Oil superpowers and their growth towers – by Peter Tertzakian (Globe and Mail – September 17, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Bakken, Permian, or Cardium? Where is all this oil coming from? New production from brittle, oil-bearing rocks in North America – otherwise known as light, tight oil – has been impressive. Yet that’s not all. A wider glance at the world of oil reveals a lot more new barrels coming to market. Other regions are busy pumping up capacity too – for instance, the Canadian oil sands and Iraq are notable for their scale.

Process differences are also important to highlight. Pulverizing subterranean rocks with fracking equipment isn’t the only way to deliver another million barrels a day. Mining and steaming bitumen in northern Alberta works too. Drilling good ol’ vertical wells into virgin Middle Eastern geology is proving to add a lot of capacity in Iraq.

Our feature chart this week shows towers of growth for 11 regions in three countries: the United States, Canada and Iraq. Each tower represents average oil output spanning 2005 to 2013 (the current year is estimated). The number at the top of each tower diarizes the change in output over the nine-year period.

Across all its oil fields, the United States is currently pumping a total 7.2 million barrels a day (MMB/d), up a remarkable 2.0 in less than a decade.

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Fort McKay oil sands ambassador at odds with industry – by Claudia Cattaneo (National Post – September 14, 2013)

The National Post is Canada’s second largest national paper.

With the Fort McKay band seeking leave to appeal the recent Alberta Energy Regulator’s decision to approve the 250,000 barrels-a-day Dover oil sands project, uncertainty is far from over for Athabasca Oil Corp. and the project’s majority Chinese partner, PetroChina.

Similar uncertainty is poised to spread to other oil sands players in the area, who have been summoned by the wealthy band to a meeting on Thursday to discuss the Moose Lake reserve and why it needs a hefty buffer zone from development.

The upshot: The dispute between oil sands neighbours has the makings of a legal runaway train, a public relations mess and an impediment to good relations between the industry and the most productive and so-far supportive aboriginal community in the region.

As Bill Gallagher, a lawyer, aboriginal expert and author put it: “The oil sands, which undeservedly is continuing to garner an international black eye, now has soured the person who could be the most helpful in putting a happy face on it,” he warned. “[Fort McKay chief] Jim Boucher could have been the most important ambassador the oil sands ever had, and instead he’s going to go to the wall on an issue of vital importance” to his band. Mr. Gallagher believes the Fort McKay’s legal case is strong, and if successful could lead to years of litigation as other First Nations start demanding buffer zones between reserves and projects.

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At Encana, days of living large are finally over – by Claudia Cattaneo (National Post – September 13, 2013)

The National Post is Canada’s second largest national paper.

Encana Corp.’s new CEO is promising bold action to revive what was once Canada’s largest energy producer. Doug Suttles said Thursday the company will be involved in fewer plays, bring in a new corporate structure and realign employee incentives to better match today’s low natural gas prices.

The changes signal a new era of restraint in a company whose past was all about living large, growing production and dominating its business, but that seems to be finally responding to what market is looking for from the country’s largest natural gas producer.

The stock bounced nearly 4% to close at $18.61 in Toronto, on anticipation of major asset sales, after falling 20% in the past year.

“We need to change in a big way, in a bold way,” the former BP PLC executive from Texas said at a New York conference. “Encana will be back to winning. We will get back to the Encana we have known for many years.”

Suttles, who joined Encana in June, promised to announce the strategy’s details in the coming weeks so they can be incorporated in next year’s budget.

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TransCanada touts national benefits of Energy East plan – by Shawn McCarthy (Globe and Mail – September 11, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

OTTAWA — TransCanada Corp. is promoting its Energy East pipeline project to Canadians with a promise that it will create thousands of jobs across the country and pour billions of dollars into government coffers.

On Tuesday, the company released a Deloitte & Touche LLP study on the economic impact of the $12-billion pipeline, which would bring about 1.1 million barrels a day of Western Canadian crude to refineries and export terminals in Quebec and New Brunswick. As part of its effort to woo those in the pipeline’s path, the TransCanada board met Tuesday in Fredericton – the day after an evening session with New Brunswick Premier David Alward.

