Author Archives: prosperitysaskatchewan
The real reasons for the Keystone gridlock
The Globe and Mail
Published Tuesday, Oct. 28 2014, 6:31 PM EDT
Last updated Friday, Oct. 31 2014, 10:31 AM EDT
Canada has staked its future on the oil sands. In November, Report on Business magazine together with Thomson Reuters examine what that means both at home and abroad. Read more from the issue at tgam.ca/oil.
Gary Doer has a front-row seat to political gridlock. From his top-floor office along Pennsylvania Avenue, Canada’s ambassador to the United States can gaze down on courthouses, government agencies and the majestic Capitol complex, which dominates the view to the east.
In the past four years, productive activity in many of these buildings has slowed to a crawl. A bitterly divided Congress has punted on taxes, trade and other matters and allowed government funding to run out last fall. The world’s most powerful military has struggled to respond to new threats in the Middle East while President Barack Obama has watched his gun-control and immigration reform efforts grind to a halt.
Then, of course, there’s Keystone XL. Because the $5.4-billion pipeline (all currency in U.S. dollars) would cross an international border on its way from the oil sands of Alberta to the refineries of Texas, the State Department has to determine whether its construction would serve the national interest. Pipeline projects typically take two to three years to clear regulatory hurdles. TransCanada, Keystone’s owners, have been waiting for six years.
It’s Doer’s job as a diplomat not to get ruffled. With his wavy silver hair and pinstripe suit, the former NDP premier of Manitoba projects the confident air of a man who spends his days managing relations between two close allies. Still, it’s impossible not to detect a hint of irritation in his voice as he talks about the U.S. environmental groups that have turned the pipeline into a high-profile symbol of global warming. “This is an easy item to raise money on: ‘You say no to the pipeline, you’ve solved climate change.’ It’s a pretty good bumper sticker, but it’s not science,” Doer says.
Environmentalists say they are only trying to discourage the development of an especially dirty form of oil extraction. But they agree that Keystone has served as an important symbol in their fight to wean the world’s largest economy from fossil fuels that contribute to climate change. Greenhouse gases may be invisible, but Keystone yields powerful visuals: despoiled forest, oozing lakes of spilled oil, pristine prairie habitat along the proposed route.
Since TransCanada filed its application with the State Department in September, 2008, the project has morphed into one of those hot-button issues, like abortion or gun control, that provide steady employment for Washington’s army of lobbyists and spin doctors. Environmental groups have staged protests in front of the White House, while business groups and construction unions have blanketed Capitol Hill with papers arguing that the pipeline would boost employment by anywhere from a mere 35 jobs to 500,000 jobs. Well over 100 organizations, from the American Jewish Committee to the League of Women Voters, have lobbied on the issue. The State Department has received 2.5 million comments on the topic.
Keystone had the misfortune to come along as U.S. politics was entering a period of deep polarization. As recently as 2008, Republican John McCain campaigned for president on a promise to scale back carbon emissions; now, few members of his party are even willing to say that human activity is contributing to climate change. Democrats have been tugged in opposite directions by labour unions that see the pipeline as a job creator and environmentalists who view it as a chance for Obama to prove his green bona fides. “It’s obviously become a signal of whether the administration is serious about climate change,” Democrat Sheldon Whitehouse, a leading environmentalist in the Senate, said this spring.
The State Department has given Keystone backers plenty to cheer about. It has concluded that the pipeline might encourage oil sands development but wouldn’t meaningfully affect climate change. Transporting the oil by other methods, such as rail, would lead to more accidents and higher greenhouse gas emissions, the department concluded.
The delay on Keystone hasn’t shut down the oil sands, as environmentalists had hoped. But there is evidence that it has hampered development: The State Department estimated last year that 200,000 barrels per day of oil sands crude would travel by rail to U.S. refineries in Texas by December; by June of this year, traffic hadn’t exceeded a quarter of that level.
Few observers were surprised when Obama’s administration announced in April that it would postpone a final decision until a dispute in Nebraska plays out, well after this year’s congressional elections in November.
Since then, the battle has shifted outside of Washington.
On Sept. 5, the Nebraska Supreme Court began hearing a challenge brought by environmentalists and landowners arguing that the state legislature overstepped its authority when it approved a route for the pipeline in 2012. A ruling isn’t expected until early next year.
