Back in business school in the late 1970s, I took a business policy course where we talked about the Boston Consulting Group's (BCG) "Growth-Share" model, developed to explain company strategy on the back of a napkin. This model is still taught in business schools today. The crux of it is you need to understand which of these four categories of businesses you have: dog, star, question mark or cash cow. If you don't categorize your business correctly, you will miss out on opportunities or throw money away.

It's a simple model but as the statistician George Box once said, "All models are wrong, some are useful." This one is useful, that's why it is still taught all these years later. Let's look at our government’s oilsands policies through that model's lens and see how we're throwing money away.

For much of the 1980s and 1990s, the oilsands were a question mark. They had low market share in the high-growth oil market of the US Midwest. Investments were made at a fairly slow strategic pace, like Imperial Oil's phased Cold Lake project, now one of the longest running oilsands projects. During that time, large volumes of offshore crude came by ship to the US Gulf Coast and flowed by pipeline all the way up to Chicago area refineries.

Somewhere nearer the 2000s, US Midwest refiners decided they wanted more oilsands crude. It was cheap, the offshore supply was more expensive and the........

© National Observer