The Future Of The Alberta Tarsands Industry, And The Future Of Work

Part 1 – Introduction

Back in 2015 and into 2016, the world looked at the choices of the American electorate and wondered . . . why?

Though it may have been a fairly small part of the campaign picture, why on earth are these people doubling down on coal?!

In terms of fossil fuels, there is nothing dirtier. In terms of economic efficiency, natural gas is far superior to coal. Even without factoring in renewable sources, the cleaner fuel natural gas is already winning against coal when it comes to North American electricity generation. And when one takes into account renewable sources of power, the necessity for coal is actively dropping.

At the moment, the necessity of fossil fuels in electricity generation is apparent. Peak electricity use tends to fall during times not conducive to solar power. A huge problem for electricity-hungry economies.

It’s a problem, but it won’t be a problem for very long in my estimation. The solution to the problem is storage. Instead of throwing away an afternoons worth of solar energy, how can it be harnessed and stored for release at a more opportune time?

Fortunately, that problem is actively being researched by people as we speak. Since it corresponds to 2 very important sectors of our modern-day society . . . electricity generation and transportation. The 2 are inherently interconnected by nature. With extended range and reliability in the EV will come better electricity storage solutions, and vice versa. Just give it 10 or 15 years.

Having said that, coal IS out. Even though fossil fuels are still necessary for the generation of electricity, coal is obsolete. Meaning that anyone willing to double down on its future is either lying for personal gain, or delusional.

Part 2 – Oil Sands

The same goes for Alberta bitumen. The Alberta Tar sands have no future.

Truthfully, I don’t even like calling it oil because it is far from it. It’s all in the name. It’s tar, not oil. It seems more reminiscent to the bottom of the barrel bunker fuel that powers the worlds seagoing cargo fleet than anything else it likes to compare itself too (West Texas Intermediate?).

My first exploration is as surprising as it is interesting.

When checking that bunker fuel (or marine fuel, alternatively) was indeed what I thought it was, I was correct. But it seems, only for a short time.

The International Marine Organization (a specialized agency of the United Nations which is responsible for regulating shipping) announced in late 2016 its plan to limit the sulphur content of marine fuel oil to 0.5% from its current 3.5% status. Though there is much groaning in the industry about the cost of changes and lack of time to prepare (imagine that), I don’t doubt that it will all sort itself out. Either a few lower sulphur bunker fuel sources will become much more valuable, or fleets will embrace alternatives (such as diesel or liquefied natural gas).

https://www.jwnenergy.com/article/2018/8/meeting-imos-new-limits-sulphur-marine-fuels/

This made me wonder about how much sulphur is contained in Alberta bitumen (and if this would further erode its value). As it turns out, a worthwhile inquiry.

Bitumen has an extremely high amount of sulphur content, earning it the designation of heavy sour within the industry. Sour crude has less sulphur than sweet crude, and it seems that bitumen is one of the most sulphurous fuels on the planet. Adding yet another problem to the ever-growing list against Alberta oil production.

There do exist options to remove this sulphur content. However, the process is very expensive and will only add a further discount to Alberta’s bitumen. If producers don’t remove it then it will be up to the customers themselves.

https://business.financialpost.com/commodities/energy/how-sulphur-is-quietly-posing-one-of-the-most-immediate-threats-to-canadas-oilsands-industry

Though I had approached these 2 topics (ISO 2020 and Alberta Bitumen) separately, it seems that the 2 are inherently connected.

When it comes to the refinement of sweeter forms of crude oil, the result is generally a majority of gasoline, diesel fuel and other end products, with a mere residual amount ending up as low-end bunker fuel. When it comes to tar sands production however, the refined amount of gasoline and diesel fuel is closer to 50% of a barrel, with the rest being heavy sour crude. This can be coked into more usable transportation fuels, but again, this all costs money.

It’s a big problem for the oil industry in general, have always used marine the marine shipping market as an outlet for the residual leftovers of production. I can only imagine the scope of the problem is magnified when close to half of the end product is this heavy sour crude. Particularly if the producers don’t own or build their coker facilities.

Part 3 – The Future Is Not Bright

I will now move back onto the original track that I had started with this writing. That being, the tar sands is obsolete. Any major investment put into the project now is going to be wasted capital in relatively short order. And from an ecological perspective, if the Canadian Government does not start dealing with the toxic legacy of the oil sands NOW, the problem is going to be a WHOLE lot worse later. Because companies that go out of business don’t have to bear the burden that is reversing the ecological footprint they created when they were operational.

Consider the scope of tar sands operations. Now, consider the amount of infrastructure (potentially dangerous or environmentally damaging) which will need to be either dealt with or left to rot. And while we are at it, consider the fate of towns and cities alike that are driven primarily by oil patch revenues. When commodities and industries go away, communities shrink and contract. Not to mention the toxic legacy that the remaining longstanding residents will have to endure.

Not all that long ago, taking this stance on the Alberta oilsands would have seemed asinine.

We have always had an ecological and moral argument. But let’s be honest . . . civilizations blinded by easy money tend to be shortsighted to the point of being delusional. In the past, this delusion was a source of deep depression for many like me. As long as the money was flowing, the ends justified the means. Even though past examples of the risks of gambling on one single industry (particularly one driven by huge corporate multi-national entities) are numerous. Often even if the gamble potentially has very real implications for the lives of their children. The ends always justify the means.

Part 4 – The Changing Winds Of The Market

To make these arguments 10, 15, 20 years ago would have been certainly premature. And rightfully. Alternatives to the internal combustion engine were barely out of the realm of the pipe dream, and the footprint of renewable energy on the grid was hardly worth noting. However, as explored before, that is no longer the era we live in.