Rocker Neil Young and country icon Willie Nelson staged an anti-Keystone concert in a Nebraska cornfield on Sept. 27. Advocates convened the “largest climate march in history” in New York and other cities on Sept. 21.
In South Portland, Maine, the city council voted in July to prohibit a pipeline owner from exporting oil sands crude through the second-largest terminal on the East Coast of the United States. The pipeline currently carries oil in the other direction, from South Portland to Montreal, but green groups worry it could be reversed. They are also trying to block a similar project in Washington state.
From coast to coast, green groups are squaring off against business interests in the dozen or so elections that will determine whether the Democrats retain control of the Senate in November. For Obama’s allies, the Senate is an important firewall against the Republican-controlled House of Representatives, which has tried repeatedly to scale back Obama’s environmental efforts.
After years of being outspent by the oil and gas industry, environmentalists have vowed to make climate change a top issue for voters in this election. San Francisco billionaire Tom Steyer, a fierce Keystone opponent, has spent at least $26-million so far to back climate-friendly candidates.
Surprisingly, Keystone doesn’t seem to be playing a prominent role in these campaigns; experts who monitor political advertising say the pipeline is showing up in fewer ads this year than in 2012. This may be due in part to the nature of the battleground, which is largely in conservative states. Democrats in six of the most competitive races are eager to tout their support for the pipeline; for candidates like Mary Landrieu in Louisiana, Keystone is a way to demonstrate their independence from an unpopular president.
Environmentalists also can read opinion polls, which consistently show that a majority of Americans support building the pipeline, even though they believe that humans play a role in global warming. While Keystone may be an effective way to rally the most committed activists, it could backfire in a broader political campaign. Thus environmental groups have sought to localize the impact of climate change by highlighting coastal flooding or algae blooms in the Great Lakes.
They also are defending Obama’s decision this spring to slash carbon dioxide emissions from power plants, which has prompted a fierce backlash in coal-producing states like West Virginia. Mitch McConnell, the Senate Republican leader, has said he will push to repeal the power-plant rules if his party wins control of the chamber.
In theory, Republicans could force approval of Keystone if they control both chambers of Congress after November. The Republican-controlled House of Representatives has voted several times to approve Keystone, and a majority of lawmakers in the Senate, including 17 Democrats, backed the effort in a non-binding vote last year. However, Republican allies expect they will probably still fall short of the two-thirds majority needed to override an Obama veto.
With no resolution in sight, advocates in Washington have little to do except repeat their talking points and speculate about how Obama might eventually rule.
Those who think the president will greenlight the project say it will be hard to ignore the State Department’s findings. Approving the pipeline also would give Obama a bargaining chip with Republicans on other matters.
Those who think Obama will reject it point to the influence of top White House aides like John Podesta and Valerie Jarrett and deep-pocketed donors like Steyer, all Keystone foes. Obama will want to burnish his green record ahead of a global climate conference at the end of 2015, they say, and he also may be reluctant to hand a victory to Prime Minister Stephen Harper, with whom he has a prickly relationship.
Doer says he doesn’t want to guess about the outcome. But he points out that Obama has already taken significant steps to curb emissions, thanks to tightened standards for power plants and automobiles. Now he should keep other factors in mind, like the likelihood of an oil-train wreck, as he thinks about posterity. “He’s not stopping the oil from coming, and he knows that–I heard him say that to people,” Doer says. “I would argue that, God forbid, if there’s ever an accident in the States, I wouldn’t want that to be my legacy.”
Andy Sullivan covers American politics and policy for Reuters News in Washington.
NORTHLANDS COLLEGE ACQUIRES SPACE FOR TRAINING PROGRAMS
Released on October 31, 2014
The Government of Saskatchewan has transferred two buildings in Air Ronge to Northlands College for the expansion of the college’s training programs.
“We are pleased to announce the transfer of this property to Northlands College,” Central Services Minister Jennifer Campeau said. “This is a great example of collaborating as partners to expand training programs and increase the number of skilled workers in the province.”
One of the buildings was being used by Central Services for storage, and the other building on the property was being leased by Northlands College for use as a lab and a classroom.
