Great Update On Sarnia, Ontario, Canada's Oil And Petrochemical Complex -- July 28, 2016

Active rigs:

	7/28/2016	07/28/2015	07/28/2014	07/28/2012	07/28/2011
Active Rigs	35	73	193	207	181

RBN Energy: interesting look at Sarnia, Ontario, Canada, and the oil / petrochemical complex there; its history and update. This is really a great example of what makes the internet so great.

Sarnia, ON is one of Canada’s leading refinery and petrochemical centers, and for good reason. From the start –– 158 years ago, with what Canadians claim to be the world’s first oil well in the Western Hemisphere –– the Sarnia area has had geology and geography on its side, and it doesn’t hurt that it’s within 500 miles of more than half the people in North America. But the interconnecting infrastructure that drives Sarnia’s Chemical Valley isn’t nearly as well known or understood as the pipelines, railroads, storage and refineries along the U.S. Gulf Coast. Also, it should be noted, Sarnia has become one of the biggest beneficiaries of Marcellus/Utica production of ethane and other natural gas liquids, the mother’s milk of the petchem sector. That alone makes it worth discussing. Today, we begin a series on a lynchpin of Canada’s hydrocarbon production and processing sector.

If Canadians are to be believed –– aren’t they too nice not to be? –– the first commercial oil well was dug (not drilled) by James Miller Williams at what came to be known as Oil Springs, ON (just south of Sarnia, in southwestern Ontario) in the summer of 1858. That was a full year before Edwin Drake drilled his first well at Titusville, PA.  Decades and even centuries before Williams dug that initial 50-foot well (some say he was drilling for water –– not oil –– and got lucky, Jed Clampett-style), the Oil Springs area had been known for its sticky, crude oil-based “gum beds,” small parts of which were excavated and refined into asphalt, paints and resins by native people and noted by early French explorers. After he struck oil, Williams, went right to work, building a simple refinery nearby and establishing Canada’s first oil company (J.M. Williams Co., which was soon renamed the Canadian Oil Co. to reflect his ambitions). Within a few years, more than 100 oil wells had been drilled in the Sarnia/Oil Springs/Petrolia area by wildcatters, and the region’s oil business was off to a rousing start –– until it wasn’t. The boom led to a bust (too much oil production flooded the market and prices collapsed –– sound familiar?), but a rebound followed, and by 1900 not only had Imperial Oil been formed (it had refineries in Petrolia and in nearby London, ON), it had been gobbled up by John D. Rockefeller’s Standard Oil. (Exxon Mobil still owns nearly 70% of Imperial.) Oil production in Ontario fizzled out decades ago, but by World War II Sarnia had cemented its place as one of eastern Canada’s refining and petrochemical hubs, criss-crossed by railroads and pipelines, and chock full of skilled refinery and petchem workers.

***********************************

Natural Resources Defense Council: Group Nominee For The 2016 Geico Rock Award

This story necessitates a new category for the 2016 Geico Rock Award: a "group award."

From Bloomberg:

"The big green groups that got invested in biofuels are tacitly realizing the blunder," said John DeCicco, a research professor at the University of Michigan Energy Institute who previously focused on automotive strategies at the Environmental Defense Fund.

"It’s really hard for the people who really -- shall we say -- hate oil viscerally, to think that this alternative that we’ve been promoting is today worse than oil."

The green backlash could give a boost to long-stalled congressional efforts to overhaul the Renewable Fuel Standard, including proposals to limit the amount of traditional, corn-based ethanol that counts toward the mandate, as environmentalists side with anti-hunger groups and even the oil industry in calling for change. The RFS forces refiners to blend steadily escalating amounts of biofuel into the gas supply. Most of the mandate is currently fulfilled by corn-based ethanol, which makes up nearly 10 percent of U.S. gasoline and provides oxygen that helps the fuel burn cleaner. [Insert RINS here for browser searching.]

The Natural Resources Defense Council used a 96-page report in 2004 to proclaim boundless biofuel benefits: slashed global warming emissions, improved air quality and more wildlife habitat.

Instead, farmers plowed millions of acres of prairie grasses to grow corn for making ethanol, with fertilizer runoff contributing to a dead zone in the Gulf of Mexico. Scientists warned that carbon dioxide emissions associated with corn-based ethanol were higher than expected. And alternatives using switchgrass, algae and other non-edible plant materials have been slow to penetrate the market.

A reader reminds me that the Natural Resources Defense Council was the primer mover behind efforts to stop/delay the Bakken, CBR. Their efforts resulted in two million acres of conservation land being converted to corn crops, driving out pheasants and migratory ducks. The NRDC realizes they screwed up, according to the reader. The sad news: unlikely to get this conservation land back to original status. 

This is exactly what happens when "we" take a page from the Soviet Union playbook in which central planning from Washington, DC, is felt to be "better" than free market capitalism with minimal government interference.

************************

The Political Page

A reader -- who seems much more insightful than I on all issues I raise -- wrote me late last night (or early this morning) with comments about Michael Bloomberg's partiality in this election and how it will affect all reporting. My reply, which is not ready for prime time (which means it has been minimally edited and could be deleted later):

Along that same line, the fact that the NYT and the LA Times "took seriously" Trump's hyperbole and joke about Russia and Clinton's 30,000 lost e-mails suggests something else is afoot.

I thought of that after you sent me your note, and then it was confirmed when I see the Wall Street Journal is reporting the Trump story the same way. I thought the WSJ was better than this. [From their editorial pages, one can see that the WSJ is not particularly happy with Trump.]

I think this is the story: this has gotten personal. Well, duh. Of course, it has, but I mean that it's become a "personal" battle between two New Yorkers, and between two New York groups.

I think most Americans think this is a "national" election. I don't think New Yorkers see this as a "national" election at all. This is local. This is personal. The New Yorker magazine has become so blatantly biased it should be renamed The Hillary Magazine. Remember the New Yorker magazine cover some years ago -- a map of the US that essentially showed the US was made up only of that part of the US east of the Hudson River.

This is almost like the huge fight among the Greek gods on Olympus prior to and during the Trojan War. In fact, the analogy -- male vs female -- Zeus vs Hera -- is almost too good to pass up. [And why I decided to post this note.]

It seems Bloomberg is truly conflicted. He can't decide if he's a Democrat, Independent, or a Republican. I forget that he actually ran as a Republican when he ran for governor of New York. Despite his wealth and prestige, he almost seems to be a pathetic figure. If folks remember the Iliad, they may seen Bloomberg as the "early" sulking Achilles. Bloomberg, it seems, has not moved on.