Hybrid vehicles have been on the market for around 2 decades now. However, it wasn’t until the past 2 years that we seen adaption to EV’s start to ratchet up on a worldwide scale. It’s a change in market wind direction that has not gone unnoticed in overall market trends, either.

Consider the sale of electric vehicles (either fully electric or plug-in hybrids). Adoption in North America has been slow, with new EV sales accounting for 2.16% of Canada’s and 2.1% of the US’s 2018 vehicles sales. For Canada, that is a fairly large jump from 0.18% back in 2013 (0.60% for the US in 2013). However, it’s tiny in comparison to Norway.

Whilst most nations were below 0% adoption back in 2013, 2 notable exceptions are Norway (6.10%) and The Netherlands (5.55%). Though adoption in the Netherlands seems to have plateaued in the following 5 years, not so for Norway. They skyrocketed to 49.1%.

https://en.wikipedia.org/wiki/Electric_car_use_by_country

Though Norway is the shining beacon of EV adopters, most of Europe (excluding France, Denmark and Germany) are ahead of North America. Though I am not entirely sure why adoption rates are lacking in the 3 European nations, range anxiety and extreme climates tend to be the big worry in the North American market (particularly in the continental interior). 
That, and the fact that no one seems to want to deploy level 3 charging stations even in areas suitable to current day EV technologies (in, and equally between, population centres).

Part 5 – The Drawbacks Of EV’s

When it comes to problems which need to be resolved in regards to electric vehicles, they are not all limited to the obvious ones. For example, in North America, a big source of funding for roads (and other public infrastructure) maintenance currently comes from gas taxes. If this is not addressed, the infrastructural shortfall will only grow as more and more petroleum-powered vehicles are scrapped.
Another far more potentially problematic factor in this could be the North American electricity grid itself.

Part 6 – The Grid

It depends on collective charging habits. Since solar power is fully online in the afternoon, the best time to make use of this clean energy is the afternoon. However, since most of us spend that time of the day working (usually without access or permission to company electricity), the charging has to happen in the evening or at night.

It all lies in electrical demand patterns of any given timeframe. In a nutshell, when most people are awake, demand goes up. When most people are asleep, demand goes down. The demand begins early in the morning and generally peaks at around 4pm. The late afternoon peak is when all major users of electricity (commercial, residential, industrial) are online simultaneously.
Though all of this demand would have to be met by coal, gas or other plants 24/7 previously, numerous recent solar energy installations in many areas help by single-handedly being able to cover much of this daytime peak demand. However, the problem comes when the sun goes down. Even though the demand still tends to be high at sundown, the previously abundant supply goes away fairly quickly.

This problem is known in the industry as the duck curve. Though the sun does a great job of taking care of the daytime demands, the rapid transition into the evening hours can be rough on existing generating infrastructure (which was generally not designed for rapid changes in demand).

https://www.energy.gov/eere/articles/confronting-duck-curve-how-address-over-generation-solar-energy

EV’s come in here because charging them could make this peak power usage problem worse. For example, if peak loads now tend to start dropping at around 6 pm, EV charging may push this peak further into the evening or night. And even if longer demand periods are not much of an issue normally, consider times of weather-induced demand on top of regular demand. For example, if EV charging coincides with commercial, residential and industrial peak usage AND air conditioning.
A valid consideration not just on account to typical summer weather patterns (let alone what the greenhouse gas afflicted future holds), but also because the international grids of North America have already demonstrated such vulnerability in the not too distant past.

2003

The 2003 blackout in the northeast happened on account to a series of cascading failures on both sides of the border, a big factor being demand. A system that was already immensely stressed due to increased load was thrown into complete chaos by what would likely otherwise be a minor set of events in the grand scheme of things.

  1. A problem with telemetry data flowing into what’s known as a state estimator is corrected by staff at Midcontinent Independent System Operator, who forget to reset the monitoring tool after correcting.

  2. A powerplant in Eastlake, Ohio trips offline (unrelated).

  1. About a half-hour later, transmission lines in northeast Ohio start to trip on account to sagging into nearby trees (presumably on account to carrying the extra electricity needed to make up for the lost power plant)

  1. Alarms are either unnoticed or ignored by staff in charge of regulating electricity flow in Ohio

  2. Another local line fails due to sagging into a tree south of Clevland.

  3. ANOTHER localized failure in Ohio (one called the Hanna-Juniper Interconnection) trips yet another feed offline. As utility officials and MISO attempt to troubleshoot the failures, they don’t inform any interconnected utilities of their internal problems.

  4. Another line is tripped off somewhere in Ohio

  5. The major failures begin as several high capacity lines connected to another Ohio electricity utility fail in rapid succession

  6. Between 3:46 and 4:13 pm, grid instability causes interconnected grid management systems to automatically trip offline power plants and connector lines serving the most populated areas of both eastern Canada and the eastern United States.

https://en.wikipedia.org/wiki/Northeast_blackout_of_2003#Sequence_of_events

Of course, this succession of failures represents a very different time in North American electricity grid management. On account to this set of failures (a situation fairly reminiscent to issues leading up to the 1965 Northeast blackout as well), governing bodies on both sides of the border tightened up processes and communication between all interconnected entities. But on the bright side, it’s been 15 years since the last burp on this segment of the North American grid, so maybe the systems are indeed better suited for the ongoing (and really, growing) electricity demands of a growing economy.

