Category Archives: other minerals

Australia’s green energy initiatives cost BHP $135-million this past year

BHP presses for cheaper power ahead of Olympic Dam mine expansion


August 4, 2017

BHP facility

(Image courtesy of BHP Billiton)

BHP Billiton is looking for ways to shore up power supply and bring down power costs at its Olympic Dam copper mine in Australia, as it plans to expand following a string of electrical outages, the mine’s head said on Friday.

The mine has been badly hit by an energy crisis in Australia stoked by the rapid rise of wind power and closure of coal-fired power plants. This has destabilised the national grid and soaring natural gas prices have driven up power tariffs.

A blackout last year forced Olympic Dam to shut for two weeks, costing the company $105 million. Over the past year, rising power bills have added around $30 million to its costs.

Olympic Dam President Jacqui McGill said security of supply, price and system reliability are all challenges for the mine.

“Cheaper power – that’s the key for me,” she said at an American Chamber of Commerce event in the South Australian capital of Adelaide. Power prices need to drop 25 percent to make Olympic Dam copper more competitive globally, she said.

While the state of South Australia has taken steps, such as lining up 129 megawatt hours of battery capacity from Tesla Inc , to help avert power outages from next summer, more needs to be done, McGill said.

Olympic Dam, South Australia’s biggest power user, draws about 125 MW alone, around 8 percent of the state’s demand.

“We’ve currently got a nationwide study underway to look at our options for power,” she said.

Batteries would not help much, she said. “When you draw the amount of power that we do, options like that don’t provide us with a lot of confidence.”

BHP will need more power and cheaper prices to justify going ahead with plans to expand output from 218,000 tonnes this year to 280,000 tonnes by 2022. It plans eventually to more than double output using low-cost heap leach technology that the company is trialling in Adelaide.

McGill said tests to smelt material produced from the heap leach process have been successful, with “significant progress” made toward producing uranium and copper cathode. The trial is due to be completed in the 2019 financial year.

Heap leaching involves stacking crushed ore over a pad, pouring on acid and water and blowing air up through the pad to leach out metals.

(Reporting by Sonali Paul; Editing by Tom Hogue)



Rio Tinto declared its biggest interim dividend in the company’s 144-year history

Rio Tinto’s first-half profit soars 93%, investors getting $3bn back

Shareholders will receive $2bn on the dividend side and $1bn of share buybacks.

Cecilia Jamasmie

Aug 2, 2017


The company’s iron ore business delivered 80% of the group’s underlying earnings. (Image of the Paraburdoo operation, in the Pilbara, courtesy of Rio Tinto)


Rio Tinto (ASX, LON:RIO), the world’s second largest miner, gave its shareholders an early Christmas present Wednesday as it declared its biggest interim dividend in the company’s 144-year history, thanks to climbing commodity prices that made first-half profit jump an impressive 93%.

The Anglo-Australian company also said it will increase its share buy-back program this year, as net profit for the first six months of the year came in at $4.14 billion, more than double the $2.13 billion it logged in 2016, yet slightly short of market expectations.

Rio will return a total of $3 billion to shareholders: $2 billion on the dividend side and $1 billion of share buybacks.

Further payouts could come “down the track” after Rio closes its $2.45 billion sale of Coal & Allied to Yancoal, expected to happen in the third quarter of 2017.

Chief executive Jean-Sebastien Jacques said the results unveiled today show the firm’s “very simple strategy” was working. “But we believe there is more we can do,” he noted, adding that further payouts could come “down the track” after Rio closes its $2.45 billion sale of Coal & Allied to Yancoal (ASX:YAL), estimated for the third quarter of 2017.

The London-based miner’s performance is a clear reflection of a reverse in the mining industry’s fortunes, as companies big and small are now benefiting from a recovery in prices of commodities including iron ore, which is Rio’s key commodity, as well as aluminum and even coal.

Should that rally fade, however, there’ll be no more cash flow from coal for Rio Tinto to fall back on, warned Wednesday Bloomberg analyst David Fickling. “And its copper-mine stakes — hit by strikes this year at Escondida in Chile and Grasberg in Indonesia, plus the vast cost of reaching full production at Oyu Tolgoi in Mongolia — aren’t producing enough earnings to make up the difference,” he wrote.

Fickling’s comments are based on the fact that the company’s shareholders receive dividends based on a policy set up in February 2016, which ensures between 40% and 60% of underlying earnings are paid out to investors as a dividend every six months. The old approach saw them receive guaranteed dividend payments, but Rio had to re-evaluate it to better reflect volatile commodity cycles, such as the one that took the whole industry down in 2015.


“These are strong results: operating cash flow was $6.3 billion and we met our $2 billion cash cost reduction target six months early,” said chief executive Jean-Sebastien Jacques.

The company’s iron ore division contributed 80% of Rio Tinto’s underlying earnings. The miner, the world’s second largest producer of the commodity, generated almost 130 million tonnes of the steelmaking ingredient during and received an average price of $67.80 a tonne in the period, 26% more than just a year ago.



Supreme Court of Canada confirms First Nations have no veto power over resource projects

Supreme Court of Canada confirms First Nations have no veto power over resource projects

By Nelson Bennett, Business in Vancouver

July 28, 2017, 2:45 p.m.

Kinder Morgan pipe
Image: Kinder Morgan Canada

Just days after the new NDP government said it would work to implement a declaration that ostensibly gives First Nations in B.C. a veto over projects like the Trans Mountain pipeline expansion, the Supreme Court of Canada ruled no such veto exists.

“Overall, the decisions are positive for project development in Canada,” said Robin Junger, an expert in aboriginal law for McMillan LLP and former head of the B.C. Environmental Assessment Office.

On one hand, David Eby, the NDP’s new attorney general, confirmed last week what Junger has previously said to be the case – that his government doesn’t have the legal authority to deny permits for the pipeline expansion.

Those are statutory decisions made by civil servants, not political decisions to be made by cabinet ministers.

On the other hand, last week Premier John Horgan issued a mandate to Scott Fraser, minister of Indigenous Relations and Reconciliation, to work with First Nations “to establish a clear, cross-government vision of reconciliation to guide the adoption of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).”

That declaration has a clause that states that indigenous people have the right to “free prior and informed consent” on development projects within their asserted territory.

