Category Archives: economic impact
Province responds to federal report on modernization of the National Energy Board
Published on: June 13, 2017 | Last Updated: June 13, 2017 11:46 AM CST
Energy Minister Dustin Duncan TROY FLEECE / REGINA LEADER-POST
In response to a federal report on modernizing the National Energy Board (NEB), the provincial government suggests a Saskatchewan location for a new board of governors.
Late last year, federal Minister of Natural Resources Jim Carr established an expert panel to review the structure, role and mandate of the NEB. Following widespread consultations, it submitted its final report, Forward, Together: Enabling Canada’s Clean, Safe, and Secure Energy Future, in May 2017.
During the review, the Saskatchewan government shared three main interests with the panel — to gain greater access to tidewater for Canadian-produced crude oil, to prioritize moving toward pan-Canadian crude oil self-sufficiency, and to repair the global image of Canadian crude oil through promotion of the facts at home and abroad.
“Our government welcomes changes that will result in the approval of sound energy projects,” said Dustin Duncan, provincial energy and resources minister, in a news release issued Tuesday. “But those projects must be built in a timely manner for the benefit of all Canadians, including those who live and work in Saskatchewan.”
The provincial government maintains the NEB needs to separate broad policy concerns from the technical review process, while avoiding lengthy approval timelines for project proponents. One of the panel’s specific recommendations is to abolish the NEB and establish two separate bodies: the Canadian Energy Transmission Commission (CETC), to perform the technical review of pipeline projects within the federal jurisdiction; and the Canadian Energy Information Agency (CEIA), to provide data, information and analysis to both decision makers and the public.
The panel also recommends that the CETC be comprised of an independent board of governors located in Ottawa and hearing commissioners located anywhere in Canada.
“Our government supports the creation of two separate bodies, but we strongly disagree with the panel’s recommendation to situate a potential board of governors in Ottawa,” Duncan said.
“Saskatoon is the ideal location. Most major oil and gas pipelines pass through Saskatchewan and many companies have a major presence in our province, although none have headquarters in Saskatoon,” he added in the release. He suggested a Saskatoon location would allow close proximity to the energy expertise in this province and Alberta and contended that “locating the board in Saskatoon guards against concerns of partisanship and influence from lobby groups.”
The provincial government has submitted multiple comments primarily focusing on the ability of the NEB, or its successor, to approve energy projects using a non-partisan, science-based approach.
Rio Tinto CEO sees Canada as less business-friendly than in past
MONTREAL — Reuters
Published Tuesday, Jun. 13, 2017 8:43AM EDT
Last updated Tuesday, Jun. 13, 2017 8:48AM EDT
The chief executive of Anglo-Australian miner Rio Tinto , which owns iron ore, diamond and aluminum mines and processing facilities in Canada, said on Tuesday that it was becoming tougher to do business in the resource-rich country.
“You know mining well and you understand its value, but to be very frank it has been getting harder to do business here over the years – from employee relations to tax to managing land access,” Rio Tinto CEO Jean-Sebastien Jacques said in prepared remarks to be delivered at the International Economic Forum of the Americas in Montreal. Jacques did not elaborate on his comments.
Calling it the “biggest mining and metals company in Canada,” Jacques said Rio Tinto had paid $3.9-billion in Canadian taxes since 2011 while investing more than $8-billion.
Rio Tinto employs around 15,000 people in Canada at more than 35 sites, including the Iron Ore Company of Canada in Quebec and Newfoundland and Labrador, the Diavik diamond mine in the Northwest Territories and an aluminum smelter in British Columbia.
A Quebec court ruled in 2014 that a $900-million lawsuit by two Canadian aboriginal communities against a subsidiary of Rio Tinto can proceed. The communities in eastern Canada have said that more than 50 years of iron ore mining in the region has disrupted their traditional way of life.
Jacques said that investment and growth drove wealth generation, which in turn created higher living standards. Fair trade was also key, he said.
“The danger in the current climate is that we focus on wealth distribution and not wealth creation. Both are absolutely critical, but without growth we will have no wealth created to fairly distribute,” he said.
Growth in oilsands projects drives need for more pipelines to 2030: CAPP
By JWN staff
June 13, 2017, 7:27 a.m.
