>> read more

An inconvenient “toot”

Oil at $52 a barrel and predictions are the price will continue to go south. Keystone XL tapped off by the US Senate. Energy East taking a possible detour. And best of all, farting livestock: the main contributor to global climate change

Those were the big developments, or should I say headlines, in 2014 on the energy-climate change front.

Now I’m not complaining as a major carbon-emitter, paying under a Loonie for a litre of gasoline. God knows, my V-8 Dodge Ram Hemi likes to drink petrol, not to mention my fleet of boats — let’s hope it stays at the current level until the spring.

But there were many developments in terms of the energy-environment balancing act last year that were in a word, troubling. Some others were just downright ridiculous.

It’s time for a bit of a reality check.

Guess what, like it or not, we are addicted to oil. Not just us Crazy Canucks who for some unknown reason, choose to live in a land of ice and snow for at least four months of the year and burn more than our fair share of fossil fuels out of necessity.

But the whole globe.

Trains, planes and automobiles — yup they all run on oil or a refined
version of it.

Plastics. Fertilizers. Feedstocks. Solvents and even energy generation all depend on Beverly Hillbillies’ Jed Clampett’s bubbling crude.

Many want us to believe, and actually believe themselves, that you can wake up one morning, flip a switch and cure this addiction, cold turkey. But that’s just not possible, ask any junkie.

There’s no doubt that we have to wean ourselves off oil — reserves won’t last forever – but it’s a process that won’t happen overnight and there are many elements to be taken into consideration, aside from the obvious environmental impact of climate change.

The first is the effect on the global economy.

Flipping the switch today, while not even fathomable, would send the world economy into a tailspin.

The Wolf of Wallstreet would turn into the Littlest Hobo. Speaking of Hollywood flicks, Leonardo DiCaprio, Robert Redford, Daryl Hannah and of course Al Gore need to put their limelight-seeking egos in check for just one second and think about what they are proposing.

How does Gore get to his $250,000 speaking engagements? What about Leonardo’s little stint out to the oil sands — did he walk or bicycle?

Hardly, considering it’s in northern Alberta and we’ve seen the roads thanks to History’s Highway to Hell TV show.

No, he used carbon. Drove a car (maybe even a truck) and flew in an airplane.

Guess what Mr. DiCaprio — they all use gas. Shame on you.

It just bugs me to see people of influence jumping on a bandwagon, distorting the facts and being hypocritical about an issue that is really common sense.

We know Leonardo, the oil sands (not the tar sands) are ugly. It’s strip mining. But what you didn’t say is that only 20 per cent of the oil reserves in Alberta’s reserves are reachable by this process. The remaining 80 per cent are deep, deep in the ground and are extracted using a much less invasive technology called in situ. Google it, dude.

But that wouldn’t generate headlines, now would it?

The reality is that no matter what stars say, despite the hyperbole they spew — and believe me the environmental lobby is damn good at it — the fact is that we need oil to run our every day lives, regardless of how “green” some claim to be.

Right now, we don’t have any other choice.

That doesn’t mean we can’t and shouldn’t take steps to wean ourselves off this addiction. We must and we are, slowly. But it’s going to take time, money and a lot of energy.

And too much energy was spent in 2014 on the issue of Keystone XL. Obama’s lack of leadership on the issue was in a word, disappointing, not to mention confusing.

Especially with his comments in November: “Understand what this project is. It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else.”

That’s just cow dung, not to mention grammatically incorrect.

As the leader of the globe’s superpower and second-largest economy, he needs to make decisions that at the very least make common sense and are for the benefit of the American people, not just the Democratic voter base.

The US has been preoccupied with their security for a long while, but definitely since 9/11, a safe, secure supply of oil has topped the US foreign policy agenda.

Uncle Sam has to look no further than its neighbo(u)r to the north to help feed that appetite.

Canadian oil from the toque-wearing people in a land known for its beer, hockey and gifts to both the US music and on-screen industries. It’s close, it’s secure and it’s cheap.

You would think that would be enough of an argument. Nope. The US Senate delayed the Keystone project in a close vote in November, throwing up yet another roadblock.

Republican Presidential hopeful Governor Chris Christie sent a more positive message to Canada in December during a speech in Calgary.