On the surface, that sounds like the NDP would be handing the Tsleil-Waututh of Burrard Inlet a veto, since they deny the federal government’s and Kinder Morgan Canada’s right to expand the pipeline in their territory – the Burrard Inlet in Burnaby.

But as the federal Liberals discovered when they too promised to implement UNDRIP, actually giving it legal force would require a constitutional amendment, which is why the federal Liberals abandoned it.

Two Supreme Court of Canada decisions issued on July 26 made it abundantly clear that, while the federal government has a duty to consult, that does not mean that First Nations can veto a project.

In one ruling, the Supreme Court of Canada ruled that regulators like the National Energy Board (NEB) can represent the federal Crown in executing the duty to consult First Nations, but that those consultations must be real, not lip-service.

In the Clyde River Inuit case, the Supreme Court ruled that the NEB has the authority to represent the Crown in executing its duty to consult, but that, in that particular case, it had failed to do so properly. The court ruled the NEB’s consultation failed to properly address the Clyde River Inuit’s concerns.

The other case, involving the Chippewas of the Thames First Nation decision, is particularly relevant to the Trans Mountain pipeline expansion. In that case, the court ruled that the consultation with the Chippewas had been adequate.

The Chippewas were objecting to a reversal and expansion of a pipeline owned by Enbridge. The Supreme Court ruled against the Chippewas in that case and in doing so affirmed that, provided consultations are adequate, First Nations don’t have the legal authority to stop developments in their territory.

“The duty to consult does not provide a ‘veto’ for indigenous peoples over Crown decision,” Blake, Cassels & Graydon LLP explains in a legal brief on the two cases.

So what does that mean for the NDP’s promise to implement UNDRIP? Junger said it is clear that it has no legal force.

“This is the law,” Junger said. “No elected person can change the law by statements.”

“Courts have interpreted Section 35 of our Constitution as saying there’s no veto. So I think don’t any government would have the power, even by legislation, to make that change. It would have to be a constitutional amendment. You can’t make it law by saying you endorse it.”




Shocks to Canada’s natural resource sector should be the real cover story – not Trudeau

John Ivison: Shocks to Canada’s natural resource sector should be the real cover story

As the prime minister graces the cover of Rolling Stone, the real news this week is how two major natural resources projects have been scuttled by government and the courts

The National Post

John Ivison

July 26, 2017
6:39 PM EDT

Pacific Northwest
Petronas considered building the Pacific Northwest LNG project on Lelu Island near Prince Rupert, B.C.Handout/Pacific Northwest LNG


The fawning front cover of the latest Rolling Stone, which features Justin Trudeau and wonders wistfully, “Why can’t he be our President?” also touts a headline promising to explain how the Trump administration is destroying the U.S. Environmental Protection Agency.

Many Canadians will rejoice at the contrast — and, it’s true, few would exchange Trudeau’s golden aura for Trump’s tangerine tincture.

But the idea that Trudeau is getting everything right — particularly when it comes to balancing environmental protection and growing the economy — is fallacious.

The government is touting the International Monetary Fund’s forecast that Canada will lead the G7 in growth this year. But there is a lag before government action affects the economy. The warning this week from the Chamber of Commerce that Canada’s climate-change plan and other measures are raising the cost of doing business in this country to breaking point is a canary in the coal mine, gasping from exposure to the toxic gases of too many taxes and too much regulation.

This has not been a good week for the reputation of this country’s natural resource sector. On Tuesday, the $36-billion Pacific NorthWest liquefied natural gas project was cancelled, ostensibly because of poor global prices but really because of the reduced attractiveness of the Canadian market for investment.

This was compounded Wednesday by a Supreme Court of Canada decision to block seismic testing in Nunavut because of opposition by local Inuit, who said they had not been consulted adequately before the National Energy Board gave oil companies permission to search for oil and gas in northern waters.

There was some good news for industry in a companion Supreme Court decision that suggested the courts do not equate the constitutional duty to consult with a veto over development.

The court looked at a claim by the Chippewas of the Thames First Nation in southwest Ontario, who claimed they had not been consulted adequately over the reversal of the Enbridge-owned Line 9 pipeline between Sarnia and Montreal.

The court judged that the Chippewas were informed the National Energy Board would hold hearings; were granted funding to participate; and subsequently filed evidence outlining their concerns about increased ruptures and spills.

The NEB approved the project, on the basis that the impact of the reversal of an existing pipeline would be minimal and mitigated by conditions imposed on Enbridge. The Supreme Court agreed.

While the Court ruled the Chippewas were consulted, it said the Inuit of Clyde River were not given adequate opportunity to participate in the NEB process into offshore seismic testing for oil and gas in Nunavut.

The Court said the Inuit had a constitutional right to harvest marine mammals like whales, seals and polar bears. It said it was undisputed that the testing could negatively affect hunting rights and that the proponent of the project did not make clear to the Inuit what the impact might be, nor give sufficient opportunity for participation in the process. Unlike in the Line 9 case, there were no oral hearings and no participant funding.

“These cases demonstrate that the duty to consult has meaningful content but that it is limited in scope. The duty to consult is rooted in the need to avoid the impairment of asserted or recognized rights that flow from the implementation of the specific project at issue; it is not about resolving broader claims that transcend the scope of the proposed project,” the court concluded.

The Supreme Court appears to have struck a legitimate balance between rights and development that benefits Canadians. Ottawa, on the other hand, is still searching for symmetry.

In its most recent survey the Canadian Association of Petroleum Producers forecast that oil and gas capital expenditure in Canada will fall to $44 billion this year, nearly half the $81 billion spent in 2014.

CAPP blamed the dramatic change, in part, on “continuing uncertainty” in Canada’s policies and regulations, which are seen as “increasingly more stringent and costly.”

While politicians blamed poor global LNG conditions for the Pacific NorthWest decision, similar projects have gone ahead in Australia and the U.S.

The situation is likely to be compounded by changes to federal environmental assessment legislation being contemplated by the Trudeau government. The aim is to “restore trust” in the assessment process, according to the government but industry fears reviews will become the venue to implement broader public policy — notably on Indigenous reconciliation and climate change.

The expert panel that submitted its recommendations to the government urged that assessments move beyond the “bio-physical environment” to encompass all impacts likely to result from a project, according to the “five pillars of sustainability” — environmental, social, economic, health and cultural impacts.