Christina Lake. Image: Cenovus
Canada will need more pipelines built through to 2030 to transport an additional 1.3 million bbls per day of oilsands production to markets across North America and around the world, the Canadian Association of Petroleum Producers (CAPP) announced today in its 2017 Crude Oil Forecast, Markets and Transportation report.
Overall Canadian oil production will grow to 5.1 million bbls per day in 2030, up from 3.85 million bbls per day in 2016.
This 1.3 million bbl-per-day growth will be driven by a 53-per-cent increase in forecasted oilsands production of up to 3.7 million bbls per day in 2030 from 2.4 million bbls per day in 2016.
Conventional oil production is expected to remain flat, producing 884,000 bbls per day on average throughout the outlook.
New offshore production from the Hebron project in Newfoundland and Labrador, expected at the end of 2017, will contribute to a rise in eastern Canadian output to 307,000 bbls per day by 2024, but thereafter, due to natural declines, forecasted production will drop to 186,000 bbls per day by 2030.
The projected growth will exceed the existing pipeline transportation capacity, highlighting the urgent need for pipelines heading east, west, and south. Today, the pipeline network can transport four million bbls per day of oil and oil products but by 2030 it will need to move more than 5.5 million bbls per day. Increased pipeline capacity to reach more Canadians and new, growing markets around the world will ensure Canada remains globally competitive.
Capital spending in the oilsands is expected to decline for the third consecutive year to $15 billion in 2017 from $34 billion in 2014. Drilling by conventional crude oil producers is forecast to increase 70 per cent compared to 2016 levels, but will still be 40 per cent lower than in 2014.
At present, Canada’s oil industry faces a number of challenges tempering long-term growth prospects, including uncertainty related to provincial and federal climate change policies in Canada, potential protectionist policies in the U.S., and diverging regulatory efficiencies between Canada and the U.S.
Among its biggest challenges continues to be pipeline constraints, CAPP says. In the past year pipelines such as the Trans Mountain Expansion Project, Enbridge Line 3, and Keystone XL have been approved and, when built, will provide much-needed pipeline capacity to access North American and Asian markets. However, Energy East—a portal connecting Canada to Europe and beyond—is still needed to further connect Canada’s growing supplies to diverse markets.
“The urgent need for new pipelines to increase our competitiveness continues to be one of the biggest challenges facing our industry. Without access to emerging new markets we’re putting our economy at risk,” said Tim McMillan, president and CEO of CAPP.
“It is imperative we get our oil to markets in all directions to ensure fair market value for our natural resources, and provide the world with a source of safe, reliable, and secure energy from Canada.”
The 2017 Crude Oil Forecast, Markets and Transportation report can be downloaded here .
National Energy Board plans new rules for pipeline parts
CALGARY — Reuters
Published Monday, Jun. 12, 2017 4:37PM EDT
Last updated Monday, Jun. 12, 2017 4:38PM EDT
Canada’s National Energy Board (NEB) will push for a shift in standards for pipeline parts after TransCanada Corp and Enbridge Inc discovered some that they were using had been substandard, a senior regulatory official told Reuters.
The NEB’s changes must pass external standards committees that include the pipeline industry and would change the way manufacturers have been designing parts, making production more complicated, NEB chief engineer Iain Colquhoun said.
The NEB will set out precise measures after a multi-party workshop in June, Colquhoun said in an interview in late May.
“They’re big changes in philosophy because the standards that we are (currently) using evolved over many decades,”
The changes are unlikely to significantly affect pipeline operators, although parts manufacturers may see some increased costs as they try to meet new requirements.
The NEB in April warned about parts from Tecnoforge, a subsidiary of Italy’s Valvitalia SpA, and South Korea’s TK Corp, but did not name the companies using them.
An internal NEB memo seen by Reuters under access-to-information laws named TransCanada as the company using Tecnoforge fittings and noted it had two similar cases with other manufacturers.
Colquhoun, who spoke to Reuters after it had seen the memo, identified Enbridge as the company using TK Corp fittings.
TransCanada and Enbridge said in separate statements they acted immediately and proactively after discovering the issues and that all their pipes were safe. Valvitalia and TK Corp declined to comment, with the latter calling the issue “sensitive.”
