On the empty platitudes of the anti-pipeline advocates

The prose reflect careful prior thought and research without platitudes, very coll and thank you.

A Chemist in Langley

This week was a busy one in the Energy East pipeline debate with Denis Coderre and his merry band of municipal politicians stepping out of their jurisdictional depth to come out against the pipeline and our Prime Minister saying he will be a referee in a process where he ultimately has to be the decision-maker. I’ve written several posts on the subject (“A Chemist in Langley’s take on Energy East” and “Debunking more Myths and Fables about the Energy East Pipeline” and a short-take at the Huffington Post I Support The Energy East Pipeline As A Pragmatic Environmentalist). As well this week comedian Rick Mercer had his say on the topic in his weekly rant. All week I have been reading criticisms of both my writing and Mr. Mercer’s rant. The most popular response to Rick Mercer’s rant was a counter-rant by another comedian…

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A response: Alberta Refinery v Strategic Planning

Alberta Refinery v Strategic Planning

Darryl et al (on LinkedIn),

Now we have a conversation going. What started as an idea about a refinery in Alberta is evolving into a discussion of significant importance to Alberta/Canada and for Albertans/Canadians, namely, a Strategic Future Energy Plan compatible with economic aspirations and climate concerns. 

Let’s get back to the Alberta refinery idea to start. Historical strategic thinking over many decades has served to turn Canada, in particular Western Canada, into a raw materials and commodities exporter. It is well understood now that this strategy, born in board rooms, served the corporate bottom line and political pundits first before much else.  

In the current socio-economic climate, much voice is being given to ideas like an Alberta refinery motivated by the recognition that exporting raw materials is akin to exporting jobs and economic prosperity. Market diversification away from a single (USA) customer base by way of pipelines to the coasts for marine export is also a hot topic, as is Energy East. 

Over time, some have advocated for a TransCanada (coast to coast) trunk-line much in the vein of the TransCanada railroad built in the late 1880’s to unite Canada. In this case, the trunk-line would have several multi-directional pipelines in a single trench set with input and output headers strategically placed to afford Canada the flexibility to ship energy and fluids in any direction as markets and technologies evolved. 

A decade or two ago, this concept made huge strategic sense for the country as whole as well as its various constituents. The question as to whether a concept like this is viable in a broader current 2015/16 strategic view within context of the technological change coming to the energy and water industries over the next 15 years to 2030 merits both dialogue and study.  

Certainly the technologies and capability to develop the technologies to build a multi-purpose, hyper-smart and secure trunk-line system with negligible environmental impact are now, more than ever, at our disposal. 

Since my (part time) time return to Canada in the past few years after a life abroad, I have been advocating for not only refining in Alberta, but deploying massive technological change to the refining processes such that diverse carbon neutral energy inputs are used to power the process, refining capacity is flexible and reasonably mobile, water is fully recycled and most importantly, that carbon capture including re-use/re-purpose is part of the refining process. 

Building up startup exploration and production (E&P) oil and gas (O&G) companies around the world forces one to innovate and think strategically. As the former soviet union broke up, some of us went east, it turned out to be the wild wild east with a whole set of unique challenges, not least of which, the overall strategic challenge of making stable and sustainable markets for the product(s). 

While the London boardrooms preferred the traditional model exporting product abroad for hard currency, to succeed over time, market and product diversity were required right from the start, far from easy. Disrupting traditional models and innovating into vertically integrated O&G companies exporting raw product as well as distributing refined product to local and regional markets contributed to sustainable success. 

Success, dependent upon strategic thinking and innovation, was also contingent upon environmental performance. 

As the iron curtain fell, the true nature of the soviet era environmental performance with regard to oil and gas (O&G) exploration and production came to light, Canadian oil extraction of the era looked downright pristine by comparison. Had these new western joint and sole ventures adopted the same environmental practices and policies as soviet era companies, no success would have been realized. Taking leadership positions up front and following through with a ‘zero discharge’ policy won over hearts and minds of even those most opposed to western companies operating in their back yards. 

A ‘zero discharge’ aspiration of the early ‘90s might equate to a ‘carbon neutral’ aspiration of today and the inevitable ‘carbon zero’ aspiration within a decade in socio-technological terms and capability. 

The venerable Peter Lougheed came out in support of the notion that Alberta needs to be refining its crude and exporting refined product. A decade or more ago, building an Alberta refinery (of undetermined scale and technology) made strong strategic sense both short and medium term. Alberta’s job situation and economic prosperity might look decidedly different today, not to mention pump prices. 

