Seventeen trillion dollars. That’s more than a million times the amount of money capitalist big-shots on the golf course finagle, bullshit and haw-haw about in their most abject studied manners trying to manipulate the success of their passionate desire for their ship to finally come in. It’s a million lottery winners who can finally quit their shit jobs and buy an RV and tour the Southwest as they’ve always dreamed of.
That’s how much money we’re talking about in the Athabascan Tar Sands - sitting there under all that beautiful boreal forest in the traditional hunting and fishing range of the Dene Nations. Queen Victoria made a treaty with them – Treaty Number 8 – in the interest of protecting the Yukon gold rushers from their ire. It was about money then and it’s about money now.
At $100 per barrel (there is a current differential between West Texas light crude at $94.02 and Brent crude at $112.24 – this differential has driven a great amount of greedy insanity both in our country and Canada – as an “average” I’ll go with $100), 170 billion barrels of oil is worth seventeen trillion dollars - $17,000,000,000,000.
This is an unimaginable number, an unimaginable amount of wealth. An amount of wealth that creates its own moral universe; its own universe of value. An amount that can turn a country, like Canada, from a leading signer of the Kyoto protocol into an international carbon villain and dinosaur – withdrawing from that protocol and standing in the way of progress on saving our planet from our own inability to deal with such vast amounts of wealth.
The center of the Athabascan Tar Sands is Fort McMurray. Fort McMurray is a boom town. People are making pilgrimages to this desolate, isolated wilderness on the Athabasca river because there are jobs there. Fabulous jobs! Wages are high – even Wendy’s is paying $13.00 per hour (Canadian) and wages for an electrical tradesman run as high as $200,000 per year. And the tar sands employs more than 140,000 people at these kinds of six figure salaries.
All this, of course, assumes those one hundred seventy billion barrels are the kind of assets the corporations rooting their noses into the Canadian boreal forest assume they are. Not sub-prime assets. And certainly not toxic assets.
This is important because sub-prime and toxic assets led to our most recent financial meltdown, the Great Recession, that many say is not over. The Great Housing Bubble: the assumption that housing prices wouldnot/couldnot/willnotever go down led to an unprecedented bubble in house prices that didn’t follow the “laws” (if ever there was a “science” that didn’t deserve to use the word “law” it is economics) of supply and demand. For as house prices rose the demand also rose – because people were madly consuming and, since real wages were stagnant, their houses became income sources. And thus, a huge cesspool of toxic assets centered on house financing swamped the economy.
But, Very Serious People say, the Tar Sands is nothing like this. Bitumen is an asset resistant to bubbles. The price of oil extracted at huge expense, raping the ecology and waters of the northern Alberta taiga, is high and will stay high. Everyone needs oil. That’s the way it is.
Welllllll… some people have the temerity to say that this bitumen, this Tar Sands, is just such a toxic asset,
The huge reserves of coal, oil and gas held by companies listed in the City of London are "sub-prime" assets posing a systemic risk to economic stability, a high-profile coalition of investors, politicians and scientists has warned Bank of England's governor, Sir Mervyn King.How dare hippies say such things about energy – energy extracted 365 days a year, 24 hours a day, by 400 ton dump trucks the size of apartment blocks!? If this isn’t a virile, free-market enterprise accomplished in the frozen northern wilderness by liberty loving individuals then Ayn Rand was a psychotic wackjob… Oh wait.
In an open letter on Thursday, they tell King that the global drive to reduce carbon emissions could mean billions of pounds of fossil fuel reserves will rapidly lose value and cause a "major problem" for institutional investors and pension funds.
At the most recent UN climate change summit in December, 194 of the world's nations agreed to enact legally binding curbs on greenhouse gas emissions within three years to limit global warming to 2C. But meeting this limit would mean just 20% of existing fossil fuel reserves could be burned, according to recent research.
"These high-carbon assets pose significant strategic challenges for the future prosperity of Britain that just can't be ignored," said investment manager James Cameron, who is a member of the prime minister's business advisory group. "Investors continue to pour cash into unsustainable assets without understanding the risks associated with these investments, such as climate change, local pollution, fossil fuel price volatility, political risk and catastrophes such as Deepwater Horizon."
A Carbon Bubble; what a concept!
But, if as us hippies say, the burning of fossil fuels will destroy our planet, then there is no more toxic asset than the Athabascan Tar Sands. It must be discounted massively. The risk is too great. Greater by far than those toxic mortgage assets that sent bankers into Bailout Heaven.
So Stephen Harper, heavily involved in the Alberta based Alliance Party – a conservative pro-Tar Sands organization – has arisen to leadership of our Northern neighbor… seventeen trillion dollars carries a lot of political water. And, of course, it is money that shares in the Canadian ethical paradise. Here is some delicious irony from ethicaloil.org
Investors — wherever they come from — also come here knowing that Canadians own the energy resources in this country, and we make the rules about how they can be produced. And our rules are stringent. We have a diverse country that does not tolerate discrimination. The public insists, through our laws, that our environment is well taken care of and that workers are treated to the highest safety standards and rights anywhere. We even require, again through law, that aboriginals are included in any decision process affecting them. These codes of conduct are every bit as high, and mandatory, for CNOOC and Kuwait Petroleum Corp. as they are for Canadian-owned firms.But what if these “energy resources” aren't worth what is claimed? In fact, what if they are toxic assets that no one would want to own because they threaten to destroy the planet and all other assets that exist upon that planet?
This is what being an ethical oil producer is all about: It’s about Canadians, and the values we uphold in society and business. The fact that investors continue to flock to our country in increasing numbers, from all over the globe, and agree to practice standards so far above what they’re used to at home, only proves that they appreciate the value of the way we do business. Canada’s oil industry has set a tremendous example for the world in so many ways — not least the pioneering innovation developed right here to extract previously unusable oil resources from the oil sands in an economic and environmentally sustainable way. But the most striking lesson we teach international businesses every single day is how unsurpassed ethics are good for business. Our profitable, globally admired businesses are coveted by investors not despite the way they operate, but precisely because of it.
But, us hippies say, this is true. They are toxic assets. They do threaten to destroy all other assets that exist upon our planet.
The Carbon Bubble is based upon denying this truth. It won’t last. Any sensible investor who understands science can do nothing but sell Canadian Tar Sands short.