Regardless of what happens, Canadian oil will get to market as Canadian Ambassador to the US, Gary Doer has said. That’s one fact that everyone is overlooking –— despite the misinformation and the star power behind the Keystone opposition, the US’ free-market economy will ensure that supply meets demand, however at a much higher cost.

Like it or not, pipelines will be a mainstay of Canada’s energy future. TransCanada’s other project Energy East will link western crude with eastern refineries, if the company can get the green light.

The project calls for converting existing natural gas pipelines (mainly in the east) into oil pipelines, along with the construction of new pipelines.

Again, this is being met with opposition from both the general public as well as governments and the corporate world.

The existing natural gas pipeline, which runs 400 metres from my own house and underneath the Rideau River, impacts my community directly. I was surprised to see the NIMBYs (Not In My Backyard) pop up immediately in my neighbourhood.

“I think they are just going to pump crude oil through the existing pipe and I don’t want it springing a leak because it’s old,” was the comment from one of my neighbours.

Do you really think TransCanada is going to do that without inspecting every inch? Do you think converting the pipeline is even possible without doing at least some repair work or upgrading?

C’mon people.

Yes, I’m the only one out of 30 neighbours who didn’t sign the petition against the project and yes, I’ve been trying to explain the merits, the benefits as well as possible drawbacks of this project to each and every one of them.

I even told one neighbour that despite having a natural gas pipeline a stone’s throw away since 1980, we haven’t been able to secure natural gas fuel to heat our homes and chances are we never will, so don’t bet on opposing this project solely on that front.

Look at the bigger picture. That’s what we need to do in the energy-environment debate. And apparently, that’s what researchers from around the world did in a study on the impact of livestock farts that was released in November.

Yes, you read that correctly.

I don’t know how much this cost, although the US EPA did a similar study in 2010 to highlight the top-10 states in terms of flatulence emissions, (to basically create a fart chart) and it cost $15 million.

The main conclusion is that meat hurts the environment because cows, sheep, pigs, goats and chickens release methane in the normal digestive process also known as eating, farting and taking a dump. Methane or CH4 is 20 per cent more damaging in terms of Green House Gas (GHG) emissions than carbon dioxide, the report states.

The western world’s appetite for steak puts cows as the top emitters — they’re also the largest animals, consume the most food and, well… However, it’s sheep that actually fart the most. Stinky, baaad little animals, those sheep.

The conclusion? Eating meat is a smelly business and our atmosphere can’t take the increasing GHG emissions emitted by livestock every year (a 19 per cent increase in the past 20 years) so we need to put the animals on a diet; turn to new technology to satisfy our meat craving like stem-cell research grown burgers and 3D printed synthetic steak or, become vegetarians.

Ironically, solving the globe’s dependency on oil is just one way of saving Mother Earth. The bigger and more pressing problem it seems is to stop livestock from passing gas.

C’mon President Obama, focus on what really matters. Take on the cows and single out Texas and Alberta even more.

That’s the “inconvenient toot” we learned in 2014. I’m not sure what the new year has in store, but buckle up because according to the world’s new largest economy’s zodiac, 2015 is the year of the sheep.

Pass the nose plug. Ewe-www.

>> read more

A year in review: Lessons learned in 2014

By James Careless

The end of an old year is a good time for managers to assess what happened during that time, and what lessons can be learned from those experiences. These lessons can then inform management’s actions in the year ahead

CME members have been looking back at 2014 to see what conclusions can be drawn from coping during that chaotic time. We asked three of them to share their conclusions with 20/20 readers. (In a companion article, these same CME members offer their News Year’s Resolutions for 2015.) Here is what they learned:

Take On Trade Challenges: Some countries seek unfair competitive advantage, and no one knows that better than CME members. Between protectionist barriers and illegal subsidies utilized by some of Canada’s trading partners — can we say state‑owned enterprises? — and efforts by firms in those and other countries to dump artificially underpriced foreign goods into our market, Canadian manufacturers and exporters had their hands full in 2014 with competition from foreign governments.

Faced by so many unfair trade practices, one can’t blame Canadian firms for throwing up their hands and trying to ignore these issues. After all, just running their day-to-day operations, given the current economy, is more than challenge enough! But savvy CME members such as Tenaris, a manufacturer of steel casing/tubing, connections and accessories (with their Canadian headquarters in Calgary) have learned that wishing for fair treatment is not enough. They have to fight to obtain it — and they are.