2015 is closing out with many Canadians either distraught or hopeful. New governments in, old ones out. Circa 100,000 jobs in the O&G sector gone, most relegated to history. Royalty reviews, climate change policy review and carbon capture X-Prizes are water cooler and LinkedIn topics while many voices are speaking to near term job and prosperity solutions like refineries and east west pipelines.  

Other voices including Darryl are calling for a strategic forward plan. 

As a passionate student of the future including the future of energy and now relocating to Alberta, I share interest in a strategic plan for not only Alberta but Canada. Around the world, Canadians are generally well known for their ‘Candoo’ philosophy and attitude. If we really want an east west trunk-line and/or a state of the art high tech refinery in Alberta, we ‘Candoo’ it. Clearly. 

The question now at hand is whether we ‘Candoo’ strategic thinking. Can we look out to 2030 and beyond to develop a leadership plan, commencing in 2105/2016, that seeks to ensure Canada’s future economic and climatic prosperity as carbon based energy loses its global strategic influence and market space to lo-carbon energy. 

Can we we strategically innovate and evolve from a struggling but highly capable and resourced raw material exporter of today into Diversified Energy and Water powerhouse of tomorrow? 

Candoo ! 

[Referencing earlier comments to this discussion, a caveat: Very rarely and occasionally does the leadership and vision required to ‘Candoo’ arise out out of the confines of the halls of government or boardrooms. More commonly it is ‘we the people’ in the back alleys and garages that start shit happening.] 

The ‘Oilpro Time Machine’ File

The ‘Oilpro Time Machine’ File

A file from ‘The Roughneck Files: Exploring Energy & Water circa 2030 (E&W~2030)’

          If in 2030 one were asked to reflect on the state of the energy & water industry in 2015, they would deem it fragmented and segmented. Whilst it sat in that broken state, one would add that the prime mover, Oil & Gas, was in transition, and incumbent Low Carbon Energy was gaining traction, market share, as well as friendly media coverage.

          An exploration into the 15 year future of constituent industries of the energy and water sector in an era of unprecedented innovation and disruptive change must be done through as many lenses as possible; the establishment, the vested, the aspiring, the ambivalent, the opposed, as well as students of future innovation, technology, and market share trends.

          These are The Roughneck Files…….

 The ‘Oilpro Time Machine File’

          On 11.Aug.02015 The Roughneck Files : Exploring Energy & Water circa 2030 (E&W~2030) published a collaborative ‘should-be’ millennial view of the energy & water industries circa 2030 and what mind set might be required to get there entitled ‘The Great Crew Change OS3’. https://www.linkedin.com/pulse/great-crew-change-os3-dave-davies?trk=prof-post

On 12.Aug.02015, Oilpro published their headline article ‘A Retrospective View Of A Restructured Energy Industry’ by esteemed industry writer Allen Brooks. Mr. Brooks opens the discussion with a time travel metaphor.

         The really spectacular peculiarity of time travel is that the traveller’s experience is generally seen through the same lens used to experience history and the present day. The potentiality of the future is often muted by the filters of the past and present. That is generally referred to as linear thinking.

This enjoyable, as well as extremely well researched and written article clearly demonstrates thinking beyond just a linear lens. The scenarios presented are imaginable and consistent with industry precedent, however they struggle to support the initial posit of $95 bbl oil in 2025.

As a seasoned and worldly roughneck of similar years to the author and lifelong student of technological innovation, disruption and trends, I wonder if there are just a few too many historical lens filters in play. Furthermore, a US-centric filter on this time machine might not account for the scale of global exponential change due to occur between now and 2025 nor their impact upon the prognosed consolidation scenarios.

This article fails to mention the inexorably growing link between water and energy, nor whether the Canadian Oilsands will evolve from its loss making raw material export to a profitable refined product export. Each of these factors alter the time machine lens significantly, particularly when projecting future oil prices and the state of the industry(s). Glass reflects, whereas a lens looks through and into future opportunity, it seems as though Mr. Brooks has a few shards of glass interrupting the time machine vision.

If history has taught us anything, it is two fold:

  • Predictions of the future, unless radically forward (exponential) thinking, are generally proven short sited;
  • We pretty much envision and make our own future.

