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This will probably give Trudeau NIGHTMARES !!!

 

Heavy Canadian oil surpasses $100 for first time since 2008 

WCS surges as U.S. ponders a ban on imports of Russian oil

https://financialpost.com/commodities/energy/oil-gas/heavy-canadian-oil-surpasses-100-for-first-time-since-2008?utm_medium=Social&utm_source=Facebook&fbclid=IwAR1TiPVnQrYwTbS-bJXtEycAMujNT5_Pd6PzJbmGgQAxVcYu2z9DWkF6dHg#Echobox=1646680859

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For supporters of carbon taxes, why so glum about high gas prices?

 

  • Calgary Herald
  • 8 Mar 2022
  • LICIA CORBELLA Licia Corbella is a Postmedia columnist in Calgary. lcorbella@postmedia.com Twitter: @Liciacorbella
img?regionKey=k2tg155YZnPseQeYeXnLGQ%3d%3d  

“Hooray! Regular gasoline costs more than $2 per litre,” cheered Vancouverites over the weekend. Just kidding.

That's what should be happening, but it's not. Funny that. In fact, the opposite is happening. Anger is bubbling over in Lotus Land where gasoline prices Monday hit $2.09.9 per litre and are expected to continue to rise.

But ... why the anger? People in favour of carbon taxes should be celebrating the high price of gasoline. After all, the higher the price the less people will drive and heat their homes and the faster alternatives to fossil fuels will be made available.

That's the theory behind carbon taxes, but some people must drive regardless — like truck drivers who deliver basically everything we consume, unless it's brought to us by pipelines (another no-no) directly into our homes in the form of natural gas or electricity through wires. As the saying goes, if you bought it a truck brought it.

Therefore, as gasoline prices rise, so does the price of everything — food, clothes, vehicles, cellphones, furniture, tires, you name it.

Roger Mcknight, chief petroleum analyst with En-pro, an Ontario-based energy consultant, says even without pump and rack prices being “Putinized,” there were many factors driving gasoline prices higher.

“Even before the invasion on Ukraine ... U.S. inventories of crude and refined products were, and still are, well below the five-year average,” he wrote in En-pro's Weekly Energy Report of March 3.

“This, at a time when refineries are in their turnaround mode to prepare for the summer driving season. And, as we emerge from the pandemic, demand for gasoline is now up 11 per cent and jet fuel is up 24 per cent,” versus last year.

The Kent Group, a division of Kalibrate, lists the price of fuel and breaks down the tax and margin costs for each litre of gasoline. For those angry at oil companies and gasoline retailers, you might want to redirect your anger toward your federal, provincial and certain civic governments.

On Friday in Vancouver, for instance, the average price for a litre of gasoline was $2.01. If you remove all taxes — six in all — the cost would be $1.43.6 — a 56.5cent price difference per litre! As for the retailers, their margin was just 8.7 cents per litre, or just four per cent of the cost.

Vancouver has the priciest gasoline of all major Canadian cities thanks to a Dedicated Motor Fuel Tax-translink, a city-imposed carbon tax of 18.5 cents per litre, which goes to help pay for local transit.

Then there's the federal carbon tax. In 2019, Prime Minister Justin Trudeau's Liberal government set a minimum price of $20 per tonne for CO2, which rose by $10 every year to $50 in 2022. The carbon tax will increase by $15 every year until it reaches $170 in 2030. That will add about 40 cents to the cost of every litre of gas.

Champagne corks will be popping then by the pro-carbon tax crowd, right?

Angry consumers in B.C. have called on the provincial NDP government there to put a cap on gas prices, similar to the action taken during B.C.'S floods, but B.C.'S Energy Minister Bruce Ralston wisely says there are no plans to do this because it would lead to “unintended consequences,” something he learned about when the government did that during the devastating floods in the Fraser Valley last year.

In Calgary, the average price for a litre of gasoline on Friday was $1.57.2. If all taxes were removed, the cost would be $1.17.9. In Toronto, it was $1.74.6, or $1.21 per litre without taxes. Still high, but a lot less without the taxes.

Here in Alberta, Premier Jason Kenney has done the right thing by pausing the provincial fuel tax — which will save consumers 13 cents per litre on gasoline.

The Alberta government gas tax cut will take effect on April 1, just as the federal government's carbon tax is set to increase by two cents from about nine cents per litre to 11 cents.