When it comes to the problems potentially posed by electric vehicles on already strained power grids (at least during peak periods like hot windless evenings and nights), we have to consider one important aspect. This is a potential problem to North American and European (I am assuming) grids as they are currently deployed.

Profits in electricity generation, like profits in commercial sectors such as big-box retail, are all about scale. Generating power for customers of a localized area is inherently reliable (fewer points of failure that can cascade), but scaling up tends to be far more profitable for all involved. When you can sell power externally, your infrastructure investment and repair budget are that much larger. Meaning that customers should see lower electricity costs as a result. The bigger your customer base, the more spread out the costs.

Scaled up electricity grids are efficient and good for regional and national economies, but they come with the inherent risk that faces any machine dependant on many interconnected parts. Not to mention the problems posed by the sheer geographical spread of the operations. Widespread power grids are extremely efficient, but not at all resilient. Few forms of infrastructure are more vulnerable to climate change than interconnected international power grids.

Which is where ever-evolving battery technology may present a potential fix to an issue caused by increased electrification of vehicles. To provide the comforts and range necessary to quell range anxiety in much of the public, batteries will both need to store a lot of power (at a wide range in temperatures), be stable, and be fairly compact. Though lithium-ion has brought us a long way, there is definitely still room for improvement on many fronts.

When battery storage becomes cheap and compact enough to make new EV’s (and EV conversion kit’s for those so inclined) affordable to the average person, it stands to reason that scaling this technology up for use in power grid stabilization will also become cheaper.

The duck curve will become a thing of the past. With the ability to store extra energy created by solar and other methodologies comes increasing freedom from previously necessary fossil fuel-driven peakers, as the industry calls then. Not just the peakers, but also many existing generating systems. Coal is facing that reality right now, but so to will oil, gas and most other fire fueled stations.
Maybe even nuclear. It may be carbon neutral by nature, but the technology comes with a whole new set of nightmarish problems of its own. And no, I’m not talking about one in whos how huge the number incidents such as Chernobyl, Fukushima or Three Mile Island either. More, the already huge and constantly growing number of spent fuel rods, irradiated water and all the other waste generated by nuclear power. Most of this waste is currently stored in and around the nuclear facilities in which it was generated (for lack of anywhere else to store it). Given the constant maintenance that this stuff needs, it is the definition of non-resilient. A nasty pandemic could have the potential to upset this powder keg, let alone unpredictable chaos in the natural world.

https://www.ucsusa.org/nuclear-power/nuclear-waste

https://medium.com/the-long-now-foundation/the-other-10-000-year-project-51425d40f93

Hyperbolic?

Maybe a little. In this context, a good candidate for an entirely new piece of inquiry. However, when the topic of electricity generation is on the table, one should explore all aspects. Particularly when this increasingly ageing technology is almost obsolete at this point.

The economic argument is obvious. The initial investment may be steep. But the returns once the system comes online (and eventually pays for itself) are virtually limitless. Every other non-renewable generation method requires the ongoing purchase of raw material (be it biomass or trash, coal, oil, natural gas or uranium). A grid powered by renewables runs on freely available ambient energy.

Part 7 – A Real World Example

The benefits of an early form of such tech are already deployed (with a measure of success) in the interior of Australia.

https://www.theguardian.com/technology/2018/sep/27/south-australias-tesla-battery-on-track-to-make-back-a-third-of-cost-in-a-year

Australias interior now enjoys a reliable electrical grid thanks to the battery banks ability to smooth out periods of instability. This setup seems to work for Australia (it has both smoothed out grid instability AND paid for itself by offering storage access to the rest of the continent).

It is far from accessible (or sustainable!) in other ways, however. For one thing, the price tag ($90 million) is steep for even the largest of electric utilities. While significantly less than the cost of building new conventional generation plants, it’s still a bitter pill when the longevity is only 15 years (or potentially less, if the batteries don’t hold up). Which means both a further investment AND the need to dispose of all of these batteries properly. Not to mention the fact that lithium is also not a limitless resource (soon leaving us back at square one).

While current-day lithium-ion battery technologies are relatively well suited for use in electronics and modern-day EV’s that don’t typically have much of a lifespan beyond 15 years, this isn’t suitable for such long term installations as power grids. None the less, it’s still a promising technology that will no doubt help bridge a transition into firstly, a more renewable-powered electric grid. And secondly, a more resilient power grid.

Part 8 – The Future Of The Power Grid

When the word resilient hits my ear in this context, the implication seems to be local and regional over national and international. If the goal is reducing reliance on fossil fuels and being more chaotic climate adaptable, then this is certainly a good game plan. However, the issue then becomes how to bring power companies into compliance with this (being that electricity profits are generally greatest for energy which is exported to other regions or electric utilities).

Naturally, this does not have to be a dichotomy. AKA small self-contained grids VS gigantic macro grids.

I suspect a better usage of resources would be a hybrid of sorts. A co-operative approach to how utilities keep the electrons flowing. More or less how the system works now, but without the inherent vulnerability of being reliant on ever more strained power infrastructure. I can picture something like the internet . . . many grids of all sizes which can be interconnected, but only sharing power if it’s needed. Advances in battery storage even open up the possibility of exporting electricity out of the country (imagine sailing a ship charged with energy to Europe, China or elsewhere), or even flying it into places which are hard to reach (like the Canadian north). Such places currently rely on diesel generators.

Fortunately, we’re not entirely dealing in the realm of utopian future technologies when it comes to this stuff. We’re not quite there when it comes to retrofitting the electrical grid in any sustainable way, but defeating much of the range anxiety associated with EV’s is now within reach.