TransCanada chief executive Russ Girling said the economic benefits will accrue right across the country, though the maximum job impact will occur during the three-year construction phase from 2016 to 2018, when it hits 7,729 full-time-equivalent positions each year.

“The project will help support thousands of jobs and millions of dollars in government tax revenues over the short- and long-term life of the project,” Mr. Girling said on a conference call.

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Keystone pipeline in the sand – by Peter Foster (National Post – September 11, 2013)

The National Post is Canada’s second largest national paper.

Keystone has become the most contentious issue in Canada-U.S. trade relations since the Trudeau government’s National Energy Program in 1980

There have been reports this past week of a mysterious “letter” from Prime Minister Stephen Harper to President Obama offering cooperation on climate policy. This in pursuit of the president’s approval of the Keystone XL pipeline, which sits in limbo five years after its sponsor, TransCanada Corp., first applied to build it.

The notion that Mr. Harper might seek to promote Canadian interests via diplomatic channels is hardly surprising, but the media has been trying to build the missive’s significance. For example, was Energy Minister Joe Oliver, who visited Washington on Monday, “in the loop?” Mr. Oliver was non-committal about the letter during and after his visit to meet with his counterpart, U.S. Energy Secretary Ernest Moniz, but that is hardly surprising.

Keystone has become the most contentious issue in U.S.-Canada trade relations since the 1980 National Energy Program. Then, Pierre Trudeau’s Liberals fell prey to destructive economic nationalism.

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Canadian producers can meet U.S. oil demand even without Keystone, executive says – by Yadullah Hussain (National Post – September 11, 2013)

The National Post is Canada’s second largest national paper.

TORONTO – Calling Canadian heavy oil logistical challenges “overblown,” a senior oil sands industry executive says other pipelines and rail projects are available to meet rising demand from Alberta producers who until recently have been counting largely on the controversial Keystone XL pipeline to move their product to the United States.

“Misconceptions are common,” Doug Proll, executive vice-president with Canadian Natural Resources Ltd. said Tuesday. “There is ability to meet the supply even without Keystone XL. For the next little while, market access should not be constrained as result of other options.”

Enbridge Inc.’s debottlenecking of the Mainline pipeline will facilitate 400,000 barrels per day to the United States, while TransCanada Corp.’s west-to-east pipeline and the southern leg of the Keystone XL, along with a number of other proposals, expansions and added rail capacity mean Canadian producers have a number of outlets to get to market.

CNRL is planning to spend $2-billon to $2.5-billion annually over the next three years to take production from its Horizon Oil Sands development to 250,000 bpd from its current level of about 100,000 bpd.

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Neil Young Talks Oilsands, Compares Fort McMurray To Hiroshima – by Jason MacNeil (The Huffington Post Canada – September 10, 2013)

 

http://www.huffingtonpost.ca/

His guitarist in Crazy Horse might be dealing with a fractured hand, but Neil Young threw some verbal punches this week when he compared the oilsands in Fort McMurray, Alta. to Hiroshima, the site of the first atomic bomb drop in August 1945.

The Globe and Mail today reported Young was in Washington, D.C. yesterday when he told those attending an event for the National Farmers Union about oilsands development and its environmental impact.

“The fact is, Fort McMurray looks like Hiroshima,” he said, as shown in a YouTube clip. “Fort McMurray is a wasteland. The Indians up there and the native peoples are dying. The fuels all over — the fumes everywhere — you can smell it when you get to town. The closest place to Fort McMurray that is doing the tarsands work is 25 to 30 miles out of town and you can taste it when you get to Fort McMurray. People are sick. People are dying of cancer because of this. All the First Nations people up there are threatened by this.”

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Keystone XL ball is now back in Obama’s court – by Claudia Cattaneo (National Post – September 10, 2013)

The National Post is Canada’s second largest national paper.

In another visit to the United States to promote the proposed Keystone XL oil sands pipeline, Natural Resources Minister Joe Oliver met Monday with his United States counterpart, Energy Secretary Ernest Moniz, to propose a joint approach to greenhouse gas emissions and other technology initiatives in energy.

While light on specifics and heavy on niceties, it’s increasingly obvious something had to be done by Ottawa to rescue the Alberta-to-Texas pipeline from sliding yet again into President Obama’s too-hot-to-handle purgatory. The two countries remain far apart on the controversial project and a decision on a permit is now expected next spring.