Currently, gas prices in Alberta include 10 cents per litre in federal gas tax, 13 cents provincial gas tax, five per cent GST and 8.8 cents per litre carbon tax.

Franco Terrazzano, federal director of the Canadian Taxpayers Federation, says Trudeau intends to proceed with a scheduled April 1 carbon tax hike, that will result in another two-cent hike for each litre of gas during a time of high inflation and record gas and home heating costs.

“Politicians could and should immediately make life more affordable for Canadians by providing some much-needed tax relief,” said Terrazzano, who praised Kenney for his cut.

“The first rule of government should be to first do no harm, but Ottawa is doing harm by hiking the carbon tax during the middle of the pandemic. Trudeau's carbon tax is already increased twice during the pandemic while so many Canadians have struggled and he's getting ready to hike it again in a few weeks.”

Terrazzano says while Canada is raising taxes, other jurisdictions are providing relief during the pandemic.

South Korea reduced gas taxes by 20 per cent for six months, Spain cut its value-added tax on electricity from 21 to 10 per cent until April 30, Italy is cutting income and business taxes, France is reducing electricity taxes, the United Kingdom cut fuel taxes on short flights, Poland is reducing food and fuel taxes, Sri Lanka is cutting food and medicine taxes, India cut fuel taxes, 25 Indian states and union territories cut fuel taxes too, 11 American states are cutting income or business tax rates, Florida Governor Ron Desantis is proposing a state gas tax holiday and New Jersey reduced its gas tax by eight cents per gallon.

“You even have U.S. President Joe Biden (the guy who cancelled the Keystone XL pipeline on the first day of his presidency) ... considering gas tax relief, while our federal government is raising taxes at the pumps again,” said Terrazzano.

Battling climate change is important but so is putting food on the table, heating our homes and driving to work. If you voted for politicians who vow to continually raise carbon taxes, you should be happy about the high cost of gasoline, but it's understandable if you're not. Reality bites.

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Of course as the price of fuel rises the amount going also rises with the amount of GST and in most cases PST increasing. 

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On 11/18/2019 at 11:27 AM, Mitch Cronin said:

The world needs it to stay right where it is, so give it up. Stop raping forests and pumping filthy oil for temporary profit. Start thinking of priorities other than cash... you know, things that really matter, like long term survivability for our next generations.

Resistance to fossil fuel industry is growing and will keep doing so, so best you just give it up. 

William McNally: The drawbacks and dangers of oil and gas divestment

Calls from environmental activists for investment fund managers to sell off assets in the oil and gas sector — what’s called divestment — have been getting louder. Late last year, for example, some members of University Pension Plan, a large Canadian multi-university pension fund, demanded that the plan’s managers “exclude fossil fuels” from their portfolio. The goal is to starve oil and gas companies of capital and thus end global production of these resources. Will it work? And is it a good idea?

Many major firms, including Exxon and Shell, have dutifully committed to reducing their fossil fuel extraction as this sort of activist pressure ramps up. As the west divests, however, Vladimir Putin and others have been more than happy to pick up the slack. Worldwide production has not fallen. Instead, western divestment has helped enrich and embolden non-western actors. And remember, healthy Russian oil and gas profits are what’s financing Putin’s colonial adventure in Ukraine.

Besides the fact that divestment gives succour to a madman, here are five other major problems with the argument for it.

First, it hurts workers. A well-run pension fund will create a portfolio that seeks to maximize returns based on a pre-selected level of risk. Any significant change in the portfolio’s holdings — eliminating politically unpopular companies, for example — will not cause the portfolio to perform better. It can only decrease returns and/or increase risk. And doing so undermines the retirement finances of all members. Activists are welcome to reduce their own savings’ returns if they want to, but they should leave the savings of others alone.

Second, if the goal is to starve companies of capital, activists need to target firms’ access to primary markets, where funds are raised through the initial issuance of stocks and bonds. But divestment occurs in the secondary market. A fund manager who sells Shell on the stock market to buy Tesla isn’t directly affecting Shell’s access to capital.

In fact, many oil and gas firms have less need for the primary market these days as their ability to self-finance has improved. And while refineries and pipelines are still very capital-intensive, these needs are occasional and represent only a small proportion of the primary market. Plus, we shouldn’t forget that major western resource companies make up only about a third of the international top 20. The remainder include many state-backed behemoths such as Saudi Aramco, PetroChina, and Gazprom that are typically less vulnerable to activist pressure. In fact, if the price is right, one would expect these companies to be willing purchasers of divested assets.