Part 9 – The Trans-Canada EV Corridor

Back when I began writing this paper in its rough draft form months ago, the Canadian charging network for EV’s was virtually non-existent for the entire corridor between British Columbia and Southern Ontario. That is not to say that charging stations didn’t EXIST. They just weren’t the level 3 chargers capable of quick charging an EV to the 80% level in a half hour. Level 1 (ordinary outlet) would take forever, and level 2 wasn’t much better (at least 5 hours).

Recently, however, a partnership between the Canadian government and a flagship Canadian gasoline brand is going to bring a pair of level 3 chargers to many of its stations located along the Trans Canada highway. Thereby effectively erasing what was once the enormous range gap that represents the prairie provinces.

https://driving.ca/auto-news/news/canadas-ev-charging-network-is-growing-making-electric-road-trips-possible

Granted, that has to be supplemented by more infrastructure within city limits once EV adoption takes off (imagine the line-ups!). Even so, however, entirely enabling of the Trans-Canada highway as an EV corridor is a big step. Not to mention it being an inherent business opportunity for restaurants, stores and other attractions located near charging stations.

Part 10 – The Future Of Transportation

When it comes to the trajectory of both the mobile technology and the motor vehicle industry, this change fits right into where this is all going. Vehicle anatomy is the way of the future. Though it can likely just as easily be deployed in petroleum-powered vehicles, I am confident that we’re not far from the day when running gasoline and diesel will become more expensive than it’s worth. And not all based around fuel prices, either. Once demand starts to drop, I suspect the price of oil will also drop. Rather than pushing the prices up, the race will be in the other direction.

While fuel prices are one aspect, maintenance is another.

Everyone (particularly those in charge of a fleet) knows how much it takes to maintain an internal combustion engine.

Oil changes. Lubrication jobs. Fluids for all manner of purposes. And of course, the fact that a machine of many moving parts is a machine that has many failure points.

Unlike its gasoline and diesel counterparts, EV drive trains are a whole lot simpler of a machine to maintain. For one, oil is unnecessary, and lubrication is minimal (compared to a fuel-driven vehicle).

https://www.quora.com/Are-electric-cars-more-reliable

Part 11 – Canadian Politics

Which brings us back to there here and now.

The latest attempt by seemingly all parties equally (minus the Greens) to appease Canada’s oil patch workers is making the argument that the road to a cleaner future is paved with tar sands bitumen. Or to put it in a way that every single Alberta resident that I have talked to puts it:

“People don’t get it. We HAVE to build these pipelines!”

Whilst the proposal would seem to strike a balance between career tar sands workers and ecologically conscious Canadians, it’s still bullshit. It might be grounded in reality if we were Texas or Saudi Arabia, but the product we offer the world is FAR from it.

This paper alone illustrates pollution problems (namely, high sulphur content) which are going to be affecting the value of bitumen IMMEDIATELY. And even with the gradual transition of Asia onto cleaner energy sources that the majority of bitumen supporters seem to be banking on, consider this little nugget of information. Air pollution in China is now hindering solar power output from the nations many installations. At a cost of billions of dollars.

https://www.fastcompany.com/90375916/chinas-air-pollution-is-so-bad-solar-panels-no-longer-work

I understand that Trans-mountain can support either bitumen or conventional oil. If China (presumably, as the largest market opportunity) is to purchase bitumen, then it must be transported back home and further refined into usable fuels on arrival. Adding to this already dire air pollution problem.

And if they choose to purchase the already refined stuff, it’s antithetical to their place in the Paris agreement. It is antithetical either way!

Part 12 – WCS vs. WTI

A common comparison that I often hear in the media is the price differential between Western Canadian Select and West Texas Intermediate. Both are umbrella’s covering a general type of petroleum-derived from a general geographic area. However, though they are usually put side by side, I would argue that to be akin to the well-understood description that is Apples VS Oranges.

It is true that in terms of market accessibility, West Texas Intermediate has Western Canadian Select beat. WTI has always had the infrastructure for export, as opposed to tar sands exploration (which only began in 1967, around 100 years after the discovery of oil).

However, there are important differences in the end product that needs consideration. A big reason why I keep using the term tar sands, as opposed to oil sands. It’s meant to drive home an upcoming point. West Texas Intermediate is fairly light and sweet (low in sulphur). Western Canadian Select is heavier, sourer (more sulphur content).

Crude oils that are light (higher degrees of API gravity, or lower density) and sweet (low sulfur content) are usually priced higher than heavy, sour crude oils. This is partly because gasoline and diesel fuel, which typically sell at a significant premium to residual fuel oil and other “bottom of the barrel” products, can usually be more easily and cheaply produced using light, sweet crude oil. The light sweet grades are desirable because they can be processed with far less sophisticated and energy-intensive processes/refineries. The figure shows select crude types from around the world with their corresponding sulfur content and density characteristics.

https://www.eia.gov/todayinenergy/detail.php?id=7110

In processing this grade, existing refineries have to be upgraded. Will markets that Western Canada hopes to attract be willing to make the commitment on account to the lower price?

Maybe.

Will refineries here in Eastern Canada be willing to make upgrades if access to WCS were more streamlined?

I doubt it.

I can’t help but seeing WCS producers as always facing a catch 22. Being the nature of what they are making available, it will never be as valuable as other common standards of quality (for example, WTI). And if Canada were to expend the capital to build the facilities needed to create a product that the world wants, the industry will STILL be operating at a loss. In most market cases, complex manufacturing process costs are passed on to the consumer. However, you can’t do that if you wish to remain competitive with even other North American benchmarks.

