Sunday, June 26, 2011

Questions About Shale Gas Viability

The New York Times has run a disturbing article about the potential for the shale gas explosion being a bit of a fizzle. If you want to get an idea of how important this question is bear in mind that shale gas is presently projected to provide 38% of North America's natural gas needs 2035, up from 13% now. This number is even more impressive when one considers that this is in the context of much larger demand than exists now. This is all outlined in a report prepared for KM LNG and filed with the National Energy Board as a part of the application for the approval of the export of natural gas through the Kitimat LNG facility (see pages 14 and 15 of the report for a tidy summary of the supply situation with a great graphic on page 15).

I suspect the science is out on this one for a bit but I have to say that I am a bit suspicious of anything that requires a lot more work and a lot more investment being able to produce gas at the same or lower costs than traditional gas production. This concern is somewhat offset by the fact that as gas reserves have declined the technology used has evolved toward what is now fracking (part of the technique now used to get shale gas out of the ground) but still if shale gas really were as cheaper or cheaper than conventional gas why have we been pumping gas 5000kn across North America and building LNG terminals on the Eastern Seaboard?

What is important to observe about this issue is that there are a lot of decisions being made on the assumption that shale gas production in eastern North America could or is going to completely displace or significantly reduce the demand for western gas in the east. The most obvious decision that presses for is to open up the large fields in Quebec and New England for production. Promoters will say that the decades of low priced local natural gas that will be produced and can be burned cleanly will more than outweigh the environmental damage caused by the surface infrastructure and underground fracking. If this argument carries the day it will be a bit of shock if the plays peter out after five to ten years after the rural countryside of Quebec, New York and Pennsylvania is turned into Alberta and Texas with bushes (no, not that kind, the leafy kind).

There are also decisions that will be made concerning alternative energy supplies that are being determined on the basis of shale gas providing a stable natural gas base for Canada and North America out for the next 25 years. For example, the viability, timing and pricing of the Muskrat Falls development will be very much affected by the question of whether or not New England can satisfy its electrical needs by putting a straw into the ground behind a gas generation station or two or has to bring hydro-electric power in from Canada. Newfoundland may want to be careful about committing to any further pricing arrangements based on current market projections as ultimate prices will be much higher if shale gas turns out to be a bust.

The Kitimat LNG terminal is another example of a decision that is being made on the basis of positive projections about shale gas production in North America. The export of natural gas to Asia makes perfectly good sense (from a public policy perspective) if there is an effective glut of gas in North America. From an economic point of view companies have substantial investments in western gas plays (particularly shale gas plays) and it makes little sense (it is said) to wait until the North American supply declines to develop this. Shareholders are not investing for the distant future; they are investing for returns in a time frame extending from the next quarter to the next five years. However, if it turns out that the Great Eastern Shale Gas Glut is a bust investing large amounts of money in export infrastructure and committing significant chunks of our natural gas supply to Asia in long term contracts may turn out to be not such a great idea.

Maybe before we plan the next 25 years on the basis that we are all going to be afloat in shale gas and that the environmental wreckage is worth the price, we should take a good hard look at those production numbers and really assess if there is a prize to be won here at all?

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Saturday, June 25, 2011

That Was A Riot

Now now everybody, step away from the panic button.

To read the papers and listen to the news over the last week and half one would get the impression that it is either a sign of the Apocalypse or at least the end of western civilization that a group of young people rioted in Vancouver after the Canucks completed their choke in game seven of the Stanley Cup playoffs. To listen to various handwringers it was instigated by rootless anarchists sent straight up from East Hastings Street; bored suburban men and women looking for a bit of excitement and lacking parental guidance; CBC and its evil big screen at Georgia Street or perhaps the police for sending too few (or to many)riot police.