Third, starving the fossil fuel sector of capital only makes sense if other forms of energy are ready to pick up the slack. But if an “energy transition” is already underway, it is very slow-moving: the demand for oil and gas will remain high for decades. Fossil fuels currently constitute 74 per cent of the Canadian and 79 per cent of the U.S. energy mix and the proportion is even higher in China, at 86 per cent. No wonder the International Energy Agency says fossil fuels “will continue to make a major contribution to the global energy mix through to 2050.” Not just a contribution but a “major” contribution.

An acceleration of the transition away from fossil fuels will require energy alternatives that are economically, technically and environmentally viable. For my money, next generation nuclear reactors look to be the most promising non-carbon energy option . But, in general, anyone concerned about climate change should stop trying to mandate an end to fossil fuels and focus instead on how to make them irrelevant.

Fourth, no one signs up to be poorer. Divestment is a strategy built on sacrifice, as it suggests pensioners and other investors are willing to accept lower returns and greater risk to produce a greener future. But evidence suggests this is not the case. A CBC News poll in 2019 found that although nearly two-thirds of Canadians said fighting climate change was one of their top priorities, half did not want to pay any more than $100 per year to do so.

Finally, activists need to improve their awareness of basic economics. The goal of divestment is to limit output and exploration by reducing firms’ access to capital. But if demand for fossil fuels is unchanged, any temporary reduction in supply will simply result in higher prices. And this in turn motivates investors to replace whatever supply was lost by the initial activist pressure.

Consider recent drilling statistics in Western Canada. When prices bottomed out in spring 2020, drilling activity fell with them. Since then, however, prices have been on the rebound. And so has drilling. The number of new wells was up 40 per cent last year and analysts expect another big increase in 2022. Experience thus suggests divestment can be partly self-defeating.

Divestment won’t stop fossil fuel production because it does nothing to reduce actual energy demand. For individual investors, the only thing divestment will do is lower their investment returns and imperil their retirement.

 

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Alberta's dirty oil transforms into elixir of freedom

 

  • Calgary Herald
  • 10 Mar 2022
  • CHRIS NELSON Chris Nelson is a regular columnist for the Calgary Herald.
img?regionKey=HRiZuf8MoZCH0F15mGF6iQ%3d%3d  

There hasn't been this much absolution granted since Father William Corby performed that sacred rite for the entire Irish Brigade, just before it collectively entered the Battle of Gettysburg slaughterhouse, back in July 1863.

Yes, what once was universally derided, as Alberta's dirty oil, is suddenly washed clean.

Today, with a world panic-stricken over rapidly rising energy costs and subsequent skyrocketing amounts of cash needed to fill any gas tank or supply any furnace, our once infamous product finds itself appreciated anew, leaving its previously lonely supporters somewhat agog at this development.

Nowhere was this rapid reputational turnaround more evident than in a recent business yarn, courtesy of Canada's national broadcaster, in which several energy company bigwigs were interviewed about difficulties in increasing production to thereby offset lost Russian supplies, ones now assuming Alberta's taboo mantle.

Not surprisingly to readers of this newspaper, they suggested current pipeline capacity constraints made such a task beyond even Hercules's grasp. But no, it wasn't the stating of the blatantly obvious that was so interesting: rather it was that none of the usual climate-change warriors were even quoted. And, yes, to repeat for those a little shell-shocked, this was indeed the CBC.

Actually, for the more cynical among us, this sudden change of heart was always on the cards.

It just needed a catalyst to spur self-interest over social conscience — actually, it might have come much quicker if Premier Jason Kenney had significantly reduced the energy flow when first elected premier, instead of bothering with daft war rooms and pointless plebiscites that nobody outside Alberta gave a fig about.

Oh well, everything comes to those who wait, I suppose. And the general appreciation of Alberta's safe, secure and abundant oil reserves is finally having its day in the sun.

That's not surprising, seeing pump prices at some outlets on Vancouver Island are hitting $2.16 a litre, the highest in North America, while gas in Montreal is touching the twobuck mark as Toronto drivers are warned their cost might reach $2.20 a litre by next month. No wonder only the green that most Canucks feel these days is jealousy at Alberta axing its 13-cent-a-litre gasoline tax on April 1.