The debunk

I would not be doing my job if I didn’t note here that this point of mine has already been destroyed.

My argument is both wrong and flawed because processors of heavier grades of crude can get more usable end product out of a barrel of oil (by way of cracking the larger hydrocarbons down to the smaller ones more suited to running machinery) than processors of lighter crude can get from that raw material. Processers of lighter crudes end up with more heavy waste product just on account to the inability to refine it further.

Although it sounds counter-intuitive, refineries can actually make more money by processing heavy sour crude. Over the past 10 years, most refineries in the Gulf Coast and US Midwest have been modified into high-conversion facilities. These refineries crack and coke the heavy crude “bottoms” into high-value products, removing all traces of sulphur to produce expensive low-sulphur fuels. These highly complex facilities are specifically designed to process heavy sour feedstock, such as Western Canadian Select. In fact, refining margins are better with heavy crude feedstock than lighter oil.

https://www.oilsandsmagazine.com/technical/product-streams

Though I don’t doubt the logic, it is not without cost.

First of all, working with heavy feedstock requires a steep initial expenditure or pricy upgrades. And on top of that, the cracking process itself is very energy-intensive. It is true that there are many refineries stateside that have been built (or retrofitted) to process this crude since the early 2000s or so. However, the past 20 years has also had oil prices that more than justified the expenditure. But going forward, this is changing.

Demand is what keeps the price of oil high, and keeps even heavy hydrocarbons profitable. However, there is more progress than ever towards alternatives to the once irreplaceable fluids that are gasoline and diesel fuel. More than that, these internal combustion replacements are tending to be far less maintenance intensive than today’s engines (perfect for fleets, let alone daily use). And most prominently, citizens and societies are becoming far more aware of our changing climatic realities than we were previously.

It dosesn’t matter how you slice it. The future is coming, and it is NOT heavy energy friendly.

Part 13 – Pipeline Logic

Profit in this business goes hand in hand with demand. It’s why we’re all hearing about pipelines, here, there and everywhere. We have the supply, Asia has the demand, so LOGIC! Build the pipeline!

Current day oil consumption certainly makes the gamble seem worthwhile. At least 50% of global oil consumption goes into transportation. It makes for a huge pie in which to grab a slice of. But also, an ever-shrinking pie, given obvious trends visible on the horizon.

With the reduced need for lubricants like motor oil and others in EV’s, demand will inevitably fall even below the original 50% number. Also not considered are potential alternatives to diesel fuel for power generation in remote areas.

https://www.truthdig.com/articles/a-solar-powered-future-is-finally-upon-us/

We will now pivot back to where we started.

Back to my claim that Albertans (and Canadian’s) are betting a losing hand when it comes to backing Alberta bitumen. Though a lot of this analysis is based around shifting winds in the industry as a whole and transitions based around technology which has not yet been realized, this is not entirely the case.

Remember, IMO 2020 regulations kick in NEXT YEAR (that is, 5 months from when I finish this paper!). And though electrification of the transportation sector will take time and planning, bitumen-based products will become un-profitable LONG before the entire world fleet is switched over. As demand for oil gradually falls, producers will adjust prices to keep customers. Not unlike any other high competition sector anywhere in the world.

In this dynamic, producers of sweeter crude are inherently better positioned, since they have a desirable product as a baseline. Though they won’t be making TODAY’s prices, they will still win on the profit angle. And as one travels down the sour spectrum, this product will be much like it is now . . . a bit lower quality, but still valuable for a time.

One benchmark that will NOT stack up in this dynamic, is WCS. As it stands, the industry goes into turmoil if the price of oil takes too much of a dive. If sentiments and trajectories remain firmly tied to the oil sands extraction industry (without even an attempt at creating a safety net), the result will only be downsized people and communities, and more human suffering. Not unlike the fate of any number of communities worldwide which were intimately tied to a now obsolete industry or resource.

Part 14 – Where To Go From Here

Though it may seem like I am laughing in the face of the inevitable impoverishment of many thousands of people, I can assure you that is not the case. It is easy to highlight problems and wrongs. But the more difficult task is often in looking for answers.

When it comes to the technology side of this stuff, I am full of possibilities. When you break open the barriers and let the mind free, the sky is the limit on this stuff. And one of the most fascinating parts about these technologies is the fact that they are no longer mere theory anymore. What is my and your current day pipe dream is likely future reality. Heck, we may be closer to that point in time than we think. I only drafted this paper back in May (it is now July) and have already observed at least one paradigm-shifting change. Canada will soon have an operational EV corridor!

The more difficult part is the social aspect. Progress is all well and good for the species, but such is hardly consolation for those cast aside by the transition.

It gets even dicier when one considers that in the grand scheme of things, this is just the beginning. Of all the jobs that the loss of the oil sands extraction industry will eliminate, it is NOTHING compared to what automation of an increasing combination of industries will bring us.

The Transition Economy

At the moment, we seem to be entering a period which is oddly reminiscent of a transition period between the era of workers and the era of machines. Referred to colloquially as the gig economy (and also the sharing economy), we’re in a time where sharing our goods for cash or working on a freelance basis is increasingly becoming the norm for many. Many of these positions are tied to smartphone apps acting as a middle man in connecting various businesses with their desired customer base.

Rather than a path to the future, however, I can’t help but see this as a stepping stone to the age of automation. Though automation can not replace the human for all roles, many of the current day gig economies positions are FAR from immune, given the right advancements. We are well on the way to self-driving vehicles and autonomous delivery drones already.

