PRESIDENT OBAMA, YOUR CANADA VISIT SHOULD LEAVE BEHIND HOPE FOR BOTH CANADA, AND USA!!

Mr. President,

Canada is eagerly awaiting your visit on 19 Feb. Canadians are thankful that on your first international trip you have chosen Canada. The visit is short – for only about 6 hours – but it is coming at a time when the world is facing the worst economic downturn since the 1930’s.

As you should know by now, US is Canada’s largest trading partner. Canada is also the number one crude oil supplier to US in terms of million barrels per day. You may probably have been told that this crude oil comes from both conventional and unconventional sources – the unconventional source being oilsands, the second largest source of crude oil after Saudi Arabia.

Lumber, beef, engineering goods, agricultural products, and so on – whole host of stuff is exported from Canada to US. In short, Canada’s economy is heavily inter-twined with that of US. Not only trade, these two countries have strategic defence cooperation too – NORAD being a prime example.

Canada is hurting now because the consumers in US are in trouble, not spending as before. The whole world is hurting – Japan reporting their worst trade figures on 16 Feb mainly because their exports have fallen off the cliff. China’s exports too are down. Why? Because the largest consumer society in the world, i.e., US is in recession. By the way, this is not the opportune time to debate whether such huge consumerism is good or bad.

Be that as it may, the question that is paramount in the minds of the Canadians is: what is going to be the outcome of US President’s visit? Will he reassure the Canadians that there will be no protectionism in US policies? Will he reassure Canada that cooperation between the two countries will continue to thrive in oil and gas sector? Is this visit going to reinforce the message that Canada is a trusted, dependable ally and that both countries will continue to cooperate and expand their relationship in an environment of friendship, goodwill and trust.

Mr. President, there may be some issues where the countries may have different perspectives but they are not so divergent so as to impinge on any issue of bilateral nature. Canadians know you are a champion of environment protection and alternative sources of energy is a topic which is close to your heart. But Canadians too are aware of the challenges of global warming, and they are already doing their part to mitigate the situation.

And, this environment thing brings one to the main point. Mr. President, the crux of the matter is that Canadians are hoping that your concern for environment will not become a stumbling block in the area of cooperation in crude supplies to US from Canada, and this specifically relates to oilsands. You may have been briefed about concerns of environmentalists regarding oilsands. One hopes you have been briefed about the measures too that Alberta province has already put in place to meet those concerns.

Mr. President, it needs to be mentioned (you may be already aware though) that scientists till date don’t know the real factors that cause global warming – what they know, however, is that GHG is one of the contributing factor. The scientists also know that GHG contributes to less than 10% of entire global warming phenomenon (but they don’t mention it in the same breath as the catastrophic consequences they narrate almost like a horror story).

The point is, therefore, why oilsands should be singled out and made a whipping boy for all the supposed global warming dangers this world is allegedly facing when the global warming phenomenon itself is not understood fully by the scientific community? Just sensationalising an issue, or creating scare in the minds of people doesn’t help.

A substance in itself is not good or bad, it all depends how it is turned in to a useful thing by humans. Uranium ore in itself is not so dangerous or useful, it all depends how it is processed – whether to turn it in to a nuclear device of destruction or source of energy. Similarly, if oilsands is processed properly and its related environmental aspects are handled adequately, surely then it shouldn’t be a cause of worry to human race, should it?!

Mr. President, you said the other day during your prime time news conference that you want US to be less dependent on ‘foreign oil’ – from Middle East. Canada can contribute significantly towards this objective of US. And no body should carry any feeling of guilt if Canada’s vast oil source helps US, because oilsands is not going to do anything to exacerbate global warming.

Moreover, Mr. President, you are a very sensible and pragmatic person. You are not afraid of embracing the reality. For example, during your recent prime time presser you mentioned a figure of 4.0 million (jobs created or saved) but in later speeches you mentioned a moderated figure of 3.5 million (jobs created or saved). One hopes similar pragmatism will be evident in the matter of cooperation between US and Canada in oil and gas sector.

