Category Archives: oil

PSAC forecasts slight increase in Saskatchewan drilling for 2018

PSAC forecasts slight increase in Saskatchewan drilling for 2018

BRIAN ZINCHUK

PIPELINE NEWS

Nov 24, 2017

drilloing pipe oil

On Oct. 31 the Petroleum Services Association of Canada (PSAC) released its 2018 Canadian Drilling Activity Forecast in Calgary. PSAC expects a total of 7,900 wells (rig releases) to be drilled in Canada in 2018. For 2017, the association’s final revised forecast predicts a yearly total of 7,550 wells.

PSAC bases its 2018 forecast on average natural gas prices of C$2.50 per mcf (AECO), crude oil prices of US$53 per barrel (WTI), and the Canadian dollar averaging US$0.82.

PSAC president Mark Salkeld said, “The small uptick in activity we realized in Q1 of 2017 has carried on through the year. Budgets set with initial optimism for a gradual climb in prices by year-end continue with their plans as drilling and completion efficiencies improve. Due to pressure to stay low, costs for services continue to be suppressed affording better margins for producers. For 2018, confidence that oil will stay in the low-to-mid US$50 range as markets tighten and inventories reduce, along with growing interest in Canada’s vast liquids rich natural gas, should support a 4 – 5 per cent increase in activity levels.”

On a provincial basis for 2018, PSAC estimates 3,998 wells to be drilled in Alberta, and 2,931 wells for Saskatchewan, year-over-year increases of 152 and 84 wells, respectively. At 230 wells, drilling activity in Manitoba is expected to remain constant year-over-year whilst activity in British Columbia is projected to increase from 612 wells in 2017 to 730 wells in 2018.

Although the Association expected 2018’s activity to be better than 2015, 2016 or 2017, the projected total of 7,900 wells is still 30 per cent lower than the number of wells drilled in 2014.

Salkeld continued, “The cancellation of TransCanada’s Energy East pipeline is another blow to investor confidence in Canada and so PSAC will continue to advocate hard for market access and a competitive environment. The world’s energy needs are growing and polls show that countries would prefer Canadian oil and gas that is responsibly-developed and working to reduce carbon emissions through innovation. Market access and development of our natural resources would not only help reduce global emissions and help lift third-world countries out of energy poverty, but would continue to benefit Canadians, too, by providing energy security, LNG for remote and northern communities, great high-tech jobs and world prices for our resources so that they can continue to provide economic benefits to all Canadians.”

Digging into the details, the forecast predicts Saskatchewan will see 2,879 oil wells, nine dry wells, and 43 service wells for a total of 2,931. Notably, there is are no gas wells expected this year at all. In 2003, there were 2,113 gas wells completed in Saskatchewan, according to the Ministry of Economy.

Broken down, southeast Saskatchewan had 751 oil wells, nine dry wells and five service wells. Northwest Saskatchewan (north of Kerrobert) is expected to see 462 oil wells and 26 service wells. Southwest Saskatchewan, including the Kindersley area, is expected to have 166 oil wells and 12 service wells.

Spud-to-release days for rigs has remained consistent for the last three years in southeast Saskatchewan at eight days. But northwest Saskatchewan has seen a substantial decline, from five days in 2015 Q3 to four days in 2016 Q3 and three days in 2015 Q3.

Operating days in Saskatchewan are expected to be up slightly in 2018, at 13,486 days. The forecast for 2017, rounding out the end of the year, is 13,101. That is a big improvement from 2016, which posted just 7,549 operating days.

For 2017 up until Oct. 31, the top ten drillers in southeast Saskatchewan saw 285 wells drilled by Crescent Point Energy Corp., 80 by Spartan Energy Corp. 27 by Torc Oil & Gas Ltd., 17 by Astra Oil Corp, 16 by Ridgeback Resources Inc., 13 by Ridgeback Resources Corp, 13 by Villanova 4 Oil Corp., 12 by Pemoco Ltd., 11 by Steppe Petroleum Inc. and a tie for 10th positions, with Midale Petroleums Ltd. and Vermillion Energy Inc. each having 10 wells.