The Downward Spiral?

The era in which we find ourselves barreling toward, the era of automation, may well test the bounds of civility in many places. Given the already rocky path that we find ourselves on as it is, one can’t help but worry. And I am not just worried about the political reactionaries dragging the enraged masses further and further to the right. I also worry about the habitual knee jerk refusal to even deal with the problem that manifests itself in anti-automation stances. For example, refusing to use a self-checkout or menu terminal on account to not wanting to eliminate jobs.

I hate to break the news to you, but those cashier jobs are ALREADY on the way to being obsolete. These companies made the choice a long time ago to make the switch, and it is GOING to happen. My advice to you is to get used to it.

Part 15 – Focusing On The Real Problem

So much energy is wasted on boycotting cashier replacing machines that could be focused to other far more pressing problems. For one thing, cashier jobs eliminations due to machines are generally net negative, as these employees are often shifted elsewhere in the store. I suspect that this will the case for a while yet since productivity needs of much of the service industry are still complex enough as to be hard to automate.

Amazon may have opened a store without cashiers, but the shelves don’t stock themselves. Furthermore, Walmart developed an order writing robot (which bases its decision on empty holes on shelves), but they still don’t have one that can fill that hole when the truck arrives.

Of course, there is likely a time limit on these jobs, too. We wouldn’t be here if cost-cutting wasn’t priority #1, to begin with.

And so the question becomes, what then? If my job were to one day be eliminated by progress, obsolescence or collateral damage of a combination of the 2, what do I do?

Given that I have always had an interest in technology, that seems like the most obvious route to choose. Though the term is a HUGE umbrella with seemingly unlimited possibilities (my current day excuse for not moving forward in this area), the industry comes with inherent stability.

As social media has taught me, the sky is the limit when it comes to future tech. And as the Security Now, Darknet Diaries and Hackable podcasts have taught me, there is even more career stability in the probing and prodding of every exposed surface of this new technology. Whether your goal is planting a crypto miner, cashing in a bug bounty or pen-testing companies weak points, your advancement opportunities are virtually endless.

When it comes to retraining, the tech and IT industries are going to be one of the bright spots as time goes on. Whether on the front lines as a mechanic or in the background keeping all the systems online, there will always be a place for people with the right certs. And when it comes to getting such certs, there are already many online resources that help make the learning curve (or just keeping up to date) much easier.

If federal and provincial governments spent as much money on establishing and maintaining programs like this as they currently do on creating and airing propaganda for the oil & gas industries, imagine the possibilities!

Of course, this lateral movement is not for everyone. Which brings us to the VERY difficult part of this thought experiment. Going outside the box.

Part 16 – Re-Writing The Story Of Human Purpose

For likely as long as there has been industry, jobs have been more than simply a means to an end. Hard work is considered a virtue. And as such, the simple fact of being employed tends to be a big part of a person’s identity. Both in terms of their self-worth, and in terms of how they are perceived in society. While this is blatantly visible in how people look at so-called welfare queens or the homeless, a more interesting case study is older generations working habits. Many that have chosen to retire end up back in the workforce. Not always out of necessity. It’s more to do with a lack of meaning. Without a place to be at a set time, they find themselves without purpose in life.

It’s an interesting problem. One that I can’t help but see this as somewhat cruel, being that “The hard work tide lifts all boats!” mantra is an increasingly rare phenomenon. People are so brainwashed by corporate growth propaganda that they can’t even fully enjoy life when they finally get some free time to do so. After helping benefit these faceless entities with all the good years of their lives, these people can’t even fully enjoy their Golden Years.

Despite having such a strong opinion on the matter, though, I live by the mantra that is to each his own. The matter that is more important is this societal conditioning. The notion that we are defined by the work we do. Though this certainly had a place in the previous status quo’s, we are rapidly moving into a different era. Machines are far more efficient (and less in need of physiological conditioning) than human resources. The benign yet terrifying corporate derived terminology which sounds like it was ripped out of the Matrix.

How’s THAT for a red pill?

The era of jobs is looking like it’s coming to a close. Okay, this is not entirely true. However, given that this change is going to impact pretty much every sector in the economy, this is going to be big. One can draw comparisons to the industrial revolution, or the automobile revolution, but a HUGE difference between then and now is the sheer number of bodies on the planet. During those transitions, there were both fewer people in need of accommodation due to mechanization AND there were generally other fall back jobs to go into (the service industry). Of course, those seldom paid as well as the jobs removed, but it was still something.

Part 17 – What’s Next?

If previous economic strategies are to prove the way forward, nothing will be done. Where applicable, social safety have been available to soften the blow. However, the situation has generally been quite pragmatic. Frankly, the cost of sacrificing a Detroit or a Cleveland has never outweighed the benefits. To be fair, we’re playing a bit of an apple vs oranges game here (free trade agreements in combination with automation drove a lot of this). None the less, lost jobs are lost jobs.

Though the sheltered elites could afford to lay waste to selected regions or urban areas which were heavily reliant on now obsolete (or outsourced) income sources, that is not the case now. This wave of change will reach every single city and region, worldwide.
Not dealing with this in a guided manner runs a high risk of throwing society into chaos, and thus putting the economy into jeopardy. To some extent, we already see this happening in the form of the twins ultra-nationalism and fascism once again taking root in the liberal world. However . . . you ain’t seen NOTHING yet.

