Outlook for natural gas

http://www.simmonsco-intl.com/research/docview.asp?viewnews=true&newstype=2&viewdoc=true&dv=true&doc=100

-- Cave Man (caves@are.us), December 26, 2000

Answers

December 26, 2000

Winter of discontent

By PAUL STANWAY -- Sun Media

With oil, gas and electricity costs setting new records, this is shaping up as a winter of raging discontent.

With the cost of the holidays already eating away at your income and your credit cards, record heating and power bills are the last thing you need. Every time you fill up the car at the pumps you want to strangle someone. Anyone!

The letters pages and radio talk shows are filled with the angst of those folks who feel somebody has to be to blame for all of this. Governments, greedy CEOs -- somebody has to be responsible. Right?

In Alberta the favourite culprit is deregulation and the influence of the power, oil and gas industries. Somehow the Klein government, the producers and utility companies have got together to screw the consumer. If only it were that easy.

There is an easy answer to the present energy conundrum, but it's not one that most people will find very satisfying.

Our civilization is based on cheap (as in affordable) energy. Energy makes our world go round. Without it, we would not be able to produce and consume as we do, and that production and consumption creates the wealth we share (however unevenly).

Unfortunately, most of our energy comes from non-renewable resources. Coal, oil and natural gas. Demand for these sends the price up. Not deregulation, not Ralph Klein, not ATCO or Epcor. Demand.

The economic slumps of the early '80s and early '90s put a damper on demands for energy, otherwise we'd have been facing the present situation a half-dozen years ago. The timing may be politically brutal for the Klein Tories as they push ahead with plans to re-regulate the power industry, but this winter's rocketing energy prices have little to do with government policy.

Those who stoutly deny the realities of the marketplace, such as the University of Alberta's Parkland Institute, point to the fact that government regulation can keep consumer prices down. Which is true, but those lower prices discourage producers from developing new resources or building expensive items like power-generating plants. So at some point demand outstrips production and there's pressure on prices.

Which is where we're at now.

Most of the experts predict that in the short term we'll see higher prices, maybe even combined with some energy shortages. The worst of both worlds.

Government rebates will ease the pain, but pain seems inevitable. No more really cheap energy. Canadians and Americans will likely see energy costs climb closer to the levels Europeans have paid for years.

As usual, when energy prices jump, Albertans find themselves both victims and beneficiaries of the times.

We use energy just like everyone else and we hate the higher prices like everyone else, but we own and produce coal, oil and natural gas -- so we benefit from lower taxes, a thriving economy and a hot job market.

If there's a political cost for Albertans, it's that most Canadians are only dimly aware of the benefits of a thriving Alberta economy for the country as a whole.

They are consumers, they want lower prices, and if the energy price crunch lasts into the spring it is this agenda of the majority which will drive Ottawa's response. To heck with Alberta.

Politically, Canada has yet to recover from the last time the federal Liberals attempted to artificially control prices with the national energy program. It created a faultline which divided West from East and a powerful sense of resentment in Alberta.

In the end, no government can alter the fact the world relies on finite energy resources to power the global economy. And as long as global wealth and prosperity increase, so will demands on those resources.

We can be more efficient, but in the end the only solution would seem to be a new, cheaper energy source. And the search for that energy source will frame the history of the new century now unfolding.

http://www.canoe.ca/CalgaryNews/15n3.html

-- Cave Man (caves@are.us), December 26, 2000.

This is 1974 de'javue.....

-- benthere (alrightey@benthere.con), December 27, 2000.