$16B Alberta-B.C. oil pipeline has First Nations backing — but it may still never get built

This $16B Alberta-B.C. oil pipeline has First Nations backing — but it may still never get built

The project’s major obstacle is the federal government, specifically the tanker moratorium for B.C.’s northern coast announced by the Prime Minister last November

CLAUDIA CATTANEO

Published on: November 23, 2017 | Last Updated: November 23, 2017 5:57 AM CST

Financial Post

oil tankers

As proposed Canadian crude oil export pipelines struggle to get built, one project is gaining momentum — the First Nations-led, $16 billion Eagle Spirit Energy Holding Ltd. pipeline and energy corridor between Alberta and the northern British Columbia Coast.

The project is twice the size of the Northern Gateway project rejected by Prime Minister Justin Trudeau and has secured support from First Nations from Bruderheim, Alta., through Northern B.C., to Grassy Point, B.C.

Major Canadian oil producers including Suncor Energy Inc., Cenovus Energy Inc. and Meg Energy Corp. also want it to go ahead, while investment broker AltaCorp Capital Inc. has been lined up to organize financingThe pipeline’s right of way would be on an energy corridor that would be pre-approved by First Nations to also house gas pipelines, hydro lines and fiber optic cable. The Aquilini Group of Vancouver is also a backer.

 

“It’s an exciting time here,” chairman and president Calvin Helin said in an interview. “We developed a model, particularly for the ocean, that has a higher environmental standard than the federal government is proposing anywhere else in Canada.”

The project’s major obstacle, however, is the federal government, specifically the tanker moratorium for British Columbia’s northern coast announced by the Prime Minister last November, at the same time as he cancelled Northern Gateway. The ban, now before Parliament, has the support of environmentalists who want to keep oil tankers away from the West Coast, particularly the Great Bear Rainforest ‘fiction’ they helped create.

Helin, a lawyer, said the forest covers the traditional lands of the Lax Kw’alaams of which he is a member, was invented by green activists who want it to be off limits to development and without Indigenous input.

He said First Nations would fight the ban in court if implemented because they weren’t properly consulted and because it would kill Eagle Spirit and other development options they may want to pursue.

The Prime Minister may have to re-think the moratorium if Eagle Spirit gains significant Indigenous support, said Ken Coates, Canada research chair at the University of Saskatchewan’s School of Public Policy, and senior fellow in Aboriginal issues at the Macdonald-Laurier Institute.

The project could turn out to be “the only one that has a significant chance of succeeding” because of its Indigenous leadership, he said.

If First Nations want to explore it, “it’s hard for the government to say we are not going to talk to you about it, because we are making decisions on your behalf,” Coates said. “That is old style. That is the way we used to do it.”

The project is an example of Iindigenous support for natural resource projects that meet their environmental standards and offer them revenue opportunities.

Oilsands giant Suncor, the Fort McKay First Nation and the Mikisew Cree First Nation, both in Alberta, announced Wednesday the completion of the acquisition of a 49 per cent partnership in Suncor’s East Tank Farm Development for $503 million. The two First Nations independently financed the acquisition through $545 million, 4.136 per cent senior secured notes due December 31, 2041. The offering was structured and marketed by RBC Capital Markets.

“The deal represents the largest business investment to date by a First Nation entity in Canada, and not only demonstrates the great potential for partnerships between First Nations and industry but serves as a model for how First Nations can achieve greater self-determination through financial independence,” said Fort McKay chief Jim Boucher.

The Eagle Spirit oil pipeline would be about the same size as the Energy East project cancelled last month by TransCanada Corp., that proposed to transport one million barrels a day from Alberta to the East Coast.

It would have many advantages compared to other pipeline projects, but needs to resolve the tanker ban before applying for a permit, Helin said.

Its oil would be loaded on large tankers and head to markets in Asia three days faster than from Vancouver, the end point of Kinder Morgan Canada Inc.’s Trans Mountain pipeline, whose proposed expansion is struggling with opposition by environmentalists, municipalities and some First Nations. Its port would be located near the open ocean, making navigation safer.

Regulatory approvals for Eagle Spirit could also come faster, cutting costs for proponents, since the project has agreements in principle with all impacted First Nations and is guided by a Chief’s Council, Helin said.

The project would be less vulnerable to attacks by environmentalists that are giving other pipeline proposals a rough ride because First Nations that support it have rights to manage their lands.

In contrast to Eagle Spirit’s previously announced plans, which involved building a pipeline and an upgrader, the new version involves a pipeline that would carry bitumen until the upgraded product is available as well as the pre-approved energy corridor.