Both firms discovered the substandard parts prior to putting them into operation, and the companies were not penalized.
Pipe parts are usually made stronger than needed, and the substandard ones had not caused safety issues, but the “repeated occurrence” of the matter demands broad action, according to the NEB memo, dated October 2016.
Colquhoun said the NEB would push for manufacturing processes in which strength was determined at the design level through more calculations in coming up with attributes such as thickness and diameter.
The NEB may also push for other changes to production processes, including in heat treatment, he said.
According to the NEB, TransCanada discovered a substandard Tecnoforge fitting in 2016 on a compressor station on its Nova Gas Transmission Ltd network, which spans the provinces of Alberta and British Columbia. The company has since removed at least 44 of its “several hundred” fittings from the maker installed since 2011, the NEB said.
According to the NEB, Enbridge discovered a substandard TK Corp part in 2012 on a minor pipeline system under the authority of the province of Alberta.
Enbridge said that it has replaced more than 400 fittings, although it did not name the pipeline system they had been on.
Sask. government optimistic of oil recovery as price stays low
D.C. FRASER, REGINA LEADER-POST, REGINA LEADER~POST 06.09.2017
Energy Minister Dustin Duncan
Saskatchewan Energy Minister Dustin Duncan is looking on the bright side of the province’s oil industry.
After attending the annual Saskatchewan Oil & Gas Show in Weyburn this week, Duncan said exhibitors and people within the oil industry are in a more positive mood than in the past two years.
“Just by and large, the amount of drilling that’s going on around here in the last couple of months is a pretty positive sign,” he said.
In 2007, there were 3,453 oil and gas wells drilled in Saskatchewan. In 2016, with natural resource prices dropping, there were only 1,664, according to the Ministry of Economy.
Duncan says drilling projections for 2017 show the numbers are going to be much better than last year.
The number of wells drilled in Saskatchewan in the first three months of 2017 is 856, compared to 399 wells drilled during the same period in 2016.
“I think cautious optimism would certainly be a good way to describe the mood around the show,” said Duncan.
The minister says he is more optimistic than cautious, even though the price of oil has not yet reached the level the province predicted when the budget was released March 22.
At that time, the province projected that over the 2017-2018 fiscal year, the average U.S. price per barrel of oil would be $56.25. The closest oil has gotten to that was in April, when the price hit $53.38. Since the budget was released, the average cost has been $49.37.
A barrel of oil hasn’t risen above $55 since June 2015.
Still, Duncan is remaining positive.
“I’m hopeful that at the end of the fiscal year (March 31, 2018) we’ll be in a positive position based on, compared to even the forecast we gave at budget time,” he said.
Duncan pointed to recently released land sale numbers as one source of his optimism.
The province’s public offering for petroleum and natural gas rights raised $22.8 million on Tuesday, which is the most earned for a single public offering in almost three years, according to the province.
Duncan says land sales are a “leading indicator for the industry” and the revenue generated is a good sign companies are expanding drilling operations in the province.
He says that if land sales are up, it shows companies are busy. He added one of the current struggles of oil and gas operators in the Weyburn area is finding people to work.
Enbridge sets out oil pipeline growth plan to cover Western Canada for a decade
By The Canadian Press
June 8, 2017, 2:49 p.m
Enbridge Inc. has outlined a pipeline expansion plan it says can cover the expected oil production increase from Western Canada for the next decade.
The company’s executive vice-president of liquids pipelines says the replacement and restoration of its Line 3 pipeline, combined with upgrades and adjustments to other pipelines on its mainline system, could add about 875,000 bbls a day of capacity.
“These solutions can be staged to meet industry’s needs through to about 2028,” Guy Jarvis said Thursday at an investor day meeting in Toronto.
The capacity increases would include 375,000 bbls a day from restoring the full capacity of Line 3, plus about 500,000 bbls a day of capacity elsewhere on the mainline system that Jarvis said would require little to no regulatory permitting.
Jarvis said that shippers want Enbridge to continue with plans to expand the mainline system that runs from near Edmonton to Superior, Wis., due to uncertainty about other projects.
“There is still concern amongst our shippers about the viability of the competing pipelines getting approved, and if approved, getting built,”’ he said.