South of the border, it's not too different, as the Biden administration's hope to keep gasoline below the psychological $4-a-gallon average, as mid-term elections predominate the political mindset, has fallen flat. Our U.S. cousins are looking at their highest-ever pump prices, with some states, notably California, already way beyond the $5 mark.

Yes, maybe Joe Biden may now rue kiboshing that Keystone XL pipeline in his first day on the job, which is why Kenney is no doubt enjoying reminding him where to look now for safe supplies.

“We could discuss how to ship nearly one million barrels of day of responsibly produced energy every day from the U.S.A.'S closest friend and ally! All it would take is his approval for Keystone XL. Easy,” tweeted our pumped-up premier.

Mind you, given the roller-coaster ride TC Energy endured for almost a decade in trying to get that line built, it's hardly surprising the company is balking at getting back on the ride — though maybe if they got repaid the fortune wasted during that time, a deal could still be resurrected. Never say never when it comes to oil these days.

Ah, and then there's our prime minister, still clinging to his tattered old script, even as the world looks enviously at our country's abundant natural resources during this worrying time of huge economic upheaval.

At a news conference in England, he was asked if Canada would use its petroleum reserves to lessen Europe's dependence on Russian oil.

“We need to move forward on decarbonizing our economies, but we need to do that in a way that supports people through that process and we're going to continue doing that,” was Justin Trudeau's reply.

Later, some foreign journalists were left wondering why Canada's prime minister never actually answered the question.

Yes, indeed. Welcome to the club.

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Potential for Canadian natural gas to help Europe move away from Russia: Wilkinson

Ryan Tumilty  17 hrs ago

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Trudeau travels to Poland to see Ukrainian refugees, meet with officials

War in Ukraine offers redemption to maligned US intel community

OTTAWA – Federal natural resources minister Jonathan Wilkinson said his government is interested in helping Europe replace Russian natural gas and that shipping more natural gas to Europe would not contradict Canada’s climate goals.

© Provided by National Post Federal natural resources minister Jonathan Wilkinson says sending natural gas to Europe is not inconsistent with the government’s climate goals.

Wilkinson said Vladimir Putin’s invasion of Ukraine is a wake-up call that the continent is far too reliant on Russian energy and in recent international meetings there is widespread desire for change.

“Every one of the European ministers that spoke to me basically said we have to get off Russian oil and gas. We can’t be hostage to somebody who can blackmail us,” Wilkinson said.

Canada has no significant liquified natural gas (LNG) plants today. A massive project is under construction near Kitimat, B.C., but isn’t scheduled to ship gas until 2025 and the main customers would not be in Europe. There are no facilities on the east coast, although several have been proposed.

Wilkinson said the government wants to help European allies and will be looking at possibilities for the industry.

“We are going to look at options around LNG and whether there’s something that Canada might be able to contribute there in a manner that is low emission and climate consistent,” he said.

The U.K. and U.S. joined Canada on Tuesday in banning Russian oil and gas, but the three countries import little from Russia currently. The International Energy Agency estimates the European Union imports 40 per cent of the gas it uses from Russia, flows that are continuing even as Russian tanks roll through Ukraine and  most other parts of the Russian economy have been sanctioned.

Earlier this week, Dutch Prime Minister Mark Rutte said turning off the taps immediately would be devastating to his country and many others in Europe, including Ukraine.

“The painful reality is that we are still very much dependent on Russian gas and Russian oil,” he said.

“We have to ensure that they don’t generate unmanageable risks to energy supplies in Europe, European countries and beyond, including Ukraine.”

Wilkinson said sending natural gas to Europe is not inconsistent with the government’s climate goals, because European nations are generally climate leaders.

“Europe obviously has thought its way through more than anybody else. They’ve been working on the climate challenge for decades longer than the rest of the world and so in that context, those conversations are quite simple.”

Wilkinson said his European counterparts all express interest in moving toward more renewable energy, as well as hydrogen, and Canada could help bridge the gap as these countries make the transition.

He pointed out that in addition to being a transition fuel, natural gas can be used to make hydrogen, which burns without emissions.

Prime Minister Justin Trudeau met with German Chancellor Olaf Scholz in Berlin on Wednesday and said Canada supports his proposal to create a “carbon club” of countries who commit to similar climate policies and avoid carbon-related trade levies.

