Category Archives: Managing Risks

The Hydrological Spread – Market incentives to solve our Water Use Dilemma?

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the water cycle

the water cycle

The Oil Sands Float Rights strategy … proposes to seed a market incentive to curtail waste during Oil Sands extraction.  Could we apply the strategy to protect Aquifers?

Successful water management and conservation is a key factor in any plan to improve where we live.

Could we apply the concept of “anticipated future value” of public resources to minimize aquifer loss?

Could we combine it with the idea that the hydrological water cycle has a leverageable financial spread–the Hydrological Spread–to resolve the wicked problem of our water use dilemma; …our “water tragedy of the commons“?

Oil Sands Float Rights blog post here, and PDF file here.

Water Float Rights PDF file here.

 

Dave Huer

Oil Sands Float Rights

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Athabasca_Oil_Sands_map

Oil Sands in Canada

The idea? A market incentive to curtail waste during Oil Sands extraction

While searching for ways to help our veterans get honourable Post Traumatic Stress coverage care, I noticed an opportunity for Western Canada to leverage the Oil Sands in a new way: Creating a second market revenue stream to avoid the boom-and-bust cycle.

 

“Float Rights” pdf – link here.

The idea is that Alberta licenses the right to pre-extract the anticipated intangible value of the physical resource; extracting the rolling anticipated value of Oil Sands as a spot market, in sequenced pre-extraction before “Liquid Right” licensees remove the physical resource.

 

The effects are interesting:

New Royalties from the one resource

  • Float Right Licensee does not necessarily have to be Liquid Right Licensee
  • Leaseable by Province to collateralize other risks
  • Leveraging underperforming Liquid Rights assets whenever demand slows
  • No need to depend on mining, export or hold-ups in pipeline capacity
  • Extraction-less industry when the market fluctuates

A Market Incentive for Zero Waste

  • Float Rights revenues leveraged
  • “100% Capture” Target (100% of extractable liquid and tailings) becomes value-added
  • “Zero Waste” Target (100% pollution prevention) becomes value-added

A New Energy Spot Market

  • Trading on global oil, insurance, and finance exchanges
  • Float Right leverages 10% of resource that is extractable using current technology
  • As collateral, could Float Right leverage the other 90% until it is extractable?
  • Extraction owners could profitably backstop insurance costs and rent risk coverage

https://orcid.org/my-orcid?orcid=0009-0007-5071-7789

David Huer