Archive | Oil and Gas Sector-Politics and Image

Why India could be the oil market’s next big driver of consumption – by Joe Chidley (Financial Post – May 30, 2016)

Oil’s rise to US$50 a barrel earlier this month proved to be short-lived, but at least it suggested that oil prices had established a new and higher range. We might not be looking at a return to US$100-a-barrel WTI anytime soon, but prices seem to have stabilized somewhat, remaining north of US$40 for several weeks now.

Who knows how long this will last, of course. Support for higher prices has come at least in part from supply disruptions — in Nigeria and Libya, as well as Alberta, thanks to the Fort McMurray fires. Recent U.S. Energy Information Administration data suggest that stockpiles of crude are coming down.

Yet things like supply disruptions are difficult to predict, and even harder to count on when it comes to having a lasting impact on the supply glut. The better news might be that the other side of the supply-demand imbalance is starting to do what it’s supposed to do: There are signs that global demand is picking up. Continue Reading →

Will Electric Cars Destabilize the World? – by David Koranyi (The National Interest – May 29, 2016)

After a deep dive, oil prices are slowly crawling back up on the back of resurging demand from China and India in particular, as well as looming supply shortages from Nigeria to Venezuela. Yet oil markets are in for a rough ride, as uncertainties mount regarding oil’s continued predominance as transportation fuel in the coming decades.

An accelerated adoption of electric vehicles would hasten the end of the oil era, and could cause significant geopolitical turbulence as producer countries heavily reliant on oil revenues will struggle to diversify their economies. We are already witnessing the destabilizing effects of low oil prices in the Middle East, while Russia’s aggressive behavior can also be partially explained by its domestic economic woes.

At first glance, oil producers should not be too nervous. The International Energy Agency predicts that before the end of this decade, we should expect oil prices to rebound in the 80-plus-dollar range, as demand will continue to rise and new sources of supply will need to be brought to production to replace depleting ones. Continue Reading →

A 7,000-kilometre northern corridor in search of shared vision – by Claude Montmarquette and Andrei Sulzenko (Globe and Mail – May 27, 2016)

Canada’s history is full of examples of large-scale transportation infrastructure projects that have motivated growth and helped define a shared vision for the country. The Canadian Pacific Railway, the Trans-Canada Highway and the St. Lawrence Seaway are prime examples.

But the Canada of 2016 does not have such grand plans for infrastructure that may be vital to supporting economic and social development in this country. Aside from some private-sector proposals (mainly pipelines), there are precious few examples of transportation infrastructure developments outside our major urban centres.

The best way to address this lack of vision may well be through a bold approach being examined by researchers at the School of Public Policy at the University of Calgary and CIRANO, a Quebec-based economic research organization. We have just released a study on the potential for a major transportation right-of-way through Canada’s North and near North, connecting resource-rich areas with tidewater access on all three coasts. Continue Reading →

Proposed 7,000-kilometre resource corridor would improve life in Canada’s North, researchers say – by Eric Atkins (Globe and Mail – May 27, 2016)

An ambitious proposal to build a 7,000-kilometre trade and infrastructure corridor in Canada’s North has taken a key step forward.

The Northern Corridor would link Canada’s people, goods and natural resources with overseas and southern markets, and boost sovereignty and development in vast swaths of the country that are economically isolated, concludes the first feasibility study of the concept. The idea was launched a year ago by the University of Calgary’s School of Public Policy and Montreal’s Centre for Interuniversity Research and Analysis of Organizations.

Pipelines, railways, roads, electricity and transmission lines would share the right of way that extends from the Pacific to Atlantic oceans, the Beaufort Sea to the north, as well as Hudson Bay and the St. Lawrence Seaway, connecting to existing rails, roads, pipes and ports in the southern part of Canada. Continue Reading →

Donald Trump says he would approve Keystone XL, but with new deal and piece of the profits – by Claudia Cattaneo (Financial Post – May 27, 2016)

CALGARY — The U.S. environmental movement’s biggest win yet, the defeat of the Keystone XL pipeline, could be history if Donald Trump takes the White House in November.

The Republican presidential candidate confirmed Thursday he would approve TransCanada Corp.’s proposed oil pipeline to link Alberta’s oilsands to refineries in the U.S. Gulf, but on different terms.