When it comes to the question that is “Where from here?”, there will always be a salesman of controversy that will have an answer to that question. Though culling the herd conspiracies of all kinds already exist, they are likely to only get stronger. Given the current inability of modern media platforms in dealing with the spread of other false information, we likely also have more of this to look forward to. Along with whatever ramifications that may bring. Unstable minds can create all manner of chaos.

Do I think that is our future?

No.

There is no doubt that the future certainly looks dark from this vantage point. Not only are people themselves not adequately preparing (aside from fruitless or pointless measures for the sake of feeling like they are making a difference), nor are the people at the helm (governments). Of course, this is not a surprise. Government officials are not usually chosen by merit or intelligence. But none the less, the extraordinarily short term outlook of many of these officials (often in the name of voter pandering) can be depressing.

Having considered all of that, barring something unforeseen, I don’t see us as descending into some post-industrial capitalism hellscape (at least, not anytime soon). While we have seen the devastation that economic stagnation can bring to communities, unlike the automation and outsourcing changes of the past, the enormous change brought by the elimination of even half to 60% of all human labour is impossible to ignore. Because it’s not just a handful of cities or regions.

It’s EVERYWHERE.

Part 18 – Lunar Lunacy

As much as the scared elites of the world would love to jump ship and hop on over to a new colony on the moon or mars . . . they have to live here too.

  1. Don’t shit where you eat.

  1. There are a WHOLE lot more of us than there are of them.

Speaking of the moon and Mars colonizing craze of recent years, it’s about time we quit beating that drum.

Spearheaded by such well know figures as Stephan Hawking and Elon Musk, the reasoning behind this (at least as comprehended by me!) seems to be “We done fucked this up, so time to try again elsewhere!“. The accepted mantra is that we have around 100 years of familiar climatic conditions left before the proverbial shit hits the fan. And the solution is. . . get the hell outta dodge.

Though I don’t disagree with the often grim assessments of the earth’s climate in the not too distant to distant futures, I think that dumping an enormous amount of resources into moving humanity onto another planet is a HUGE mistake. Though it is being made out to be a necessity for the survival of humanity, this seems more like an excuse to fund the pet project of a set of billionaires.

Before I go any further, I will state my somewhat controversial take on the issue. I do not consider hopping over to mars or the moon (and possibly elsewhere down the road) a valid option for a few reasons. One, because I find it hard to believe that this new world will have space for everyone. Indeed, I am going down a road I had criticized just a paragraph ago. Having said that, however, I highly doubt that the journey to (or existence within) said colonies will be free. Much like a 2 million dollar home in a nice area of town, technically anybody can buy it.

The second reason is more philosophical. I don’t like the idea of leaving behind a trashed and exploited earth just to hop onto the moon/mars/wherever else because chances are we will be in the same situation there. If humans just transplant the philosophies that have driven us to the brink on earth (mass consumption is driven by free-market capitalism), then how will this new world be any different?

As I see it, the only non-delusional way to interpret this would be to view us as the most dangerous parasites in the observable universe. Forwarding the desire of the organism takes priority over all other considerations. Including the long term health and well-being prospects of the organism.

Part 19 – Re-Writing . . . EVERYTHING

Rather than put all of my eggs in an outgoing basket to mars, my focus would be right here on earth. The first thing that comes to mind is carbon capture. Using a combination of natural and mechanized methodologies to try and mitigate the now dangerously high levels of CO2 in the atmosphere.

Next is making sure that things stay that way. Having the technology to reverse the damage of fossil fuel pollution may bring a positive light back to the industry. NOT a good thing, given the non-renewable nature of such fossil fuels to begin with.

The next step requires a radical change in the current status quo operations of the world today. The world is currently being piloted by numerous cancerous ideologies. Though all are not equally influential in shaping today’s status quo, it is fruitless to attempt drastic change without putting all under the microscope.

The umbrella ideology that I would argue caps all of them currently, is free-market capitalism. In the globalized world that we live in today, nothing arches over the capitalist free market. While you see various levels of acceptance of the language (places like China come to mind), non-participation in global trade is exceedingly rare. When nations that are barred from such trade for various reasons are removed, the list shrinks even more.

Some are likely to dispute this point (the power of the capitalist ideology), citing religion, ultra-nationalism and other ugly markers of our time. While all of these things are indeed often a force to be reckoned with, they are still generally directly interconnected to the capitalist macrostructure.

Consider religion. Though individual churches are not always swimming in cash (many smaller congregations are likely just barely keeping the lights on), those with a well-organized parent religion tend to hold enormous amounts of wealth. The wealth which is at times used to make pesky problems within the bureaucracy disappear (shuffling ministers around, handing out bribes, etc). Some of these organizations are arguably just as unethical as any other international organized crime syndicate you might come across. Certainly much better funded than most such syndicates.

All of this wealth (or more accurately, power) is currently being maintained in large part because of currency.

This is not to say that organized religion has not been at the head of the power structure in the past (with or without the influence of its wealth). Nor that some unforeseen future may bring about a re-visitation to this era.

It is to say that in a world where financial capital equals power, such capital means nothing if the fiction that lends it meaning means nothing.

My next example is the major swing to the right that has gripped the world in the past 3 or 4 years. Though these things indeed tend to happen in waves (at least traditionally), it’s hard not to consider the place of social media for acting as an amplifier for already simmering human rage.

The first thing that should be said here is that no social unrest is ever without nuance. The relationship between humans and their reactions to both their external environment and internal factors (such as biases) has yet to be understood by ANYONE. It’s a fascinating (yet terrifying) realization that I’m sure anyone taking the Artificial Intelligence conversation with any seriousness has concluded at some point. The human brain is the ultimate black box.