Here's a newsflash for everyone. The price of living in a reasonably open urban environment is that occasionally -- particularly when fed by sports, politics, hunger, alcohol and/or testosterone -- things will get out of hand. In modern times this usually means a few windows are smashed, some consumer goods are stolen, a few comfortable people get a fright and, if everyone is really lucky, a police car is burned. These riots are picnics compared to riots of the not that distant past.

For example, in 1849, a mob of angry Protestant anglophones in Montreal rioted for several days and burned the parliament buildings and government offices to the ground. They were unhappy that Parliament had voted reparations for francophones who had suffered losses in the 1830's rebellions (a measure that had been extended to anglophones years before) and the suggestion that this might lead to true democracy in Canada. Can you imagine a group of twenty and thirty year old Canadians being motivated enough to even burn down a village hall (much less Parliament) these days?

On April 5, 1932, Townies rioted in St. John's and smashed out the windows of the legislature and caused the Prime Minister to flee in fear of his life. These people rioted out of concern about the economic management of the then-Dominion. The resulting Royal Commission resulted in Newfoundland deciding to give up its status as self-governing Dominion and revert to being a colony of the United Kingdom.

Montrealers rose up again when Rocket Richard was suspended on March 17, 1955. There was a race riot in Toronto in 1993 at Christie Pitts and riot that started serious movement the gay rights movement in the same city in 1981 after the bathhouse raids. Almost every real city in Canada has examples of their own riots.

Ancient Rome was long resigned to riots over any number of matters, including food shortages, poverty and bad outcomes at sports events. Julius Caesar's funeral was famously followed by a riot that resulted in a civil war and the final downfall of the Roman Republic (see a clip of Mark Anthony's speech inciting this event) ("friends, Romans, countrymen .." and "cry havoc and let slip the dogs of war" both come Shakespeare's rendition of this event). Some of these riots resulted in change -- some in broken glass.

Indeed in our Criminal Code there is a special provision dealing with riots that essentially requires the police to make an announcement and give people a chance to go home before treating them as rioters (see s. 67 of the Criminal Code):

Her Majesty the Queen charges and commands all persons being assembled immediately to disperse and peaceably to depart to their habitations or to their lawful business on the pain of being guilty of an offence for which, on conviction, they may be sentenced to imprisonment for life. GOD SAVE THE QUEEN.

This formulation of the riot proclamation goes back to the 1741 Riot Act in Great Britain.

Don't get me wrong here: rioting has its price. During the riot rioters stand a real chance of getting beaten, trampled, shot, cut or burned. A friend of mine in Toronto who was a regular protester outside the American Consulate used to say that he did not feel it was a real protest if he did not get hit with a billy stick. Similarly, on the theory of "don't do the crime if you can't do the time", if you get caught, arrested or turned in (particularly if you are stupid enough to post pictures of yourself rioting with a confession attached on a public electronic bulletin board) you should take the usual penalties for doing what you did. These may be quite severe and may extend beyond criminal sanctions to civil sanctions and things like social stigmatization.

Likewise, we should probably think hard about creating situations where rioting is easy -- say a hot button political meeting in downtown Toronto or assembling a bunch of drunken louts in the middle of downtown Vancouver. We should probably study what happened to see how policing can be improved without destroying civil liberties. More importantly we should think about the social conditions which make riots either frequent events or more severe events. It does not take a lot of poking around to see that often entails a mass of people with time on their hands and a well fed sense of grievance arising out of poor social and economic circumstances.

What we should not do is delude ourselves into thinking that rioting can be avoided all times in all situations -- or that this would even be a good thing. Setting that as a target creates a hopeless task and one with a high price tag for even attempting. Rioting could be controlled by banning crowds at sports events; banning protests around controversial political events; and banning gatherings for concerts, fireworks or whatnot. However, would it really be worth living in a country like that? There would also be the real potential that such preventative measures might, in and of themselves, create riots (read about the Winnipeg General Strike for an example of this).

In the meantime, buy property insurance; stay home if it looks like it might be too hot for you; board up your store front when 25,000 drunken louts are gathering around the corner; put your merchandise away and recognize that with all those consumers, workers, students and families comes a few riots now and then.