Bill C-48 would send the message that it is okay to have oil tanker traffic when it supports refinery jobs in Montreal, but not when it supports jobs in Alberta and Saskatchewan

Eagle Spirit first emerged about five years ago as an alternative to Northern Gateway, which was opposed by First Nations that felt environmental protection and benefits were insufficient. It’s modeled after the Alyeska pipeline between Alaska’s Prudhoe Bay and Valdez, built and operated with involvement from the state’s Indigenous people.

Its proposed energy corridor “would be environmentally the best thing to do for Canada,” Helin said. “It could concentrate all of activities, you can divide the areas of the pipeline into zones, so First Nations in different areas can be the people who maintain and look after the environment for those areas. It could provide a host of ongoing benefits to First Nations that isn’t dependent on government.”

While also intended to protect the environment from oil spills, Bill C-48: Oil Tanker Moratorium Act, is controversial.

In feedback to the House of Commons committee that is reviewing it, the Canada West Foundation said there are no such restrictions on tankers anywhere else in Canada and implementing Bill C-48 would send the message that it is okay to have oil tanker traffic when it supports refinery jobs in Montreal, Sarnia, Quebec City and Saint John, but not when it supports jobs in Alberta and Saskatchewan tied to the export of western Canadian oil to Asia.

The Lax Kw’Alaams said the proposed law “is an infringement of Indigenous land. It cuts our community off at the knees from any economic development related to the export of oil.”

The Gitwangak and Gitsegukla tribes, whose territories are located around the Skeena River in Northwestern B.C., said they have not been consulted and “are concerned that the loud voices of foreign environmental activists are dictating what activities we can undertake in our own traditional territory in an effort to deprive us of our constitutionally protected Aboriginal rights.”

For its part, West Coast Environmental Law, a law firm that champions green initiatives, said the bill has strong support among those “that have called for B.C.’s unique north coast to be permanently protected from oil tankers,” including Coastal First Nations and the six First Nations in the Yinka Dene Alliance. It says the ban should be strengthened so that it would be harder to allow exemptions.

Helin said the tanker ban should at least come with a compromise: a shipping corridor near the Alaska border so that pro-development First Nations like Lax Kw’Alaams can ship what they want in and out, and a tanker ban for those First Nations further south and for environmentalists that want the ban to stand. The shipping corridor wouldn’t be that far from the tankers that have been shipping Alaskan oil down the B.C. coast for decades.

 

Oil over $58 and Potash shipper Canpotex fully committed through February 2018

WTI Nov 23 8am

NOVEMBER 22, 2017

BRIEF-Potash shipper Canpotex fully committed through February 2018

Reuters Staff

Nov 22 (Reuters) – Canpotex Ltd, a potash export company owned by Potash Corp of Saskatchewan, Mosaic Co and Agrium Inc said in a press release on Wednesday:

* Potash volumes are fully committed through February 2018

* Asia, Latin America spot potash prices firming, reflecting strong demand Further company coverage: (Reporting By Rod Nickel)

Nebraska approves alternative route for TransCanada’s Keystone XL

Nebraska approves alternative route for TransCanada’s Keystone XL

NATI HARNIK/THE CANADIAN PRESS

SHAWN MCCARTHY AND JEFF LEWIS

Kinder Morgan pipe

NOVEMBER 20, 2017

TransCanada Corp. has received a new hurdle in its effort to complete its $8-billion (U.S.) Keystone XL pipeline after Nebraska’s Public Service Commission approved an alternative to the company’s preferred route through the state.

Nebraska’s Public Service Commission ruled on Monday that TransCanada’s Keystone XL can be built along a “mainline” route, which shifts the line east of its preferred path.

The company announced earlier this month that it had secured adequate commitments from crude oil shippers on the proposed line. TransCanada must now assess it will proceed with construction given the approval of the mainline route.

Keystone XL will deliver up to 830,000 barrels per day of crude from Alberta to Steele City, Neb., where it will connect with an existing pipeline network to the U.S. Gulf Coast. Alberta oil producers are hopeful that added pipeline capacity will accommodate expanding supply and bring them better prices and cheaper transportation costs.

TransCanada has been attempting to win approval for Keystone XL for nearly 10 years; it was turned down by then-president Barack Obama in 2015, only to be revived by President Donald Trump last March.

The Keystone XL project has faced a barrage of criticism from environmental activists and some landowners for nearly a decade. Activists – including some Indigenous leaders – are threatening to mount mass protests against the pipeline.