This article paints a view of the future energy in 2025 through a (possibly narrow) lens of a studied seasoned professional albeit with evidence of progressive thinking uncommon to the establishment. The author’s years, opinion and rhetoric put him squarely in the ‘legacy of the Great Crew Change’ conversation.

A recommended read: http://oilpro.com/post/17441/retrospective-view-restructured-energy-industry?utm_source=DailyNewsletter&utm_medium=email&utm_campaign=newsletter&utm_term=2015-08-11&utm_content=Feature_1_img

….The Roughneck Files: E&W~2030….12.08.2015


NIST: Reducing the High Costs of Hydrogen (Fuel) Pipelines

NIST 580303_10152072709285365_1905986131_nThe National Institute of Standards and Technology (NIST) has put firm numbers on the high costs of installing pipelines to transport hydrogen fuel–and also found a way to reduce those costs.

Samples of pipeline steel instrumented for fatigue testing in a pressurized hydrogen chamber (the vertical tube). NIST researchers used data from such tests to develop a model for hydrogen effects on pipeline lifetime, to support a federal effort to reduce overall costs of hydrogen fuel. (Image: NIST)
Pipelines to carry hydrogen cost more than other gas pipelines because of the measures required to combat the damage hydrogen does to steel’s mechanical properties over time. NIST researchers calculated that hydrogen-specific steel pipelines can cost as much as 68 percent more than natural gas pipelines, depending on pipe diameter and operating pressure.* By contrast, a widely used cost model** suggests a cost penalty of only about 10 percent.>Samples of pipeline steel instrumented for fatigue testingBut the good…

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Graphene-perovskite hybrids make new super-detectors: Turning Light into Energy

Graphene Perovskite 081115 324x182EPFL scientists have created the first perovskite nanowire-graphene hybrid phototransistors. Even at room temperature, the devices are highly sensitive to light, making them outstanding photodetectors.

The lead-containing perovskite materials can turn light into electricity with high efficiency, which is why they have revolutionized solar cell technologies. On the other hand, graphene is known for its super-strength as well as its excellent electrical conductivity. Combining the two materials, EPFL scientists have created the first ever class of hybrid transistors that turn light into electricity with high sensitivity and at room temperature. The work is published in Small.

The lab of László Forró at EPFL, where the chemical activity is led by Endre Horváth, used its expertise in microengineering to create nanowires of the perovskite methylammonium lead iodide. This highly non-trivial route for the synthesis of nanowires was developed by him in 2014 and called slip-coating method. The advantage of nanowires is…

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The Great Crew Change OS3

The Great Crew Change OS3

A file from ‘The Roughneck Files: Exploring Energy & Water circa 2030 (E&W~2030)’

         If in 2030 one were asked to reflect on the state of the energy & water industry in 2015, they would deem it fragmented and segmented. Whilst it sat in that broken state, one would add that the prime mover, Oil & Gas, was in transition, and incumbent Low Carbon Energy was gaining traction, market share, as well as friendly media coverage.

         An exploration into the 15 year future of constituent industries of the energy and water sector in an era of unprecedented innovation and disruptive change must be done through as many lenses as possible; the establishment, the vested, the aspiring, the ambivalent, the opposed, as well as students of future innovation, technology, and market share trends. These are The Roughneck Files…….

         This file is the first piece of a conclusion drawn from university level debate bracketed with extensive study, and immersion in both the Canadian and British Oil and culture. This particular millennial vision shares insight into and on:

  • the state and future of the Oil & Gas industry including innovation, future scenarios and existential risks, in particular, The Great Crew Change;
  • the acceleration of innovation and price performance of low carbon energy including its impact upon the energy industry in general, the Oil & Gas industry in particular…..

The Great Crew Change OS3

          The Great Crew Change (‘GCC”), a prophecy foretold for decades, surfaced in 2008 in an effort to coin the looming existential risk to the Oil and Gas Industry. Esteemed academics, authors, and analysts have finally chosen to revisit this phenomena as the current oil glut inspires urgency and uncertainty within the different tiers of the industry. This very year marks the eligibility of 50% of the curated oil and gas industry to retire. This retiring generation of baby boomers witnessed and contributed to some of the greatest breakthroughs in Oil and Gas, flourishing beyond compare until the bust of the 1980s but still persevering beyond. These veterans, like great historians, can provide a profound wealth of knowledge and perspective on the evolution of the O&G industry as well as the evolution of the Western World itself, as they’ve observed the dissolving of the USSR, the conflict and growth of the Middle Eastern powers, the rise and turmoil of the various South American nations, and the thorough transformation of North America, especially Western Canada. Although wise and worldly, as these veterans glance back at the past 7 years of mismanagement and lost opportunity, the GCC existential risk to the O&G industry today escalates. As great creators and fondlers of wealth and knowledge many allow their judgement to be clouded by the infamous bonanza mentality.

