The Real Result of the Standing Rock ‘Victory’

Protests that stopped development of the Dakota Access Pipeline on Dec. 4 means that even more crude will be moved, day and night for years and year and years, by rail.  Tanker cars that will will roll at high speed through towns, villages, cities, neighbourhoods, street crossings, river valleys and farmland, putting millions at risk.

Shippers were expecting to move an additional 570,000 barrels of Bakken crude each day via pipeline in 2017, but if the pipeline isn’t there,  rail is likely the only other option. Because of the lack of currently available pipeline capacity, rail already comprises nearly 30 per cent of total Bakken crude export, but has the capacity to, and will likely expand to carry 65%.

Increases in crude-by-rail transport results in increases in rail incidents involving crude spills, with about 140 in 2014 compared to only one accident in 2006.  The rise in accidents followed a surge in daily rail volumes moving more than 25 million barrels a month for part of  2014.  In North Dakota alone, there were several accidents involving crude rail cars, six in 2015 and five in 2014.  In 2016, 750,000 gallons from 26 rail cars in Oregon leaked into the Colombia River Gorge.  Crude moves on existing railroads that were not planned with this in mind, they preferentially occupy convenient topography, particularly river valleys that make accidents more likely to pollute waterways.

These events pale in comparison to other high-profile accidents that involve the loss of  property and life, such as the 2013 explosion that killed 47 people in Lac-Megantic, Que.  More stringent regulations for rail are welcome, but more trains, more cars, more often will lead to more derailments and catastrophic accidents.

Yes, oil spills from pipelines occur, and they are ugly and noxious and polluting, but they can be cleaned up.  And yes, they occur more frequently from pipelines than rail cars.  In 2014, the frequency of crude spills from pipelines was about 62% greater than from rail.  But rail transport brings a greater chance of serious accidents, leaks and flammable explosions that are risks to real people, as well as to the environment.  Ultimately pipelines are more efficient, their locations are planned, they more effective, cheaper and they are safer, they don’t kill people

Production is currently down, Bakken oil production is about one million barrels per day or about 70,000 bpd above current pipeline capacity.  But American will continue to increases production and lessen their reliance on imports.  OPEC’s decision to cut production will further stabilize prices and encourage development and exploration.  The Bakken is a tremendous resource.  The near-future will see increased Bakken oil production.   It will grow, perhaps significantly.

Background

The 1,885-kilometre Dakota Access Pipeline is slated to run from western North Dakota to Illinois, and has been the subject of protests for months from Native American and environmental activists concerned about leaks and contamination of water supply.  There was a large 2013 oil spill near Mandan, ND, a city about 64 kilometres north of the proposed route of the Dakota Access pipeline.

Composed from stories by Liz Hampton Reuters/Globe and Mail, and data from the Pipeline and Hazardous Materials Administration http://www.phmsa.dot.gov/, and from http://dot111.info/ which documents the staggering increase in oil spills via rail.

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Another Greedy Government

Yet another greedy government has changed the rules mid-stream with the result of driving away foreign investment in mining, jobs and people.

The Indonesian government imposed an new 25% export tax in January for any copper concentrates in the country, and will increase it to 35% on January 2015.

Indonesia is a fantastic country comprised of thousands of miles of volcanic arcs that are the factory which forms giant porphyry copper-gold deposits.  Discovering these beasts is difficult and expensive as they hide in remote mountainous regions where they are masked by thick jungle cover.  Intrepid teams of geologists exploring in these regions, often in dangerous conditions, sometimes with the support of helicopters, put their skills on the line while their supporting company risks millions of dollars in hopes of a discovery.  Even a discovery amongst these 1000:1 odds does not equal success as Indonesia makes every step of the way a painful, difficult, time consuming and costly process to acquire permits for mining. Few can endure the pain and most companies have left.

Enduring the process is one thing, but few companies still, have the deep pockets required to invest billions in this risky environment.  Newmont and Freeport are two companies that have endured the process and both have operating copper mines in the country which account for almost all of Indonesia’s copper exports.  But the rules of the game have been changed mid-stream.  It is likely that this will cause major curtailing and potential closing of operations putting thousands out of work, and negative consequences for tens of thousands.

Accepting risk, providing capital to generate wealth for the country and benefits to the people is what large mining companies do best.  Repatriating or nationalizing deposits does not work.  Excessive or windfall taxes do not work.  All cause the fleeing of foreign investment and expertise required to extract the value from the ground.