Having said that, however, this unpredictable nature tends to vanish the further you get from the person. You don’t need to know how a person came to their conclusions to be able to utilize (or exploit) this data for various purposes.

But again, I am dragging this out into the weeds.

Though it is only only one factor of many (for example, racial power dynamics are starting to change in places like the US), employment displacement due to outsourcing and automation is feeding into this anger already. And as more and more mechanization comes online, this problem is only going to get worse.

Machines are both cheaper and more efficient than human labour. For an entity that has only one purpose for existence (generating a constant growing profit margin), the choice between human and machine is an obvious one.

Part 20 – A Whole New World

The jury is still out on whether or not human-created artificial intelligence will end human life as we know it. However, it seems almost a certainty that capitalism is going to end up being this driving force. While one can understandably interpret this statement as being apocalyptic, this is not entirely the case.

Consider the place of human dating back to the early days of agriculture. Without the need for looking after one’s subsistence, the human mind was generally free to get creative. That is, aside from the catch 22 that is none of this abundant food was free. Particularly when the industrial revolution got going strong, the mentality has generally been “you earn your keep, or you don’t eat“.

In essentially the blink of an eye, an essential part of the human experience will effectively disappear for many. As inherently inhuman and problematic as this macro philosophy of the western world (and probably beyond) has proven, it is all that a great many people know.

Of all the great changes that are on the horizon for human society, this will prove one of the biggest challenges. This is MUCH bigger than avoiding self-checkouts at the supermarket or digital menus at fast-food restaurants.

Universal Basic Income

One method of tackling this problem which is gaining steam (including with a democratic candidate running in currently upcoming 2020 presidential election campaign) is with a Universal Basic Income (or UBI). In a nutshell, it is a no strings attached payout from the government (a form of social security, if you will) that is meant to offset income lost due to employment displacement. As the Universal term implies, this would go to every single citizen in a nation (no matter their tax bracket or employment status).

Though this seems like a good solution on the surface, problems become apparent with even a little digging. One of the more concerning ones (highlighted by many progressive leftists) is the possibility that this payment may be used to cancel out other currently available social safety nets. For example, will someone currently getting disability benefits (gotta love the implicative nature of these terms) have to choose between one or the other?

While this may not seem like a big problem on the surface (money is money!), consider what this money might be covering (pricey but necessary equipment?). Forcing people to make this choice (or just eliminating all other social safety nets with a flat UBI) only succeeds in transferring modern-day inequalities into the new paradigm.

With or without health insurance premiums to also take into consideration, a universally distributed income payment is not without potential drawbacks.

https://medium.com/s/free-money/universal-basic-income-is-silicon-valleys-latest-scam-fd3e130b69a0

The Human Toll

Aside from all of the problems that stem from UBI, you also have the inevitable problems that always come from simply throwing money at an issue to make it disappear. The article above makes it abundantly clear why the private sector generally likes the idea of a UBI. It’s great for business, no matter what the social cost.

That social cost is what a UBI (or any other solution that only focuses on the financial aspect of existence) doesn’t do anything to alleviate. Loss of a previously reliable income source is just part of the problem. Having such a safety net may indeed help prevent some of my darker hypothesis from coming to reality. But this is still only part of the solution.

Though work is just a means to an end for some people, one shouldn’t underestimate the purpose that it gives to others. Or what dark places some of these people may find themselves in without this guiding light of existence. After all, a UBI can pay for a lot of self-destructive temporary relief.

And again, I find myself asking . . . where to from here?

I couldn’t tell you because I have no idea. What I can say, however, is that this is a problem that is about more than money. Though that will certainly be a component, far more emphasis will have to be placed on social dynamics. For example, how can so-called meaningful employment be replaced in an era without?

Meaningful Employment . . . it amazes me how much bullshit and corporate deceit is tucked into the everyday language we use every single day without a second thought.

And now, back to where we started.

Part 21 – Closing Arguments

What was initially conceived as an opinion piece (of sorts) about how Canadian’s doubling down on oil sands resources are doing so at their peril, has evolved into something else entirely. An investigation of 2 very different topics that are vastly separate at first glance, yet inherently interconnected upon closer examination.

In closing, we live in an era of change and disruption. So accelerated is this rate of change that visible and drastic societal behavioural alterations can now be observed in time frames as short as 5 to 10 years. With the rate of change that is being seen in ALL sectors of the economy, it’s becoming clear that almost no previously stable jobs are safe from the massive paradigm shift that is upon us. Even the at one time bulletproof oil and gas sectors are now being viewed with a skeptical eye by an increasing number of high profile big-money investors. More and more institutions are starting to put the brakes on further investments in fossil fuel oriented projects for fear of being stuck with Stranded Assets in the future.

https://canadiandimension.com/articles/view/a-future-without-fossil-fuels

https://www.carbontracker.org/terms/stranded-assets/

https://www.pembina.org/blog/climate-change-and-financial-risk-of-stranded-assets

Rather than again explain my rock-solid reasoning for coming to the very controversial conclusion that is embedded in the title of this paper, I will instead end with this excerpt from the Pembina Institute article (linked above), which was published back in 2015.

Throughout the last decade, the oilsands sector has grown in importance to Alberta and Canada. But given the world’s increasing focus on climate change negotiations, it may be time to ask where Canada’s oil and gas sector is going in the future.

High cost, high impact oils are particularly sensitive to the stranding risk. Given that oilsands disproportionately fall into that category, Canada and Alberta should take note of the material risk stranded fossil fuel assets pose to investors and their own coffers alike.

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