Analysis

Based on latest media reports, here are some of my thoughts and observations.

The Copenhagen Accord seeks a reduction in greenhouse gas emissions of 50% versus 1990 levels by 2050. China, India, Brazil and the U.S. – all outside the Kyoto Agreement, for one reason or another – have been brought under the latest clean air “umbrella.” Copenhagen remains a considerable distance away from being a formal treaty.

New technologies that have greatly raised reserve estimates for natural gas must mean a push for infrastructure to support conversion of trucks and other shipping methods. Natural gas supply outlets along major highways will be built and there will be government incentives for haulage firms to convert their fleets. Encana will be a leader in these efforts.

The U.S. will soon have improved health care, but there will not be a “public” option (i.e., no public sector provider). This is a big disappointment to left-leaning purists in the Democratic party. This may hurt the vote in next November’s mid-term elections. One would think that the left would still support the Democrats over the Republicans, but there are two problems with this logic. First, voter turn-out in the mid-terms is traditionally weak. Second, the Republican core is likely to be more energized this time around than the Democratic core.

Some analysts are still worried about deflation. This is based on the extremes of excess capacity that are still evident on plant floors and in offices. And it arises from the fact that credit availability remains greatly reduced versus earlier times. What is fails to take into account is the incredible resilience of the American business system and the work ethic of American labor.

Somebody has to do a better and more aggressive job of getting the message out to the world that Alberta’s Heavy Oil is not the Super Villain when it comes to climate change. Canada accounts for only about 2% of world dirty air emissions and the Tar Sands for only about 5% of the 2%. That’s hardly earth shattering. I have also seen where the land mass covered by open pit bitument mining is about half the size of Edmonton. Again, considering the vast expanses of this great land, that’s a pittance.

Finally, Queens Park in Ontario appears to be on a path of privatization to lower its growing and alarming debt. The three principle public bodies that are up for divestiture would seem to be: 1) the lottery and gaming corportation; 2) the Liquor Control Board of Ontario; and 3) Hydro One which distributes electricity in the province. The expectation is that Hydro One will be the first to go. The other two make more money for the government. Also, with 1) and 2) there are entrenched regulatory problems to overcome.

That’s it for now.