Oil & Gas IQ recently published a grave analysis of the situation in 2015, in congruence, a Forbes article published in April shared similar sentiment but guilelessly branded a Great Crew Change 2.0 (GCC 2.0). Generally speaking, the release of any new Operating System is followed by dismay from the public as the tendency to cling to the kind and familiar overwhelms. Many spend time hovering their index fingers over the update button but only few take the leap. Few is only substantial when many follow, and such only occurs when two situations arise: success, or failure of the familiar. Trends in recent years demonstrate the population of the few has been minuscule, this was embodied in the overall performance GCC and GCC 2.0 as they demonstrated no distinction from each other as Operating Systems, nor have they proved particularly fruitful. In order to guarantee the survival of the O&G industry we must introduce the GCC OS3.

It is important to acknowledge that the surfacing of the Great Crew Change in the years of 2008/09 coincided with the Shale revolution, and thus little attention was paid to propagating the GCC. No real innovative thinking or product of such can be recognized other than ‘lip service’ GCC programs enforced by select major players. This occurrence not only speaks to a lack of vision and foresight, but also ignorance of the accelerating pace of technological innovation in the broader low carbon energy sector. Appreciation of this was demonstrated online by select veterans as tweets declared:

 “The legacy of the O&G baby boomer will be measured not by oil & gas achievement or legend, but rather how well it prepares the next generations for the energy challenges of the future.”

This notion encompasses the ‘should-be’ efforts of the GCC OS3.

The Shale bonanza proved most prominent in the US. Innovation within the industry largely halted beyond it. Considering the global economy was recovering from the 2008 crash one can see how attractive this bonanza seemed. Even the likes of China tried to follow suit, and with intense Saudi involvement, each nation drove manically towards achieving maximum market share. One can measure the near static pace of innovation in the field at that point through the slow adoption of Big Data in the industry. Furthermore, the most obvious of indices can be seen as the lack of meaningful decrease in the cost of production. Complacently waiting for a margin bounce back as we are now is far from conducive to growth. Such a strain of linear thinking is far from impactful in an exponentially evolving world.

Circulating rhetoric predicts a dire surge in demand outstripping the supply glut, thus surmising that shale is dead. Though the bonanzas awaiting exploration beyond traditional borders suggest we are to combat a greater contribution to the oversupply. Whilst the Chinese reduce exploration in their shale deposits due to complexity and cost, the Argentinians, homing the 3rd largest deposit in the world, prepare themselves to enter the playing field on a grand scale. Moreover, the situation in Iran suggests a re-entry into the O & G sphere, and should it be executed properly, it will pose a great threat to North American market share within the industry.

Whilst the global situation unravels, ungracefully co-existing with the aforementioned mismanagement of the last seven years, the price competitiveness of low carbon and alternative energy resources has increased exponentially. Markets are swiftly morphing themselves into energy mix users as the price performances of the low carbon and hydrocarbon technologies move towards par by 2030 thus igniting a carbon-based conversation, which way do we lean if the price is the same? It is therefore necessary to aggressively innovate and commence the transition to a nimble, agile and diversified value-added energy mix and water industry responsive to meet massively shifting demand.

O&G needs to embrace and emphasize its new persona as a value-added Energy & Water industry. The GCC OS3 is the opportunity to do so, embracing this call to action, the O&G industry would no longer be a public enemy or a profit-seeking machine, it would be an active member of the global community, working towards a mutually beneficial but uncertain end.

The zeitgeist of the incoming generation, “the millennials,” boils down to a culmination of green thinkers, skeptics, soul searchers, materialists, and the growing minority, technocrats. Unfortunately, its fallback tends to be a merchant for laziness, the millennial requires a call to action, or stimulus. These millennials will be running the industry in 15 years’ time. In order to captivate this generation and pass the torch with confidence, the baby boomers need to prepare and train the millennial into the new energy mindset. The millennial does not share the same bonanza mentality as the baby boomer. The millennial, being raised in a sustainably conscious world, and being the child of the economic crash of the late 2000s reacts positively to growth and the dissemination of knowledge. With only seven to ten years remaining in the working lives of the baby-boomers, the GCC OS3 takes hold with a more pressing nature.

