Quotulatiousness

December 5, 2018

The Alberta government must be getting a heck of a deal on those tank cars and locomotives

Filed under: Business, Cancon, Government, Railways — Tags: , — Nicholas @ 05:00

Alberta Premier Rachel Notley grabbed headlines recently with her pledge to buy additional railway locomotives and tank cars to help move some of Alberta’s excess crude oil to market. Brian Zinchuk says those numbers don’t make sense, given the amount of money the province is to pay:

On Nov. 28, Alberta Premier Rachel Notley announced her province is going to be acquiring unit trains to get her province’s landlocked oil moving. Not only has she committed money to Trans Mountain Expansion, but now rail, too. This premier is serious.

However, there’s a big problem with her numbers. She spoke of $350 million to purchase up to 7,000 rail cars and 80 locomotives. That $350 million doesn’t come even close. It might be enough to lease those units for a few years. Her stated intention was this was a short-term solution, and the life expectancy of a locomotive and tanker cars is easily into three or four decades.

However, she said, “Alberta will buy rail cars ourselves in our fight to get top dollar for the resources that belong to every Albertan.”

I never saw “lease” mentioned once.

Notley spoke of 120,000 barrels per day (bpd) of capacity. Her initial statements weren’t very clear, as someone with little knowledge of the business might think she just meant two sets of 100 or 120 car trains. That wasn’t at all what she meant.

She meant enough trains to keep 120,000 barrels per day in motion, each and every day. That’s a lot of rail cars, and a lot of locomotives.

[…]

There’s a problem with her numbers, however. The current standard locomotives used by Canadian railways cost US$3 million each as of December 2017, when CN bought 200 locomotives for US$600 million. That’s $3.859 million Canadian, each, at the exchange rate at that time. Notley spoke of 80 locomotives – that’s $308.7 million. That only leaves $41.3 million for 7,000 rail cars, or $5,897 each. That’s obviously way too low. So either there’s some leasing considerations involved here, perhaps on the locomotives, or the $350 million is way too low. Remember they were asking the feds for half? Even if the feds coughed up an additional $350 million, that still leaves only $55,900 per car.

My math shows, on the low end, a price tag of $945 million for new rail cars alone. Coupled with ~$309 million for locomotives, and you come in at $1.254 billion. At the high end, it would be $1.484 billion for cars, totalling $1.793 billion including locomotives. Either way, it’s a heck of a lot more than the $350 million announced. Unless she’s leasing, Notley’s $350 million is only one-third to one-fifth of the money required to buy all these new trains, and no consideration has been given to staffing or operational costs.

H/T to Small Dead Animals for the link.

The Spanish Flu I THE GREAT WAR Epilogue 2

Filed under: Europe, Health, History, Military, WW1 — Tags: , , , — Nicholas @ 04:00

The Great War
Published on 3 Dec 2018

The Spanish flu has quickly spread all over the world since the spring of 1918 and will become the disease that killed more people in a shorter period of time than any other disease in human history.

The true lesson to be learned from GM Canada’s economic plight

Filed under: Business, Cancon, Economics, Government — Tags: , , , , , — Nicholas @ 03:00

Andrew Coyne tries to encapsulate the key economic concept that should be taken away from the GM Canada collapse:

Think of it this way. Governments have proven more than ready in the past to pay whatever the auto companies demanded to hold onto threatened jobs. If there were any chance whatsoever of buying the plant’s reprieve, no matter how foolishly or expensively, can there be any doubt they would have? That they did not — apparently GM waved them off — tells you how hopeless the plant’s prospects really are.

Many have recalled that the closure of the Oshawa plant comes less than a decade after the Canadian operations of GM and Chrysler were bailed out with $14 billion in federal and provincial money, $4 billion of which was never recovered. The lesson some have drawn from this is that GM is a devious ingrate, which may be fair comment but is not especially helpful. The real lesson is this: when you try to buy jobs with public money, the jobs last only as long as the money does. In the end, all you will have done is to lure people into taking or staying in jobs that were long since doomed.

Like most of economics, this is wholly alien to popular wisdom. There is a rich vein of commentary to the effect that the laws of economics are effectively optional, something we can resist by force of will: we can either bend to “market forces,” or we can “stand up” to them in some fashion. But in fact the latter option is entirely imaginary, at least in the long run. You can perhaps lure plants and jobs your way at the outset with subsidies and other goodies. But the only assurance they will stay is if it makes economic sense to the company to keep them there.

If not, then all you have won with your subsidy is the right to go on providing more subsidy, which is a fairly accurate description of Canadian automobile policy in recent decades. The workers whose jobs successive governments boasted of creating or saving were effectively hostages; as in all hostage-takings, the payment of ransom only stimulates further demands for ransom. Until one day when the money runs out, and the workers whose jobs were supposedly saved find themselves abandoned. This may be many things, but one thing it is not is compassionate.

Yes, Minister – The Six Diplomatic Options

Filed under: Britain, Government, Humour — Tags: , — Nicholas @ 02:00

HenryvKeiper
Published on 28 May 2009

My favorite scene from one of my favorite TV shows of all time.

QotD: Patriotism

Filed under: Europe, France, History, Quotations, USA — Tags: , , , — Nicholas @ 01:00

Once upon a time, patriotism was a fairly simple thing. It was tribal identification writ large, an emotional attachment to a people and their land. In most of the world, where patriotism exists at all it’s still like this — tribal patriotism, blood-and-soil emotionalism.

A different kind of patriotism emerged from the American and French revolutions. While American patriotism sometimes taps into tribal emotion, it is not fundamentally of that kind. Far more American is the sentiment Benjamin Franklin expressed: “Where liberty dwells, there is my country”

Thus, most Americans love their country in a more conditional way — not as a thing in itself, but insofar as it embodies core ideas about liberty. It is in the same spirit that our Presidents and miltary officers and naturalizing citizens swear to defend, not the land or people of the United States but its Constitution — a political compact. This is adaptive in many ways; one of them is that tribal patriotism is difficult to nourish in a nation of immigrants.

In France, the ideology of the Revolution displaced tribal patriotism, just as it did in the U.S. But the French, roiled by political instability and war, have never settled on a political unifying idea or constitutional touchstone. Instead, French patriotism expresses a loyalty to French language and culture and history. It replaces tribalism not with idealism but with culturism.

America and France are a marked contrast with, say, Denmark. I chose Denmark at random from the class of civilized countries in which patriotism is still fundamentally tribal. You don’t become a Danish patriot by revering the constitution or culture of Denmark; you become one by being a Dane. Which partly means being a tribesman, connected to the Danish gene pool, and partly means identifying with stories of past Danish heroism.

It hasn’t been easy to find a fire-breathing Danish patriot for at least fifty years, though. One of the effects of the terrible convulsions of the 20th century has been to discredit tribal patriotism. Many people in Europe, not unreasonably, associate it with racism and Naziism and are suspicious of anything that smacks of immoderate patriotism.

Eric S. Raymond, “Patriotism And Its Pathologies”, Armed and Dangerous, 2008-07-09.

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