Trudeau pledges support for European nations to move away from Russian energy

U.S. and U.K. ban Russian oil imports in huge escalation of sanctions

Trudeau said the two leaders talked about Germany’s energy needs in the short term, as well as larger climate goals.

“We also talked about ways where we can partner not just in the short and medium term on energy supplies, but also staying focused every step of the way on that transition towards renewables, towards hydrogen, towards cleaner sources of energy.”

The Trudeau government has vetoed several energy projects and delayed others with extra reviews. Last month, the Liberal government rejected a proposed LNG facility north of Quebec City in the Saguenay region, which had previously been rejected by the Quebec government.

The Quebec government has a bill in the National Assembly that would ban any further oil and gas exploration in the province. Ewan Sauves, a spokesperson for Premier François Legault, said it signals their broader intentions.

“This is a strong signal for the future. Quebec has everything to be a world leader in the green economy sector.”

Wilkinson said in this case he believes everyone will see the potential value.

“There is a consensus that Canada needs to do what it can for our allies and I think there is also a consensus that, obviously, whatever we do needs to fit within the context of our aggressive approach to fighting climate change. I don’t think those two things are inconsistent.”

Wilkinson said he believes Canadians will see the value in shipping natural gas to Europe in light of Russia’s security threat, as long as it is clear it is about a broader transition to net zero.

“Europe is burning natural gas right now. It comes from Russia. If it is burning natural gas that comes from the United States or Canada, it is not emitting any more CO2 into the atmosphere than it was the day before it made that switch.”

Wilkinson said the conversations that are now happening are about whether the facilities could be put in place fast enough in Canada to get natural gas to Europe before those countries transition from fossil fuels completely.

“We need to look at what would be required to get these kinds of things done and what would our timeline be and does that match with the European timeline.”

He said Canadian oil is less likely to be able to get to Europe in time, because Europe is phasing out oil more quickly than natural gas. He said they are looking at short-term measures to increase oil supply, but it won’t be much.

“We are looking at whether there’s a way for us to enhance the flow of oil through existing pipeline networks. It obviously wouldn’t be a huge supplement, but we are looking at that. It is a crisis in Europe, we are endeavouring to do everything we can.”

Twitter: RyanTumilty

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https://www.canadaaction.ca/canadian-refineries-frequently-asked-questions

• Canada is home to 18 refineries with a total combined refining capacity of nearly 2 million barrels of oil per day

• Eastern refineries rely on foreign nations with lower environmental, social, and governance (ESG) scores for some, if not all feedstock supply

• Refineries employ tens of thousands of Canadians, generate billions in economic activity and play an integral role in providing us with the petroleum products we rely on every day

CA42429B-F338-4B20-8EE7-D2367FCF6631.jpeg

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The Liberals are trying to look like heroes, suggesting Canada can somehow supply Europe with both oil and natural gas to replace Russian energy. This is the government that ensures we can ship no western oil directly off Canada’s east coast. The kneecapping of the Energy East project made sure of that.

 

The Liberals bluster about energy help they made it impossible to give 

The Liberals have done a superb job of convincing the world our oil and gas industry is constrained and contained, a dodo on the road to extinction

https://calgaryherald.com/opinion/columnists/braid-the-liberals-bluster-about-energy-help-they-made-it-impossible-to-give?fbclid=IwAR3UCR5UgaxbyJOUtW5qAMsuh-XyjfqbQU27qO50LHIt60JXMqZdv5NLiSE

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On 3/12/2022 at 7:27 PM, Jaydee said:

 

D3EB76C3-785F-4113-80C7-2B6A7F4AEF6B.jpeg

Liberal thought process stupidity(as has now been proven over the whole energy portfolio) - constant.

It will not surprise me if the calculations prove that the lefties cost this country a trillion dollars in economic activity.

And then there are most of there other ideas.

Unhappy as a left wing voter about the cost of things these days? Blame a large portion of it on your own votes.

And don’t forget to thank yourself for setting up the perfect situation to have us finance a massacre, every time we do anything that uses energy.

If we had kept Harper and Trump along with Europeans not selling themselves out to Russia(and doing incredibly stupid things like shutting down nuclear plants), it is quite possible that Putin would not have had the economic pieces of the puzzle put together to go ahead with this.

 

Junior……thinking years ahead of his time.