This phenomena is greatly prominent in Western Canada. Disruption has occurred in the form of an oil supply glut, with prices wavering in the $50 range, the economy of the nation, especially the Western provinces, suffers incredibly. As the oil goes, the government attempts to address their meandering hydrocarbon economy with short-term thinking. The new direction the conversation is going in is vital to progress in the political sphere and philosophy of the nation. Many, most habitually the older generations, who place more faith in the hands of their leadership, follow the rhetoric without complaint. Whereas the younger, more skeptical generations resonate more with the idea of leading the salvaging of this issue with mass innovation of the system, structure, and industry.

The next seven years are an opportunity to invest mass time, capital, and thinking into the vision and challenge that is the GCC OS3. It is essential to learn how to innovate the industry on all frontiers in order to ensure longevity, and the position of Energy leader of the future. We must leverage technological advancement and transform from a solely O&G entity, into an integrated Energy and Water operation actively responding to a paradigm in demand. Considering the aforementioned lack of differential between the GCC OS1 and OS2, as an operating system, the GCC OS3 must address the areas in the greatest distress, such as Western Canada. As aforementioned, with Alberta and British Columbia in recession, the rest of the Canadian economy falters. The infrastructure already in place in the Oil Province of Canada provides the opportunity to begin defining the baby boomer legacy and the course of the future of Energy, whilst keeping Canada at the forefront of this movement.

Our potentiality has no bounds. The goal is to sustain, engage, grow, develop, and integrate, with that comes great wealth of margin, knowledge, and progress. OS3 is a roadmap and a game plan vital to the conundrum at hand. In order to compete, O&G companies, who formed and contributed to this hydrocarbon economy until today have to utilize their experience to retain, build, and prepare the O&G legacy. The next decade will be the most stirring of the baby-boomers career and the establishment of the Energy industry. The fate of the industry now relies on how swiftly we take action.

….The Roughneck Files: E&W~2030….09.08.2015

Rigorous Futures: Training Course at WFS 2015

Sounds interesting !

Pre-Conference Foresight Training at the World Future Society 2015 Conference

Dr. Richard Lum and Dr. Wendy Schultz will be running a pre-conference training course in “Rigorous Futures” on Thursday, July 23 in San Francisco at the annual World Future Society conference.  Participants in the special course will be learning to harness logic, creativity, systems thinking, and intuition in exploring the futures.

Attendees will also get to preview some of the practices featured in Dr. Lum’s forthcoming book, 4 Steps to the Future: A Workbook for Creating Foresight.

Duration: 7 hours (9:15 – 12:15; 1:00 – 5:00)

Sponsors: Vision Foresight Strategy and Infinite Futures

Faculty: Dr Richard Lum and Dr Wendy Schultz

Pre-readings and course materials will be available online in advance to registered participants.

Learning objectives: Gain a firm understanding of the basic components of foresight and learn how to integrate multiple futures methods…

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An observation on gasoline prices

An observation on Calgary, Alberta, Canada gasoline prices

Gasoline prices at the pump in Calgary are rising much faster than the price of crude oil as well as the average national Canadian or US gasoline prices. The gasbuddy.com chart below illustrates price increases over the past 5 months from 12-Jan-02015 through 12-Jun-02015, summarized as follows:

  • Crude oil prices up +- 21%
  • US gasoline prices up +- 23%
  • Canadian gasoline prices up +- 28%
  • Calgary gasoline prices up +- 50%

The Canadian refining sector picture as per the chart below does not explain the discrepancy between Canadian and Calgary fuel price increases, indeed it is difficult to pinpoint any market metric(s) in support of this obvious discrepancy.

Not only have Calgary gasoline prices risen at almost twice the Canadian national average, the price rose +- 25% in the two weeks leading up to the recent Calgary Global Petroleum Show 07-09.06.02015.

One has to ask:

  • A confidence booster for a declining and beleaguered industry in desparate need of some good news, however superfulous or manufactured? Possibly.

The 2015 Calgary Global Petroleum Show theme (arguably the most transformative/disruptive) in many years:

Reimagine, Reinvent and Reposition

One has to ask:

  • Non-market driven increases in localized gasoline pump prices support reimagination, reinvention and repositioning?
  • Why are the current and inevitable near term disruptions to the energy industry being hidden under a self-indulgent feel good story at the expense of the travelling public?
  • Are we the people that gullible?