Crude oil supply from Canada took up a large chunk of this epistle because this could be one of the touchy subjects for discussion between you and Mr. Harper. Thankfully, the other potential sticking point about protectionism has already been addressed suitably in the recent meeting of G-7 finance ministers in Rome. So, hopefully, there should not be any reason for concern from Canada’s side. However, you may like to reinforce the Rome message when you are in Ottawa.

So, as you can see there is cooperation and cooperation only that pervades the relationship between these two great countries. There is hardly any issue that could potentially bring in any stressful moments during the talks – even the arctic sovereignty issue is a matter where the countries have more to gain by forming allied front rather than taking separate lines of action.

The issue of how to save the big three auto makers in both US and Canada may make both sides a bit uncomfortable but given necessary maturity and understanding on both sides this issue will hopefully not bring any sourness between the two leaders.

In the past there have been many instances of sour relationship between the leaders of US and Canada. In one of the worst instances it is said that US President Johnson got so incensed when then Canandian Prime Minister Pearson (while visiting US) called for American withdrawal from Vietnam that Johnson is said to have pinned Pearson to the wall by holding his collars and yelled “You have pissed on my rug”!

One hopes nothing of that sort will happen between you and Mr. Harper. On the contrary PM Harper may like to brush up his knowledge about Chicago White Sox, and you may like to get some briefing on maple syrup as well as on what to say when a Canadian greets saying “Howdy”!

Mr. President, this is the time when the respective leaders need to be source of hope to millions, and not be a harbinger of any impending bad news, least of which should be anything to do with disagreements between them. This is not a good time for nitpicking.

If the Canadians saw you and Mr. Harper standing shoulder to shoulder (metaphorically speaking) at this hour of extremely challenging times, and telling the media how the two countries have agreed to cooperate and expand ties further in all fields including oil and gas, it will bring cheer to millions of Canadians and they will thank you, Mr. President, for the same. And, you know very well that any expanded cooperation will do more good than harm to an average American.

Did we ask for too much?

Sincerely.

CANADIAN OILSANDS AND ITS RELEVANCE TO USA's ENERGY STRATEGY

As Jan 20, 2009 draws near when President-elect Obama takes office, there is a bit of apprehension on the northern side of US border as to what trajectory will the new administration follow with regard to energy strategy, and what implications it might have for Canadian oilsands.

The apprehension gets more acute because of the choice of Secretary Energy-designate Dr. Steven Chu. The perception in the market is that Dr. Chu is a strong proponent of nuclear energy (though he has concerns about how to dispose off nuclear waste), and also a known supporter of alternative sources of energy.

But Dr. Chu's personal views about oilsands is not available in great detail; it is said that he probably doesn't hold this abundant resource, available so close to US, in very high esteem. One of the possible reasons for this is attributed to the prevailing environment related brouhaha surrounding this unconventional source of petroleum.

It is true that synthetic crude oil produced from oilsands generates more GHG as compared to conventional crude oil production, and there are concerns about the tailings management aspect of oilsands too.

But before going too much in to concerns surrounding oilsands, and what it does to the environment, it is important that we pause here for a moment or two, and concentrate on this GHG thing and its so-called contribution to global warming.

It is true that there has been some increase in global temperature in the past decade but what the general public does not get to focus on and/or get to know about, in proper detail, are the following very pertinent aspects related to global warming:

• That global warming has been taking place during last tens of decades (even when there was no oilsands, or coal based industries); that global warming is cyclical


• That Scientists have not been able to provide any convincing explanation as to why global temperatures went up cyclically in the past decades when industrialization was no where near current levels


• That scientists in the world don't know even today, or can not explain conclusively as to what is/are the real cause(s) of global warming (all that the environmentalists do is to keep shouting from the roof tops is that CO2 is the villain)


• That seabed methane release has a significant impact on global warming but scientists have not been able to offer any proper explanation on this phenomenon


• That scientists have not been able to understand and/or predict accurately the interrelationship between cooling of earth, that's taking place since the big bang event happened, and GHG effect


• That scientists are not clear how and why La Nina effect negates the so called GHG effect and allegely causes colder spell globally (average temperature of globe in 2008 was 0.3 degree celcius less than previous years, and this is attributed to La Nina effect)


• That CO2 emissions contribute at best around 5% to overall GHG scenario


• That oilsands' CO2 emission is a small component of overall global CO2 emission quantities

All I want to highlight to people is that as of present, scientists DONOT know, I repeat, the scientists DONOT know for certain what are real causes of global warming phenomenon. So, when the scientific community does not know the real causes of global warming, then why the hell they convey just a portion of the whole story (namely the GHG effect) to people and keep trumpeting about it? May be there is some agenda behind it!

