Alberta Politics & Government Thread 3.0

[Wolven]

Originally Posted by Leondros

Get it to tide water and it really doesn't matter. Markets will use it.

As for China reaching peak demand in 2026/2027 - that is laughable. Look at the IEA's new current policy scenario and OPEC's outlook. Neither have China even close to peak oil in the first part of this century.

Forget IEA. Go look at China. CNPC (China National Petroleum Corporation) is saying it. It was even reported by the Financial Post a year ago...

But even the IEA has an article saying China's consumption has plateaued.

What is laughable is that you think China cannot pull this off. Of any nation in the world, it is pretty clear they are the only ones who can pull off a pivot like this.

[Mr.Coffee]

Originally Posted by Fuzz

I'm not sure where you are seeing that, the IEA has China in the CPS scenario decreasing demand in the 2025-2035 window:

Page 154


https://iea.blob.core.windows.net/as...utlook2025.pdf


Now, the easy argument here is China dropping doesn't matter due to demand from other regions increasing. But Wolven isn't wrong about the China claim. In the stated policy scenario it's even lower:


"As a result, oil demand in China peaks in the STEPS before 2030 and falls to around 15 mb/d by 2035."

I think the big disconnect could be- oil could peak then (as in demand could peak) or decline but are you guys suggesting that oil demand collapses or there’s then nobody to sell oil to?

I just had a hilarious conversation with ChatGPT about it. Wolven the Coles notes was a range of demand dropping ~10% by 2036 or increasing ~1-2%.

Complicated to forecast for sure due to the bazillion variables. Regardless I’m willing to take that bet that oil will be used in 2036 and there’ll be customers for decades.

And even if you did believe that oil demand will go to 0, shouldn’t that mean we rush to capture as much value of this resource as we can while we still can?

[Wolven]

Originally Posted by Mr.Coffee

I think the big disconnect could be- oil could peak then (as in demand could peak) or decline but are you guys suggesting that oil demand collapses or there’s then nobody to sell oil to?

I just had a hilarious conversation with ChatGPT about it. Wolven the Coles notes was a range of demand dropping ~10% by 2036 or increasing ~1-2%.

Complicated to forecast for sure due to the bazillion variables. Regardless I’m willing to take that bet that oil will be used in 2036 and there’ll be customers for decades.

No, you are confusing peak oil demand and total oil demand.

Oil will still be used in 2036, the point is that if demand starts going down then we shouldn't be investing a lot of money to try to make our supply go up because we won't earn our money back.

We should still sell our oil and we should move ahead with optimizing the existing pipelines ASAP to get more oil to market in the near term. The more time we waste talking about the imaginary pipeline project and not optimizing TMX is wasted opportunity to sell oil. We need to make money while we can.

At the same time, we need to understand that electrification replaces fossil fuels in many ways and electrification is not slowing down. Not only are many countries investing in electrification today they are also investing in innovations that make electrification cheaper and more effective. Those innovations will be in mass production in 10 years and will further harm the ROI on a new pipeline.

And yes, you are right in that there are many variables. Like if the Saudis decide to maximize their profits for the next 20 years and sell all of their oil. They could crush the market by unloading their oil (essentially cashing out). There is no way to forecast that, they can just do it whenever they want and most Albertans know what happens to the Alberta oil sector when the Saudis unload their oil.

[puckedoff]

Global oil production faces massive annual declines just due to production curves, so Canadian oil will have a buyer well beyond 2036+ as the oil sands production is relatively constant.

Even if global oil demand has peaked, thats still 100+ million barrels per day that needs to come from somewhere, which may as well be Canada.

Edit: Annual production decline is about 6 million barrels/day annually without new projects, so this would just provide 1/6th of one year.

[Frequitude]

Originally Posted by Wolven

While I agree that Canadian energy is better for the environment than many of the alternatives... I am not sure which markets we think we are going to reach with this new pipeline in the year 2036+?

Also, of those buying markets, which ones do we think will actually care about how "good" Canada oil is? Countries like India will only care about how "cheap" it is. Any country that is worried about environmental and social rights is likely on pace or ahead of Canada (and especially Alberta) in their energy transition and will not need to buy an increasing amount of oil in the late 2030s.

Some people are saying we would use this pipeline to increase oil sales to China... but China is talking about hitting peak oil demand in 2026-27. Some reports are suggesting that China may have actually peaked this year, which is crazy, but I wouldn't doubt their ability to pivot on that scale or their desire to keep that information hidden to mess with the rest of the world. Either way, if China does peak before a new pipeline is built then that would mean that not only would they not be interested in buying more oil from Canada... but the oil they have stopped buying would need to find a new customer. As the existing oil supply shifts to cover the shrinking demand, it gets harder and harder to see where our increased Alberta oil supply will land in a decade.