Chamber of Commerce president Perrin Beatty said the changes would make the system “unworkable” and end of investment in Canada’s natural resources sector.

Beatty is not some swivel-eyed loon, bent on rapacious exploitation of the environment. His organization has backed carbon pricing while calling for the government to countervail cost increases with relief elsewhere.

But the balance of environmental protection and economic growth that Trudeau trumpets has been weighed heavily in favour of the former.

In addition to new carbon taxes, businesses find themselves facing rising electricity costs, federal government fee increases, Canada Pension Plan hikes, richer minimum wages and higher Employment Insurance rates than would have been the case had the government not increased EI costs.

Such is the flighty nature of international capital, Beatty’s warning may have come too late — the Canadian system may already have been judged unworkable and investment in new major energy projects reallocated to other jurisdictions.

The experience of Pacific NorthWest suggests projects can be approved and built elsewhere in the world more quickly and cheaply, with far less uncertainty than in Canada.

The Liberal government is going to have to create a more focused, predictable regulatory regime or Canadians will face a future of lower living standards, higher taxes and bigger debt. Glossy profiles in the house organ of middle-aged Democrats are poor compensation for that.




Husky Energy investing in carbon capture pilot plant at Sask. heavy oil

Husky Energy investing in carbon capture pilot plant at Sask. heavy oil


 Husky edam east steam operations

Steam operations have started at the Edam East project near Lloydminster, the first of three new heavy-oil thermal projects in the province.


Husky Energy Inc. is increasing its investment in carbon capture and storage technology, which it hopes will make its expanding heavy oil operations in Saskatchewan more environmentally friendly.

The Calgary-based company has been operating a tiny CCS plant developed by Inventys Inc., a clean energy company headquartered in Burnaby, B.C., at its Pikes Peak South operation northwest of Maidstone for six months. Earlier this month, it invested millions of dollars in the B.C. company with the aim of developing a much larger plant at the site.

“We are moving ahead with a 30 tonnes per day pilot project. … We believe this technology has the potential to reduce the cost of carbon capture, compared to existing technologies, and could turn Lloyd thermal production into a lower carbon source of energy,” and Alberta more environmentally-friendly, Husky spokeswoman Kim Guttormson said in an email.

Carbon dioxide captured by the new project will be used alongside carbon dioxide recovered from other facilities for “enhanced oil recovery” operations in the region, Guttormson said. The process makes other types of oil wells more efficient, she added.

The new plant at Pikes Peak South is expected to be commissioned in the fourth quarter of 2018. Inventys CEO Claude Letourneau said it will have the footprint of two flatbed trailers, cost about $20 million and use the company’s second-generation CCS technology, which improves efficiency by absorbing the carbon dioxide into a solvent rather than a solid.

The increased efficiency, Letourneau continued, is expected to lead to significant cost savings. The capital cost of existing CCS technology is between $60 and $90 per tonne, but Inventys is aiming to cut that to about $30 per tonne — which the oil industry requires before it can start adopting CCS on a wide scale.

Last December, Husky’s board of directors approved three new $350 million steam-assisted heavy oil plants in Saskatchewan. The company, which has boosted its reliance on the facilities to 40 per cent from about eight per cent of total production, has many more projects “in the wings,” according to its former CEO.

That represents a major opportunity not just for Inventys — which wants to build 10 plants capable of capturing between 200 and 600 tonnes per day for Husky — but for an entire industry that is “looking for a solution,” Letourneau said. Husky’s investment, he continued, is a “clear sign” that energy companies are getting serious about addressing carbon capture.

Guttormson would not say how much the company has or is planning to invest in CCS technology, but Letourneau said its commitment is around 80 per cent of the $10 million it raised to support the pilot project in Saskatchewan.




Brandt wants SaskPower to catalyze renewable energy industry by favouring local firms

Brandt wants SaskPower to catalyze renewable energy industry by favouring local firms

Published on: July 12, 2017 | Last Updated: July 12, 2017 4:42 PM CST


The head of Saskatchewan’s largest privately-held company wants the province’s electrical utility to favour local firms, including his, as it works to boost Saskatchewan’s reliance on alternative energy sources to 50 per cent from the current 25 per cent during the next 13 years.

Brandt Group of Companies president Shaun Semple said a “local preference” in SaskPower’s procurement process could support not just his firm’s plan to build a wind turbine factory in Saskatoon’s former Mitsubishi Hitachi Power Systems Canada factory, but an entire industry in the province.

“Government procurement is not the solution, but it can be the seed, right? It can be the catalyst that starts an industry growing,” said Semple, just over three months after Brandt bought the sprawling 58th Street East factory for an undisclosed price and unveiled plans to fill the vacant facility with up to 500 of its employees.

The Regina-based company has already spent about $4 million on assessment, cleaning and refurbishment, and hired about 50 people to work at the massive facility. Semple said that total — Brandt currently has “just over” 2,000 employees — is expected to climb to about 100 by the end of the year, and could hit 300 by the end of 2018.

In addition to the turbine factory, the plant is expected to house elements of the company’s agricultural and custom manufacturing divisions, as well as research and development facilities, he said. Brandt does not disclose its finances, but Semple has said previously the purchase is part of a plan to boost its $1.7 billion revenue to $5 billion by 2025.

“We’re at the beginning stages of our industry on wind and alternate energy (sources), and if we don’t give the preference in the scorecards and use the procurement of SaskPower as a catalyst to develop it, it won’t happen and this plant will never see its full capability,” Semple said.

The Crown corporation’s procurement policy states its purchases must “obtain best value” for its money, ensure everyone is treated fairly, meet its operational requirements, comply with the province’s trade obligations, maintain “the highest ethical business standards” and support the development of Saskatchewan’s economy, including Aboriginal businesses.

SaskPower representatives were not available for interviews, but a spokesman for the Crown corporation said in a statement that it is “working closely with Priority Saskatchewan to ensure our procurement processes find the best value for our company.”

Priority Saskatchewan is a branch of SaskBuilds aimed at ensuring government procurement is fair and open.

“SaskPower procures goods and services in a fair and transparent public tendering process … We would look forward to any bid from (the Brandt) organization,” Jonathan Tremblay said in the statement.