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Monday, June 13, 2011

The Aesthetics of Power Generation

Neil Reynolds, one of the Globe's stable of conservative columnists recently commented on the aesthetics of wind power generation in Ontario. He is on to something here.

Wind generation differs from most other forms of power generation (other than 1960's nuclear) in that that infrastructure is not situated in distant locations out of sight of the consumers of the power. Even nuclear plants in Ontario are hidden carefully behind berms to make sure that they are not easily seen from the highways or nearby communities. Because of this proximity to major urban or suburban communities wind power has met with howls of outrage which largely relate to the whoosh of the blades and the unsightliness of the towers.

Oddly the same objections are not made to massive oil sands projects, shale oil development, coal bed methane production or hydro-electric reservoir creation. Could it perhaps be that these projects largely only affect aboriginal communities whose concerns about aesthetics maybe don't have the same political weight? Try picturing an oil sands project being built just outside of Toronto and you have your answer.

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Saturday, May 28, 2011

The Liberal Turning Point

It will be many years before the results of the last election are fully understood but I have no doubt that that election will be viewed as a watershed election in Canadian history. The simple story is that this election marked the death of the Liberal Party as it has been known for close to a century. While there may be a re-birth of the Liberal Party in some form over the next decade the interesting question will be “what will it look like?” This question really starts to point at what is really interesting about the last election, namely that there are many signs that it marks a fundamental shift in the subject matter of national debate in Canada. There are all the signs in place that a number of major changes have occurred (over a span of twenty years or so) in what people in Canada want to talk about and what actually determines their vote. This change is going to force a lot of people to think carefully about where they want to place their political efforts (if they want to place them at all).

The most obvious re-alignment that has occurred is in the emergence of a clear left versus right debate in Canada. While many Conservatives have viewed the Liberal Party as a quasi-socialist party the reality is that most true left-wingers have not thought of the Liberal Party in that way. Indeed, many NDP supporters have had a poor view of the Liberal Party for precisely this reason – that is, they viewed the Liberal Party as something of an economic wolf in sheep’s clothing. There is a great deal of merit to this position, particularly when one looks at the last twenty years. During the Chretien-Martin era the Federal government, under the leadership of the Liberal Party, engaged in a determined program of cost cutting and program termination which eliminated the deficit and greatly reduced the significance of the national debt. It also effectively removed the Federal government from almost any significant role in the development of social policy in areas such as health, education, childcare, social welfare or housing. These matters were left to the Provinces and much of the debate since then has really, for better or for worse, been a series of provincial debates.

This period began the process, I think, of disengaging young progressive voters (who by the way will often grow up to be old regressive voters) from the Liberal Party. The Liberal Party had captured a significant number of these voters in the past by harkening back to the days of Lester Pearson and the early Trudeau era when the Liberals were instrumental in rolling out a range of national social programs. That era is long ago now – the first Trudeau government is as far away from a new voter today as St. Laurent was from me when I cast my first vote; Pearson is as far away as Mackenzie King or Bennett. Even in the Trudeau era it is hard to identify a lot in the way of society changing social programs. Trudeau’s main contribution in the economic world was in the form of large scale economy engineering efforts to address the economic crises of the 1970’s and early 1980’s (for example the Anti-Inflation Act and the National Energy Program).

Despite these limited economic social progressive credentials, the Liberals managed to keep hold of many progressive voters because socially progressive people were largely gripped by other topics and, more importantly, the political agenda in Canada was largely gripped by other topics. If a person between the age of 18 and 33 or so were dropped into 1970’s and early 1980’s Canada they would not recognize the debate.

