Pipelines, energy and natural resources

[brihard]

Chew on this.

What if Carney decides to take a page from the Norwegian Sovereign Fund and has Canada become the owner of any new oil pipelines and LNG facilities in Canada and uses that wealth in the same manner that Norway does?

Wouldn’t that be a game changer?

Politically, a lot of people would defy it as “nationalization” and would absolutely lose their shit.

Personally I’m a fan of the “sovereign wealth fund” idea. I’m personally cool with an approach whereby private industry is largely the key player in getting stuff out from under our feet and exploiting value, but there should be a ‘common good’ cut of the pie that feeds into a strategic and long term fund (federal or provincial depending on the type of resources and constitutional considerations that I’m not pondering as I mull this in real time). That fund should be given a few decades to grow unmolested, and then gradually drawn upon for specific infrastructure or human capital investments, or response to future disruptive economic developments. Any drawdown from such a fund should be statutorily capped to stay well below inflation so that the fund always grows in real terms.

We often cite Norway as the example of this and of course they have the largest. But most of the major oil states have them, as does the province of Alberta- though theirs is quite modest given what they had to work with.

 

[Czech_pivo]

Politically, a lot of people would defy it as “nationalization” and would absolutely lose their shit.

Personally I’m a fan of the “sovereign wealth fund” idea. I’m personally cool with an approach whereby private industry is largely the key player in getting stuff out from under our feet and exploiting value, but there should be a ‘common good’ cut of the pie that feeds into a strategic and long term fund (federal or provincial depending on the type of resources and constitutional considerations that I’m not pondering as I mull this in real time). That fund should be given a few decades to grow unmolested, and then gradually drawn upon for specific infrastructure or human capital investments, or response to future disruptive economic developments. Any drawdown from such a fund should be statutorily capped to stay well below inflation so that the fund always grows in real terms.

We often cite Norway as the example of this and of course they have the largest. But most of the major oil states have them, as does the province of Alberta- though theirs is quite modest given what they had to work with.

The way Trump is taking stakes/ownership in US Steel, Intel, profits from Nvidia, can anyone ‘really lose their shit’ over this from the Right?

 

[Czech_pivo]

We would be like a teenager with unfettered access to their bank account, rarely ends well. Our governments are not mature enough to avoid spending large sums of money lying around.

I disagree - it would need to be arms length just like the CPPIB is.
It now stands over 700$ billion in value and has been instrumental in ensuring the long term viability of the CPP for more than 7 decades into the future.

 

[Colin Parkinson]

If you have good enough firewalls then perhaps.

 

[foresterab]

Politically, a lot of people would defy it as “nationalization” and would absolutely lose their shit.

Personally I’m a fan of the “sovereign wealth fund” idea. I’m personally cool with an approach whereby private industry is largely the key player in getting stuff out from under our feet and exploiting value, but there should be a ‘common good’ cut of the pie that feeds into a strategic and long term fund (federal or provincial depending on the type of resources and constitutional considerations that I’m not pondering as I mull this in real time). That fund should be given a few decades to grow unmolested, and then gradually drawn upon for specific infrastructure or human capital investments, or response to future disruptive economic developments. Any drawdown from such a fund should be statutorily capped to stay well below inflation so that the fund always grows in real terms.

We often cite Norway as the example of this and of course they have the largest. But most of the major oil states have them, as does the province of Alberta- though theirs is quite modest given what they had to work with.

Fundamentally I'm against the government "owning" industry. However a partnership in a privately run industry is a different story.

Hypothetically major project Pie in the Sky comes up. Federal government agrees to provide partial funding in exchange for a partial ownership. First Nations come up with another portion of funding pool. Investment must pay a small annual divided to justify expenditure. If needed open some up to IPO type public share purchase....

Industry or other partners should also have the ability to buy back government shares over time as long as there is a profit made by the government.

But most importantly have things like utilities run as utilities, pipelines by pipeline companies and ports by those who deal with ports.

Now take that share of the partnership funding and put it into a locked 3rd party managed fund like CPP and use it to build the pool of funding dollars.

 

[Colin Parkinson]

Nothing wrong with government "owning" things, the problems appear when they run it. Governments by nature need to be a bit risk adverse and are often far more accountable than big businesses are.

 

[Brad Sallows]

I disagree - it would need to be arms length just like the CPPIB is.
It now stands over 700$ billion in value and has been instrumental in ensuring the long term viability of the CPP for more than 7 decades into the future.

What is that - 1/7th of the total Canadian asset base?

We might find that a fund based on mandatory contributions becomes a gorilla with too much clout in the hands of one committee.