His comments come as the future of Kinder Morgan’s Trans Mountain project remains cloudy. The alliance between the B.C. Green and NDP parties has vowed to use all means available to stop the project despite it being fully permitted with a scheduled September construction start.
Enbridge’s growth plan is dependent on it replacing the Line 3 pipeline, which still requires regulatory approval in Minnesota where it faces a determined opposition.
The company said it could start construction on the Canadian portion of Line 3 as early as this summer and expects U.S. regulatory approvals sometime in mid-2018.
MAY JOB GROWTH
Released on June 9, 2017
There were 1,300 more jobs in Saskatchewan last month compared to May 2016, according to Statistics Canada data released today. Compared to last month, there were 2,100 more people working in the province (seasonally adjusted).
The seasonally adjusted unemployment rate in May was 6.3 per cent in Saskatchewan, the fourth lowest among the provinces. The national unemployment rate for May was 6.6 per cent.
“Our economy continues to create jobs,” Economy Minister Jeremy Harrison said. “Over the past four months we have seen positive job growth in the province. While our labour market is showing strength and resilience, other economic indicators demonstrate momentum such as wholesale trade, urban housing starts, manufacturing sales, merchandise exports and retail sales. A recent forecast by the Conference Board of Canada suggests our economy this year will have one of the highest growth rates in the country, in part due to our economy’s diversification.”
Other May 2017 highlights include:
- Employment in wholesale and retail trade up 5,500; manufacturing up 3,800; and business, building and other support services up 2,900.
- Regina’s employment was up 1,700 (+1.2 per cent), and Saskatoon’s employment was up 1,900 (+1.2 per cent) compared to last May.
- Off-reserve Aboriginal employment was up 3,200 (+7.3 per cent) for 11 consecutive months of year-over-year increases.
- Youth seasonally adjusted unemployment rate was 10.7 per cent, third lowest among the provinces and below the national rate of 12.0 per cent.
For more information, contact:
June’s Public Offering Generates Largest Revenue Since 2014
Released on June 8, 2017
Driven by strong interest in an area prospective for heavy oil northeast of Lloydminster, June’s public offering of Crown petroleum and natural gas rights raised $22.8 million dollars on Tuesday—the largest revenue for a single public offering in almost three years.
The total for the 2017 fiscal year to date is $24 million after two sales. The fiscal year’s current average price per hectare for Saskatchewan parcels is $828.81, almost double Alberta’s average of $470.71 for conventional oil and gas parcels, and comes in the wake of recent upward trends in provincial drilling activity.
“This is a significant revenue increase and the highest for any of Saskatchewan’s past public offerings since August 2014,” Energy and Resources Minister Dustin Duncan said. “Some of the most dynamic opportunities in Saskatchewan are those in our oil and gas sector, backed up by a world-class supply chain and a global reputation among the industry for low-risk investment.”
Millennium Land Ltd. bid $4,002,780 to acquire a 1,327-hectare exploration licence located southwest of Midale. The parcel is prospective for multiple targets, particularly the Bakken Formation and the Three Forks Group/Torquay Formation.
Two parcels northeast of Lloydminster in the St. Walburg area received bonus bids totalling $9,736,304.69 for 1,295 hectares, with one of these parcels receiving the highest dollar-per-hectare at $8,115.76; these parcels are prospective for heavy oil in the Mannville Group, with well logs showing significant potential for the application of thermal recovery methods.
The next public offering of petroleum and natural gas rights will be held on August 1, 2017.
For more information, contact:
Coherence, not shouting, needed in Canadian energy discussion
This is the text of a letter that will be sent to Prime Minister Justin Trudeau and all of Canada’s premiers and territorial leaders. It speaks to a special effort by the team at JWN Energy—a Calgary-based energy information company—to create a national platform via which all Canadians can access the important discussions we need to have about Canada’s energy future.
By Bill Whitelaw
June 5, 2017 5:06pm
Pipeline construction. Image: Kinder Morgan
Dear Prime Minister and Premiers:
Canadians want to talk about energy. More important, they need to talk about energy.
They want to be part of a civil society that shapes and defines its own future constructively and respectively.