Regretfully Indonesia is joining a growing list of countries that have killed their exploration industries and crippled their mining future.  Mongolia, Argentina and Ecuador, and even Australia, are additional examples where robust exploration efforts and international investment have vanished in response to actions from greedy governments.

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Colombia’s Illegal Mining Legacy

Excavators work to find 15 miners who were buried in a collapse near the town of Santander de Quilichao in Colombia as 1500 illegal miners look on.

Excavators work to find 15 miners who were buried in a collapse near the town of Santander de Quilichao in Colombia as 1500 illegal miners look on.

Colombia is an amazing country with lots of opportunity to increase its wealth and quality of life for her people by developing its mining industry.  Regretfully, its lack of leadership and enforcement is causing the industry and the opportunities to dissolve into human suffering and tragedy.

Illegal mining is rampant and uncontrollable.  Of the country’s more than 14,000 mining operations, more than 63% are illegal, and of the quasi-legal mines, less than half have the proper permits leaving only 20% in compliance.

There have been about 25 significant mining accidents so far this year.  In the past week alone, 4 people died after inhaling gases in an illegal gold mine near the town of Buritica Antioquia in the Department of Cauca,  Colombia , and there is little hope of rescuing at least 15 miners who were buried in a collapse near Santandar de Quilichao. Heavy machinery available locally to assist in the rescue were delayed because the owners are also working illegally and didn’t want their equipment impounded.

The National Mining Agency (ANM) said that from January to September 2013 were 66 reported emergencies in which 71 people died and 51 were injured.

Many illegal mines are run by criminal or paramilitary elements.  The Revolutionary Armed Forces of Colombia (FARC) , present in the west of the country , benefit from this type of activity by charging fees for entry and operation of backhoes, as well as extortion of production proceeds.  Many illegal mining areas have rampant criminal activity with drugs and guns and prostitution and explosives all easily available.  Although the armed forces have established a division to combat and eradicate illegal mining, it remains in a widespread practice in Colombia.

 

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The Long Haul

There are few things that many people dread more than a long haul flight in economy class.  Personally, I relish the opportunity to spend 15 hours on a flight to Hong Kong or Sydney!  No emails, no phones, no texts…just solitude, some reading and hopefully some sleep.  The key is knowing how to do it right. There are several keys including the right airline, the right airport and preparation.  The right airline is easy, if you don’t live in the US.  Most US carriers are atrocious.  The best are Asian carriers such as Cathay and Singapore, next are European such as Lufthansa and KLM, with Turkish Air a rapid up and comer.  And then I’d put Air Canada in the desirable class as well. Depending on where you live, the right airport might not be possible.  Vancouver is fantastic, Toronto is okay but if you are transferring across from the domestic to the international gates, it can be a major haul.  Getting through security is fast in Vancouver and improving in Toronto.  Departing from any US city is a major pain … Denver might be the best.  Getting between international and domestic terminals in Australia is terrible.

If traveling from Canada through the US, you’ll be going through Customs, as well as Security, on the Canadian side which is a double pain, particularly if during peak hours.  My recommendation is to depart in the early evening if possible when lineups are non-existent.

Preparation starts with booking the ticket.  Be sure to get an aisle row seat.  This is critical.  Even better, a centre aisle seat, that way anybody in the middle seat(s) can get out on the other side if you are sleeping.  Also, if you are a frequent flyer, let the airline know that you prefer a vacant seat next to you, this may help.  Also know that airlines seat those passengers without reserved seats from the front to the back, so simply choosing a seat in row 50 may improve your chances of a vacant adjacent seat compared to row 15. Comfort in your cramped space can be achieved.  Although I like to board the plane last to avoid all that anxiety and mayhem of other passengers finding their spots and dealing with luggage, there is a benefit to being early, mostly to ensure that your luggage gets racked above you and is not stuffed in the foot-well in front of you.

Many airlines have adjustable headrests and these are effective at allowing you to position your head in a comfortable spot.  Since you can’t control the temperature, bring a sweater or fleece jacket in case the aircon is too chilly.  And, because you’re wearing fresh socks, you can take your shoes off during the flight for additional comfort. Although the above hints won’t get you a good night’s sleep, you at least have some control of the process and your environment to provide you with moderate comfort and put your mind at ease.  To sleep?  That will be addressed in a future post.

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