Economy
Panama Canal drying up woes could have benefited Canadian LNG – If only we had any
From the Frontier Centre for Public Policy
There’s a disturbance in the force of global shipping, as if a major transit point started slipping away.
There’s a very serious problem occurring a few thousand miles to the south of us, one that Canada could have taken tremendous advantage of, if only we had built and completed some liquified natural gas (LNG) terminals by now.
The Panama Canal, one of the wonders of the modern world that utterly changed trade and geopolitics, is drying up.
The canal, which usually handles about 36 ships a day, has in recent days reduced that to 24. By Feb. 1, it is expected to fall to 18. And the largest ships who do transit the canal have to reduce their cargoes, lest they scrape bottom.
That’s because the canal uses fresh water, captured by dams and forming the massive Gatun Lake. That fresh water is collected from ample rains. Every single time a ship passes through the canal, water used to operate the locks is flushed into the ocean. While the greatly expanded third set of locks allows much, much larger ships to use the more than 100 year-old canal, they also use a lot of water despite an innovative water recovery system. And the Canal Authority says they’ve had the lowest rains in 73 years, since 1950.
So when you add up the additional, much larger locks, with a local drought, the canal is rapidly falling into crisis. And the world is starting to take notice.
As they should, since soon half of all ships that usually use the canal will be turned away.
No one depends on the canal more than the Americans. They built it, after all, for a reason. And one of the biggest is it allows for quick access for Gulf Coast ports to Pacific markets. This was a very real reason why building a half dozen large LNG terminals made so much sense (in addition to their proximity to gas production.)
Well, a lot of that just got thrown out the window. Cutting ship transit numbers by half means a dramatic curtailment of the ability of US LNG cargoes to access the Pacific markets. Their alternative is to add something like 8,000 miles going around South America’s Cape Horn, which absolutely no one wants to do due to the treacherous weather and seas.. Otherwise, they have to cross the Atlantic, Mediterranean, Red Sea, Indian Ocean and Straits of Malacca to get to east Asia markets.
The net effect will be some cargoes from the Gulf Coast destined for Asia will have to go much, much further to deliver their product. That means fewer cargoes per ship per year. It’ll tighten up ship availability, and likely put pressure on LNG prices.
And if Canada had moved quicker on building out LNG terminals, particularly on the West Coast, we would be perfectly positioned to cash in on this situation. Not only is Kitimat, Prince Rupert and the like much, much closer to China and Japan, there’s no drying up Panama Canal to contend with, either.
Small wonder, then, Conservative Leader Pierre Poilievre chose on November 10 to post on his various social media channels, “Since Trudeau took office: 18 LNG terminals have been proposed. 0 have been completed.”
To be fair, LNG Canada, the largest proposal, is in the finishing stretch. In July they reported 85 per cent completion. In recent weeks, TC Energy reported the completion of the “golden weld” on the Coastal GasLink pipeline that will supply LNG Canada and presumably other facilities on the West Coast. Without pipeline, which was both massively delayed and overbudget, no small thanks to pipeline protesters, LNG Canada would be useless.
Other projects are finally gaining traction – Woodfibre LNG at Squamish on the south coast, and Ksi Lisims LNG right on the Alaska/BC border, and Cedar LNG, a floating LNG terminal adjacent to LNG Canada and served by Coastal GasLink.
Remember when the German chancellor came to Canada, seeking LNG, and was told by Prime Minister Justin Trudeau there was “no business case?” And then the Japanese prime minister was told something similar a few weeks later?
The Ukraine War has proven a business case for almost two years in the Atlantic basin. The Panama Canal reduction in service will soon prove it in the Pacific. What more do we need?
Canada should have built these projects years ago. We’d be securing markets and cashing in today.
No business case, indeed.
Brian Zinchuk is editor and owner of PipelineOnline.ca, and occasional contributor to the Frontier Centre for Public Policy. He can be reached at [email protected].
Economy
The White Pill: Big Government Can Be Defeated (Just Ask the Soviet Union)
From StosselTV
People have been “black pilled” to think the world is doomed. Michael Malice says there’s hope.
In his book, “The White Pill,” he argues that tyrannical regimes, like the Soviet Union, can be toppled.
Today, media and universities distort history, and push socialism. It used to be worse. The New York Times once covered up Stalin’s famine, even as millions starved. Why? Malice says it’s because NYT star reporter Walter Duranty liked communism’s utopian promises, and status he got from his exclusive Stalin interviews.