“In 2014, one of the biggest challenges was unfair imports,” declared David McHattie, Tenaris’ institutional relations director (Canada). “To address this challenge, we are working with the proper government authorities who are investigating the industry’s concern.”

Keep Your Promises, No Matter What: Steelworks Design is an up-and-coming engineering design firm based in Peterborough, ON. During 2014, the company underwent substantial sales and project growth, a surge that strained its 27 member staff. And the company is poised for even more growth in 2015, as it expands its sales aggressively into the world marketplace.

“During times of growth, it is very tempting to deal with a very heavy workload by easing off on deadlines and letting the smaller stuff slide a bit,” said Rhonda Barnet, Steelworks Design’s vice president of finance. “But this is unfair to our clients, and it’s just not a smart way of doing business when maintaining a hard-earned reputation is so very, very important.”

This is why Steelworks Design learned to keep hard at it and cope with the extra workload; through better practices such as instituting an ERP software management system, hiring more staff, and just putting in more hours when they had to. “That’s just the cost of success, which comes down to keeping our promises,” Barnet said.

We Live in a Volatile Global Economy: Even for Canadian manufacturers who don’t count on exports, what happens in the global economy matters. That’s a lesson that experiences in 2014 taught to Betty Lou Pacey. She is president of Vancouver’s BL Innovative Lighting, governance chair of the British Columbia Electrical Association (BCEA), and past chair (and temporary standing chair) of the Board for CME British Columbia.

“Always remember that what happens in one part of the world does affect everyone else,” Pacey advised. This is why CME members need to keep a close eye on what is happening both with the global economy and global trade talks, and factor these trends into their own business plans. The reason for this is that what happens in China and the ongoing Trans-Pacific Partnership negotiations does have a real impact on Canadian businesses large and small, as China buys many materials from Canadian suppliers.

Speaking of the global economy, the fact that it appears to have recovered from what is now being called the ‘Great Recession’ doesn’t mean that the bad times are necessarily over. “There is great instability in the world market,” Pacey cautioned. “It is important to recognize that 2008 could easily be replicated and to not bury your head in the sand. My biggest surprise has been to see the price of gold and silver dramatically fluctuate along with the stock market.”

>> read more

Energy self sufficiency: The business case for Keystone XL

By James Careless

The words “Keystone XL” conjure up bickering partisan battles between the White House and the Republicans, playing out in the world media. This is a shame, because TransCanada’s Keystone XL is actually a sound business proposal aimed at bringing both Canadian and American crude oil to refineries on the American Gulf Coast. In doing so, the Keystone XL Pipeline applies an environmentally sound, high-tech infrastructure to the task of moving oil; one that is far safer, more reliable and less expensive than the alternatives of using rail cars, tanker trucks and oil-carrying ships

“The Keystone XL Pipeline has the ability to make North America more energy self-sufficient, even in a world of falling oil prices,” said Corey Goulet, TransCanada’s vice president of Keystone Projects, in an exclusive interview with 20/20 magazine. “This is because moving Canadian and US crude using pipelines costs substantially less than the alternatives. Lower shipping costs means that North American oil can sell for less per barrel and still remain profitable. This means that Oil Sands and shale oil producers can stay active and keep their people employed, even with oil prices dropping.”

Although the Keystone XL Pipeline has yet to receive official permission to be built, the Keystone Pipeline connecting Canada and US oil producers to the Gulf Coast already exists and is in use. The current Keystone Pipeline runs in a boomerang from Alberta eastwards to just south of Winnipeg, and then due south over the border to refineries in Texas.

What Keystone XL will do is provide a shortcut running southeast from Hardisty, Alberta to Steele City, Nebraska. In doing so, the new 1,179-mile (1,897 km) 36-inch-diameter pipeline will cut the distance that crude has to travel from Canada and the Bakken formation shale oil fields of Montana and North Dakota. “It would also double the carrying capacity of the overall Keystone Pipeline, by adding 830,000 barrels of carrying capacity daily to the system,” Goulet said.

If and when Keystone XL is approved, the project will cost $8 billion to construct. Although most of the pipeline will be built in the United States, there are still opportunities for Canadian manufacturers to take part.

