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Sunday, July 18, 2010

Anti oil sands groups urge Americans to boycott Alberta
From my perspective Americans can whine and complain and print banner ads and bill boards all they like the but fact of the matter is we Canadians in particular we Albertans did not get them into the mess that they are currently dealing with.

Obama and the White House might be shocked that the US federal court overturned a six-month drilling moratorium but it's not that surprising.
It seems the political posturing missed a very important detail... , the US oil industry is on the brink of collapse.

It's not just America's oil supply and energy security that's in danger, it's not just BP oil and the spill and the subsequently stupid drilling ban, it's the entire gulf economy that's hanging by a thread and it won't take much more to toss it over the cliff.
Truth is thousands and thousands of rig workers were effectively laid off in the 33 rigs operating in the Gulf stopped drilling.
There's a very real possibility that lost wages alone are running $330 million per month.
If you look at the BP 100 million-dollar compensation fund it looks rather paltry.

That's not the end of it. Each rig job supports jobs for four additional jobs for trucks, supply ships, operator service industries, telephones etc.
This work stoppage is huge.

If the drilling ban became permanent which it won't of course, the consequences could be dire and just like the towns that died out in the upper Midwest after the demise of the auto plants the steel mills the entire Gulf Coast in deep water drilling which is so crucial to the US economy could just... fade... away.
At best, we could call this economy fragile.

Recently the Chinese stepped forward to call this economy no longer a AAA credit risk but now a AA credit risk placing the United States of America number 13 on the list of viable creditors on this planet.

If in fact the Gulf accounts for 30% of all the oil produced in the US and should the Gulf be put off-limits that shortfall has to be made up somewhere.
Viable options are few and far between.
Russia may be a friend now but history tells us they're fond of turning off the taps and screwing customers present and past and will most likely do so again should the opportunity present.

The Middle East is hardly America's best friend and royalty structures there leave a hell a lot to be desired.
In Venezuela Hugo Chavez nationalized 11 oil rigs belonging to the US. -- how lovely!

Now, let's consider option number two, our friendly neighbour to the north, the little country that already plays a big role in US energy market. Truth is one of every six barrels of oil consumed daily in the United States comes from Alberta Canada and oil sands have taken a pretty controversial hit by uninformed and ill-informed and had been presented as if there are like broken landscapes wreaking carbon emissions. I humbly ask compared to what?

They can whine and belly ache all they want but the oil sands are going to change and change very soon. They are cost effective and they're becoming increasingly green. Steam assisted gravity drainage (SAGD) pumps steam into the ground to liquify bitumen and stiff crude oil and makes it thin enough to be pulled out of the ground. No giant holes no toxic pale plummes just two horizontal pipes one above the other puffing away efficiently. There's no question that the Gulf oil spill has become a game changer.

If the US court allows a somewhat watered-down version of the drilling ban that have occurred and will drive the price of US oil stocks to unheard-of low levels pushing the US ever closer to a financial collapse.

In the end, only two real options are left in the hands of the US - the oil sands of Canada or rethinking the drilling ban.

So I say respectfully to Americans who choose to ban the import of the very product that will keep your financial ship afloat, fire away!

The very best you could expect from this unjustified and unneighbourly behavior might be to find yourself without a supplier for the lifeblood of the American economy.

It might seem at this point in time there no are purchasers for this oil sand product but all over the world there is a demand for oil and, as might be expected, the contracts that will be set out will be long-term and might very well preclude a change of heart from our American friends.

So be very sure of who you boycott and the reasons for doing so.

Make sure you have your facts straight and your ducks all in a row.

This is not your fathers’ planet.

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