At that time the dominant topics of debate outside of French Quebec were: (1) how to maintain Canadian unity; (2) how to advance Canada’s interests on the world stage and (3) how to protect individual human rights inside of Canada. The Liberals and the Progressive Conservatives (who are definitely not the same as the Conservatives) did not argue over whether or not these topics mattered. Instead they argued over which party could best advance these interests. The Liberal Party with its strong French contingent, its internationalist leader and its agenda of introducing a Charter of Rights and Freedoms won all of these debates hands down. They further managed to keep the left-right debate from heating up by having a strong Bay Street cohort running the economic files and keeping a good chunk of the economic progressives engaged by riding on momentum from the Pearson era.

Then things changed. The Liberal agenda and mystique started to disappear. First, the Liberals won a number of their wars. Trudeau and Chretien successfully scotched the separatist threat by winning two referendums and passing the Clarity Act. In doing so though they burned all bridges to French Quebec. Second, Trudeau successfully embedded the Liberal’s old core agenda of protection for minority rights throughout Canada into the legal system (thus reducing the need to have a pro-minority rights political party). Third, the Pearson progressive momentum ran out.

On the other side of the ledger there was a concerted effort underway to change the channel. Preston Manning (a career politico), the NCC, the Fraser Institute, and the young Stephen Harper started a concerted campaign of ideas in Canada that paralleled the longer standing effort in the United States to move the debate to “why should the government be allowed to take my money?” As such these people framed the debate around the concerns of “taxpayers” (rather than citizens) and around the core principle of personal economic independence (and responsibility). While the social conservatives came along for the ride, fundamentally the focus for about twenty years was on making this the issue. National unity became an unimportant sideshow and, as the West become more powerful, increasingly a negative – many in the West would say “let Quebec go if it enhances my economic freedom.” Internationalism – the only international position to advance is that which advances Canada’s interests. The old 1970’s idea of being an “honest broker” or international boy scout does not matter. That is why, despite all the ballyhoo, the loss of the election to the Security Council did not matter – Stephen Harper did not care and he (and his movement) have convinced most Canadians not to care. In essence a majority of Canadians have internalized “it’s the economy stupid” and when they do the Conservatives win hands down in the present climate.

This may make things very challenging for socially progressive people over the next few years. No doubt it is exciting to have the NDP as a pure party of social progress and to have a clean left-right fight with no mushy Liberal middle. It will not be as exciting if that fight is always lost and there is no coalition or brokerage party such as the Liberals to advance a few of these causes. What may also be shocking to many on the left is that over the next decade the Liberals may well rebuild themselves as a party on the centre-right to resume their role as the alternative party to the Tories. They will be the weaker party – playing the role of alternative party to the new Natural Governing Party of Canada (the CPC) – but they would then become the home for Canadians wanting to ‘refresh’ governments when the CPC has been in power too long. For progressives this will not be a happy story as this will be a story of truly right wing parties switching places. It should not be discounted though – the Liberals have re-invented themselves many times: Blake was a Provincial rights advocate; Laurier a Free-trader; Pearson-Trudeau strong centralists and economic nationalists; Pearson-Trudeau big government; Chretien-Martin small government. The Liberals have a history of figuring out how to give the people what they want.

An even sadder story for progressive voters would be to see a strong progressive opposition that never, ever becomes a government. Think it can’t happen? See Alberta.

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Wednesday, May 25, 2011

A Thousand and One Nights

A friend of mine recently asked me to write a short story about an experience. Another friend suggested to me that telling a story was no different than doing the thing.

So is a telling a story no different than doing? In other words, can the telling of a story of experience be the experience itself?

For me the telling of a story is other than experience. Experience belongs to the world and to the people who share in the experience. It is seldom – I would think never – clean and/or clear as it should be. Experience is rich with irrelevancies and incongruities that can – and should – be cast out of a story. Experience has no narrative; no moral; no point – it just is what it is.

Story on the other hand reflects nothing but the choice of the storyteller. The story of a person's first intimate moment can be fundamentally changed if the storyteller decides to mention the fact that their partner did not take their white gym socks off or that they were dumped the next week for the good looking fellow from the other school. These facts may be true or fictional -- it matters not -- the choice to include them colours and flavours the story.

