A Scout is Brave Campaign Day 54 = 2014-01-24

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Dear friends and supporters, Rex Tillerson and Office of the Chairman staff:

I am emailing Rex Tillerson an OpEd and research paper that were brought tomy attention yesterday by my Citizens Climate Lobby Canada organizer and

long time friend who I met through The Climate Reality Project (Canada).The work done at Pembina by Sarah Dobson et al. must be considered by allinvolved in extracting tarsands, concocting energy strategies, setting economicand environmental policies on this continent -- any continent, for that matter.

Ms. Dobsons OpEdand the paper Booms, Busts and Bitumenclearly state thelong term downside affects on Canadas economy and environment. ExxonMobilis heavily invested in the extraction, transportation and refining of the tarsandbitumen, and must take into consideration the long term impacts of Canadianscurrent and future deliberations and decisions which will ultimately affect thefinancial health of ExxonMobil if its Board of Directors stay their course.

As we progress farther into the end-game of carbon-based fuels (which mustbe replaced with carbon-free renewable energy technology in the very nearfuture), oil industry leaders must start planning for the inevitable transition.Framing any economic analysis and calculating any discounted internal rate ofreturn of any project in context of end-game scenarios will doubtless lead toabandonment and replacement strategies as the only viable, moral options.

Sarah Dobson states in the closing paragraphs of her OpEd:

If stronger climate policies and lower oil demand are the way of the future and giventhe risks posed by global warming, we have to hope that they are then going all-in onthe oil sands becomes a risky bet for Canada.

To better manage these risks, our report recommended:

1) that governments adopt effective policies to limit greenhouse gas emissions which,in addition to their environmental benefits, would spur clean energy development inCanada, thus reducing the risks to our economy if the worlds demand for oil falls in theyears ahead.

2) that governments save more of the wealth that our one-time resources generateand consider the full economic picture costs as well as benefits when makingdecisions about new oil sands projects.

We believe the goal that matters in resource development is optimizing long-termbenefits for Albertans and Canadians, while managing that development in a mannerthat protects the environment. The simple conclusion of our analysis is the maximumpace of development in the oil sands is unlikely to correspond to that optimal benefit, nordoes it represent the minimum level of risk

It is obvious to me that extracting Canadian tarsands is a bad financial risk,given the analysis that Pembina has done, and ExxonMobil Board of Directorscontinued pursuit of tarsand extraction, processing, transportation and refiningas well as the distribution and marketing of hydrocarbon fuels produced fromtarsand bitumen would be a violation of their fiduciary duty to ExxonMobilinvestors, and by extension, to all who benefit from pensions invested in them.

January 24, 2014
http://bit.ly/Troy8Jan14http://bit.ly/PembinaNov2013http://bit.ly/PembinaNov2013http://bit.ly/PembinaNov2013http://bit.ly/Troy8Jan14http://bit.ly/Troy8Jan14


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Oil sands a risky bet for Canada

The International Energy Agency forecasts that global demand foroil will peak in 2020

By Sarah Dobson | Resource Economist | The Pembina Institute | January 8, 2014

CALGARY, AB/ Troy Media/ - Any consumer of Canadianbusiness news will be very familiar with the upside of oilsands development. Weve all read about the tens ofthousands of jobs, the billions of dollars in investments,and the taxes and royalties our governments depend on.To hear some tell it, the development around FortMcMurray saved us from recession and will make us a

global energy superpower.No one can deny that oil sands development has broughtsignificant economic benefit. But increased dependenceon a volatile natural resource sector carries some risks toCanada as well.

In a report published last month in partnership withEquiterre, a Quebec-based environmental organization,the Pembina Institute explored some of the economicrisks linked to rapid and growing oil sands development.

For example, resources have proven to be a particularly volatile source of revenues for

Albertas government. Over the past 10 years, according to the C.D. Howe Institute, thevolatility of Albertas government revenues was twice that of B.C., Saskatchewan orOntario. Budget 2013 in Alberta provided a perfect illustration of this phenomenon:despite record levels of bitumen production, the province rolled out an austerity budgetdue to a $6.2 billion overestimate of the resource revenues it would collect.

In a country that is prone to regional tensions, the uneven distribution of oil sandsbenefits also carries some risk. A study by the Canadian Energy Research Institutesuggests that Alberta will realize 94 per cent of the GDP benefit of oil sandsdevelopment, and retain 86 per cent of the jobs associated with oil sands investmentsand operations. The same analysis suggests that the United States will enjoy twice the

benefits that Canadians outside of Alberta will see.The equalization system and labour mobility add some complexity to the question of thegeographical distribution of oil sands benefits. But with governments in B.C., and now inOntario and Quebec as well, raising questions about the risks and rewards of potentialoil sands pipelines crossing their jurisdictions, the concentration of oil sands benefits in

Alberta is already a bit of a political football. If production grows as rapidly as theindustry envisions, those tensions will almost certainly become more acute.

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Some of the same regional considerations come to the fore in discussions of the impactour strong loonie has on Canadas manufacturers. While there is healthy debate aboutthe causes and strength of the effect, its clear that our currency tracks commodityprices closely, creating one more hurdle for Canadas manufacturing sector at a timewhen its already facing challenges.

Perhaps most significant of all, our report examined the risk to oil sands expansionplans and the economic benefits expected to accompany that development associated with tackling climatechange. If the world takes action to avoid dangerousglobal warming, demand for fossil fuels will fall from todays levels. For example, theInternational Energy Agencys analysis shows that in a scenario where the worldsgovernments cut greenhouse gas emissions to limit global warming to 2C (thethreshold governments have deemed to be dangerous climate change) global demandfor oil peaks in 2020.

If stronger climate policies and lower oil demand are the way of the future and giventhe risks posed by global warming, we have to hope that they are then going all-in on

the oil sands becomes a risky bet for Canada.To better manage these risks, our report recommended:

1) that governments adopt effective policies to limit greenhouse gas emissions which,in addition to their environmental benefits, would spur clean energy development inCanada, thus reducing the risks to our economy if the worlds demand for oil fallsin the years ahead.

2) that governments save more of the wealth that our one-time resources generateand consider the full economic picture costs as well as benefits when makingdecisions about new oil sands projects.

We believe the goal that matters in resource development is optimizing long-termbenefits for Albertans and Canadians, while managing that development in a mannerthat protects the environment. The simple conclusion of our analysis is the maximumpace of development in the oil sands is unlikely to correspond to that optimal benefit,nor does it represent the minimum level of risk.

Sarah Dobson is a resource economist with the Pembina Institute, a national non-partisan clean energy think-tank, and lead author of the reportBooms, busts andbitumen: the economic implications of Canadian oil sands development.

Troy Media, January 8, 2014 - http://bit.ly/Troy8Jan14

Booms, Busts and Bitumen, November 2013 - http://bit.ly/PembinaNov2013

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Documents

A Scout is Brave Campaign Day 54 = 2014-01-24