“I would absolutely approve it, 100 percent, but I would want a better deal,” Trump told reporters at a press conference in Bismarck, N.D., where he was scheduled to give a speech to an oil conference on the energy policies he would pursue. “I want it built, but I want a piece of the profits,” Trump said. “That’s how we’re going to make our country rich again.” Continue Reading →

A Tale of Two Gluts: Oil and Ore Cross $50 on Opposite Paths – by Eddie Van Der Walt (Bloomberg News – May 26, 2016)

Crude oil and iron ore are two of the world’s most important industrial commodities, where supply and demand are tied to the fate of the global economy. Yet, they’re doing very different things right now.

Oil traded above $50 a barrel for the first time this year while iron, moving in the opposite direction, fell below $50 a ton on Thursday. It’s a slightly artificial comparison — there’s little physical equivalence between a barrel of oil and a ton of ore — but their differing paths tell us something about how the aftermath of the global commodities crash is playing out in different industries.

While both commodities have been plagued by overproduction, the glut looks to be ending in oil as unprofitable fields are shut and companies cut investments, according to forecasters from the International Energy Agency to Goldman Sachs Group Inc. Continue Reading →

The Sand Mines That Ruin Farmland – by Nancy C. Loeb (New York Times – May 23, 2016)

Nancy C. Loeb, the director of the Environmental Advocacy Center, is an assistant clinical professor at Northwestern University’s Pritzker School of Law.

Chicago — WHILE the shale gas industry has been depressed in recent years by low oil and gas prices, analysts are predicting that it will soon rebound. Many of the environmental hazards of the gas extraction process, called hydraulic fracturing or fracking, are by now familiar: contaminated drinking water, oil spills and methane gas leaks, exploding rail cars and earthquakes.

A less well-known effect is the destruction of large areas of Midwestern farmland resulting from one of fracking’s key ingredients: sand.

Fracking involves pumping vast quantities of water and chemicals into rock formations under high pressure, but the mix injected into wells also includes huge amounts of “frac sand.” The sand is used to keep the fissures in the rock open — acting as what drilling engineers call a “proppant” — so that the locked-in oil and gas can escape. Continue Reading →

Fort McMurray fire sweeps east through northern oilsands sites – by Marion Warnica (CBC News Edmonton – May 17, 2016)

The Fort McMurray wildfire has destroyed one of the oilsands camps north of the city and is roaring eastward toward others in its path.

The fire destroyed all 665 units at Blacksand Executive Lodge, which provided temporary housing for workers in nearby oil facilities, on Tuesday morning. By Tuesday afternoon, flames were at the edges of the Noralta Lodge camp, just a few kilometres east of Blacksand.

CBC News also obtained photos of flames at the edges of an AFD Petroleum facility, about five kilometres northwest of Noralta. Officials said the fire was expected to move east on Tuesday and would likely jump Highway 63 south of Noralta Lodge. Businesses in the area have been alerted. “We have an evacuation plan and we’re ready to use it,” said Dave Harman, a director for the Northlands Sawmill. Continue Reading →

Trudeau’s reliance on West to meet hefty greenhouse gas emission reductions could backfire – by Claudia Cattaneo (Financial Post – May 17, 2016)

Prime Minister Justin Trudeau made ambitious commitments to reduce greenhouse gas emissions in Paris last December — and now he will lean heavily on Canada’s western provinces to ensure he meets them.

That’s the unsettling conclusion of a report by the Canada West Foundation (CWF), appropriately titled “Look Out,” which urges Western provinces to “bury the hatchet” after years of bickering over pipelines and form a common front to protect their resource-based economies from Ottawa’s coming power grab.

The report by the Calgary-based think-tank, released Monday, also urges Western provinces to develop a common carbon price and design climate change policies appropriate for their economies, such as building a Western electricity grid that uses hydro produced in British Columbia and Manitoba to help Alberta and Saskatchewan get off coal and natural gas. Continue Reading →

Canada’s relationship with indigenous people should be a partnership – by John Ibbitson (Globe and Mail – May 13, 2016)

With a simple statement in New York this week about First Nations’ rights, the Trudeau government gambled that Ottawa can forge a new, productive partnership with indigenous Canadians.

The stakes are high. Failure could mean billions of dollars of economic opportunity lost and thousands of indigenous Canadians, especially First Nations living on reserves, consigned to another generation of poverty. Success requires everyone – government, business, indigenous and non-indigenous Canadians alike – to think and act differently.

“We are not in a good place now,” says Brenda Gunn, a professor of law at the University of Manitoba. “Canada’s not at peace. But recognizing rights is how we actually live together in a harmonious relationship. This is how we can reconcile.” Continue Reading →

Embracing a UN right to make things more difficult to build – by Kevin Libin (National Post – May 11, 2016)

It’s no great moral distinction to support the United Nations Declaration on the Rights of Indigenous Peoples, as the Canadian government says it will now do after years of refusing to. Brazil supports it, even as its government continues to throw tribes off their ancestral territory to make way for ethanol crops or mining projects.