While a homegrown wind turbine industry could have “huge” economic benefits for Brandt and other local companies, it’s vital that the government balance the need to support Saskatchewan businesses against the benefits of open competition, said North Saskatchewan Business Association executive director Keith Moen.

“We still are taxpayers and we want to see our government act prudently and judiciously in awarding their contracts, and whenever you can have that connection of it being a Saskatchewan company that gets the contract it’s a win-win. But it isn’t always a win-win because … we don’t want them to spend money frivolously.”


Antarctica’s Larsen Ice Shelf Break-Up driven by Geological Heat Flow Not Climate Change


Antarctica’s Larsen Ice Shelf Break-Up driven by Geological Heat Flow Not Climate Change

Antarctic Larsen Ice Shelf 1
Figure 1) North tip of Antarctic Continent including Larsen Ice Shelf Outline (black line), very active West Antarctica Rift / Fault System (red lines), and currently erupting or semi-active volcanoes (red dots).

Progressive bottom melting and break-up of West Antarctica’s seafloor hugging Larsen Ice Shelf is fueled by heat and heated fluid flow from numerous very active geological features, and not climate change.

This ice shelf break-up process has been the focus of an absolute worldwide media frenzy contending man-made atmospheric global warming is at work in the northwest peninsula of Antarctica.

As evidence, media articles typically include tightly edited close-up photos of cracks forming on the surface of the Larsen Ice Shelf (Figure 2) accompanied by text laced with global warming alarmist catch phrases.

This “advertising / marketing” approach does in fact produce beautiful looking and expertly written articles. However, they lack subsidence, specifically a distinct absence of actual scientific data and observations supporting the purported strong connection to manmade atmospheric global warming.

Working level scientists familiar with, or actually performing research on, the Larsen Ice Shelf utilize an entirely different approach when speaking about or writing about what is fueling this glacial ice break-up.

They ascribe the break-up to poorly understood undefined natural forces (see quote below). Unfortunately, comments by these scientists are often buried deep in media articles and never seem to match the alarmist tone of the article’s headline.

“Scientists have been monitoring the rift on the ice shelf for decades. Researchers told NBC News that the calving event was “part of the natural evolution of the ice shelf,” but added there could be a link to changing climate, though they had no direct evidence of it.” (see here)

Antarctic Larsen Ice Shelf 2
Figure 2) An oblique view of crack in the Antarctic’s Larsen C ice shelf on November 10, 2016. (NBC News Article credit John Sonntag / NASA via EPA

This article discusses what more properly explains what is fueling the Larsen Ice Shelf break-up. A theory that is supported by actual scientific data and observations thereby strongly indicating that the above mentioned undefined natural forces are in fact geological.

Let’s begin by reviewing the map atop this article (Figure 1). This map is a Google Earth image of the local area surrounding, and immediately adjacent to, the Larsen Ice Shelf, here amended with proven active geological features.

If ever a picture told a thousand words this is it. The Larsen Ice Shelf lies in and among: twenty-six semi-active (non-erupting but heat-flowing) land volcanoes, four actively erupting land volcanoes, two proven semi-active seafloor volcano (seamounts), and a proven actively heat flowing major fault system named the West Antarctic Rift.

Not shown on this map are known seafloor hydro-thermal vents (hot seafloor geysers), likely heat emitting fractures, and prominent cone-shaped seafloor mountains that are most likely seamounts (ocean volcanoes).

This geological information paints a very clear and compelling picture that the Larsen Ice Shelf is positioned in an extremely active geological setting. In fact a strong case can be made that the Larsen Ice Shelf owes its very existence to a down-faulted low valley that has acted as a glacial ice container (see research on the Bentley Subglacial Trench of the West Antarctic Rift / Fault).

Next let’s review in more detail a few of the key very local areas on the Figure 1 map which will help clarify the power and recent activity of these areas.

First up, the Seal Nunataks area which is labeled on the Figure 1 map as “16 Semi-Active Volcanoes“.  In general, these volcanoes lie within and push up through the northern portion of the Larsen Ice Shelf (Figure 3).

More specifically, the Larsen Ice Shelf is formally divided into three sub-areas: northern “A” segment, central “B” segment, and southern “C” segment. The 16 Seal Nunataks‘ volcanoes are strongly aligned in a west to east fashion and are designated as the boundary between the Larsen “A” and B” segments.

This 50-mile-long and 10-mile-wide chain of visible land volcanoes has likely been continuously volcanically active for at least the last 123 years based on limited amounts of data from this remote and largely unmonitored area.

Each time humans have visited this area they have recorded obvious signs of heat and heated fluid flow in the form of: fresh lava flows on volcanoes, volcanic ash on new snow, and volcanic debris in relatively new glacial ice. Remember, these observations only document volcanic activity on exposed land surfaces, and not the associated volcanic activity occurring on the seafloor of this huge volcanic platform.

More modern research published in 2014 by Newcastle University is here interpreted to indicate that the Larsen “B” portion of the greater Larsen Ice Shelf pulsed a massive amount of heat in 2002. Research elevation instruments showed that a huge portion of the Larsen “B” area quickly rose up, likely in response to swelling of underlying deep earth lava pockets (mantle magma chambers).

This process heated the overlying uplifted ground. This heated ground then acted to bottom melt the overlying glaciers (quote below). This is an awesome display of the power geologically induced heat flow can have on huge expanses of glacial ice.

“Scientists led by Newcastle University in the UK studied the impact of the collapse of the giant Larsen B ice shelf in 2002, using Global Positioning System (GPS) stations to gauge how the Earth’s mantle responded to the relatively sudden loss of billions of tonnes of ice as glaciers accelerated. As expected, the bedrock rose without the weight but at a pace ‚Äì as much as 5 centimetres a year in places ‚Äì that was about five times the rate that could be attributed by the loss of ice mass alone”, said Matt King, now at the University of Tasmania (UTAS), who oversaw the work.

“It’s like the earth in 2002 was prodded by a stick, a very big stick, and we’ve been able to watch how it responded,” Professor King said. “We see the earth as being tremendously dynamic and always changing, responding to the forces.”  Such dynamism – involving rocks hundreds of kilometres below the surface moving “like honey” – could have implications for volcanoes in the region. Professor King said. (see here)

Antarctic Larsen Ice Shelf 3
Figure 3) Map of the Seal Nunataks 16 Semi-active volcanoes relative to the three Larsen Ice Shelf segments, “A”, “B”, and “C” (see here). Also, a historical aerial photo of several Seal Nunatak volcanic cones pushing up through the Larsen Ice Shelf.