But there’s nothing civil about the way we discuss energy currently. In fact, it’s more akin to thinly-disguised civil war.
Take the pipeline “debate.”
Look what’s happening in British Columbia. It’s shameful. A decision with the force of democracy behind it has been made—on a project that was thoroughly debated and is intensively regulated. And yet there are those who think they can undo it simply by disagreeing with the decision. That attitude flouts the way we do democracy in Canada and it sets us on a slippery slope.
So far, we should give ourselves a C-minus grade on how-to-get-along-on-things-energy report card. And that’s being generous.
Most Canadians also want a stop to the shouting and political backbiting around energy matters; an end to the activists who torture facts and figures until they scream false confessions. They want a stop to the pseudo-science that generates misleading headlines from a befuddled media and a stop to the belief we can flip a switch and be independent of petroleum in a heartbeat. No wonder they seem disinterested; who would really want to step into the mess we’ve made of our energy heritage.
In the oil and gas sector, we get that we have been part of the dialogue problem. We haven’t done a particularly good job talking to Canada. Oh, we shovel numbers and equations at Canadians that they know mean something, but it all somehow gets lost in translation. Put another way, we haven’t helped ordinary folks make meaning around the ways energy intersects and transects their lives.
We should be helping Canadians understand they actually own the hydrocarbon molecules we extract and process. Beyond what we take as profit, as a reward for risking capital, the rest of the proceeds go toward making Canada better. Health care. Education. Social welfare. Public infrastructure. These all come to mind, among many other benefits, that sometimes seem too countless to enumerate.
It’s a tough message, but we’re energy entitled in this country. As Canadians, we use (and even abuse) energy. As the oil and gas sector—as do our counterparts in other energy systems—we need to share with Canadians the realities of accountabilities and responsibilities of being so energy blessed; to recognize we live with an embarrassment of energy riches, but we’re also spending ourselves silly.
Instead, as a sector, we have focused on talking to elected officials, often convinced we need to do that because your ears are being bent by special interests who don’t get how important energy, in this case petroleum, is to the way we live as Canadians.
We get as a petroleum sector we need to improve our performance. And improving we are. We’re tackling air, water and land challenges with world-class technologies developed by some of the finest minds around. Often, we’re the envy of other jurisdictions globally for the way we innovate and the way we regulate.
We have great stories to tell. But we haven’t been very good storytellers. Nor have we been very good at earning trust.
All that means we’re at an energy crossroads in Canada. There are important choices we have to make collectively as Canadians—choices informed by balanced and rational dialogues unfiltered and unadulterated by the extremes of both ends of our energy continuum. There’s much about energy Canadians don’t know—much about how energy fuels so much of what we take for granted in our overall life quality.
So my company is stepping up.
At JWN Energy, we’re trying to make a difference. We’re not a big company. Many oil companies make more in an hour than we make in a year. But we’re passionate. And we know energy. We’re stepping up because no one else so far seems to be able to bring Canadians together through energy knowledge development, idea-sharing and working through challenges collaboratively.
We’re using our flagship brand, Oilweek, to create a national dialogue platform—one that embraces all forms of energy and welcomes all energy stakeholders. On this platform the hydro community will connect to the solar community; the nuclear folks to the petroleum people. We will discuss. We will debate. We will collaborate. And we will disagree.
Yes, we’re leaving Oilweek as the name. It’s a brand with value. And it stands for something. It stands for an energy sector that for more than a century has helped make Canada what it is; the reality is that a robust and evolving petroleum sector is still critical to Canada’s well-being domestically and internationally—and it will be so for a long time to come. If we don’t get the oil and gas conversation right, we will fail miserably as other forms of energy gain momentum as stable suppliers to Canadians.
For 75 years Oilweek has served, we think honourably, Canada’s upstream petroleum sector as a perspective platform. Now, as we turn 150 as a nation, this fall we are turning our attention to all forms of energy—and to all Canadians.
Our new positioning statement: Connecting Canadians to Their Energy.
There are no free energy rides. Sunbeams and wind gusts don’t pay royalties, but solar and wind and hydro and biomass have an important part to play in the way we shape our future. But as systems, they need to cohere and mature. Oil and gas is a mature energy system, both bruised and built by decades of experience. We will transition over time, and those other systems will come to play important roles in an evolving system of systems. But petroleum will remain a key driver of our economic and social foundations for a long time despite the noisy naysayers. People won’t drive electric cars on roads paved with charged particles but rather on asphalt derived from petroleum. That’s how a system of systems works.
