European Militaries Don't Need US? Oh Really??

[giblets]

Alberta also has zero debt and a perfect credit rating, so the short-term financial pain isn't crippling. It's not like we're the US and in debt to a hilarious degree.

Alberta isn't a country. What is Canada's debt? Besides, I don't see what's so hilarious about 60% of GDP.

[Asher]

Alberta isn't a country. What is Canada's debt?

Why does it matter? Canada doesn't own Alberta's oil, Alberta does.

And I don't expect Americans to see what's hilarious about their debt load. I think Canada's is way too high and it's 34%.

[Kuciwalker]

There are alternatives to the pipelines. In the short-term (ship) tankers could be redirected and (land) tankers utilized.

And the same is true for the United States.

Your idea only works if Alberta's logistical flexibility is inexplicably much larger than the United States'. Since Alberta is landlocked and the United States comprises the plurality of world port capacity (guesstimate, but I bet it's true), this is silly.

[Asher]

No, the distances you'd have to cover and the logistics are orders of magnitude different. Alberta is moving Point A to point B, the US would be a systematic restructuring of the infrastructure.

Additionally, the supply pool of oil the US would be would be a subset of the oil on the market.

[Hauldren Collider]

Doesn't the US produce more oil than Canada?

Also, Asher, you compared Canadian provincial debt to US federal debt. Does that seem like apples and oranges to anyone else? Not to mention that it is entirely irrelevant to whether or not Canada could afford to stop selling the USA oil.

[Kuciwalker]

No, the distances you'd have to cover and the logistics are orders of magnitude different. Alberta is moving Point A to point B, the US would be a systematic restructuring of the infrastructure.

The US would have to add just enough capacity to carry the amount of oil Alberta was previously supplying, i..e precisely the capacity Alberta would have to add too.

Additionally, the supply pool of oil the US would be would be a subset of the oil on the market.

No, because there's no reason we couldn't pay the tankers leaving Vancouver (?) with Albertan oil to just turn around and go to Seattle as soon as they hit international waters.

It's like you don't even understand what it means for oil to be a fungible commodity traded on a global market.

[Asher]

Doesn't the US produce more oil than Canada?

Currently? Yes.

Will that be true in 5 years? No. Will it ever be true again? Not even in the same ballpark.

Also, Asher, you compared Canadian provincial debt to US federal debt. Does that seem like apples and oranges to anyone else? Not to mention that it is entirely irrelevant to whether or not Canada could afford to stop selling the USA oil.

Why does it matter?

Last I checked, every single US state is in debt, and Canada is not nearly as in debt as the US is nationally either.

[Hauldren Collider]

So what if they all have debt? Virginia is barely in debt at all, is running a budget surplus, and has a AAA credit rating. The idea that you should never have any debt is ridiculous. For instance, Governor McDonnell recently took out loans to construct roads while interest rates are low. In my opinion, a very smart move.

Comparing the Feds to Alberta is incredibly silly. Also, I think Alaska doesn't have any debt. Thanks to all the oil money, it always runs large surpluses. Which is similar to a certain Canadian province...

Also, if Obama finally opens up Alaska, the East coast, and the Gulf to more oil drilling, I suspect Canada will not outpace the US in oil production.

[Asher]

The US would have to add just enough capacity to carry the amount of oil Alberta was previously supplying, i..e precisely the capacity Alberta would have to add too.

You've no idea what you're talking about. Again, you cannot comprehend basic logistics. To you it's simple theory (just ADD capacity! Simple!). Do you understand geography?

Google for a map of the US crude pipeline. Look where it all comes from. Look how the landlocked states get their oil. It's not from coastal US cities which accept them via tanker. It's all coming from the north.

You're going to have to build massive capacity pipelines to connect that to the port cities, and then add massive capacity TO those ports.

That's FAR more time consuming, FAR more expensive, and FAR more extensive than Alberta adding a couple more pipes to hop one province over to the coast.

No, because there's no reason we couldn't pay the tankers leaving Vancouver (?) with Albertan oil to just turn around and go to Seattle as soon as they hit international waters.

Yes, you could pay a premium (what the tanker pays + their markup), which is entirely the point. Not only would the price of oil itself be high, but now you're paying a premium to scalp Alberta oil from others.

[Asher]

So what if they all have debt? Virginia is barely in debt at all, is running a budget surplus, and has a AAA credit rating. The idea that you should never have any debt is ridiculous. For instance, Governor McDonnell recently took out loans to construct roads while interest rates are low. In my opinion, a very smart move.