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4 minutes ago, Junior said:

Liberal thought process stupidity(as has now been proven over the whole energy portfolio) - constant.

It will not surprise me if the calculations prove that the lefties cost this country a trillion dollars in economic activity.

And then there are most of there other ideas.

Unhappy as a left wing voter about the cost of things these days? Blame a large portion of it on your own votes.

There are a lot of people surviving in Canada on Solar and wind only so take this with a grain of salt.

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5 minutes ago, boestar said:

There are a lot of people surviving in Canada on Solar and wind only so take this with a grain of salt.

Re-read my post as I added to it while you were replying.

 

Stupid policies can have huge effects on other people.

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There are also a lot of people in rural Canada surviving on wood because propane and electricity have gotten too expensive, hst and carbon tax tyvm. So much for reducing carbon footprint.

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Thought I might post an article from almost 4 years ago for those who conveniently forgot. Just in case you are thinking of believing the frauds that call him pro-Russian. And remember how the reaction was that Trump had made America the new enemy of Europe. Ignore the frauds.

Trump lashes Germany over gas pipeline deal, calls it Russia's 'captive'

BRUSSELS (Reuters) - U.S. President Donald Trump launched a sharp public attack on Germany on Wednesday for supporting a Baltic Sea gas pipeline deal with Russia, saying Berlin had become “a captive to Russia” and he criticized it for failing to raise defense spending more.

Trump, meeting reporters with NATO Secretary-General Jens Stoltenberg, before a NATO summit in Brussels, said it was “very inappropriate” that the United States was paying for European defense against Russia while Germany, the biggest European economy, was supporting gas deals with Moscow.

Trump was due to meet German Chancellor Angela Merkel at the summit later in the day and will meet Russian President Vladimir Putin in Helsinki on Monday.

Berlin has given political support to the building of a new, $11-billion pipeline to bring Russian gas across the Baltic Sea called Nord Stream 2, despite qualms among other EU states. However, Merkel insists the project is a private commercial venture and is not funded by German taxpayers.

“When Germany makes a massive oil and gas deal with Russia,” Trump said to Stoltenberg. “We’re supposed to be guarding against Russia and Germany goes out and pays billions and billions of dollars a year to Russia.

“We’re protecting Germany, we’re protecting France, we’re protecting all of these countries. And then numerous of the countries go out and make a pipeline deal with Russia where they’re paying billions of dollars into the coffers of Russia.

“So we’re supposed to protect you against Russia and you pay billions of dollars to Russia and I think that’s very inappropriate,” Trump said at the residence of the U.S. ambassador in Brussels.

“Germany will have almost 70 percent of their country controlled by Russia with natural gas. You tell me, is that appropriate?,” he asked, while Stoltenberg listened.

At one point, the former Norwegian prime minister pointed out that the NATO allies in Europe disagreed among themselves on ways to reduce the continent’s reliance on Russian gas.

“Germany is totally controlled by Russia, cause they are getting 60 to 70 percent of their energy from Russia and a new pipeline.”

Trump renewed his call for other NATO allies to pay in more to the Western alliance after years in which U.S. taxpayers have, he said, borne an “unfair” share of military spending.

“I think these countries have to step it up, not over a 10 year period, they have to step it up immediately. Germany is a rich country, they talk about increasing it a tiny bit by 2030. Well they could increase it immediately, tomorrow, and have no problem,” Trump said.

“If you look at it, Germany is a captive of Russia. They got rid of their coal plants, they got rid of their nuclear, they’re getting so much of their oil and gas from Russia. I think it is something NATO has to look at. It is very inappropriate.”

Trump lashes Germany over gas pipeline deal, calls it Russia's 'captive' | Reuters

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Interesting….Could it be? All the anti-oil BS over the last decade has been pushed by Russia to kill off the North American oil industry? Leaving Russia as the main supplier? 
 

More >>  

 

503F159B-E005-4FC9-A803-68597B84C27A.jpeg

Edited by Jaydee
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As Trudeau and Mitch want to kill off the Canadian oil industry…Russia says FU, and expands….

 

Russia looks to Northern Sea Route as its military ambitions expand

Moscow aims to use Arctic waters as strategic link between Asia and Europe

 

TOKYO -- Russia recently started building a shelter for submarines on the Kamchatka Peninsula in its remote Far East, fanning concerns it aims to use the Northern Sea Route, a shipping lane that connects Asia and Europe via the Arctic, for more than purely economic purposes.