India represents 25% of the global increase in oil demand right now. If they get their energy transition to accelerate over the next decade then that is pretty much game over for the new pipeline before it is built.

Also, the speed in which alternative technology innovations are being discovered and then moving to mass production is staggering. Giving the alternative technologies a decade to discover, prove, and start mass production puts a huge amount of risk onto the new pipeline project.

I would move ahead with the TMX expansion ASAP and shift focus from a new pipeline to additional industry diversification in Alberta. Alberta should get in on the new sodium-ion battery innovation and build a mega-plant of energy storage as well as a factory for manufacturing of next-gen batteries for other North America jurisdictions (or any other bleeding edge technology that will be in high-demand throughout North America).

In short, Alberta is good at oil because Alberta is good at innovation. Instead of focusing on oil, we should be focusing on our ability to drive innovation and applying that spirit to industries with real growth opportunities for future generations.

It's not about getting a share of increased demand, it's about getting a share of natural decline replacement. The vast majority of oil production in the world declines at 10-30%/yr. So even if oil demand remains flat, there is still a pile of new production that is needed. That's where we want to come in. Long lasting low decline oil now. Let the rest of the world fight over future demand decline with their own sustainment investments once we're already up and running.

[Mr.Coffee]

Originally Posted by puckedoff

Global oil production faces massive annual declines just due to production curves, so Canadian oil will have a buyer well beyond 2036+ as the oil sands production is relatively constant.

Even if global oil demand has peaked, thats still 100+ million barrels per day that needs to come from somewhere, which may as well be Canada.

Not to mention if the logic is that another seller will flood the market, why don’t we?

He is wrong, the pipeline is needed for sure. Export capacity will be constrained next year, and if we want leverage with the USA, we need it more than ever (and urgently).

Also oil is used for more things than electricity can replace. Also population is growing to 2036 onward. Also jet fuel. Also this. Also that. Also… here’s a big one- why shoot ourselves in the foot?

[Wolven]

Originally Posted by Mr.Coffee

Not to mention if the logic is that another seller will flood the market, why don’t we?

Because we cannot compete with OPEC in that strategy.

[para transit fellow]

need to clarify: we want to a pipeline that will take ten years to plan/ design/ build so we can take a bigger part in a declining market?


and investors can actually make money on this model?

[Mr.Coffee]

Originally Posted by para transit fellow

need to clarify: we want to a pipeline that will take ten years to plan/ design/ build so we can take a bigger part in a declining market?


and investors can actually make money on this model?

Yes, so what does that tell you?

[Doctorfever]

Originally Posted by Mr.Coffee

Yes, so what does that tell you?

That we would be in a very good spot had we built the Northern Gateway.

However, this is still great news!

[para transit fellow]

Originally Posted by Mr.Coffee

Yes, so what does that tell you?

Albertans will get shafted as investors get their money but the province is left holding the bag for clean-up

[afc wimbledon]

The one thing I don't really get is why it makes more sense to go to Prince Rupert rather than doubling or trebling up to Vancouver, the ships are all having to sail south past Vancouver anyway to get to the Asian markets, I dont see any point trying to open up a new route legally

[Leeman4Gilmour]

Originally Posted by puckedoff

Global oil production faces massive annual declines just due to production curves, so Canadian oil will have a buyer well beyond 2036+ as the oil sands production is relatively constant.

Even if global oil demand has peaked, thats still 100+ million barrels per day that needs to come from somewhere, which may as well be Canada.

Edit: Annual production decline is about 6 million barrels/day annually without new projects, so this would just provide 1/6th of one year.

My tinfoil hat theory is that Ghawar is going to decline faster than the Saudi's forecast. American's going hard after Venezuela, now Carney signing an agreement for anothr pipeline. All reactionary to a future supply issue. I got more tinfoil if you want a matching hat.

[Whynotnow]

Originally Posted by afc wimbledon

The one thing I don't really get is why it makes more sense to go to Prince Rupert rather than doubling or trebling up to Vancouver, the ships are all having to sail south past Vancouver anyway to get to the Asian markets, I dont see any point trying to open up a new route legally

The inlet port is not able to handle increase volumes, that terminal is one of the tightest spots I’ve seen. The pipeline row doesn’t have space for another line.

[afc wimbledon]

Originally Posted by Whynotnow

The inlet port is not able to handle increase volumes, that terminal is one of the tightest spots I’ve seen. The pipeline row doesn’t have space for another line.

Well I wasn't saying it should go to Burrard, out in Tsawwassen at Delta Port would be the logical site

[Weitz]

Originally Posted by Wolven

Because we cannot compete with OPEC in that strategy.

OPEC has their own issues with under reporting their declines for years.