At the hearing before the commission, TransCanada argued its preferred route was far superior to the one that the commission approved on Monday. It said its preferred path had fewer ecological sensitive areas, fewer stream crossings and crosses the range of fewer threatened or endangered species.

The company will now have to obtain easements from landowners, after securing rights from 90 per cent of landowners along its preferred route. The mainline alternative is also longer which, in additional to other factors, will add to the costs. As well, it is unclear whether the federal approval for the KXL project covers the route approved by the state commission.

“If the Keystone XL pipeline were to follow the mainline in its entirety, it would require considerably greater length in the overall pipeline route than the preferred route currently uses,” the company argued in its submission to the commission. “This additional length would cause greater environmental impact and render the route inferior to the preferred route.”

Despite the hurdles, some analysts hailed the decision as a qualified victory for TransCanada.

“Nebraska’s decision today greatly diminishes the political risk for the project, likely clearing the way for increased volumes of Western Canadian heavy crude to reach the Gulf Coast,” Zachary Rogers, analyst at Wood Mackenzie consultancy, said in a note. “The pipeline’s commercial viability is strengthened as declining heavy oil production in Mexico and ongoing Venezuelan risk has recently tightened the heavy-crude market in the Gulf Coast.”

Whitecap buys Cenovus’ Weyburn Unit for $940-million cash

Whitecap buys Cenovus’ Weyburn Unit

Company plans to resume drilling of new production and injection wells

BRIAN ZINCHUK / PIPELINE NEWS

NOVEMBER 13, 2017 05:33 PM

cenovus-goodwater

Photo By Submitted

Weyburn, Calgary – It may have been prescient that Whitecap Resources Inc. CEO Grant Fagerheim was inducted into the Saskatchewan Oilpatch Hall of Fame at the 2017 Saskatchewan Oil & Gas Show. He’s liable to be spending a lot more time in Weyburn now, as Whitecap announced on Nov. 13 it had bought the Weyburn Unit from Cenovus Energy Inc. for $940 million cash. Whitecap plans on resuming drilling and expanding the operation.

Cenovus took to selling off assets in a big way to finance its $17.7 billion purchase of ConocoPhillip’s 50 per cent interest in jointly owned oilsands venture and deep basin conventional assets, announced March 29. Since then, it’s targeted $4 billion to $5 billion in asset sales to cover part of the purchase. The Weyburn Unit went on the block.

The Weyburn Unit is one of Saskatchewan’s most significant oilfields, producing over 60 years. They introduction of a carbon dioxide miscible flood enhanced oil recovery (EOR) scheme near the turn of the century dramatically enhanced the field’s expected producing life, to the point where Cenovus stopped putting an estimate on its longevity. The field initially only took carbon dioxide from the 20 inch Souris Valley Pipeline running from the Dakota Gasification Company at Beulah, N.D. Since 2014, it has also been receiving carbon dioxide from the SaskPower Boundary Dam Unit 3 Integrated Carbon Capture and Storage Project, near Estevan, a contract that has seven years of life remaining.

The previously announced sale of Cenovus’s Pelican Lake assets closed on September 29, 2017 and the company still anticipates the previously announced sales of its Palliser and Suffield assets to close later this year. “We’re pleased with the progress we’ve made in delivering on our divestiture plan to optimize our portfolio and deleverage the company’s balance sheet,” said Alex Pourbaix, Cenovus president and CEO. “Net proceeds from the Weyburn asset sale, combined with the other three divestitures announced earlier this fall, will position us to retire the entire $3.6 billion bridge facility associated with the ConocoPhillips asset purchase by the end of 2017.”

For Whitecap Resources, it’s another significant addition in southern Saskatchewan in recent years, as other, larger players move out. In May 2016, Whitecap purchased 11,600 barrels of oil equivalent  (boepd) assets from Husky in southwest Saskatchewan as that company, too, sought to divest itself of much of its widespread assets to have a more concentrated focus on thermal heavy oil projects.

While the operator of the Weyburn Unit, Cenovus has many partners with minority shares in the unit. The agreement is for Cenovus’ interests.

The acquisition includes a 62.1 per cent operated working interest in the Weyburn Unit (14,600 boepd) and 200 barrels of oil equivalent per day boepd of production from minor assets in southeast Saskatchewan. Whitecap described the Weyburn Unit as a world class carbon dioxide enhanced oil recovery development with a low base decline rate of less than 5 per cent, high operating netback of $31.86/boe, and significant short and long term development and expansion opportunities. The assets also include extensive infrastructure in place to facilitate future development plans.