We’re fragmented as an energy nation. At a time when we need coherence, we’re shouting at each other. The noise is deafening.
At Oilweek, we hope to be a stepping stone to the Canada that can be: one in which energy solidarity defines us as a nation.
K+S Potash, Ducks Unlimited in $2.8 million project to protect wetland in Saskatchewan
June 5, 2017
Regina, Sask. – K+S Potash Canada (KSPC) has committed over $2.8 million in funding for wetland conservation through an agreement with Ducks Unlimited Canada (DUC) to ensure wetlands affected by the Bethune mine are offset through the restoration and preservation of wetlands across Saskatchewan. The agreement, based on a unique science-based formula developed by Saskatchewan’s Ministry of Environment in collaboration with DUC and KSPC, is the largest-known wetland industry offset in Saskatchewan’s history.
“Wetlands are one of the most important eco-systems on the planet and provide critical habitat for migratory birds including waterfowl,” explains Trevor Plews, Head of Conservation Programs for DUC in Saskatchewan. “Wetlands have been in decline for many years and because Saskatchewan is in the heart of waterfowl breeding habitat in North America, this offset agreement goes a long way to help mitigate habitat loss in this very important region.”
KSPC’s offset agreement is the largest mitigation payment DUC has ever received in Saskatchewan and will enable DUC to invest in areas that provide the greatest conservation value possible. Direct and indirect impact on 199 acres of wetlands near the Bethune mine site will be offset by restoring 361 acres of wetlands in DUC’s target landscapes in Saskatchewan.
Eric Cline, Vice President of Land and Sustainable Development for KSPC, says the agreement satisfies the ministry’s condition for approval of KSPC’s Environmental Impact Statement and does so through a credible third party. “It’s of benefit to have Ducks Unlimited Canada facilitate this agreement because their interest is to maximize the amount of quality wetlands in Saskatchewan,” says Cline. “This partnership with DUC is valuable to our company not only because it ensures the offset meets our commitment to the ministry, but also because it assures the public that the conservation plan is being implemented in a scientific way.”
While this landmark initiative demonstrates the power of collaboration and responsible environmental management in the province, the ministry hopes that other industry players will benefit from this large-scale “test case” of their formula-based approach.
“The lessons learned from this experience will help us further improve and develop this promising approach,” said Brant Kirychuk, Executive Director of the ministry’s Fish, Wildlife and Lands Branch. “I would like to congratulate and thank K+S Potash Canada and Ducks Unlimited Canada for being leaders and innovators in our quest for responsible development.”
This historic announcement corresponds with this year’s World Environment Day which is themed “Connecting People to Nature,” a call to action for people to protect the Earth that we share. “Protecting the Earth is everyone’s responsibility,” says Michael Champion, Head of Industry and Government Relations at DUC, “and we want to recognize the efforts of KSPC in doing their part as a good corporate citizen.”
About K+S Potash Canada GP
K+S Potash Canada GP (KSPC) is a K+S Group company with headquarters in Saskatoon, Saskatchewan; a solution potash mine and production facility located near Moose Jaw, Saskatchewan; and a world-class potash handling and storage facility operated in partnership with Pacific Coast Terminals in Port Moody, British Columbia. Bethune mine, formerly known as the Legacy Project, is the first new potash mine in Saskatchewan in nearly fifty years. KSPC celebrated the Grand Opening of Bethune in May 2017 and expects to reach a production capacity of 2 million tonnes by the end of 2017. The Bethune mine has created new job opportunities for Saskatchewan workers and new business opportunities for Saskatchewan companies supplying goods and services to this major economic development. All sales and distribution of the potash produced at the Bethune mine will be carried out through the K+S Group’s experienced and well-established global distribution structures.
About Ducks Unlimited Canada
Ducks Unlimited Canada is the leader in wetland conservation. A registered charity, DUC partners with government, industry, non-profit organizations and landowners to conserve wetlands that are critical to waterfowl, wildlife and the environment.