 

[foresterab]

What is that - 1/7th of the total Canadian asset base?

We might find that a fund based on mandatory contributions becomes a gorilla with too much clout in the hands of one committee.

hence why I believe that there needs to be a separate Canadian investment fund. And it's not just about government bailouts but also I believe should include a portion of federal revenue received from non-renewable sources such as oil and gas, gravel, mining, and crown land sales. As revenue increases a portion can be remitted back to the government of the day to offset tax bills.

Enough of the unsecured industry loans...start taking ownership shares in exchange. Revenue from that fund goes to expanding the Canadian economy and providing more high value jobs. I don't want to see a country full of Mcjobs and doctors...needs to be hope and opportunity across the board for any Canadian worker who wants to advance.

Don't have all the answers just a dream that my tax bill can be reduced in exchange for the same dollars being funded by industry investments made. Or if it's not reduced we're actually focused on federal priorities like national security, international trade agreements, secure borders and public law and order.

 

[YZT580]

Chew on this.

What if Carney decides to take a page from the Norwegian Sovereign Fund and has Canada become the owner of any new oil pipelines and LNG facilities in Canada and uses that wealth in the same manner that Norway does?

Wouldn’t that be a game changer?

would cost twice as much, take twice as long and last half its life expectancy. All equipment would have to be battery operated which would require massive power infrastructure the entire length of the pipeline to be completed before starting installation of the pipe. That power would come from windmills and solar so no construction with less than 10 mph winds.

 

[daftandbarmy]

Politically, a lot of people would defy it as “nationalization” and would absolutely lose their shit.

Personally I’m a fan of the “sovereign wealth fund” idea. I’m personally cool with an approach whereby private industry is largely the key player in getting stuff out from under our feet and exploiting value, but there should be a ‘common good’ cut of the pie that feeds into a strategic and long term fund (federal or provincial depending on the type of resources and constitutional considerations that I’m not pondering as I mull this in real time). That fund should be given a few decades to grow unmolested, and then gradually drawn upon for specific infrastructure or human capital investments, or response to future disruptive economic developments. Any drawdown from such a fund should be statutorily capped to stay well below inflation so that the fund always grows in real terms.

We often cite Norway as the example of this and of course they have the largest. But most of the major oil states have them, as does the province of Alberta- though theirs is quite modest given what they had to work with.

Because Alberta’s done such a good job with that ‘wealth fund’ thing, right?

 

[Brad Sallows]

Opportunity cost applies to funds sequestered to create a sovereign wealth fund as much as any other use. People advocating a SWF ought to prove that they can find money that has no greater utility than being set aside to produce future income. (That does include finding current spending that is worth less than SWF investment, which obviously is a cat-among-pigeons issue.)

 

[Czech_pivo]

would cost twice as much, take twice as long and last half its life expectancy. All equipment would have to be battery operated which would require massive power infrastructure the entire length of the pipeline to be completed before starting installation of the pipe. That power would come from windmills and solar so no construction with less than 10 mph winds.

That makes zero sense.

 

[Fishbone Jones]

Because Alberta’s done such a good job with that ‘wealth fund’ thing, right?

They could probably do a lot better if Ottawa wasn't siphoning off billions per year from them.

 

[Fishbone Jones]

What is that - 1/7th of the total Canadian asset base?

We might find that a fund based on mandatory contributions becomes a gorilla with too much clout in the hands of one committee.

"Mandatory contributions" is just another tax. Canadians are already taxed enough. Especially when the government steals more than you take home.

I wonder if carney has room for one more account in his bicycle shop offshore tax haven in Bermuda.

 

[Good2Golf]

Governments by nature need to be a bit risk adverse and are often far more accountable than big businesses are.

Because Alberta’s done such a good job with that ‘wealth fund’ thing, right?

What could have been… $170B vs $9B…

Heritage Trust Fund - Alberta Views

A sharp fall in global oil prices ate into revenues, so the province scaled back its contributions to the Heritage Fund.

albertaviews.ca

 

[YZT580]

That makes zero sense.

an attempt at sarcasm that failed but seriously, do you really think that this government could undertake any major development project without the aforementioned cost overruns and delays and without building trying to make it environmentally friendly at the same time as in the electric construction equipment? If you thought that was far-fetched just think of California's mandating all electric transport trucks>

 

[Good2Golf]

If you thought that was far-fetched just think of California's mandating all electric transport trucks>

Or an Arctic nation having its military use propane powered vehicles…at temperatures below propane’s boiling point, thus no pressure in the fuel system…and drivers jumping up and down in the bumpers to try and add enough energy to the fuel to get some vapor pressure…