Strategic rationale

In a press release on Nov. 13, Whitecap said, “The acquisition is a continuation of Whitecap’s strategy to enhance our existing portfolio with assets that exhibit lower production declines, high operating netbacks and significant growth opportunities with strong capital efficiencies to further enhance our future free funds flow. The Unit is a self-sustaining operation that generates strong free funds flow even in a low commodity price environment and requires minimal capital investment to maintain production volumes and associated funds flow.

“In 2018, our base case assumptions are to invest 35 per cent of the net operating income from these assets to maintain production at 14,800 boepd which we anticipate will result in significant additional free funds flow of approximately $112 million. We estimate that over the next five years, the base assets have the potential to grow to approximately 17,700 boepd and generate cumulative free funds flow of $459 million using a flat operating netback of $31.86/boe.”

Drilling to resume

Whitecap noted there has been minimal development of this asset over the last few years with only 12 infill wells drilled in 2015 and one CO2 expansion phase added in 2014. Due to low commodity prices, capital spending has been limited to production maintenance over the last few years. A drilling rig that worked in the unit for decades was released during this time.

Whitecap anticipates spending approximately $60 million in 2018 on the Unit, which represents 35 per cent of anticipated net operating income from the assets, to maintain a flat and stable production profile.

The Unit is anticipated to be a multi-decade source of self-funding growth and annual free funds flow with meaningful near and long term growth opportunities. There are significant optimization and expansion opportunities within the Unit including:

  • 34 waterflood and EOR area infill drills;
  • Reservoir optimization of the mature EOR patterns to minimize decline and improve CO2utilization;
  • Eight identified and planned COexpansion phases which include the drilling of 93 (57.8 net) production and 62 (38.5 net) injection wells; and
  • Recovery of hydrocarbons liquids from recycled CO2stream prior to reservoir reinjection.

Whitecap said the eight EOR expansion phases are conservatively booked to an ultimate recovery factor of 31 per cent compared to an average ultimate recovery factor of 54 per cent booked on the existing 13 phases. To date, the 13 existing phases have recovered on average 42 per cent of the original oil in place (OOIP) with some of the more mature phases recovering over 60 per cent. The eight expansion phases will develop a significant portion of the remaining 44 per cent of the Unit area that has yet to benefit from the CO2 injection. The hydrocarbon liquid recovery from the CO2 stream, prior to re-injection, is also expected to provide an extremely stable and significant source of free funds flow.

There are also material expansion opportunities identified immediately offsetting the existing CO2 scheme which are in the preliminary planning stage. These include vertical and lateral expansion of the existing CO2 EOR scheme of which the combined opportunity set is unbooked and could represent incremental gross reserves of 109 MMbbls and a peak incremental gross production increase of over 13,000 bopd.

The field has had a long history

Sixty-three years ago, the discovery well of what would eventually become known as the Weyburn field was drilled near Ralph by Central Leduc Oils Ltd., a company which became Central Del Rio Oils Ltd. in 1957 with the merger of Del Rio Oils. The discovery well at 14-7-7-13-W2 came in during the fall of 1954.

According to PetroleumHistory.ca, “Central-Del Rio was purchased by Canadian Pacific Oil and Gas in 1969. However, the company continued to operate under the Central-Del Rio name until 1971 when its name changed to PanCanadian Petroleum Limited.

“PanCanadian was purchased by Alberta Energy Company in 2002 and became EnCana. Later EnCana was split into EnCana and Cenovus.”

That split took place in 2009, with EnCana at the time focussing on natural gas, and Cenovus focussing on oil.

 

Tesla battery production releases as much carbon dioxide as eight years of gasoline driving

Tesla battery production releases as much carbon dioxide as eight years of gasoline driving

by  DAVID BOOTH  | NOVEMBER 10, 2017
http://driving.ca/auto-news/news/motor-mouth-a-few-more-inconvenient-truths-about-ev-co2-emissions

gas gauge

It was a huge announcement, greeted with much fanfare. Ford, BMW, Mercedes-Benz and the VolkswagenGroup have joined together to build an automobile-recharging network throughout Europe, one they hope will allow uninterrupted EVing all throughout the continent by 2020. Better yet, said recharging stations will be of the ultra-fast 350 kilowatt variety, which are the ne plus ultra of battery rebooting, rendering an almost complete recharge in but 15 minutes or so. Now, never mind that there are currently no car batteries — no, not even Tesla’s — that can withstand such an onslaught of electrons without blowing up, or that the first cars (mondo expensive Porsches and Audis) that will be 350 kW-capable won’t be released until 2019; the formation of what’s called the IONITY consortium is a development worthy of front page, extra bold headlines.