On the one hand, it appears the White House is pushing Canada to adopt more stringent GHG targets for oil sands companies than Canada is prepared to do, the price for approving KXL so environmental organizations get their pound of flesh.

On the other, Canada believes it is finalizing GHG reduction targets for the oil and gas sector that enable it to meet its international climate-change commitments, plans to announce them by the end of the year, and wants extra efforts to come under a joint Canada/U.S. approach to avoid putting its oil and gas industry at a competitive disadvantage.

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Obama blaming Canada for Keystone delay is just more fence-sitting – by Claudia Cattaneo (National Post – September 6, 2013)

The National Post is Canada’s second largest national paper.

As the latest, realistic decision point on whether the Keystone XL pipeline gets a United States permit slips toward the spring of 2014, the new excuse bandied about is that the delay is Canada’s fault because it has failed to deliver greenhouse gas regulations for the oil and gas industry.

It’s an excuse that needs to be exposed for what it is: a continuation of the U.S. administration’s leadership by avoidance on a grossly mishandled project.

Indications are that Canada will be well on its way to implementing regulations for oil producers by next spring that will be more stringent than anything Obama has been able to deliver in his own country.

The regulations will put Canada’s oil and gas industry at a disadvantage versus U.S. oil producers and all other suppliers of oil to the United States, yet the odds are Obama will still sit on the fence because he will by then be facing mid-term elections in November 2014, when he will need the support of his insatiable green base.

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So-called ‘Dutch Disease’ has actually left Canada’s economy much stronger, economist says – by Jen Gerson (National Post – September 6, 2013)

The National Post is Canada’s second largest national paper.

A Quebec-based economist is trying to squelch the “Dutch Disease” theory long touted by New Democratic Party leader Thomas Mulcair, claiming the phenomenon has actually left Canada’s economy much stronger.

“The increase in commodity prices is a good news story for Canada. It means there is increased world demand for something Canada produces,” said Stephen Gordon, author of a report released Thursday by the University of Calgary School of Public Policy.

“What happened is that we shifted workers away from a declining sector and into an expanding sector. That’s exactly what you’d expect, and it’s what you’d want because it results in higher wages.”

The economic premise of Dutch Disease has long pinned the decline of central Canada’s manufacturing sector to growing oil production in Alberta.

The term is an economic shorthand that describes the hollowing out of a country’s manufacturing sector after the discovery of natural resources; the subsequent increase in the value of currency makes exporting manufactured goods uncompetitive.

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Gas export control half-baked idea – by William Watson (National Post – September 5, 2013)

The National Post is Canada’s second largest national paper.

A report in this paper Wednesday told of a new lobbying effort by the country’s big energy users to get the National Energy Board to pull back on Canada’s exports of liquefied natural gas. They evidently don’t want to pay the world price for energy they’d prefer to have privileged access to.

That’s great news for this country’s newspaper industry. Having vanquished Verizon, our Big Three telecom companies have no further need of two-page ads for their over-the-top nationalist crusade and can instead go back to the business of encrypting their various service plans in ways not even consumers with super-computers can decipher. If big natural gas users start an anti-export campaign of the sort recently organized by Dow Chemicals in the U.S., that can only help your revenue-challenged factitioners.

In its story on Dow’s campaign, The New York Times summarizes the company’s position as “the government needs to plan an energy policy that carefully balances the interests of the oil and gas companies that want to freely export natural gas with those of industries like Dow Chemical that fear that an export boom could outpace domestic gas supplies and bring higher energy prices.” Lord help us when governments get into “careful balancing.”

Anyone who considers them capable of such a thing just hasn’t been paying attention. It’s no credit to this nation’s economists that a “Keep our gas in Canada” campaign will find lots of sympathizers, even beyond gas-users who profit personally when domestic gas prices are held below the world price.

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Israel’s natural gas reserves reshape Middle East dynamics – by Stephen Starr (National Post – August 30, 2013)

The National Post is Canada’s second largest national paper.

As the prospects of another war in the Middle East increase, one country is looking to cut its energy ties with the region and manage its own needs, thanks to newly discovered gas riches.

