Peak oil and your wallet

If you have concerns about the price of oil these days, you’re not alone. With oil at $135 a barrel and rising daily, you are witness to a major life-altering event in the world economy – peak oil. Diesel fuel is now at $1.52 a liter, roughly 23 cents higher than regular gas. The high price of fuel in Europe over the years has led to the greater use of diesel engines in their new vehicles, in turn causing a greater demand and now a higher price.

A typical barrel of oil provides 73 liters of gas and 29 liters of diesel as well as other products. European refiners ship their excess gas to North America.

In New Brunswick, the total taxes on gas / diesel is 36 cents and 39 cents respectively, which is 27% and 25% of the total price at the pumps. The taxes consist of a federal excise, provincial taxes and HST of 13%.

If the price seems to be too high in Canada, you may want to try Venezuela where the price of gas is 3 cents a liter. A fill-up will cost you roughly $1.20. Hugo Chavez provides a subsidised domestic price, an off price break for friends such as Cuba and poor neighbourhoods in the US, but also sells at the world market price.
Saudi Arabia sells a liter for 12 cents. In England and France drivers pay $2.09 due to high taxes, with the Netherlands being one of the highest at $2.38 per liter. The tax policy is designed to stimulate energy efficiency in choices.

Stephen Harper weighed in on the debate this week saying that the federal government has no power to change world oil prices. He indicated that price relief would be limited to the existing cuts in the HST. For the average Canadian, this amounts to roughly $43 / year in reduced gas prices.

In another era, the 1961 national oil policy provided higher than world prices for Alberta producers while Eastern Canada had cheap Middle East oil. The policy ended in 1973 and after the OPEC oil embargo the government broke the link between the domestic and world energy prices giving protection to Canadian consumers. A further change was the National Energy Policy of 1981 following the second oil embargo. It appears that previous governments have reacted to public concern.

The present government is buying time for the status quo. Ultimately though, as the price of oil climbs to extraordinary heights, a number of things will happen. One, the value of the Canadian dollar will rise, perhaps to $1.15 US causing serious grief to industrial Canada. Secondly, the public outcry from gas at $2 or $3 a liter will force this government or its replacement to implement a number of steps to reduce dependence on oil.

Stephane Dion’s proposal for a carbon tax is the least of the worries facing the average consumer. The carbon tax is proposed as a revenue-neutral method to introduce a higher sticker price for carbon based fuel with the intended effect of increased efficiency of use and reduced greenhouse gases. Income taxes would be reduced to compensate for the change.

Prime Minister Harper portrays this as a tax grab. Very indirectly, he indicates that peak oil is here saying, “the world is using low-cost hydrocarbons more quickly than most people are aware.” Is there some information that you should be sharing with us, Mr Harper?

How are we to feel about a government which offers us no solution to the dangers of peak oil and an opposition leader who proposes a carbon tax, which is only a partial step towards a comprehensive solution? Would the words disappointment, sadness or anger describe our lost opportunities and money?

The price of inaction on oil conservation by world leaders has been astonishing. Oil consumers now pay $2.4 trillion dollars more than a year ago to oil producers. The additional cost to Canadians is $55 billion dollars per year or $1,700 per capita. That is equivalent to 10% of the federal budget.  Do you wonder why there is less money in your wallet?  The future will be even more expensive.

Stephen Harper is right to resist lowering the cost of energy as being short-sighted and counterproductive. There are many things that could be done to reduce our dependence on oil but our existing government has little interest in an effective off-oil and conservation program.  How long can we afford this type of incompetence?

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Dion can lead on energy

There was a big difference between the Saint John and Moncton municipal elections. Saint John voters were not happy and it showed in the polls. The people voted for change of style and substance. Can Ivan Court, as the new broom, sweep clean? Does he have the vision and backbone to accomplish his daunting tasks? As an optimist, I’d like to believe so. However, we have been disappointed too often in the past, with Shawn Graham being the latest example.

Dieppe voters also threw out the old mayor, whom some considered as arbitrary with overspending tendencies. The new mayor is Jean Leblanc, a local businessman, with an interest in public service. He promises open government with past secret contracts being brought to light if legally possible. It will be interesting to follow the paths of the new mayors of Dieppe and Saint John who have similar intentions.

In Moncton, there was no great dissatisfaction with city government other than the normal concerns with property taxes levels. In my case, running for councillor at large with two well-known and respected incumbents was near suicide. Readers of this column were familiar with my message that I brought to the citizens of Moncton: our economy is based on an energy supply that is starting to decline and that has serious consequences. The law of supply and demand indicates very high prices and economic disruption. Our municipal governments need to educate and lead citizens through the coming difficult times.

I was delighted to received 4100 votes and am greatly appreciative of that confidence. Unfortunately, the incumbents received more votes, so I now have more time to write this column, which I enjoy greatly. It is easy to make mistakes in a campaign, as Obama or Hillary would tell you. My mistakes, and there were a few, were part of the learning process. The part that I enjoyed the most was “mainstreeting”, talking to people about my vision and how we could change the future.

