The Canadian Institute of Mining & Metallurgy (BC) kicked off their distinguished-speaker lunch series today. The venue was one of those hotel rooms with an impossibly high ceiling and walls festooned with gilt-painted plaster curliques and dying-grass-green drapes. The talk was on an issue that is sure to excite the mining industry for years to come: global warming and carbon credits.
The talk was dense and obtuse. I choose to broadcast its message by telling a story culled from The Farmers Almanac dated 2020. Stand by; this is a serious tale and a sobering problem, although you may not believe me as you proceed through the narration. Here is my story:
————————————————————————————————————————
A TALE OF TWO FARMERS
Many years ago, there were two farmers. Farmer Ames ran a large cattle ranch in Carbondale County, Wyoming. He had 10,000 head of cattle who produced milk; when they died, they furnished soft leather for Dodge Durango SUVs. Farmer Candu ran a large cattle ranch in Oil Parish, Alberta. He had 10,000 cattle destined for meat in U.S. McDonald’s hamburgers.
Farmer Ames secretly voted Republican, for he believed in the virtues of family and hard work. In public, he sent money to the Political Action Committee of the Democratic Congressman Bigpurse, who after all was in Congress and brought the bacon home to Carbondale County.
Farmer Candu was apolitical. After all, who do you vote for when there are three minority parties messing things up in Ottawa? And how can you vote against the incubents in Alberta who over the years have been so generous with oil sands revenues?
One day, Farmer Ames received a letter from Congressman Bigpurse telling him that in terms of the Bingaman Bill, the Department of Agriculture had awarded him 30,000 OFCs. An OFC, you will recall, is a carbon credit good for the lifetime of one farting cow (OFC). And recall that scientists had established that farting cows were one of the biggest sources of methane emissions that constituted carbon emissions contributing to global warming. Farmer Ames was baffled as to what to do with his OFCs. He joined his buddies for coffee in the local McDonalds to eat hamburgers (meat from Canada) and discuss this “gift” from a Senator from New Mexico, or was it Arizona?
From the babble around the recycle-paper hamburger wrappers, he soon understood that by law he need to own 10,000 OFCs — one for each of his 10,000 cows. The rest he was free to trade on the Chicago Mercantile Exchange. Secretly he wondered who the hell would buy such worthless pieces of paper put out by bureaucrats. But he joined his buddies in e-mailing the Exchange telling them he had OFCs for sale. He expected nothing to come of it.
Up in Alberta, the time arrived to send 2,500 cows down to the meat processing plant in Montana (you know, one of those heavily industrialized & mining states.) Farmer Candu got everything ready, but just as he was about to dispatch the cows, his shipping agent told him that he had to have valid international OFCs. You see Canada had signed every possible treaty to do with global warming they could find. It precluded the Green Party winning at the polls.
“Where do you get OFCs?” Farmer Candu asked.
“Easy, I’ll buy them for you in Chicago.” replied the pretty little shipping agent. “I don’t actually go there. I just use my Canadian Blackberry.”
“Better get ‘em,” replied Farmer Candu, “As long as they are not expensive.”
“No problem,” replied Shipper, “They are currently trading at a dollar.”
Recall that since 2007 the U.S. and Canadian dollar have remained pretty much on a par all these years.
“”Expletive”" exclaimed Farmer Candu. “But I suppose a dollar a cow is much less than the cost of a hamburger here in Alberta, so you had better go ahead. I can’t afford to feed those damn cows with the winter coming on.”
So Famer Candu transferred $2,500 to Farmer Ames. And Farmer Ames was very happy.
Of course, Farmer Ames had over 20,000 excess OFCs to sells, so what with all the other cows coming down from Alberta, he grew rich. And as he ran out of OFCs, Senator Bingaman continued to issue new carbon credits. The one that really impressed Farmer Ames was for using genetically modified corn seeds whose corn used more than normal carbon dioxide to grow.
Meanwhile in Canada, the minority government had hastily passed a cap-on-carbon-emissions bill. Because of the haste and because Canadians are nice people who never argue, each farmer had to reduce cow methane emissions to less than 0.8 of standard. To achieve this, Farmer Candu installed a carbon capture hood over the stall and fed the methane through a patented substance. To him the substance looked like groundup trees sprayed with oil. But that never really worried him, for there was so much oil in Alberta, you kind of got used to it. He continued to buy OFCs for cows sent to Montana, but fewer because he got credit for his methane capture hood. He lived comfortably and drove a Smart Car.
So they all lived happily ever after. The farmers of Carbondale county bought their children SUVs to go to university in Vancouver to study serious film making. The children of the farmers of Oil Parish rode bikes made of recycled aluminum and studied political science.
The environmentalists continued to publish badly-written articles in recycled-paper magazines about the virtues of carbon credits and vegetarianism.
And when it was reported that Castro at the age of 105 had ascended on a socialist chariot to a mansion to join Marx et al., Starbucks U.S.A. started to sell organic, fair-trade, Cuban coffee fertilized with low-carbon cow manure.
The world is a little warmer than it was in 2007 when all this began, but in the developed nations of the West, we are all a lot richer than hitherto because of the genius of the Bingaman Bill.
The End.
———————————————————————————————————————–
I am sorry if anything in this story offends you. That is not my purpose. My sole objective is to reduce this afternoon’s lunch talk to an understandable concept. For as a Canadian and as an American who thinks about global warming and the success of the economy of both countries, I hope this little story awakens both to issues that could make or break the future for my soon-to-be nine grandkids.
To be honest, I have not the faintest idea what the mining industry must do. I leave that to the second-year UBC mining engineering students who heard the talk with me. I believe that one of them will find the answer. At least that is my prayer.
What is the logic behind Farmer Ames receiving 30,000 OFCs in the first place? Is this in effect a US government subsidy?
Why does Ames get more OFC’s than his ranch currently produces? That won’t pass muster with Al Gore’s army for long. Why didn’t Candu get credits for his cows under the international treaty that gives Ames all his credits?
Montana is neither industrialized, nor mining country anymore. Now that mining is virtually dead there, good or bad, the stockyards are beginning to be targeted.
Most importantly, where is the value-added in this little story? Not to mention the additional bureaucracy required to administer and enforce this equivalent to the other product generated by OFC.