Yes, CO2 may be contributing to GHG effect but it is not THE villain which it is made out to be for global warming, and by logical understanding of the aforementioned bullet points it is amply clear that oilsands is not THE villain which can potentially cause some kind of 'disaster' to this planet.

I am not a lobbyist belonging to any oil company nor am I trying to gloss over the concerns relating to GHG emissions. I am a rational thinker who does not jump on any bandwagon just because it is fashionable to do so which seems to be the case with a number of eminent people when it comes to environment. I don't see any virtue in sticking any environment related poster on my back and crying my voice hoarse about some doom and gloom scenario for this planet without having a clue as to what I am talking about.

The bullet points mentioned above do not, by any stretch of imagination, suggest that oilsands industry should abandon its technological endeavours to minimise CO2/SO2 emissions, or should not adopt better tailings management processes.

In fact, Canadian province of Alberta, which has the largest oilsands deposit in the world, has taken a giant step towards mitigation of CO2 issue by allocating $2Billion for carbon capture and sequestration. As well, the provincial government is incentivising the oilsand companies towards adopting innovative strategies for effectively managing the environment un-friendly aspects of oilsands processing.

Now, it is well known that Mr. Obama in his election rhetoric mentioned frequently that he would like US to be less and less dependent on Middle-East oil. One of the faster ways to achieve this is to get oil supplies from Canada - whether from conventional or unconventional sources. And, Canada is poised to play its part with so many of the oil companies willing to invest in oilsands industry.

One of the most vital advantages for US in expanding US-Canada oil ties is the geo-political angle. Canada is a close ally of US - militarily and otherwise - NORAD is one example of US-Canada alliance. Canada is a politically stable country, follows democratic system of governance, has a strong and unbiased judicial system, and shares a historic relationship with US. Canada is a country which US can trust and rely on in good or bad times.

Guided by these premises only some Canadian oil & gas companies like, Encana, Husky have formed strategic partnership with US oil companies to process the bitumen supplied from Alberta to across the border to south. Some US companies like, ConoccoPhillips, Imperial Oil (owned by Exxon-Mobil) are implementing projects to produce bitumen from oilsands and transport the same via pipelines to their refineries in US. All this bodes well for US from the standpoint of having stable assured supply of oil without the fear of any disruption.

But the apprehension is that under the new dispensation if some folks in the US Dept of Energy in their over enthusiasm start to throttle the bitumen supply from Canada because some chest thumping ignoramuses are portraying it to be THE evil causing all environment aberrations, then it will be more damaging to US's long-term energy strategy of becoming independent of Middle East oil.

Canada will hurt obviously because its biggest customer (US) will not have been buying its bitumen. In such a situation Canada will then have to look for other customers - China seems to be prime candidate to fill in the slot vacated by US. This certainly won't be good from US's geo-politico-military game plans. But then Canada will not be liable to be held responsible for entry of a new buyer for the abundant bitumen because after all Canada also needs to earn revenue for its own economy.

One hopes the new US Secretary of Energy will be guided by pragmatic and a rationalist's approach while at the same time remaining fully cognizant of the rock solid time tested US-Canada relationship and its contribution to US's interests and strategies.

No one disputes that alternative sources of energy should be explored and developed but that approach need not be predicated on strangling a stable source of energy (oilsands) based on unsubstantiated cause-and-effect scenarios attributed to it. Hopefully, the new US administration will not allow its vision and judgement to be clouded by irrational populism, and therefore will not stray in to alleys which don't lead to actualization of interests of USA and one of its closest allies - Canada.