Near the end of the campaign, the Times and Transcript indicated their choices of who they thought should win. On the Saturday before the election, they published a picture of each candidate with checkmarks on their favourites. So much for a level playing field from the print media.

But I have been ignoring the energy file while on the campaign trail. Oil has risen to $126 per barrel. Goldman Sachs predicts $200 by the end of the year. So does OPEC. The American government is again pressuring the Saudis to open the tap and if they could, they probably would. The Saudis have been spending large sums recently to try to build spare capacity and combat depletion. The average price at the pumps in the US is $3.70 per US gallon. At 3.7 liters per gallon, that’s only $1 per liter. Canadians would be happy with that price.

We had a remarkable statement from Stephane Dion on “peak oil” this week. “The peak oil era is happening and we need to prepare our country to win in this economy… We need a strategy in the coming years that will make us less dependent on fossil fuels,” according to a CTV news report on his speech.

The Liberal leader has finally found a major issue where Stephen Harper is vulnerable. People vote with their pocketbook and the rising price of gas has the population steaming and looking for answers. The PM’s insistence that Canada (really Alberta) is an energy superpower is at odds with the facts. Our conventional resources are declining and that low quality resource called the tar sands, have a dubious future from an environmental and net energy point of view.

Here in New Brunswick, the price of gas and diesel just went up 5 and 9 cents per liter respectively. If you’ve been watching the “energy policy” of the Graham government, it consists basically of the energy hub – supporting construction of a new refinery and a second Lepreau to be in service by 2016. Is this a job strategy or an energy policy?

Does Minister of Energy Jack Keir still believe that “peak oil” is a long way off and that we will adjust to it without any problems? If so, he’s more of an optimistic than most. Perhaps Stephane Dion should give him a call and the two Liberals can get on the same page.

Seek a compromise on French Immersion Decision

If you live in New Brunswick, you probably have an opinion on how the French language is taught as a second language to the majority anglophone population.  The recent decision by the Minister of Education Kelly Lamrock to eliminate early immersion is supported by those who see unaddressed negative effects on the school system emanating from the immersion program.  The change to late immersion has been contested strongly by families who have seen good results from the early immersion program.

The installation of an intensive French second language (FSL) education was a conscious effort on the part of government to provide a way for the majority to learn the minority language and allow them equal access to public service jobs providing service in both official languages. A secondary benefit of the FSL program has also been the introduction of the French community and their culture to the English over the years.

The progress in language training has not come without problems.  As the numbers of Early Immersion classes increased though the system, there were difficulties in finding enough appropriately trained teachers.  At the same time, hiring of teachers for English language classes ceased as districts scrambled to find places for the existing teachers displaced.

According to some educators, a real inequity in the quality of education provided to immersion versus the core classes is at the root of the government’s decision.  This is largely caused by the streaming effect, which negatively affects the learning environment in core classes by removing many of the positive role models, increasing the concentration of special needs students and has the unintended social consequence of fostering feelings of elitism among immersion students.  It has also had the effect of depressing the achievement levels (in English, math & science) in the immersion classes, where many of the most talented learners are found, due to the immersion model used in NB and the way it has been implemented in most schools.  Of course, it has depressed the achievement in French in the core French classes as well (streaming effect).

Teachers have been telling education officials for years about the almost impossible teaching and learning conditions in many of the core classrooms.

So, we have a serious issue for a large group of students being dealt with by the government versus a significant number of parents and their lobby group.  The supporters of Early Immersion question the effectiveness of the new approach. The new plan to defer all French language training to grade five contains risks.  Students at a later age will not gain the fluency of pronunciation and will be less likely to overcome shyness to actually speak the language outside the classroom, a necessity for retention.   If the language performance of the new graduates is lower than EFI, will the government lower the standards it demands for new hires?

Is there a middle ground between these groups that could satisfy the basic objectives? Or will the government and the immersion parents hold their ground?

Most would agree that a second language is grasped with better fluency at a very young age.   We all know politicians, who having learned a second language later in life, fracture the French or English language on a consistent basis.  As a sign of respect for their brave efforts, I won’t identify them by name.

We learn a language from listening to our parents and talking.  Most of us speak our native tongue adequately before the age of four.   It is only later at school that we learn the rules of grammar and expand our vocabulary to a sophisticated level.

Just a suggestion … Perhaps the kindergarten level could be the place where the intensive French language training takes place instead of the proposal for grade 5.  It could be followed up in grades 1-5 with enhanced core French and late immersion starting in grade 6 as proposed.  This removes the streaming until grade six yet retains an early immersion element, albeit for a one year period.  A little water in everyone’s wine might work.

The purpose of our schools is to help all of our children succeed in Mathematics, English and French language skills, and many other subjects.  During their journey, they must learn respect for each other and be treated fairly by the school system.

The present education system needs improvement to treat all students fairly.  The Government’s proposal, though well meaning, is flawed and could be improved.  Given some willingness on both sides, perhaps a compromise could be forged that would lead us into a win-win situation.