“We estimate that anywhere from $1.25-$1.5 billion will be spent in Canada to build Keystone XL,” Goulet said. “Although the pipe has already been sourced, there is still a tremendous need for smaller items such as pipe fittings, sump tanks, pumps and pressure transducers.” TransCanada will also be hiring skilled workers to help with the Canadian section, which will produce a trickle-down effect as the money workers spend boosts Canada’s economy.

In Canada, building the Keystone XL Pipeline will add about $1 billion to our GDP. In the US where most of the project will be located, Keystone XL will add $3.4 billion to US GDP, and according to the US State Department, it will create 42,100 direct and indirect jobs. The prosperity that Keystone XL will generate for the US economy will also enhance that country’s ability to buy Canadian-made goods and services, indirectly boosting our economy in the process. As the old aphorism frequently quoted by President John F. Kennedy goes, “a rising tide lifts all boats.”

In sifting through all the contradictory media reports about Keystone XL, there are a few points that CME members would be well-advised to hold onto.

First, the fact that Keystone XL will help to move Oil Sands crude, which has come under fire in some quarters for its environmental impact, does not make Keystone XL responsible for this fuel’s issues. In other words, with or without Keystone XL, Alberta’s oil will continue to flow because the North American market demand that it does.

Second, the fact that moving oil by pipeline comes with the risk of spills and other environmental risks does not change that fact that pipeline carriage is far safer than the alternatives, a point tragically underscored by the 2013 Lac-Mégantic rail disaster.

Third, if built, the Keystone XL Pipeline will be constructed out of modern, durable materials, and use technology that is superior to much of what is found on existing pipelines throughout North America. In fact, the degree of environmental planning and assessment undertaken in proposing Keystone XL is far beyond what was done for previous pipelines.

“The overwhelming reason to build the Keystone XL Pipeline is that it is the best option for moving oil in North America,” said Corey Goulet. “Putting Keystone in place will improve oil shipping safety as much as it will increase capacity.”

“As well, the Keystone XL Pipeline will ensure a reliable supply for the North American economy,” he concluded. “This will keep our economy from being held hostage by international oil exporters who do not share North American values or have our environmental rules.”

>> read more

25 billion reasons to build the Energy East Pipeline

By James Careless

Up to $25 billion: That’s the amount of money that leaves the Canadian economy annually, thanks to the reliance of Eastern Canadian refineries — and their customers — on imported crude oil

It’s not the refineries’ fault. Currently there is no economically viable source of domestically-produced crude oil available to them.

If approved, TransCanada’s Energy East Pipeline will keep this $25 billion in the Canadian economy where it belongs. Currently in the application stage at the National Energy Board (NEB), the proposed Energy East Pipeline would bring 1.1-million barrels of crude oil per day from Alberta and Saskatchewan to refineries in Eastern Canada. It will end the need to buy imported oil.

The Energy East route would cover 4,600 kilometres from west to east. Only 1,600 kilometres of this pipeline — from Cornwall, ON to its terminus in Saint John, NB — would be new construction. The remaining 3,000 kilometres would come from the repurposing of an existing, under-utilized natural gas pipeline that runs from Alberta to Cornwall.

“If approved first by the NEB and then the federal cabinet, the $12 billion Energy East budget would be spent on sourcing steel and other products from Canadian companies,” said Energy East President Francois Poirier. “We are also building 72 pumping stations along the entire route, plus tank terminals and associated facilities. There are a lot of opportunities for Canadian manufacturers to serve as our suppliers.”

During Energy East’s development, construction and first 20 years of operation, the pipeline is expected to add $36.4 billion to Canada’s Gross Domestic Product (GDP). Over that same timeframe, $7.8 billion in added tax revenues will be paid by TransCanada to all levels of government. On the employment side, Francois Poirier predicts that Energy East will create an average of 13,690 Full Time Equivalent (FTE) direct and indirect jobs during its seven year building phase, followed by 885 direct, permanent, high-paying jobs during the first 20 years of operations.

The creation of tank terminals along Energy East’s route will provide hubs for business to grow and thrive. Four are planned: One in Hardisty, AB; one in Saskatchewan, one in the Quebec City area and another in the Saint John region. As well, Energy East will be delivering oil not just to the Irving Refinery in Saint John, but other refineries in Montreal and Quebec City.