It is clear that the vast Seal Nunataks’ volcanic plateau at the very least pulsed significant amounts of heat and likely heated fluid flow in the following years: 1893, 1968, 1982, 1985, 1988, 2002, 2010.

The next key local area on the Figure 1 map is portion labeled as “6 Semi-Active Volcanoes” of which two are seamounts (seafloor volcanoes) and four are land volcanoes. All of these geological features are known to be currently emitting heat and heated fluid flow, however the rate and volume of this flow is not well understood. The most noteworthy feature is Deception Island, which is a huge six-mile-wide collapsed land volcano (caldera).

This volcanic feature: extends a great distance outward and downward into the surrounding ocean, has been earthquake active in the years 1994 / 1995 / 1996, and has moderately erupted in the years 1820, 1906 / 1910 / 1967 / 1969 / 1992.

Early explorers used the harbor created by this collapsed volcano, however, on occasion they had to abandon their moorings when the seawater in the harbor boiled (see quote below). More modern research stations in the 1960s had to temporarily abandon the island due to moderate eruptions.

“The fifth volcano, off the northern tip of the Antarctic Peninsula, is a crater that has been ruptured by the sea to form a circular harbor known as Deception Island. Beginning in the 1820s, it was used as shelter by sealing fleets from New England and later by whalers.

On occasion, water in that harbor has boiled, peeling off bottom paint from the hulls of ships that did not escape in time. An eruption a decade ago damaged research stations established there by both Britain and Chile.

This volcano and the two newly discovered ones on the opposite side of the peninsula, the longest on earth, are thought to be formed by lava released from a southeastward-moving section of the Pacific floor that is burrowing under the peninsula in the same process thought to have formed the Andean mountain system farther north, in South America.” (see here)

The last two key local areas on the Figure 1 map are labeled as “1 Erupting and 5 Semi-Active Volcanoes” and “3 Erupting Volcanoes. These two areas represent major currently erupting land volcanoes that are spewing huge amount of ash into the atmosphere, and most importantly, massive amounts of heat and heated fluid flow into the surrounding ocean (see here and here).

These ongoing eruptions all lie along, and are generated by, deep earth faulting associated with the northern extension of the West Antarctic Rift / Fault System (red lines on Figure 1 map). The reader is directed to previous Climate Change Dispatcharticles detailing heat flow and volcanic activity along this West Antarctic 5,000-mile-long fault system (see here and here)

Reviewing how mega-geological forces drive Earth’s internal heat engine also has direct bearing on what is fueling the Larsen Ice Shelf Break-up as follows:

  • Earth is undergoing an extremely active period of volcanic and earthquake activity during the last three years especially major deep ocean fault systems such as those associated with the Pacific Rim of Fire and Icelandic Mid-Atlantic Ocean Rift. It makes perfect sense that the West Antarctic Rift / Fault System which underlies the Larsen Ice Shelf has also become more active of during this time frame.
  • The 2015-2016 El Ni√±o Ocean “Warm Blob” has now been proven to be caused / generated by “natural forces”, and not manmade or other purely atmospheric forces. These natural forces are almost certainly geological as per numerous previous Climate Change Dispatch articles (see hereand here). If geological forces have the power to warm the entire Pacific Ocean, they can certainly act to warm the ocean beneath the Larsen Ice Shelf.
  • Climate scientists favoring manmade Global Warming continue to force fit all anomalous warming events into an atmospheric framework because this is the only abundant data source they have available. However, there is very little global atmospheric data that supports rapid local Larsen Ice Shelf melting or local rapid ocean warming. Most global atmospheric data indicates that the Antarctic atmosphere is cooling or not changing temperature.
  • The surface of our planet is 70% water and 90 % of all active volcanoes are present on the floor of Earth’s oceans. Quite amazingly only 3-5% of the ocean floors have been explored by human eyes, and virtually none of this area is monitored. This is especially true in the nearly unexplored / completely unmonitored deep regions of the oceans in and around the Larsen Ice Shelf.
  • It just makes sense that if major rift / fault zones that from the boundary of Earth’s outer crustal plates that have the power to move entire continents 1-2inches per year, certainly have the power to warm oceans as per the Plate Climatology Theory. The Weddell Sea which surrounds the Larsen Ice Shelf, no problem.

In summary huge amounts of research and other readily available information clearly indicates that the Larsen Ice shelf lies within a geologically active region. Media reports that do not mention this aspect relative to the potential cause of bottom melting and subsequent break-up of the Larsen “A”, “B”, and “C” glaciers are best characterized as “Fake News” and not “97% Proven / the Debate is Over” news.

Thankfully there are smaller media venues such as Climate Change Dispatch that provide scientists with a platform to present viable alternative explanations to complicated climate and climate-related events, specifically in this case…. Antarctica’s Larsen Ice Shelf Break-Up is Fueled by Geological Heat Flow and Not Climate Change.

James Edward Kamis is a Geologist and AAPG member of 42 years with a B.S. and M.S. in geology who has always been fascinated by the connection between Geology and Climate. More than 12 years of research / observation have convinced him that the Earth’s Heat Flow Engine, which drives the outer crustal plates, is also an important driver of the Earth’s climate. The Plate Climatology Theory ( was recently presented / published at the annual 2016 American Meteorological Society Conference in New Orleans, LA. (see here)


REFERENCES Warm Winds not Climate Change but from Geologically Warmed Ocean. Three Volcanoes North of Antarctica Erupt at Once Bristol Island Eruption May 1, 2016 Lamont Doherty Involvement in Operation Ice Bridge Antarctica Deception Island South Shetland Islands Antarctica Mantle Under Larsen Shelf Rises and Activates Volcanoes. Bentley Subglacial Trench in West Antarctica  Map Larsen Ice Shelf Deception Island and Bransfield Strait



Why Commodity Traders Are Fleeing the Business

Why Commodity Traders Are Fleeing the Business

The number of trading houses has dwindled, and the institutional, pure-play commodity hedge funds that remain are few.