“These buildings will allow Northlands to expand their programs as they continue to play a key role in educating a skilled workforce in the north,” Advanced Education Minister Kevin Doherty said. “Northlands is helping all our northern students have opportunities to live and learn at home, and ensuring First Nations and Métis students are part of our growing economy.”
Northlands College acquired the building for the expansion of its training programs and campus facilities. The building is being used to expand trades and technical programming, including electrical, plumbing, carpentry and power-line training. Northlands College now owns and is responsible for both buildings and the surrounding property.
“We are extremely appreciative of the Ministry of Central Services for the transfer of these buildings and properties,” Northlands College President and CEO Toby Greschner said. “These buildings are already filled with students taking trades and mining related programs. This is a good example of how we are all working together to utilize what we have to meet the training needs of the growing Saskatchewan economy.”
Northlands College provides education, training programs and services that meet the development and employment needs of northerners. The college offers programs that prepare northerners to participate in the labour market and that help industry meet its labour needs.
For more information, contact:
Alyssa Pittet Central Services Regina Phone: 306-787-4460 Email: firstname.lastname@example.org
Aimee Pascua Advanced Education Regina Phone: 306-798-3170 Email: email@example.com
Low kimberlite discovery rate seen sparking diamond production crisis by turn of decade
The stability of the diamond sector has always been a slave to the fine balance between supply and demand. Over the last century, the industry has had to contend with various crises of oversupply, largely spurred by conflict, global economic instability and the vagaries of consumer demand. As a result, it has been at the mercy of drastic price troughs.
The most recent crisis, spurred by the 2008 global financial recession and a sharp fall in gem prices in 2011, is still fresh in the mind of the industry, although there are definite signs that the sector is beginning to recover with steady growth of consumer demand, and the stabilisation and steady increase of diamond prices.
De Beers’ recently published Diamond Insight Report 2014 reveals that global demand for diamond jewellery reached a record high of $79-billion in 2013. The report also states that demand is expected to continue to grow over the long term, driven by ongoing economic recovery in the US, as well as the growth of the middle classes in developing markets, such as China and India.
However, while recovery is expected to continue for the next four years, which will facilitate a more balanced market, there is growing consensus among analysts and industry stakeholders that a new spectre – that of waning production – now looms on the horizon and threatens to disrupt that recently restored balance by the close of the decade.
The Diamond Insight Report reveals that global rough diamond production has already begun to decline from a peak of 175-million carats in 2005 to 145-million carats in 2013. The report also states that the forecast reduction in supply from existing sources is not likely to be matched by new production coming on stream in the years ahead; diamond supply is expected to plateau in the second half of the decade before it is expected to decline from 2020.
Speaking at the Kimberley Diamond Symposium 2014 last month, junior miner Tsodilo Resources president and COO Michiel de Wit elaborated that, while there are several new projects set to come into production over the next few years – including the Grib mine, in Russia; the Botuobinskaya project, in Siberia; the Gahcho Kué, Renard and Jay mines, in Canada; as well as the Lace, Liqhobong, and Ghagoo mines, in Southern Africa – these projects are quite small and will only add some 17-million carats a year to global production.
“Cumulatively, these projects will not have a major effect on the steady decline on production of rough [diamonds], and the downward trend is forecast to accelerate over the next few years,” warned De Wit.
He further emphasised that the widening gap between supply and demand is a reality, which “will not do the diamond industry any good, as it will open a feed for synthetics and recycling”.
The looming production crisis can be attributed to the significantly low discovery rate of economically viable kimberlites since the turn of the century.
De Wit states that even new projects coming into production consist of kimberlites that were found decades ago.
Interestingly, since the discovery of the first diamondiferous kimberlite pipes in the Northern Cape in the 1870s, more than 8 000 kimberlites and lamproites have been discovered worldwide, 43% of which are directly attributable to De Beers’ exploration efforts over the past five decades.
However, this significant number belies the difficulties associated with diamond prospecting, as only 15% of kimberlites have proven to be diamondiferous. More astonishing is that, of that vast number of discoveries, only 67 deposits have had a resource sufficient to justify the economics of establishing a mine with sustainable production, while only seven deposits are classed as Tier 1 deposits and account for 62% of rough production.
The heyday of diamond exploration was the period between the 1960s and early 1980s, which yielded the remarkable Tier 1 discoveries of the Orapa and Jwaneng mines, in Botswana, and Venetia, in South Africa.