The shelter, located near Petropavlovsk-Kamchatsky, the largest city in the Kamchatka Peninsula and a key base for the Russian Pacific Fleet, will be supply submarines with missiles, torpedoes and fuel, according to Russia's Izvestia daily newspaper, as well as hosting full-scale repair and maintenance work. State-of-the-art minesweepers will also use the site.

A submarine base near Petropavlovsk-Kamchatsky is home to most of Russia's Pacific missile submarine fleet. Since Vladivostok, where the Pacific Fleet is headquartered, faces the Sea of Japan, submarines operating from the port are vulnerable to monitoring by enemies. But subs based in the city on the east coast of the Kamchatka Peninsula are less likely to be detected.

This area, however, has one big strategic disadvantage: It is not connected to the rest of Russia by land transport routes. All supplies have to be carried to the city by air or by sea, which are naturally susceptible to bad weather. Moreover, electricity is costly and supply is unstable in the area, which mainly depends on power generated by diesel. In a nutshell, the region is plagued by logistical challenges.

But, if the melting of ice as the planet warms paves the way to the year-round use of the Arctic shortcut between Europe and Asia, that could reshape the way things move between the two regions.

https%253A%252F%252Fs3-ap-northeast-1.amazonaws.com%252Fpsh-ex-ftnikkei-3937bb4%252Fimages%252F_aliases%252Farticleimage%252F0%252F5%252F5%252F5%252F39315550-1-eng-GB%252F20220308-Northern-Sea-Route-Map.png?source=nar-cms

Russian President Vladimir Putin appears to see this as more than simply a new strategic opportunity for unlocking and monetizing Russia's vast oil and gas reserves in the Arctic.

The Kremlin believes gas is a solution to the challenges and the key to the military development of the region. The Putin administration has announced plans to use LNG to supply power to the entire area.

Bechevinskaya Bay in the Kamchatka Peninsula is now attracting a wave of international attention as a major Russian energy company has decided to build a liquefied natural gas transshipment terminal there. The total cost of the LNG project is estimated at $1.28 billion. Construction equipment and facilities for the project started being carried into the bay last November.

https%253A%252F%252Fs3-ap-northeast-1.amazonaws.com%252Fpsh-ex-ftnikkei-3937bb4%252Fimages%252F_aliases%252Farticleimage%252F1%252F9%252F2%252F0%252F39310291-3-eng-GB%252FCropped-1646621776AP_1201040406617.jpg?source=nar-cmsA base near Petropavlovsk-Kamchatsky in the Kamchatka Peninsula is home to most of Russia's Pacific missile submarine fleet.   © AP

The terminal will be used for exporting LNG produced in the Gydan and Yamal peninsulas in the Russian Arctic, transported through the Northern Sea Route. The gas will be shipped to key regional markets such as Japan and China. Ice-breaking LNG carriers currently used for the Arctic shipping lane will be replaced by non-icebreaking LNG tankers.

Russia is developing the Northern Sea Route and LNG projects in areas along the sea lane for both economic and military purposes. But the strategic and military importance of the efforts has grown markedly since the conflict in Ukraine started in 2014. The Putin administration, which sees the Arctic as the front line in defense against the U.S., has been steadily expanding the military functions of the region.

Airports and other military facilities have been built in areas and islands along the Northern Sea Route, including Sredny Island, along with Tiksi and Wrangel Island, which is close to Alaska. In Pevek, an Arctic port town in northeastern Siberia, the world's first floating nuclear power plant, developed by Russia in 2019, has started operations.

https%253A%252F%252Fs3-ap-northeast-1.amazonaws.com%252Fpsh-ex-ftnikkei-3937bb4%252Fimages%252F_aliases%252Farticleimage%252F4%252F0%252F8%252F0%252F39310804-3-eng-GB%252FCropped-16466232812021-12-23T000000Z_514658775_RC2BKR9P9XQD_RTRMADP_3_POWER-PRICES-RUSSIA-GAS.JPG?source=nar-cmsGas wells at the Bovanenkovo gas field owned by Gazprom on the Arctic Yamal Peninsula in Russia.   © Reuters

The U.S. has been openly bothered by these developments in the Arctic. A report published by the U.S. Navy in 2021 criticized Russia for opaque military activities and attempts to restrict free navigation in the Arctic Ocean, an open sea.