Comparing the Feds to Alberta is incredibly silly. Also, I think Alaska doesn't have any debt. Thanks to all the oil money, it always runs large surpluses. Which is similar to a certain Canadian province...

Alaska has $9B of debt. That's what, $13K per capita?

Also, if Obama finally opens up Alaska, the East coast, and the Gulf to more oil drilling, I suspect Canada will not outpace the US in oil production.

Based on your in-depth knowledge of the offshore oil reserves, amiright?

You may think there's a lot of oil there, and there probably is. It's just not nearly on the same scale as Alberta. Not even within an order of magnitude.

[Hauldren Collider]

It probably costs less to recover, however...

Oil sands aren't as easy to extract from as wells.

And you still haven't addressed the observation that debt can be a very good thing, if borrowed at the right times for the right reasons.

[Asher]

It probably costs less to recover, however...

Oil sands aren't as easy to extract from as wells.

With all of the new environmental laws going in to protect against spills? It's not going to be as cheap as you think.

Off-shore oil isn't exactly cheap in general. My dad spent years managing the development of the biggest off-shore rig on the planet -- the budgets for those things are immense.

And you still haven't addressed the observation that debt can be a very good thing, if borrowed at the right times for the right reasons.

Yes, and that's not included in my comments (net debt). Alberta borrowed over $3B for some big capital projects in the past couple years, but we have way more than that in liquid assets. The rate of return of that money invested elsewhere was higher than the cost of short-term debt.

[Kuciwalker]

You've no idea what you're talking about. Again, you cannot comprehend basic logistics. To you it's simple theory (just ADD capacity! Simple!). Do you understand geography?

Google for a map of the US crude pipeline. Look where it all comes from. Look how the landlocked states get their oil. It's not from coastal US cities which accept them via tanker. It's all coming from the north.

You're going to have to build massive capacity pipelines to connect that to the port cities, and then add massive capacity TO those ports.

That's FAR more time consuming, FAR more expensive, and FAR more extensive than Alberta adding a couple more pipes to hop one province over to the coast.

We have to replace EXACTLY AS MUCH PIPELINE CAPACITY AS YOU. You are giving us X barrels/day, you need to build capacity to instead send those X barrels/day to the coast, say from Calgaryish to Vancouverish. Trivially, we could build an identical pipeline running parallel from Seattle to wherever the Albertan pipelines enter the US. In practice, there are probably even cheaper and more efficient ways.

A three year old with a crayon could come up with a better plot than yours.

Yes, you could pay a premium (what the tanker pays + their markup), which is entirely the point. Not only would the price of oil itself be high, but now you're paying a premium to scalp Alberta oil from others.

So you are contending that the harm to the US would be... that we have to pay the shipping costs from Vancouver to Seattle instead of whatever charge there is for the pipeline from Alberta? THAT is your plan to cripple the US economy?

Oh no a fraction of our oil just become a few cents more expensive WHATEVER SHALL WE DO

[Asher]

We have to replace EXACTLY AS MUCH PIPELINE CAPACITY AS YOU.

What do you not get? Yes, you do. But your replacement pipelines have to go far longer than ours do which cost a lot more and take a lot longer to build.

It's simple.

Not to mention the political -- most US states don't any any new oil pipelines in their state, period. It's a huge hassle.

So you are contending that the harm to the US would be... that we have to pay the shipping costs from Vancouver to Seattle instead of whatever charge there is for the pipeline from Alberta? THAT is your plan to cripple the US economy?

Oh no a fraction of our oil just become a few cents more expensive WHATEVER SHALL WE DO

The economy would be crippled before the new capacity could be built. Contrary to your textbook theory, this is not done instantaneously and with no ill-effects.

The long-term effects are increased price of oil as the US is forced to pay premiums, which benefits Alberta.

[Kuciwalker]

The economy would be crippled before the new capacity could be built. Contrary to your textbook theory, this is not done instantaneously and with no ill-effects.

So your theory is that Canada can sneakily build a bunch of excess pipeline capacity and then SURPRISE NO OIL FOR YOU!!! ? Really? That's your plan?

The long-term effects are increased price of oil as the US is forced to pay premiums, which benefits Alberta.

The premiums are all transaction costs and accrue to the people who own the tankers. Not only does Alberta recoup none of these costs (unless it made a sneaky tanker investment too!), it actually incurs some of them because the elasticity of demand is greater than 0.