A story is nothing but narrative; moral and the point. A good story is experience extracted to paint a picture for the intended audience. We choose in telling a story what we want our audience to know. We choose what we want them to know about us. We choose what we want them to know about the others in the experience. We choose what we want them to think is important or funny. We choose what to hide. We choose the tone. When we tell a story – even when it is not of our own experience -- we paint a picture of ourselves and the relationship we want to have with the person to whom we tell the story. We also define the relationship we want to claim we have with the subject of the story.

No story though can be as complete, unbiased or as uncaring as experience. As we have an experience we feel the good, the bad and the ugly. As we eat a delicious meal we try to convince ourselves that the tastes and textures are all we experience but in truth we see the sauce on the white tablecloth; we hear the couple at the next table; we feel irritation (or happiness) at what the others around us do or say. Beyond even those things that we notice (and later elide from the story) there are all the things that we do sense but are as much a part of the experience: the struggle in the kitchen to make the meal; the stains on the carpet disguised by the dark lighting; the waitress eager for the guests to leave. To relate all of this would make a poor story – we crave narrative, tone, moral – not just overwhelming description.

The telling of a story is in itself an experience – and a different one than the experience that provides the fodder for the story. Scheherazade and Shahryar are changed by Scheherazade’s stories -- not by the experiences related in the stories. It is in the way that Scheherazade refuses to finish a story when the sun rises; the way that she makes each story more engaging; the way in which she takes Shahryar way from himself that stays his hand and, in time, leads him to love her. It says much that she knew the stories that would entrance him.

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Thursday, May 19, 2011

Senate Reform in Canada

Yesterday's appointment of three still smelling losers to the Senate was a little reminder that there is still a need for Senate reform in Canada.

Actually reforming the Senate in any serious way is a massively difficult project under the Constitution given the amending formula's high hurdle for achieving any such change. That being said however, I think there is a way to do that would be successful and meaningful.

Now to understand this I think there are two things to bear in mind. First, I think the only Senate reform worth talking about is abolition. An appointed Senate is an affront in this day and age. It is obviously undemocratic and serves no legitimate purpose that I can see. The so-called "sober second thought" function is largely a joke since the only time such thoughts seem to occur is when the Senate majority can be called upon to ditch a project that the party leadership don't like (both CPC and Liberals have been guilty of this).

Second, an elected Senate -- without massive re-working -- is even worse in some ways. At least as they stand the Senators know that they are the illegitimate bastard children of politics and so keep a low profile most of the time and let the Commons have its way. If elected there will be no such constraint on the Senate. Suddenly legitimized we can expect that they will start poking their nose into all sorts of areas and substantially weakening the power of the Commons. Given the radically undemocratic distribution of seats in the Senate this would make what is already a bad situation in Canada worse. Further, given the weaker central government we have here in Canada (as opposed to the United States) the case for needing disproportionately empowered provincial or regional blocks in Parliament to ensure these interests are respected is weak. The Provinces do this quite well on their own thank you very much.

The simple route to Senate abolition then is this. A brave Prime Minister would announce "we are having a national referendum with one question : Should we abolish the Senate? Yes or No?" He (or she) should then promise that is this passes in every promise the resolution will be introduced in Parliament and, when passed, each Province will be asked to sign-on. If it does not -- then Senate reform will be dropped forever (or at least until there is a new government). It seems to me that this campaign would be a no brainer -- ask any ordinary Canadian if they would like to fire a Chamber full of unelected clowns with serious salaries, staffs and pension entitlements and you will get a resounding "yes" -- even in Quebec.

Then the question would be, would any provincial premier seriously try to turn a "yes" result into a chance to whine about other things when the result might be keeping these people in power?

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Reviving the Blog

After a somewhat extended absence (who does not get distracted from time to time) I have decided to revive my blog and get back to some non-work writing for a change. Thanks for tuning in ... (or not, as the case may be).

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