Indeed, the recent discovery that Israel’s offshore natural gas reserves are far larger than previously thought has the potential to revolutionize the country’s economic fortunes. The find could save Israel tens of billions of dollars in energy imports from Egypt and other places, and see it positioned as a new natural gas source for Europe, one of the world’s largest LNG markets.

According to the U.S. Geological Survey, recoverable natural gas in the Levant Basin located in Israeli and Cypriot waters of the eastern Mediterranean Sea, amounts to a massive 18.9 trillion cubic feet. One industry CEO called the finding “a once-in-a-decade opportunity.”

The Leviathan Field, 130 kilometres off the Israeli coast and under 5,000 feet of water, is a potential game changer not just for the country’s economy – the third-largest in the Middle East – but in shaping broader regional dynamics.

Houston-based Noble Energy along with Israeli conglomerate Delek Group and subsidiary Avner Oil Exploration are behind the exploitation of the field expected to produce initial volumes of 750 million cubic feet per day when it opens in 2016.

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How to price a barrel of water in the oil sands – by Claudia Cattaneo (National Post – August 29, 2013)

The National Post is Canada’s second largest national paper.

We all know the value of a barrel of oil, but how do you put a price on a barrel of water? It’s a growing and challenging debate in the oil sands, where oil, which sells at a readily available market price, and water, which is priceless but restricted, are so intertwined one cannot be produced without somehow shortchanging the other.

Indeed, oil sands projects are also giant water handling factories, with oil sands mines using on average of about 3.1 barrels of fresh water for every barrel of oil they produce, and in-situ operations using about 0.4 barrels of fresh water for every oil barrel they produce.

Much like the larger debate over the oil sands’ greenhouse emissions, views on the right oil and water mix are polarized: for some, any water used to produce oil comes at an unacceptable cost to an ecosystem that needs it; for others, water use is minor relative to its abundance and justified by the value it creates through oil.

Environmental organizations like the Pembina Institute, for one, are indignant over withdrawals of any amounts of water from rivers like the Athabasca that run through Alberta’s oil sands region, claim development contaminates water bodies nearby and that monitoring is inadequate.

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New energy infrastructure ‘strategic imperative’ for Canada – by Carrie Tait (Globe and Mail -August 28, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

CALGARY — Oil and gas companies need to diversify their export markets because new discoveries south of the border will temper demand for Canadian energy, say the country’s natural resources ministers.

Joe Oliver, Canada’s minister of natural resources, met with the majority of Canada’s energy and mining ministers Tuesday in Yellowknife at their annual meeting. The group emphasized the importance of opening export markets in the Asia-Pacific region, which requires new infrastructure.

Energy proponents have long argued new pipelines must reach tidewater so Canada can charge more for its products because it would bring access to more global customers. Now the industry and politicians are increasingly calculating the impact of surging oil output in the United States, as production soars in places like North Dakota and Texas.

The shift in focus shows how Canada’s energy ministers are trying to strengthen the argument for export pipelines. Mr. Oliver noted Canadian energy exports to the United States will continue to grow, but at a slower pace.

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As Syria fears send oil higher, Canada looks like bastion of safety – by Yadullah Hussain (National Post – August 28, 2013)

The National Post is Canada’s second largest national paper.

As war clouds loom over Syria, oil soared to a six-month high and oil traders fretted over more trouble in the Middle East.

Western countries appear to be preparing a military response to Bashar Al Assad’s chemical attack against the opposition, but the defiant Syrian government has chillingly responded that Damascus’ defense will ‘surprise’ the world — sending most financial markets tumbling and bolstering safe havens like gold.

Add Russia, Iran, Israel and Lebanon’s Hezbollah into the mix, and fears of a wider Middle East conflict engulfing more stable Gulf oil exporters have escalated.

Brent ended the day 3% higher, to $114.08 after rising to $114.15 — a six-month high. West Texas Intermediate also hit a five-week high to $109.32, retracing its July 19 price, and its highest level since March 2012.

“Assuming that the Western powers want to protect their dwindling credibility and influence in the region, military reprisals against the Syrian regime appear likely,” said Pierre Fournier, geopolitical analyst at National Bank Financial Inc. in a note to clients, adding that the strikes may have a limited mandate to punish Syria rather than topple the Assad regime.

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