Malice says the fall of the Soviet Union should give us hope that America can resist the universities and media’s brainwashing – or any tyranny that someone is “black pilled” about.
Our video explains Malice’s “white pill” and why you might want to take it.
After 40+ years of reporting, I now understand the importance of limited government and personal freedom.
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Libertarian journalist John Stossel created Stossel TV to explain liberty and free markets to young people.
Prior to Stossel TV he hosted a show on Fox Business and co-anchored ABC’s primetime newsmagazine show, 20/20.
Stossel’s economic programs have been adapted into teaching kits by a non-profit organization, “Stossel in the Classroom.” High school teachers in American public schools now use the videos to help educate their students on economics and economic freedom. They are seen by more than 12 million students every year.
Stossel has received 19 Emmy Awards and has been honored five times for excellence in consumer reporting by the National Press Club. Other honors include the George Polk Award for Outstanding Local Reporting and the George Foster Peabody Award.
Links
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To get our new weekly video from Stossel TV, sign up here: https://www.johnstossel.com/#subscribe
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Alberta
Emissions cap threatens Indigenous communities with higher costs, fewer opportunities
Dale Swampy, founder of the National Coalition of Chiefs. Photograph for Canadian Energy Centre
From the Canadian Energy Centre
National Coalition of Chiefs founder Dale Swampy says Canada needs a more sustainable strategy for reducing emissions
The head of the National Coalition of Chiefs (NCC) says Ottawa’s proposed oil and gas emissions cap couldn’t come at a worse time for Indigenous communities.
Dale Swampy says the cap threatens the combined prospect of higher costs for fuel and groceries, along with fewer economic opportunities like jobs and revenues from involvement in energy projects.
“Any small fluctuation in the economy is affected on our communities tenfold because we rely so much on basic necessities. And those are going to be the products that increase in price significantly because of this,” says Swampy, who founded the NCC in 2016 to fight poverty through partnerships with the natural resource sector.
He says that of particular concern is the price of fuel, which will skyrocket under the emissions cap because it will force reduced Canadian oil and gas production.
Analysis by S&P Global found that meeting the cap’s requirements would require a production cut of over one million barrels of oil equivalent per day (boe/d) in 2030, and 2.1 million boe/d in 2035.
“Production gets reduced, and the cost of fuel goes up,” Swampy says.
“Our concern is that everything that has to do with both fuel for transportation and fuel to heat our homes is amplified on First Nation communities because we live in rural Canada. We live in isolated communities, and it costs much more for us to operate our daily lives because we have to travel much further than anybody in a metropolitan area. So, it’s going to impact us greatly.”
Indigenous communities are already stretched financially, he says.
“What you could buy in 2019 terms of meat and produce is almost double now, and even though the inflation rate is trending downwards, we still haven’t gotten over the impact of what it costs for a bag of groceries these days,” Swampy says.
“In our communities, more than half are under the age of 21, so there’s a lot of bigger families out there struggling to just get food on the table.”
The frustrating timing of the cap is that it comes amid a rising tide of Indigenous involvement in Canadian oil and gas. Since 2022, more than 75 Indigenous communities in Alberta and B.C. have agreed to become part owners of energy projects.
Three major projects – the Trans Mountain Pipeline Expansion, Coastal GasLink Pipeline and LNG Canada export terminal – together have spent more than $11 billion with Indigenous and local businesses.
“We’re at a turning point right now. There’s a real drive towards getting us involved in equity opportunities, employment opportunities, and contracting opportunities,” Swampy says.
“Everybody who didn’t talk to us in the past is coming to our front door and saying, ‘Do you want to work with us?’ It couldn’t come at a worse time when we have this opportunity. The emissions cap is going to reduce the amount of activity, and it’s going to reduce the amount of investment,” he says.
“We’re part of that industry now. We’re entrenched in it now, and we have to support it in order to support our people that work in this industry.”
Economic growth, and more time, is needed to fund development of low emissions energy sources without ruining the economy, he says.
“I think we need more consultation. We’d like to see them go back to the table and try to incorporate more of a sustainable strategy for emission reductions,” Swampy says.
“We’re the only country in the world that’s actually incorporating this type of legislation. Do you think the rest of the world is going to do this type of thing? No, they’re going to eat our lunch. They’re going to replace the production that we give up, they’re going to excel in the economy because of it, and they won’t talk about significant emission reduction initiatives.”
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