By Shelley Goldberg

July 12, 2017, 3:00 AM CST July 12, 2017, 11:32 AM CST



Copper, the “beast” of commodities.

 Photographer: John Guillemin/Bloomberg

Profiting from commodity trading often requires a combination of market knowledge, luck, and most importantly, strong risk management. But the number of commodity trading houses has dwindled over the years, and the institutional, pure-play commodity hedge funds that remain — and actually make money — can be counted on two hands. Here is a list of some of the larger commodity blow-ups:


Phillip Brothers

The largest and most successful commodity trading house in its day caved, triggered by copper trading


Metallgesellschaft AG

The New York branch of this large German conglomerate lost $1.5 billion in heating oil and gasoline derivatives


Sumitomo Corp.

Yasuo Hamanaka blamed for $2.6 billion loss in copper scandal


Enron Corp.

Dissolves after misreporting natural gas trades, resulting in Arthur Andersen, a ‘Big 5’ accounting firm’s fall from grace



Broker of commodities and futures contracts files for bankruptcy after accounting fraud


Amaranth Advisors

Energy hedge fund folds after losing over $6 billion on natural gas futures


BlueGold Capital

One of the best-performing hedge funds in 2011, closed its doors in 2012, shrinking from $2 billion to $1.2 billion on crude oil bets


Brevan Howard Asset Management

One of the largest hedge funds globally. Closed its $630 million commodity fund after having run well over $1 billion of a $42 billion fund



The sister and energy trading arm of Phillip Brothers, ranked (1980) the 15thlargest U.S. company, dissolves


Vermillion Asset Management

Private-equity firm Carlyle Group LP split with the founders of its Vermillion commodity hedge fund, which shrank from $2 billion to less than $50 million.

Amid the mayhem, banks held tightly to their commodity desks in the belief that there was money to be made in this dynamic sector. The trend continued until the implementation of the Volcker rule, part of the Dodd-Frank Act, which went into effect in April 2014 and disallowed short-term proprietary trading of securities, derivatives, commodity futures and options for banks’ own accounts. As a result, banks pared down their commodity desks, but maintained the business.

Last week, however, Bloomberg reported that Goldman Sachs was “reviewing the direction of the business” after a multi-year slump and yet another quarter of weak commodity prices.

What happened?

In the 1990s boom years, commodity bid-ask spreads were so wide you could drive a freight truck through them. Volatility came and went, but when it came it was with a vengeance, and traders made and lost fortunes. Commodity portfolios could be up or down about 20 percent within months, if not weeks. Although advanced trading technologies and greater access to information have played a role in the narrowing of spreads, there are other reasons specific to the commodities market driving the decision to exit. Here are the main culprits:

  1. Low volatility: Gold bounces between $1,200 and $1,300 an ounce, WTI crude straddles $45 to $50 per barrel, and corn is wedged between $3.25 and $4 a bushel. Volatility is what traders live and breathe by, and the good old days of 60 percent and 80 percent are now hard to come by. Greater efficiency in commodity production and consumption, better logistics, substitutes and advancements in recycling have reduced the concern about global shortages. Previously, commodity curves could swing from a steep contango (normal curve) to a steep backwardation (inverted curve) overnight, and with seasonality added to the mix, curves resembled spaghetti.
  2. Correlation: Commodities have long been considered a good portfolio diversifier given their non-correlated returns with traditional asset classes. Yet today there’s greater evidence of positive correlations between equities and crude oil and Treasuries and gold.
  3. Crowded trades: These are positions that attract a large number of investors, typically in the same direction. Large commodity funds are known to hold huge positions, even if these only represent a small percent of their overall portfolio. And a decision to reverse the trade in unison can wipe out businesses. In efforts to eke out market inefficiencies, more sophisticated traders will structure complex derivatives with multiple legs (futures, options, swaps) requiring high-level expertise.
  4. Leverage: Margin requirements for commodities are much lower than for equities, meaning the potential for losses (and profits) is much greater in commodities.
  5. Liquidity: Some commodities lack liquidity, particularly when traded further out along the curve, to the extent there may be little to no volume in certain contracts. Futures exchanges will bootstrap contract values when the markets close, resulting in valuations that may not reflect physical markets and grossly swing the valuations on marked-to-market portfolios. Additionally, investment managers are restricted from exceeding a percentage of a contract’s open interest, meaning large funds are unable to trade the more niche commodities such as tin or cotton.
  6. Regulation: The Commodity Futures Trading Commission and the Securities and Exchange Commission have struggled and competed for years over how to better regulate the commodities markets. The financial side is far more straightforward, but the physical side poses many insurmountable challenges. As such, the acts of “squeezing” markets through hoarding and other mechanisms still exist. While the word “manipulation” is verboten in the industry, it has reared its head over time. Even with heightened regulation, there’s still room for large players to maneuver prices — for example, Russians in platinum and palladium, cocoa via a London trader coined “Chocfinger,” and a handful of Houston traders with “inside” information on natural gas.
  7. Cartels: Price control is not only a fact in crude oil, with prices influenced by the Organization of Petroleum Exporting Countries but with other, more loosely defined cartels that perpetuate in markets such as diamonds and potash.
  8. It’s downright difficult: Why was copper termed “the beast” of commodities, a name later applied to natural gas? Because it’s seriously challenging to make money trading commodities. For one, their idiosyncratic characteristics can make price forecasting practically impossible. Weather events such as hurricanes and droughts, and their ramifications, are difficult to predict. Unanticipated government policy, such as currency devaluation and the implementation of tariffs and quotas, can cause huge commodity price swings. And labor movements, particularly strikes, can turn an industry on its head. Finally, unlike equity prices, which tend to trend up gradually like a hot air balloon but face steep declines (typically from negative news), commodities have the reverse effect — prices typically descend gradually, but surge when there’s a sudden supply shortage.

What are the impacts? The number of participants in the sector will likely drop further, but largely from the fundamental side, as there’s still a good number of systematic commodity traders who aren’t concerned with supply and demand but only with the market’s technical aspects. This will keep volatility low and reduce liquidity in some of the smaller markets. But this is a structural trend that feasibly could reverse over time. The drop in the number of market makers will result in inefficient markets, more volatility and thus, more opportunity. And the reversal could come about faster should President Donald Trump succeed in jettisoning Dodd-Frank regulations.

