bet. And their stock is coming from forestry waste.  Competition coming?  Might just be a bit better for the environment too.

So no KeyStoneXL won't please Trans Canada Pipeline.  However it might just create some options. Long term community value is one of them.

So if you had $7B, are you betting Keystone XL, or betting local, where's the value proposition for you?

Canadian Oil Sands - US Council on Foreign Relations

Made s middle of the night visit to Emergency, at the Canmore Hospital .Didn't know exactly where it was. Bumped into 3 RCMP constables during my search. Advised to park my car and got my first ride. Even got an offer for a pick up, if my visit proved to be short. Alas the burning sensation in the middle of my chest was to dictate otherwise.

Of course self diagnosis was asthma or bronchitis. Figured in and out in an hour or two . Uh no!. Emergency crew in Canmore , deliberate , professional , empathetic and much more knowledgeable than the would not be patient.

Several tests coupled with symptoms revealed my ticker was toking as well as ticking. In combination that's not necessarily a good thing. So it was a good thing I was where I was. Thanks Canmore RCMP!

Over several hours, it was determined the mountain bike ride was off. The good folks in Canmore had ample evidence a higher level of care was needed. First thought Calgary of course. Nope Calgary didn't want me. No offense. preferred to be home, in YEG, in this circumstance.

So in a heart beat, a plan hatched to Medi -Vac to YEG. Second ride up coming. But my belongings were in hotel room and rental car was parked in down town Canmore. Quick call and folks at Rocky Mountain Ski Lodge packed up my room and delivered my belongings. Thanks Rocky Mountain Ski Lodge.

Quick call to Budget and they say we'll pick up vehicle and deliver your stuff.
Thanks Budget!

And thanks nurse Sue and docs Anita and Mansur ( sic) And Canmore EMS Chris and her partner for ride two, to Medi - Vac at YYC. Not sure how long that ride took, was a little engaged in how the ticker was toking. And it was doing ok.

So now ride three with Lane ,Chris ,and Byron , Calgary EMS , and the medi-vac pilots.Forty nine minutes and TD at YEG muni. and transport to Sturgeon Valley. Hospital Yes several hospitals closer, suspect vacancy rate might have s lot to do with the locale. Now under watchful eye of SVH nursing staff, snd Dr Fadi Khadour. Angiogram is slated for Monday, as long as the ticking and toking remain in synch, which they are at this writing.

O and the learning, a whole gaggle of Alberts Health Services people made my day Saturday and likely a whole bunch more. Thanks!

It's getting a tad nasty in Tory ville. Calgary's power brokers are fired up on power.  It started with Calgary Herald calling out Tory leadership candidate, Ted Morton, on transmission lines.

Tory Leadership game on!

All prompted by Wikileaks suggesting exporting power is  the rationale for the new  transmission lines.

The government says power export is not the reason for the upgrade. 

Follow the link. You decide.

Nothing overly sinister about exporting power.  It's imported and exported all the time.  That's the essence of a grid system. Power is consumed on demand. Moves to where it's needed. 

It's good there's a modicum of discussion, now. Not so good there wasn't much, over the last two years.The issue is complex. Curious to me how myopic the focus is.  Disclosure, I worked as consultant for the Heartland Transmission Project, the capital region sector of the proposed transmission line up grade. 

How did transmission capacity become the key solution to our power needs. Why limited discussion on intrinsically related issues? Our power comes from coal. How does generation impact our GHG emissions? How does our 'dirty' power system impact our reputation? 

Dirty oil, dirty power, dirty Alberta, I'm tired of being called dirty, you? What's the value of our reputation?  How does that translate into the cost of our power? Should it? 

With a singular focus on transmission. We squandered an opportunity to derive value from our grid. Manage our reputation. Didn't consider an array of options. Conservation and managing demand. Making the grid smarter. Decentralizing distribution. Integrating alternative sources, wind, geothermal, solar, and natural gas.  Crucial elements to creating a thorough solution to our power needs.

There's lots of value for wire line companies, AtlaLink, Epcor, and Atco.  We pay for the up grade, they own the lines. Reap the value from export sales. Does that work for you?

January 17th 2011 is a big day for Edmonton. That's 'arena' day a city council. Decisions made will to be a tipping point for Edmonton's future. I'm not optimistic.

No public financing of the arena is the overwhelmingly sentiment emerging form public open houses, held last fall.  The Katz Group bears responsibility for that.  Demands for all revenue from building operations has usurped support. Arrogant self centered greed is an old business practice. It desperately needs to change.  Unfortunately, corporations are not change agents.

Why has the arena, as one element in Edmonton's down town revitalization failed to galvanize support, or ignite community imagination. Despite recent zoning changes the project lacks imagination. Do we need more hotels and bars?

The proposed financing formula, get government to pay, is old. Claims of future development are nebulous. The Community Revitalization Levy is complex. A billion dollars worth of investment would yield $14 million a year in taxes, according to City Planing Manager Gary Klassen. It could take a decade to generate a billion in development. At $14 million a year the payback is 30 years. Just in time to build another one. 