Another supporter, Honduras, also makes a practice of harassing indigenous groups and driving them off their land. It’s also now accused of arranging the recent assassination of two indigenous activists who were leading the fight against the government-backed Agua Zarca hydroelectric project.

The dam was going ahead despite the fact that local tribes hadn’t consented to it, which meant it automatically contravened the UN declaration itself. That led to protests and blockades. Violence followed. Continue Reading →

Oil companies aim for quick restart after Fort McMurray fire – by Jeff Lewis (Globe and Mail – May 11, 2016)

CALGARY — Alberta’s oil-sands producers are aiming for a speedy ramp-up of lost production north of fire-ravaged Fort McMurray, easing market fears that emergency shutdowns of more than one million barrels a day could extend indefinitely.

Some facilities have already begun pumping crude at reduced rates, and others could start production within 24 to 48 hours of a decision to resume operations, Suncor Energy Inc. chief executive officer Steve Williams said after meeting with Alberta Premier Rachel Notley on Tuesday.

“Some will be more difficult and could be a week or two,” Mr. Williams told reporters in Edmonton, speaking on behalf of the industry. “The most difficult will be the ones we haven’t been able to get into to see yet, which are down south of Fort McMurray, where the fire actually went across the plant.” Those include Nexen Energy ULC’s Long Lake operation and Athabasca Oil Corp.’s Hangingstone plant, officials said. Continue Reading →

No end in sight to oil sands shutdowns – by Shawn McCarthy and Jeffrey Jones (Globe and Mail – May 9, 2016)

OTTAWA and CALGARY — Alberta’s oil sands have been spared a direct hit from the devastating wildfire that forced the shutdown of more than one million barrels a day of production, but it remains unclear when companies can restart operations.

After visiting Fort McMurray on Monday, Premier Rachel Notley will meet the next day with oil company executives to gauge the impact on the province’s biggest industry and discuss plans for getting it back on line.

“Each of these operations and these companies are very sophisticated in terms of the work and capacity to keep themselves safe and ensure their work starts up again in a safe way,” Ms. Notley said on Sunday during a news conference in Edmonton. “But we’ll see if there is anything the province can offer to ensure the safe resumption of economic activity in the area.” Continue Reading →

Peter Munk to donate $1-million to Fort McMurray relief effort – by Kathryn Blaze Baum and Daniel LeBlanc (Globe and Mail – May 6, 2016)

TORONTO and OTTAWA — Mining magnate Peter Munk is donating $1-million to the Canadian Red Cross to help the thousands of people who have been displaced by the wildfires in the Fort McMurray area – a crisis that the philanthropist said reminds him of his own past as a refugee and marks an opportunity for Canadians to unite.

The Peter and Melanie Munk Charitable Foundation will on Friday announce the pledge, which will build on the roughly $11-million in donations that have flowed to the Red Cross fund dedicated to supporting those affected by the fire. The federal government announced Thursday that it will match all charitable donations to the organization, including those that had already been made.

Jean-Philippe Tizi, vice-president of emergency management at the Red Cross, said the money will be used to meet the immediate physical and psychological needs of affected citizens. But he added that the donations will also be used to help people rebuild their lives. “It’s going to take four or five years, but we’ll be there as long as it takes,” he said.

In an interview with The Globe and Mail, Mr. Munk said the footage of residents fleeing a burning city conjured thoughts of his own parents escaping a besieged Budapest during the Second World War. Continue Reading →

Fort McMurray fires shut down even more oilsands facilities, knock one million – by Claudia Cattaneo and Geoffrey Morgan (Financial Post – May 6, 2016)

CALGARY — The shut down of energy facilities accelerated Thursday, taking off line about one million barrels — close to 40 per cent — of Alberta’s daily oilsands production, as a wildfire that started near Fort McMurray spread south to new producing areas. Meanwhile, oil companies poured their resources into the firefighting effort — from sheltering evacuees to helping with medical emergencies.

Overnight Wednesday, the raging fire forced the evacuation of smaller communities south of Fort McMurray, where many evacuees fleeing the flames this week had taken shelter. They joined residents of Fort McMurray, who were ordered to leave their homes earlier in the week.

“Based on press releases and our discussions with producers, the fires have impacted oilsands production by an estimated 0.9 to 1 million b/d — disproportionately weighted towards synthetic crude oil,” Greg Pardy, co-head of global energy research at RBC Dominion Securities Inc., said in a report. Continue Reading →