(Corrects attribution of Goldman’s review of commodity operations in third paragraph.)

Bloomberg Prophets Professionals offering actionable insights on markets, the economy and monetary policy. Contributors may have a stake in the areas they write about.

To contact the author of this story:
Shelley Goldberg at

To contact the editor responsible for this story:
Max Berley at


Helium infographic

Saskatchewan has a rare helium deposit. See Weil Group eyes growing helium market with $10-million plant in Mankota Saskatchewan It has be known for a while Helium Prospects in Southwest Saskatchewan by H.B. Sawatzky, R.G. Agarwal and W. Wilson – 1960

Helium Infographic

Further troubles lie ahead as Ottawa’s attempt at modernizing major resource project approval processes reveals a divided Canada

Further troubles lie ahead as Ottawa’s attempt at modernizing major resource project approval processes reveals a divided Canada

By Darrell Stonehouse

June 29, 2017, 1:21 p.m.

Kinder Morgan tanker at terminal

Image: Kinder Morgan Canada


Call it an exercise in herding cats.

Only one year into the federal government’s efforts to reshape Canada’s environmental and regulatory processes surrounding resource development, and it’s already revealed a country deeply divided on how to assess environmental concerns with new projects and how to regulate industry to mitigate any issues.

The federal government launched its multi-department review last June after instituting a temporary system in January for projects already under environmental assessment. The goal is to replace the environmental assessment legislation put in place by Stephen Harper’s Conservatives in 2012, while modernizing the National Energy Board (NEB), Fisheries Act, and Navigation Protection Act.

The rationale for the review is to “restore Canadians’ trust in environmental assessments,” said Catherine McKenna, the federal minister of environment and climate change.

“The review of Canada’s environmental and regulatory practices will ensure that decisions are based on science, facts and evidence,” added Kirsty Duncan, the federal minister of science.

Over the last year, the government has been gathering submissions and holding public hearings to get input from Canadians across the country. In early April, the expert panel reviewing the environmental assessment process released its recommendations. A similar report concerning the modernization of the NEB was released in mid-May.

The preliminary results from the environmental review show the challenges of trying to balance environmental stewardship with industrial growth.

“Views about federal environmental assessment across the various interests ranged from support to all-out opposition,” the environmental panel said in its report to the government.

The view from industry

Industry was looking for a number of things from the review, including assurances that any new regulations wouldn’t further harm the country’s competitiveness.

“Canada is competing globally for capital investment in our oil and gas resources, and it is imperative for the Canadian economy that Canada remain competitive with other jurisdictions,” Jim Campbell, Cenovus Energy’s vice-president of government and community affairs, told the task force on behalf of his company.

Campbell pointed to a recent study and survey showing the Canadian industry is falling behind competitors when it comes to competing for capital. “Primary reasons cited Canada’s decline include regulatory duplication and inconsistencies and complexity of environmental regulations,” he noted.

In its submission to the task force, Suncor Energy, like most others from industry who offered input, said the federal review process should dovetail with, rather than overlap, provincial and local review processes. The process should, “accent, not duplicate, provincial reviews,” said Suncor. “One project, one assessment. Duplicate reviews do not add additional protections and can add years to project applications.”

The federal assessment “should be a process to assess residual environmental risks in areas of federal jurisdiction,” Suncor added.

Cenovus, with most of its primary assets in Alberta, agreed primary responsibility for environmental assessments should remain with the provinces.

“Local regulators have the experience and technical expertise to best evaluate projects, work with local communities and perform follow-up monitoring and compliance,” noted Campbell.

Campbell also said federal and provincial environmental assessment processes should be streamlined by allowing for substitution and equivalency agreements based on the principles of the best-placed regulator to do the work and a single-window approach.

When it comes to addressing First Nations’ concerns, Suncor said the federal government, rather than industry, must take a leadership role, pointing out that the review “must ensure the Crown is upholding its duty to consult.”

“Proponents have the responsibility to support the Crown through direct engagement and partnership with affected communities, incorporating traditional knowledge through applications and developing projects in a sustainable manner,” Suncor added.

The oilsands giant said the people and communities closest to projects should be at the front of the line when it comes to consultations in environmental assessments.

“Reviews must allow those most directly affected by the outcome of a particular project to have the greatest opportunity to participate and have a voice in the process,” it noted. “Input from affected stakeholders can get diluted when the process is used for purposes other than gathering information on a specific project.”

Suncor and other resource companies and associations also said they don’t believe the review process should be hijacked by groups wanting to debate larger public concerns outside the boundaries of the project. Governments should first set public policy direction on these broader issues like climate change, and then the review process should ensure public policy standards are met.

“The review process is not the appropriate venue for debating broader public policy,” the company said.

Another key element for industry and provinces with resource-based economies in the review process was ensuring the designated projects section of the Canadian Environmental Assessment Act, 2012 remained in place. Projects including minerals mining (such as potash), linear developments (transmission lines and highways) that do not cross provincial boundaries, extraction of non-potable groundwater, in situ oilsands developments and natural gas facilities were removed from the list of projects requiring federal assessments in the 2012 legislation.

“Removing these projects from federal [environmental assessment] review saved time and cost by greatly reducing unnecessary duplication of [assessments] and other regulatory processes, reducing red tape for proponents while maintaining robust provincial environmental safeguards,” said the government of Saskatchewan in its submission. “The province advocates for the exclusion of such projects from federal review, recognizing mature and effective provincial environmental regulatory review processes.”

Green groups, First Nations look for greater participation in process

While industry looked to streamline the environmental assessment process and provide certainty to investors, environmentalists and First Nations looked for greater input into the process and for the federal government to expand the list of designated projects that require federal approval. Many also requested a climate test be included in the process.

West Coast Environmental Law said it was looking for a “next-generation assessment law” that accounted for the economic, ecological and social aspects of sustainability, that respected First Nations authority and governance, that provided for full public participation, and that connected the assessment, decision-making and action of different levels of government.

They also wanted the law to “address the causes and effects of climate change, include strategic and regional assessment as fundamental components, and to require appropriate assessment of the thousands of smaller projects currently not being studied.”

