Canada At Risk Of Becoming The Venezuela Of The North -- February 22, 2016

I always said the western Canadian oil sands would be "the canary in the coal mine." Bloomberg is reporting:

The growth engine of Canada’s energy industry is poised to shut off next decade, according to the International Energy Agency.

Production gains from the oil sands in northern Alberta will slow dramatically or come to a halt as crude prices remain low and costs too high for one of the world’s most expensive sources of oil, the agency forecast Monday in a report on the global medium-term crude market. Environmental concerns, a lack of new oil pipelines and uncertainty about policy in Alberta are also causing companies to slow development work.

“We are likely to see continued capacity increases in the near term, with growth slowing considerably, if not coming to a complete stand still, after the projects under construction are completed,” the agency said.

Oil sands producers were pulling out of projects in the face of competition from U.S. shale even before the current global market rout took hold more than 20 months ago. Suncor Energy Inc. and Total SA scrapped the Voyageur upgrader in 2013.

With U.S. crude trading about 70 percent below its mid-2014 high, companies continue to shelve oil-sands work. Royal Dutch Shell Plc made the rare move of canceling a drilling development under construction last October, Carmon Creek.

Canada runs the risk of becoming the Venezuela of the north.

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Americans Set Driving Record

The Los Angeles Times editors must be having apoplexy. This wasn't supposed to happen. By 2015, the entire east coast and west coast of the US were either going to be flooded due to rising water (global warming) or converted to 100% mass / public transportation with bullet trains and light rail. Instead the urban centers on the east coast (from NYC to Boston) and San Diego to San Francisco contributed to a new American record. The LA Times is reporting that Americans drive 3.1 trillion miles in 2015, a new record:

Driving in the U.S. set a new record last year: 3.1 trillion miles, according to the government.

The previous record was 3 trillion miles set in 2007, before the Great Recession led to a sharp reduction in driving. The numbers come from the U.S. Department of Transportation's Federal Highway Administration.

Miles driven in California jumped an unadjusted 11.3% in December from the same month a year earlier, leading the nation. It was followed by Hawaii, which had a 7.2% increase, and Arkansas, where miles driven rose 6.2%.

This is music to/for my ears. A few years ago, on the blog, I said I was saddened by the fact that our granddaughters and their boyfriends would not experience the thrill of muscle cars or drive pick-up trucks because they would be unable to afford high-priced gasoline. That was when the peak oil theory folks had me convinced that the earth was running out of oil, oil was priced at $140/bbl, and gasoline was hitting $5/gallon on the west coast.

It is amazing how fast free-market capitalism can change things.

The American driving experience is part of what makes America great.

A huge "thank you" to a reader for sending me this story. I can go to bed happy tonight.