Harper bitumen plan an economic puzzler

This is from the CalgaryHerald.
Actually in this case Harper makes good economic sense. In fact as I recall Ed Stelmach wanted to ban the export of bitumen period. The reason is that it makes much more economic sense for the province to have value added production by processing the bitumen in Alberta than exporting it to other countries such as the US which then gains the profits from the value added production. However, the US is already a big importer of bitumen and will import even more in the future as facilities are expanded there so Harper takes the politically astute way out of excluding the US from the ban because the US has as good pollution controls as we do. There might be difficulties under NAFTA if Harper were to ban bitumen exports to the US. For this once at least Harper makes good sense both in terms of political astuteness and economic knowledge. I can't say the same for the Calgary Herald.


Harper bitumen plan an economic puzzler
Deborah Yedlin, Calgary HeraldPublished: Saturday, October 04, 2008
For a guy who says he is an economist, Conservative Leader Stephen Harper seems to be lacking understanding in some very basic economic principles.
Take supply and demand as one example.
Many people understand the connection between the two variables: If supply is greater than demand, prices fall. Conversely, when demand exceeds supply, prices rise to what the market will bear while also taking into account the possibility of product substitution.

Conservative Leader Stephen Harper's bitumen pledge surprised the oilpatch.

If Harper truly has a grasp on this concept, why is it that he is prepared to restrict bitumen exports to countries that are not mindful of their greenhouse gas emissions?
Doesn't this statement fly in the face of his promotion of Canada on the world stage as an energy superpower? Much good the 173 billion barrels will do if Alberta has but one export option -- the United States. Applying the rules of supply and demand in this context results in a solution that points in the direction of a cap being put on bitumen prices.

Alberta bitter about Harper's bitumen remarks.

Seems Albertans would like Harper to keep his sticky hands off bitumen that Alberta owns. Harper wanted to emphasize the importance of having more value added production in Alberta. Stelmach in an earlier Conservative campaign wanted to not export the bitumen period but to upgrade it in Alberta to produce more value added production within the province. But Harper cannot go that way because the U.S. is already a big importer of bitumen and planning to import more so that is why he comes out with the meaningless prohibition. The US emission standards are at least as good if not better than Canada's so there will be no problem. This is a good example of the careful sleazy nothingness manufactured in the Conservative strategy rooms.This is from the Edmonton Sun.

September 28, 2008
Bitumen talk stirs pot
Alberta Tories not sure where Harper's coming from
By NEIL WAUGH, EDMONTON SUN
The last guy who occupied the big office on the third floor of the sandstone castle called a similar touch-and-go attack on Alberta's interests a "drive-by smear."
But Stephen Harper's 12 hours of living dangerously in what's allegedly his home province last week received hardly a murmur of reaction from the Stelmachistas.
Maybe because the prime minister's plan to place semi-tough limits on oilsands exports is the same thing that Premier Ed Stelmach promised he would do two years ago during the provincial PC leadership campaign.
At the time, Stelmach compared shipping bitumen and jobs down the pipeline to Texas and Illinois with stripping the "topsoil" from a farm. After 20 long frustrating months, Stelmach's hopeless Energy Minister Mel Knight and his energy-crats have yet to produce their value-added strategy.
Meanwhile, pipeline companies and energy outfits like EnCana are scrambling to build lines and upgraders south of the Medicine Line to ship and process millions of barrels of raw Alberta bitumen.
On Friday, Harper's campaign plane landed briefly in Calgary to deliver Knight the political slap up the side of the head that the premier should have given him months ago - by announcing a plan that "will prohibit the export of bitumen."
This happened a day after it was revealed that an outfit called Value Creation had walked away from its semi-built $5-billion BA project in Upgrader Alley.
Meanwhile, EnCana was whooping it up about its $3.6- billion upgrader in Roxana, Ill., that will process a quarter of a million barrels a day of Alberta bitumen when it's up and smoking.
UPGRADER ON HOLD
Two more Upgrader Alley projects are in some kind of development limbo, with others expected to follow.
Harper talked about how the country can't "afford to export the jobs and spinoff industrial opportunities created by the upgrading of bitumen."
OK, Harper was not exactly being upfront and honest. He's an Ottawa politician, so everything that comes out of his mouth is targeted at a southern Ontario soccer-mom audience.
Albertans - like we were under Brian Mulroney - are nothing more than federal Tory cannon fodder.
That's why the ban was downgraded to bitumen exports to countries with lower greenhouse gas emissions standards than Canada.
Except the only country that bitumen is exported to right now is the United States, which has pretty good emissions rules.
The one Canadian province where emissions are being regulated with a carbon tax is Alberta.
So it's really all make- believe, although Enbridge brass might be feeling a little seasick about their proposed Northern Gateway pipeline to pump half a million barrels a day of Alberta bitumen to a tanker port at Kitimat, B.C.
That's the point that deputy premier Ron Stevens was trying vaguely to make about Harper's oilsands assault.
"That particular kind of idea just lends further uncertainty with respect to the development of our bitumen," Stevens sniffed.
It's an "idea" because Stevens doesn't believe Harper is really serious.
"You're in the business of speculating," he said. "I'm in the business of dealing with this matter with a new government.
WHAT DOES IT MEAN?
"It's 25 words on a page," Stevens continued. "I don't know what it means."
Not exactly all-hands-on-deck-man-your-battle-stations stuff, is it?
Even though Harper's raid "is going to impact on our rights as a province" and on a product "which is owned by the people of Alberta."
Which is a lawyer's way of saying, keep your Ottawa hands off the oilsands which the Canadian constitution says is ours, although the Supreme Court of Canada - which in Pierre Trudeau's Canada is the country's real government - hasn't ruled in Ron's favour yet.
Heck, Harper didn't even tell the Alberta government this was coming down the Tory pipeline.
"He's my MP," Stevens yelped. "His office is right across the hall from mine."
"If in fact they want to pursue it," he added, "we're keen on having that discussion."
And that was about as good as it got.
What would Ralph Klein have done?