“This isn’t the time to make small adjustments to a deeply flawed process—we need a new law that ensures the health of Canadians and the environment, and this is our chance to get it right,” said Stephen Hazell, the director of conservation and general counsel at Nature Canada.

Recommendations favour expansion of federal role in assessments

The initial report from the expert panel is promising many of the big changes environmentalists and others who submitted opinions wanted. The first is a major expansion in the assessment process beyond the environmental impacts of a project.

“We outline that, in our view, assessment processes must move beyond the bio-physical environment to encompass all impacts likely to result from a project, both positive and negative. Therefore, what is now ‘environmental assessment’ should become ‘impact assessment,’” the panel said. “Changing the name of the federal process to impact assessment underscores the shift in thinking necessary to enable practitioners and Canadians to understand the substantive changes being proposed in our report.”

This new assessment process would cover what the panel calls the “five pillars of sustainability: environmental, social, economic, health and cultural impacts.”

While industry said it would like to see public input limited to those most affected by the project, the panel also sided with environmental groups wanting to see broader public input. The panel also said that more meaningful public participation in the assessment process is a must.

“An overarching criterion of public participation opportunities in impact assessment processes is that these opportunities must be meaningful,” the report added. “A meaningful participation process needs to have the inherent potential to influence decisions made throughout the assessment, provide inclusive and accessible opportunities for early and ongoing engagement from the public and indigenous groups, and provide the capacity required for active participation in the engagement.”

The panel said current rules regarding public participation are lacking and have been perceived as having been designed to “limit public participation in the assessment process.”

The panel believes the NEB’s adoption of the “standing test” has greatly hindered trust in its assessments.

“The degree to which this test has limited participation is evident through NEB participation data. The outcome of this is not an efficient assessment process or timely incorporation of public input into a decision-making process,” the panel said. “In the case of the Trans Mountain Expansion project review, a ministerial panel was convened after the NEB assessment process was completed, at least in part to hear from those who felt shut out of the initial process. In short, limiting public participation reduces the trust and confidence in assessment processes without bringing any obvious process efficiency.”

“The panel recommends that…legislation require that [an impact assessment] provide early and ongoing participation opportunities that are open to all,” the report said. “Results of public participation should have the potential to impact decisions.”

The expert panel also questioned the need for time limits on the review process, suggesting that instead, the time frame of the review process be project-specific. The current process, put in place in 2012, requires environmental assessments of projects that occur on federal lands, such as pipelines, to be completed within one or two years, depending on the project’s size and complexity.

“This has not met the objective of delivering cost- and time-certainty to proponents,” the report said. “Our recommended approach seeks to build public confidence in the assessment process. We believe that public trust can lead to more efficient and timely reviews. It may also support getting resources to market.”

The expert panel also recommended a number of ways to increase First Nations participation in the assessment process, including implementing the principles of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), “especially with respect to the manner in which environmental assessment processes can be used to address potential impacts to potential or established aboriginal or treaty rights.”

The panel recognized that there are broader discussions that need to occur between the federal government and indigenous peoples with respect to nation-to-nation relationships, overlapping and unresolved claims to aboriginal rights and titles, reconciliation, treaty implementation and the broader implementation of UNDRIP. According to the panel, many of these discussions will be necessary prerequisites for the full and effective implementation of the recommendations contained in the report.

Among its recommendations regarding indigenous people, the panel suggested that indigenous peoples be included in “decision-making at all stages of the assessment process, in accordance with their own laws and customs.”

It also suggests First Nations be funded adequately to allow meaningful participation in the process and be given the time to review information.

The panel report defines the criteria for the type of projects that should be federally reviewed and limits the criteria of projects that are included for federal review in the designated projects list.

“Many participants favoured the continued use of a project list approach to trigger federal assessments because it is predictable and clear and places the focus on major resource projects,” wrote the panel.

“Requiring an assessment for projects with minor impacts was described as too burdensome and time-consuming for proponents and lacking proportionality. Participants also said, however, that the current project list is too focused on certain industries, such as mining, and should be revisited to ensure that the list more accurately reflects projects with the highest potential for adverse effects, with some participants indicating that in situ oilsands projects and hydraulic fracturing activities should be included.”

The committee recommended only projects that affect federal interests should be included on the list. This differs from the current approach that includes projects that may not affect matters of federal interest. And it said there should be an appropriate threshold for effects on federal interests so that a trivial impact does not trigger an assessment.

“A new project list should be created that would include only projects that are likely to adversely impact matters of federal interest in a way that is consequential for present and future generations,” said the committee.

On the issue of government jurisdiction, there was widespread support for the idea of “one project, one assessment.”

However, a key goal of the assessment process is to leverage the knowledge of all government levels.

“In Canada, many jurisdictions have the expertise, knowledge, best practices and capacity to contribute to impact assessments,” said the panel. “For example, the federal and provincial governments may focus on closely related issues, such as impacts to water quality versus impacts to a fishery. Yet indigenous groups also have relevant knowledge on these topics related to the practice of their aboriginal and treaty rights, their traditional and ongoing land use, and their laws, customs and institutions. Similarly, municipalities are the custodians of land use and the full range of local impacts that affect residents and their communities.”

The committee said it believes the best way to connect all these areas of expertise is through a co-operative approach.

“To date, the best examples of co-operation among jurisdictions have been joint-review panels backed up by general co-operation agreements between Canada and many provinces,” said the committee. “As such, expanding the co-operation model to include all relevant jurisdictions is the preferred method to carry out jurisdictional co-ordination.”

Climate change a sticky issue

The expert panel said the issue of climate change has proved difficult to address under existing environmental assessment regulations.

“Current processes and interim principles take into account some aspects of climate change, but there is an urgent national need for clarity and consistency on how to consider climate change in project and regional assessments,” it said.

The panel said criteria, modelling and methodology must be established to assess a project’s contribution to climate change, consider how climate change may impact the future environmental setting of a project, and consider a project’s or region’s long-term sustainability and resiliency in a changing environmental setting.

Industry is concerned the issue of climate change has sidelined project assessments and turned them into debates over government policy. The panel addressed this issue by recommending the federal government lead a strategic impact assessment or similar co-operative and collaborative mechanism on the Pan-Canadian Framework on Clean Growth and Climate Change to provide direction on how to implement the framework and related initiatives in future federal project and regional assessments.


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