The CRL only works when property value escalates. So government escalates them. That translates to higher capital and operating costs. Higher prices for services provided. Governments create inflation. Inflation is not wealth. It is an insidious robber of it.

Why not consider a community bond? A  bond is a relatively simple financial instrument. It is easy to understand. Buy the instrument. Get your money back, plus interest, in a specified time period. When asked Bob Black, Katz Group Arena President, dismissed the concept. It would require new legislation. That's what Peter Elzinga is for.  And it's easier to get government to pay.

There's an historic financial precedent that could be revisited.  When AGT was privatized to create Telus, Albertans were able to purchase shares before they were offered for public sale. The 1990, $890 million offering was the largest in Canadian history, at the time. 

A similar procedure based on a community bond could be engaged for the arena and the entire down town redevelopment plan. If there is financial merit, financial institutions will buy in. Pension plans at work!  Governments off the debt hook.  Why not?

Lack of will is the biggest impediment to exploring financial innovation. It takes courage and leadership. Predisposition to engage Edmontonians, Albertans, and Canadians, in the upside of the arena and arena district operations. Belief in Edmonton's long term growth.  Bias towards open, financial  practices. The Katz Group does not lean that way. Not a public company, no need to act like one, they say. They could innovate on that.  

This project has the potential to re shape the city as an innovation centre, on many levels. It can establish Edmonton as a world leader, in responsible urban design and engineering, environmentally compatible energy use and waste management processes and systems.

Lord knows, on the energy side, we need a major makeover. We think we are smart. Time to prove it.  Embrace the risk in innovation.  Create new systems and practices. Think long term community legacy  Think like AMICO!

We are squandering an opportunity. A chance to create new locally based, globally impact-full industries and jobs. Squandered by narrow 'now' thinking. By a focus on glitz, at the expense of substance, the trivial instead of the meaningful.

The arena has a role to play in what urban Edmonton will be in 2030. It needs to be a public private collaboration, a laboratory for responsible environmentally respectful urban development, an embracing and inclusive community endeavor.  It's a tragedy to date it hasn't been.

Update:

Two City Groups  One Edmonton and Yes for Edmonton have both endorsed the concept of a downtown arena as part of the re-development of the city core. With due respect to those groups, most members have a vested interest in the outcome.  Most stand to gain personally and corporately.  Nothing inherently sinister about that. However where's the larger view? Where is the tapping of  individual networks to devise a unique made in Edmonton financing formula. Why down load that crucial decision to city administration. 

These are bright dynamic people. Why the lack of courage? It is easy to recommend some else do something.  Where's the innovative collaborative community first thinking?  Absent again. Why the arena project remains bereft of substance.  A chance to unite around a common cause is being segregated into us and them. Creating scarcity where there isn't or shouldn't by any.

Stopped by the Solar Society public lecture at Grant MacEwan University, last night. Retrofitting buildings was the topic. Shafraaz Kaba from Manasc Isaac provided the insight.

Key learning. Efficient buildings are a metaphor for behavioral change. Change the dogma associated with a retrofit.  Example, consider the amount of energy tied up in old structures. Concrete and steel ingest lots of energy.  Why demolish and loose that investment? 

Manasc Issac's creative has two pillars, efficiency and a holistic approach.  Example, use natural light, generously. Effect, lower electrical expenses. In their portfolio you'll see lots of windows like this idea for a retrofit of the Milner Library. Glass comes from silica. Alberta has 200 year supply, north of Peace River.

Natural light creates, healthier working environment, happier tenants, long term relationships, higher occupancy rates.  Now if we can just get building codes geared towards efficiency. Wonder how long it will take for industry associations to break down the we can't do that dogma?

Now I bet you didn't see that headline, last week. Distracted by James Cameron's visit I guess. 

Suncor has decided tailings are a big priority. Yes the environment is a key driver.  Tailings are bad business, too.  They are costly. Expensive to build, maintain, and fix .In the next two years Suncor plans to spend $1.2Billion to essentially eliminate them.  Eliminate. Going forward there won't be any more. 

The focus last week was on the past. It took 40 years to reclaim one small pond. Fair enough. Missed in the reportage  was 7 years and $250 Million to develop a technology that will clean up the ponds, in 3 weeks.

"We've modified a technology from phosphate mining, created a polymer that  is specific to our challenge", says Suncor VP Gord Lambert. That investment will turn reclamation time from 40 years to 3 weeks. Essentially cleaning up, as the process moves forward.

So while we take it on the chin a little in the Oil Sands PR game.  Perhaps it's time has come  to investigate the issues for our selves.

Brave to enlist a media call for a parking lot. I mean what's newsworthy about a parking lot opening. Joni Mitchell comes to mind. 

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Smart Park Peter Value.mov (2.31 MB)

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Just read Curtis Stock's take on Dan Kepley's resignation. It's insightful, contextual and passionate, as I expect from one of this berg's premier play pen scribblers.  I wish he surfaced more often, in the paper and on line.  

                                                                        

                                                            

Just good business. Wise words from an old friend. An apt description of the announcement of the 189 room. CourtYard Marriott to be in business, at Edmonton International Airport, by 2012. Just when the terminal expansion is completed. 

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