Meanwhile, though diamond prospecting has continued, although at a much-reduced rate since 2008, the rate and nature of economic kimberlite discoveries has declined substantially.
According to the Diamond Insight Report, the industry has spent almost $7-billion since 2000, with only meagre results to show for its efforts. Only one diamond deposit of significant size, Bunder, in India, was discovered during this period.
Moreover, the average size of kimberlites that contain diamonds has decreased significantly from just over 30 ha in the 1940s, to just 2 ha in the past decade.
“These statistics show not only that the number of discoveries has decreased significantly, but also that the sizes of more recently found kimberlites are substantially smaller than those found several decades ago, which even further reduces the already tight supply of rough [diamonds] for the future,” states De Wit.
De Beers exploration head Charles Skinner believes that the decline in the diamond discovery rate is attributable to a decrease in exploration effectiveness over the last two decades, exacerbated by the fact that key prospective areas lie in countries that are deemed a political risk.
Skinner says finding an economically viable kimberlite is significantly more difficult than looking for other minerals. Key factors contributing to the decline in appetite include: the difficulty of retaining expertise, particularly operational competencies and in-house knowledge and science; rising costs, which results in longer lead times and less perseverance; and increasing prerequisite regulatory compliance and best practice, particularly in the US, the UK and the European Union.
Skinner adds that these factors, coupled with the recent cycle of depressed prices and a scarcity of venture capital for mineral exploration, have resulted in a prominent exit from diamond exploration by juniors and key majors.
“At this point in time, companies, particularly the majors, are just so protective of their balance sheets that they are unwilling to release the funds necessary to pursue green- or brownfield diamond exploration, and junior explorers and miners have been decimated.”
Greenfield diamond exploration is a difficult process and can be prohibitively expensive and lengthy. Typically, the work programme to undertake an initial indicative grade test on a kimberlite pipe of five to ten hectares might take a month and cost $1-million, while determining its potential economic viability might take up to 12 months and cost between $2-million and $4-million. Thereafter, the resource evaluation to deliver a conceptual study, which can take up to 18 months, can cost between $10-million and $35-million.
Illustrating this general sentiment is midtier miner Petra Diamonds technical director Jim Davidson, who tells Mining Weekly that, given the reality of the poor success rate of diamond exploration, Petra Diamonds does not allocate material resources to its exploration arm, spending only between $3-million and $5-million a year, against a total group revenue of $427-million last year.
“At this point in time, we do not envisage any significant increases to this spend,” says Davidson.
This is despite Petra Diamonds’ success in its limited exploration programme, having discovered the KX36 kimberlite pipe in Botswana several years ago. Davidson elaborates that the kimberlite is now close to being classified a ‘deposit’, although more work is required to prove the diamond grade and value.
With diamond exploration proving less successful, are there any other large economically viable kimberlite deposits left to discover? And will there be an upswing in prospecting activities in the near future, particularly in light of a looming production crisis?
Fortunately, the understanding of the geological complexity of kimberlites has deepened over the past two decades, along with the required expertise, technologies and techniques to effectively target, discover and assess diamond deposits.
On that basis, there is a general consensus among geologists that there are parts of the globe that are still highly prospective and could yield large kimberlite discoveries.
“There is still room for good junior mining development across all commodities, not just diamonds,” he says, adding that there are still parts of South Africa, namely the Northern Cape and the Bushveld Complex, where the geological setting is not entirely understood, and intensive and fairly detailed exploration could still yield important mineral discoveries.
However, regarding South Africa, he notes that to unlock the untapped mineral potential of this unique and still highly prospective country, there is an urgent need to make the local mineral title application and compliance process more user-friendly for exploration and mining companies.
“We are at the bottom of the cycle and are beginning to see a change in the attitude towards cold exploration. The recent diamond symposium in Kimberley, which was surprisingly well attended by a range of industry, academic, manufacturing and supply company representatives, is certainly an indication that the horse hasn’t entirely bolted from the stable, and the jockeys are starting to mount up again, ready for the next race of diamond exploration,” Bristow avers.
“Post 2006, De Beers completely refocused its exploration business to align [with] the reality of the future – where we need to be, what we need to do to be successful and how much it would cost, but in a manner that would ensure sustainability of the exploration business over the longer term,” states Skinner.