Japan also has strategic interests in the region. In 2019, the Japan Bank for International Cooperation (JBIC), Mitsui O.S.K. Lines and a Russian natural gas producer signed a cooperation agreement for an LNG transshipment project in Kamchatka.

Also in 2019, Mitsui, a major Japanese trading company, and others acquired a stake in a project to build and operate an LNG plant on the Gydan Peninsula. Nearly 80% of the LNG produced at the plant will be exported to Asian markets through the eastbound Northern Sea Route all year round.

Japan has a clear interest in diversifying its energy suppliers. Japanese investments in Russian LNG projects have paid off in the rise of Russia's share in Japanese LNG imports to about 10%. But there is a growing risk that these projects could be used for military purposes without the knowledge of Japanese investors.

JBIC President Masafumi Maeda said at a news conference earlier this month that the bank is reviewing its financing of projects in Russia in the wake of the country's invasion of Ukraine.

China is also showing a strong interest in expanding its presence in the Arctic. Obtaining a new shipping route in the region would be a boon to Beijing, which is locked in a bitter battle with the U.S. for global dominance. China has become the largest foreign investor in Russia's Arctic development and LNG projects. A Chinese company has been chosen as the main contractor for the LNG transshipping complex in Bechevinskaya Bay.

Shoichi Ito, a manager and senior researcher at the Institute of Energy Economics, Japan, had said before Russia's invasion of Ukraine that Japan's involvement is driving closer energy cooperation between China and Russia. Both countries welcome Japanese investment, which also helps them avoid becoming too interdependent. In addition, Japan's involvement also helps them dodge criticism from the U.S. and Europe by allowing them to make such projects look beneficial to the West as well.

A complicated matrix equation with many variables determines the value of Arctic energy projects. Russia's invasion of Ukraine has only made the equation even more complex. It is probably time for Japan to reassess the wisdom of investing in the strategically sensitive region.

https://asia.nikkei.com/Politics/International-relations/Russia-looks-to-Northern-Sea-Route-as-its-military-ambitions-expand

Edited by Jaydee
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On 11/19/2019 at 8:20 AM, Wolfhunter said:

As this progresses, people will be forced to confront the question of what they are willing to give up to go from 1.7% of global emissions down to 1%.

It's a huge cost, emissions are currently rising (not lowering) and as yet, no one has said where the 79 megatons of current accord deficits are to come from. Until those discussions start taking place, good intentions amount to nothing more than fluff in a belly button. Shutting down the entire agricultural sector (in its entirety) is currently not enough to do the job and with each passing day we are losing ground.

Liberal platitudes about filthy oil are less than meaningless without huge sacrifices that liberals themselves will balk at. If you are a carbon tax fan (and I'm not) it needs to be at  about $300.00 per ton. I will believe this is an emergency when those screaming emergency begin to act like it's an emergency. If you want to get my attention and support, you need to say where you want those 79 Mts to come from..... when you are willing to pay the price, I'm ready to listen. Until then, strident screams into a pillow is about all ya got.    

Are you suggesting that they are frauds? Any strong supporters on this thread of Green New Deal ideas feel like keeping your home heat at 60 in the winter and no air conditioning in the summer.

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The majority of my electricity is provided by Nuclear and Hydro Electric.  I will continue to crank my AC in the summer.

 

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The hypocrisy in all of this is mind boggling. My own province of BC keeps blocking pipelines and makes the shipment of our crude difficult, but happily ships off vast amounts of coal to Asia. Quebec blocks pipelines in its province but happily imports foreign tankers up the St. Lawrence and happily accepts equalization payments that have over the years been largely supported by oil and gas revenues. Also some time take a look at the carbon foot print of people like Al Gore and David Suzuki.

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6 hours ago, GDR said:

The hypocrisy in all of this is mind boggling. My own province of BC keeps blocking pipelines and makes the shipment of our crude difficult, but happily ships off vast amounts of coal to Asia. Quebec blocks pipelines in its province but happily imports foreign tankers up the St. Lawrence and happily accepts equalization payments that have over the years been largely supported by oil and gas revenues. Also some time take a look at the carbon foot print of people like Al Gore and David Suzuki.

On top of all of that, hasn't Premier Horgan decided to have an inquiry as to "Why" the gas prices are so high ???

Think about that one for a minute.

 

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