But, like all things EV, it seems like it’s only the rah-rah, let’s-plunge-headfirst-into-something-we-haven’t-fully-calculated optimism that gets the media’s attention. A little more sobering is a recent study by the University of Michigan that calculated the “well-to-wheels” production of automotive greenhouse gases depending on a) the source of the electricity used to recharge said electric vehicles and b) the rough country-by-country breakdown of those sources. And, to make it easier for simpletons (that would be Yours Truly) to understand, rather than quantifying the difference in kilowatt-hours, BTUs or some other archaic scientific quantum that would mean nothing to the average motorist, authors Michael Sivak and Brandon Schoettle converted the entire equation to a miles per gallon equivalent. By Sivak’s estimation, for instance, a battery-powered electric car fueled by electricity generated by coal gets the equivalent of 29 US miles per gallon. Ditto for oil-powered generation. On the other hand, solar power is good for 350 mpg, nuclear 2,300 mpg and hydro a whopping 5,100 miles for every blessed gallon of gasoline.

The beauty, then, of Fuel Sources for electricity in the individual countries of the world and the consequent emissions from driving electric vehicles is that it gives an easily understood quantification of the benefit of converting cars from gasoline to electricity depending on what sources each country uses to generate all that electricity. Put even more simply, the numbers Sivak et al have determined are the break-even point: If gasoline-powered cars can achieve these magical fuel economy numbers, then they will pump out less C02 than BEVs. If they can’t, then EVs have the advantage.

First, the good news, at least for we Canuckians: According to U of M’s calculations, thanks to our cornucopia of green energy sources, gasoline cars would have to average 1.4 litres per 100 kilometres to match the CO2 reduction available from BEVs. That’s 169.5 miles per gallon. Needless to say that’s an unattainable goal, even the most optimistic motorhead not daring to posit such a breakthrough. Score one for the Great White Frozen North then when it comes to EVs.

But, before you go getting all smug, note that we’re not anywhere near the top. Pride of place atop the potential CO2 reduction sweepstakes goes to — cue drum roll — Albania. Yes, with 100 per cent of its electricity generated by hydro power, it gets a perfect 5,100 mpg score. Never mind that there’s probably not a dozen people in the once-totalitarian agrarian state that can afford a Tesla; at least the potential is there. Ditto for Paraguay, Nepal, the Congo and Ethiopia, which are next in line. Indeed, it is in 7th place Norway that one finally sees some convergence between fuel economy equivalency (1,820.6 mpg) and the ability to afford an expensive EV.

But even Norway is a drop in the greenhouse gas reduction bucket. And the numbers for the world’s largest economies are not nearly as energizing. The breakeven point for the United States, for instance, is 55.4 mpg (4.2 L/100 km). With 33 per cent of its electricity supplied by coal and another third by natural gas, if America’s fleet of gasoline-powered vehicles could average 4.2 L/100 km or better, they would actually produce less CO2 than electric cars. Now, to be sure, the current average consumption is about twice that, but 55 miles per gallon is still the number former president Obama was touting as attainable by 2025 (albeit with some loopholes). And, let us not forget, the current president is promoting coal production, so Sivak’s magical number may become be easier to attain.

Worse yet is China, the country many environmentalists are currently touting for its massive push toward EVs. Because so much of its electricity is coal fired, its break-even point is 40 mpg (5.9 L/100 km), a number my new 2018 Accord easily achieved on a recent trip to Ottawa. Somehow that doesn’t gel with the narrative being proposed of China as green siren.

But according to the U of M team, even that calculation doesn’t fully account for a BEV’s total C02 production. According to Sivak, building a BEV results in 15 per cent higher emissions than manufacturing a similarly-sized conventional automobile. For larger vehicles — cue Teslas and upcoming Porsche/Audi products — with larger batteries, the difference is even greater; 68 per cent. Indeed, according to a recent Swedish report, Tesla battery production releases as much CO2 as eight years of gasoline driving. