History, it is said, is just one damn thing after another. So is the future, the difference being that with history we sort of know what happened, whereas with the future, who can really know?
What ifs are the future. Companies and people make a lot of money telling others what will happen, but who can be really sure?
As a rule of thumb, the further the projection, the weaker the prediction. That rule doesn’t stop people from making predictions, many of which consist, wrongly, in assuming that the future will proceed in some linear fashion from today.
So let’s play a little what if with Canada’s bitumen oil, of which there is said to be a 200-year supply in Alberta.
It is landlocked. It has to pass through others’ territories to get to customers. There are many pipelines now, and four more are ready to go or in planning: to the Pacific near Vancouver (Trans-Mountain) and Kitimat (Northern Gateway), the Gulf of Mexico (Keystone XL) and Saint John.
The Harper government Tuesday approved the Northern Gateway project. Government approval, however, is one thing; getting it built is another. Chances are that pipeline will be tied up for years in the courts as aboriginals contest it. And the population of British Columbia, or at least a chunk of it, doesn’t want the pipeline either. Meeting the five conditions laid down by B.C. Premier Christy Clark will be hard to impossible. So Northern Gateway is likely a long shot.
Trans-Mountain? Opposition to twinning the existing line is very strong in the Lower Mainland, where the spectre of more tanker traffic is deeply unpopular. The federal government can implement new safety measures for pipelines and tankers, but people still fear an accident. Maybe the fear is irrational. Maybe the odds of something bad happening are so low that people should stop worrying. But they do, and that’s a political reality. Put Trans-Mountain down as a maybe.
Keystone XL has been studied more than any pipeline in history. Still, it hasn’t been approved. The closer President Barack Obama gets to the end of his time in office, the more he, like all presidents, begins to think of legacy. Here’s a leader who has talked extensively about the challenge of climate change. Would his legacy – as he is defining it – be enhanced or hurt by approving Keystone XL? The forces in the U.S. favouring Keystone XL are formidable. Ultimately, one person with an eye on history will decide.
The west-to-east route across Canada has the best chance of success. But success is not assured, because no defined project has been submitted and opponents have not mobilized. It has the best political shot, what with a strongly federalist Premier in Quebec, a very eager New Brunswick government, and the chance to replace imported oil along the route. Chances of success: probable.
Rail, it is argued, could pick up at least some of the slack should some or all of these pipeline projects fail. Indeed, it could. But with the memory of Lac-Mégantic fresh in everyone’s mind, how many towns and cities want a big upsurge in trains carrying crude oil rumbling through them? It’s not a given that flowers will be strewn on the tracks in welcome.
What about price? Wise people keep saying oil prices will keep rising because new discoveries cost more to find and exploit than conventional oil. But what if that prediction is wrong? What if renewable energy really takes off, because, as is happening, wind and solar are becoming cheaper by the day and electric cars (see Tesla) become much more popular a decade from now and the Chinese, no slouches at long-term planning, arrive with electric vehicles for the masses. And so on. What if new technologies continue to unlock more conventional oil? Where would that leave bitumen?
At a recent conference in Ottawa, a representative of the Global Commission on the Economy and Climate, showed predictions (again, the uncertainties of the future) of oil prices in 2030: the International Energy Agency, around $115 (U.S.); Standard & Poor’s, around $60; HSBC and Bloomberg, $50.
If the IEA is right, bitumen oil should be profitable; if the others are correct, where would that leave bitumen?
Maybe the future will unfold as most “experts” believe and our governments want; that is, it will be a lot like today. If not, however, then what?Report Typo/Error
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