“All of these areas will benefit from these facilities and supplies, just like the towns and cities that grew up along the Canadian Pacific Railway,” said Francois Poirier. “And make no mistake: This new route will spur economic growth just as the railway did.”

In preparing its 30,000 page NEB application, TransCanada has taken great pains to address the landowner, First Nations and environmental concerns that accompany a project of this magnitude. At the same time, the company is dispelling myths that have turned up in the media. Chief among these, from a business standpoint, is that Energy East’s repurposing of the Canadian Mainline to carry crude oil instead of natural gas will result in a natural gas shortage and send prices skyrocketing.

The truth is quite different, and not at all alarming. Right now, the 3,000 km natural gas pipeline that is due to be converted for crude oil is woefully under-used.

“For example, east and south of North Bay and east of Toronto, Ontario, the pipeline has historically served two markets — domestic use in Ontario and Quebec, and export to the northeastern United States. But we’ve seen a dramatic fall in recent years in demand from the US, thanks to the growth of US-produced shale natural gas,” said Poirier. “A portion of the pipeline system east of North Bay was built to transport up to 1.6 billion cubic feet (BCF) of gas to the US, but today it has firm export contracts for less than half of that amount.”

Poirier adds, “The US shale industry – which has gone from zero BCF in 2007 to 15 BCF today — is quickly eliminating the demand for natural gas exports from Canada, and indeed starting to sell US product into our market. That’s why we need to repurpose the pipeline.”

It’s also worth noting that TransCanada will be building 250 kilometres of new pipeline to cover gaps caused by repurposing the Canadian Mainline. But even with this expense, the reduction in transportation, operations, maintenance and property tax costs provided by taking this 3,000 km pipeline out of the system will produce savings that will drive natural gas prices in Ontario and Quebec down, not up.

All told, the Energy East Pipeline is a business proposal that is good for the Canadian economy, business and employment. “Like the CPR, Energy East is a true exercise in nation-building,” said Francois Poirier. “It offers real benefits for all Canadians, from coast to coast to coast.

>> read more

Examining Canada’s Growing Electric Vehicle Market for Opportunities

By James Careless

January 2015 marks a milestone: 10,000 electric vehicles (EVs) have been sold in Canada

That might not sound like much, until you consider that “the number was close to zero only a few years ago,” said Ian Jack, the CAA’s managing director of communications and government relations. “For the industry to have got this far, with car makers such as BMW, Ford, Mitsubishi, Nissan and Tesla offering all-electric battery-powered vehicles, is no small achievement.”

This said, EVs are still so new that determining their specific market opportunities is no easy task. This is precisely what the industry group Electric Mobility Canada is researching right now. When asked what opportunities exist for Canadian businesses to profit from the emerging EV market, EMC President and CEO Chantal Guimont told 20/20 magazine: “we’re looking for that information too.”

The CAA’s Ian Jack does not promote himself as an expert on electric vehicles. However, his knowledge of this market in Canada, plus his own experience in test-driving EVs, offers a few clues.

First, EVs have a limited range between charges. For instance, the BMW i3 electric can go 160 kilometres between charges, which is representative of the range this technology offers. “As a result, current EVs are not suited for rural driving,” said Ian Jack. “But they are ideal for urban commuting, especially because stopping-and-starting actually transfers energy from the brakes to the car’s battery.”

Second, the EV’s need for large lithium ion storage batteries limits the kinds of vehicles that can exploit this technology. “Small EVs can run using small batteries, which is why they work well for commuting, fleets that use small vehicles, courier deliveries, and taxis,” Jack said. “However, you would need much larger batteries to power big multi-axle trucks. The loss in payload, combined with the batteries’ limited range, makes this impractical.”

Third, the fact that EVs can be charged by being plugged into a standard AC wall plug seems to eliminate the market for charging stations. “But that’s not the case, because commercial-grade charging stations use higher voltages — 240 and 480 volts (V) — that refresh EV batteries far faster,” said Jack.

For the record, 120V EV chargers are known as ‘Level I’ chargers, 240V chargers are ‘Level II’ and 480V chargers
are ‘Level III’.

Level I chargers require an overnight charge to revive an EV’s batteries, using conventional household plugs. Level II chargers can do the job in about 5 hours but need a 240V circuit, like those used for clothes dryers — which can be professionally installed in a home or at businesses. Level III ‘fast chargers’ can bring an EV’s batteries up to 80 per cent in less than 30 minutes, the maximum charge that they are allowed to provide for safety reasons.

