Think Of It As An Incentive to Walk

Gas prices will continue to rise so long as customers continue to buy

Drivers everywhere in the country are getting mad as hell... and they're probably going to keep on taking it.

Fuel prices in Montreal hit 129.9 cents a litre -- an infantesimal amount short of $1.30 -- yesterday, and CIBC figures it's not going to come back down anytime soon.

"My feeling is that oil prices are probably going to rise for the foreseeable future. Generally speaking, gasoline prices are going to track oil prices higher," said CIBC World Markets economist Jeff Rubin. "People should get used to the idea of $1.50 a litre gas."

"The major factor is, of course, the cost of crude," says Roger McKnight, a senior anaylst at Oshawa, Ontario's En-Pro consulting. "A year ago, the cost of crude was about $65 a barrel. Today it's about $114 a barrel. If the price of your feedstock goes up close to 50 per cent, then the price coming out of the end of the pump ... would expect to reflect that increase."

"Right now gasoline is quite a bargain," McKnight said. "When you look at the differential in the crude costs - you haven't seen anything yet."

Of course, one of the biggest factors in crude oil pricing is demand. And so long as we continue to live in a society where we deem it acceptable to do things like drive to the 7 11 for a pack of cigarettes, we aren't doing ourselves any favours in terms of gas prices.

Gas prices -- generally considered to be price inelastic (which indicates that demand is largely unresponsive to price) -- will only continue to rise so long as a market willing to pay the price for it exists. And while many people certainly don't have the option of walking or busing everywhere, the exorbitant price of gasoline could be considered an incentive for those who can, and an incentive for those who need to commute to work to at least start fuelling more of their casual travelings with two feet and a hearbeat.

The point is that while most people don't have an immediately available substitute for gasoline to fuel their vehicles, they do have an immediately available substitute for their cars -- at least for short-distance travelling.

It could significantly reduce demand for gasoline, increase the price elasticity of that commodity, and provide producers with an incentive to keep the prices lower wherever possible (and considering that production costs remain largely static despite the higher market price of oil, an incentive is what's needed here).

Most importantly, walking a little more will also pay dividends in terms of local air quality and health.

So think of the higher fuel prices as an incentive to do something our society should have been doing for the last thirty years: namely, a lot more walking and biking.

When Incompetent Dumbfucks Collide

Lunn, Keen wrangle for last word before parliamentary committee, but what the fuck does it matter?

The latest news to come out of the Chalk River reactor fiasco is a bombshell-and-a-half.

Linda Keen will get the last word before the special House of Commons committee called to investigate Lunn's push to fire Keen. Conservative MPs and Opposition MPs had been scrapping it out over who would get to testify second.

And this matters precisely how?

Anyone paying attention to the Chalk River debacle may, at this point, have learned that the incomplete upgrades at Chalk River are a problem that has persisted throughout Keen's tenure as Nuclear Safety Commission president and beyond. Yet Keen did nothing until November.

But in the most astounding dumbfuckitude surrounding this matter, Atomic Energy Canada Ltd, the crown corporation that operates Chalk River, has accused the CNRC of issuing misleading statements.

"The commission made a decision and in retrospect, in light of all this evidence, we have shown it was a wrong decision and the reactor's extended outage could have been prevented," AECL spokesman Dale Coffin announced.

You probably just read that correctly: the crown corporation that failed to complete the safety upgrades in question has admitted that the reactor's extended outage could have been prevented.

He's right, too. You know how? If AECL had completed the work in the first fucking place!

Conversely, it could have been prevented if the CNRC had forced AECL to complete the upgrades!

So now Gary Lunn and Linda Keen are going to appear before a special Commons Committee to fight over who should be fired, much like a pair of Apprentice contestants who are mutually responsible for the failure of some insipid business deal.

Donald Trump never had the option of firing both on these occasions on the show. Fortunately for Stephen Harper, he does.

Hopefully, Harper has better taste in civil servants than Trump does in hairdressers.

Jim Harris Green With Embarassment

Green Party Excels at Warm & Fuzzy Feelings, But Still Naive

Jim Harris is a man on a mission. His mission? Convince one million Canadian voters to cast their ballot in support of his party on January 23.

In order to do this, he’ll have to do a number of things. Among them, he’ll have to convince Canadians that his party is not set to embark on a reactionary anti-business crusade.

So on that note, one of his party’s major platform points concerns the oilfield. First off, the Green party wants to ensure that oil prices “reflect their true costs to society through new regulations that force polluters to pay for damages and remediation costs.” Little is said about the value of these resources to society (after all, people in Canada have to heat their homes), but that’s neither here nor there of the current topic.

The Green Party plan, essentially, is to shift the majority of the taxes charged on the production of oil to periods earlier in the production process. The idea, allegedly, is that this will encourage oil companies to become more environmentally-conscious in order to offset the costs of these additional costs.

Jim Harris should have remembered the first rule of economic regulation: never attempt to regulate an industry you obviously don’t understand.

If Jim Harris understood anything about the Canadian energy industry, he would understand that almost all the oil companies operating with Canadian currently exceed the environmental standards the Canadian government has placed on their operation. In other words, these companies already exert more effort toward protecting the environment than the law requires. And while many of the leftist drones that tend to support parties like Harris’ would argue that this is only because the standards are too lax, it underscores an important fact about Canada’s oil industry: environmental protection is a prominent item on their agenda.

Furthermore, Harris’ logic is entirely defunct. Because environmental protection programs cost money, shifting taxes to points earlier in the production of oil will only result in companies cutting back these programs to bear-minimum expenditure in order to recover the profits a Green party government would cut into. If this didn’t happen, basic economics dictates only one other outcome: an increase in energy prices. Harris has neither defied popular conceptions of his party, or even put forth a workable energy policy.

There is only one word for what the Green Party has committed with all this: blunder.
This is one foolish idea that will overshadow an energy policy that is mostly filled with wise ideas. Beginning Canada’s transition from fossil fuels to renewable energy sources is a necessary process that must begin as soon as possible. While the renewable energy technologies to completely meet Canada’s needs don’t yet exist, a proactive government would invest in the research and development necessary to produce them: an idea the Green Party obviously understands.

Corporate welfare is something that has been allowed to remain rampant in Canada for far too long. The Green Party’s plan to end subsidies to all non-renewable energy industries is certainly a step in the right direction. After all, with the profits energy companies are earning annually, it doesn’t seem like they need an awful lot of help.

Perhaps even best of all is the Green Party’s unique community-outward (as opposed to state-inward) approach to nation-building. The Green Party’s plan to work with individual cities and towns to build sustainable communities is a breath of fresh air in a country where far too many politicians believe that the bulk of the government’s power must always lie with the state.

Unfortunately, the Green Party’s energy policy also falls flat on one other matter: it doesn’t seem to understand even the concept of money, or how much energy development costs.

The Green Party’s proposition that $1.5 billion (split between the provinces) is going to be sufficient to build 10,000 MW of renewable energy.

The Green Party is certainly a group that deserves to have success in Canada – and eventually, it will. Sadly, for now it’s going to have to go back to the drawing board and get a grip on a little thing we like to call “reality”.