[Whynotnow]

Originally Posted by afc wimbledon

Well I wasn't saying it should go to Burrard, out in Tsawwassen at Delta Port would be the logical site

Still no room in the existing row for another line and I’ve looked at trying to get from Burnaby to Robert’s bank and I just don’t see a route there.

[Point Blank]

Sorry if I’m derailing the current topic, but I’m currently working on some data analysis for the system and thought I’d share some insights.

For those of you who don’t know, PAT’s are provincial achievement tests students in grade 6 and 9 write across the province. The data is typically used to inform schools and school boards on areas of growth.

The PAT results are not communicated in raw percentages, but are instead usually communicated in the percentage of students receiving “Acceptable” and “Excellent” standards.

To determine what score constitutes as Acceptable or Excellent, the province uses “cut scores”, which are adjusted annually to account for test difficulty and maintain consistency and track trends over time.

In the years before the UCP implemented a new curriculum, the cut scores for “acceptable standard” typically hovers around 50%. In 2021-22, the percentage of students achieving acceptable standard was 64.1%, in 2022-23, the percentage was 65.4%. Again, these were with cut scores of about 50%.

How are our students doing with the new curriculum?

In 2024-25, the percentage of students achieving acceptable standard was 53.1%. This is a 12 percentage point drop, or an 18.8% decline.

But that’s not even the worst news. The cut score that was used to determine the acceptable standard was 37%

So not only did the number of students who achieved acceptable standard drop significantly from 65.4% to 53.1%, but what was considered a pass also dropped from around 50% to 37%.

In other words, we went from about 35% of the province achieving below 50% on the Grade 6 Math PAT in 2021-22 to about 47% of students achieving below 37% in 2024-25. That’s how bad the math results are currently looking.

What about ELA results? In 2021-22, 76.1% of students achieved acceptable standard in ELA 6. In 2024-25, 69.1% of students achieved acceptable standard. I don't have cut scores for either of these. This shows a 9.1% decrease, less than half of what we see in Math (18.8%).

For the most part, PAT results were holding steady post-COVID and the massive drop off occurred just this last school year. 2024-25 was also the first time students wrote PAT’s after the new curriculum was rammed through with minimal piloting completed.

This to me suggests several things, I’m sure many UCP supporters would like to either blame COVID disruptions or the large influx of immigrants in the last 5 year for these results. But while these likely have an impact, it’s more likely due to the implementation of the new curriculum because:
1. The decline was not steady- it was a massive drop off in 2024-25.
2. The decrease in math was over twice compared with ELA- one would have expected ELA to decline more with more newcomers who don’t speak English.
3. Grade 9 PAT’s did not experience anything near this level of drop off, and Grade 12 diploma results actually increased year over year. And there’s no new curriculum yet for Grades 9 and 12.

What about natural implementation dip? A natural implementation dip is expected, but again, not this significantly nor should we have seen such a massive discrepancy between ELA and math.

I have a hard time understanding why the UCP chose to impose this new curriculum all at once instead of a gradual roll out one year at a time starting in Kindergarten. Because they shifted all the math 2 years earlier, students in Grades 2-6 all missed 2 years worth of foundational mathematical concepts they needed to know to be successful with the current new curriculum. These kids really got screwed over. And with the new Grades 7-9 curriculum expected to roll out in the next 2-3 years, this cohort of kids will get screwed AGAIN when they’re in junior high.

For a party that preaches the urgency of not losing learning time, this group of students lost 2 years worth of foundational learning because they chose not to pilot or roll out this curriculum properly.

BTW These are results collected across the province and includes public, francophone, independent, charter, and private schools. And no PAT results were available in 2023-24 because they were not written that year with the new curriculum.

[afc wimbledon]

Originally Posted by Whynotnow

Still no room in the existing row for another line and I’ve looked at trying to get from Burnaby to Robert’s bank and I just don’t see a route there.

Obviously I have no idea as to whether it is feasible or not but I am not suggesting that the pipeline should or could be built cheaper or easier if we just stuck it all in the same trench or cutting, I mean dig a second line next to the first, it has to be easier to persuade people who are already living with a pipeline in their back yard 'here's a brown bag full of money, we want to put in a second or third pipeline, no extra risk and a bag full of extra money!!'

As to the route in the lower mainland that is the easiest part, the original pipe already runs through Surrey, just run it to Delta along 60th Ave or so from Sumas, it's almost all agricultural land so far less issues, like I said not suggesting it would be cheaper, my guess is it would cost the same, but a vast terminal on the Georgia Straight in the lower mainland makes more environmental sense, is closer to the customers and is likely an easier sell, they could close Burnaby down as part of the deal

[curves2000]

I have a feeling that Alberta Investment Management Co (AIMCO) will be a big time investor in whatever potential pipeline/ carbon capture projects are going to be built.

There was some changes recently to AIMCO regarding previous lawsuits (trading losses) but I suspect more changes may be coming to that file soon.