“Right now, the CAA has compiled a national map that shows the location of about 1,500 Level II and III charging stations of all kinds — and we are adding 30–40 a day,” Ian Jack said. Known as the CAA Electric Vehicle Charging Station Locator, this map can be found online at www.caa.ca/evstations.

“We are currently seeing tremendous growth in the vehicle recharging infrastructure across Canada,” said Marcel Guay, chief marketing manager for the Nissan LEAF at Nissan Canada. “Whether chargers are being installed as part of a public charging network such as Hydro Quebec’s Electric Circuit, or by government/private offices or residential homes, these networks employ a number of people — including certified electricians — to install and maintain.”

So where do the opportunities lie for Canadian businesses wanting to get into the EV market? Beyond direct sales of these vehicles — either as manufacturer-franchised car dealers or independent after-market sellers — there is room for existing Canadian car garages to add EVs to their service roster.

“These vehicles are much simpler to service, because they have fewer moving parts than gasoline-powered cars with their internal combustion engines,” said Ian Jack. “EVs also need tires and all the other supplies that wear out on conventional cars.”

Installing Level III fast-charging stations also offers an opportunity for Canadian businesses. As mentioned earlier, these 480V chargers can bring a typical EV’s batteries up to an 80 per cent charge in less than 30 minutes. Since it is illegal to resell electricity in Canada, the business opportunity offered by Level III chargers is as an attractive lure to bring in affluent consumers - the kind who buy EVs. For instance, a Level III charger would be a great reason for these consumers to choose a specific restaurant, or shop at a particular mall.

Building chargers is another opportunity. “We are starting to see homegrown charger manufacturing companies emerge – such as Sun Country Highway and Add Energy — which are growing in Canada and exporting,” said Marcel Guay.

The bottom line: Although EV opportunities are still vague, they are definitely out there — and ready to be seized by forward-looking Canadian businesses.

>> read more

Next Issue: March–April 2015

Show your Canadian roots

Close deadline: January 30, 2014
Material due: February 6, 2014

To advertise, contact: Ronda Landygo — ronda.landygo@cme-mec.ca or call 1-877-880-3392

Special feature: Canadian success stories

Features:

  • 3D Printing

  • Robotics

Deliver your message to Canada's leading decision makers

The March/April issue of 20/20 explores and brings insights on Innovation and Automation for Canadian manufacturers and exporters.

Have an opinion or a story to tell? Join us and add to the debate.

That's why it's critical you participate in this insightful and undoubtedly, provocative issue.

The publication date for this issue is early March

Canadian Manufacturers & Exporters' magazine — 20/20 is the only publication that Canada's manufacturing and exporting leaders rely on for intelligence and solutions to the issues they face day to day. We are not afraid to ask the tough questions nor provide the answers you don't necessarily want to hear — we deliver the intelligence you need.

Distributed via Canadian Manufacturers & Exporters (CME) to 16,000 manufacturers across the country in hard copy along with 17,000 digital copies. Readership of 20/20 magazine is 82,500 per issue.

Our value proposition is simple — we can make a difference in your business. Becoming a CME advertiser gives you access to the biggest business network in the nation and more importantly, helps you translate your message into language understood by manufacturers and exporters across Canada.

And it works. More than 98 per cent of our advertisers in 20/20 magazine are repeat customers. Join us.

We have two available options to support this important initiative including placing an advertisement within the feature of your choice or, participate in creating a feature article with partnered content. For more information about our partnered content that can be formatted into single or double-page article options or for discounted ad rates in this issue, contact:

Ronda Landygo
Executive Director, Partnership & National Business Development
Associate Publisher, 20/20 magazine
Tel: 1-877-880-3392
Email: Ronda.Landygo@cme-mec.ca

Tailor your message, gain new business opportunities, expand your market reach. Share your solutions with leading industry decision makers from coast to coast. Leverage the only magazine the represents Canada's manufacturing and exporting sectors.

2020Just-In-Time

2020WebExclusives

>> read more

2020PartneredContent (Featured in this Issue)


Different, Innovative, Edgy, Informative
Website Designers Ottawa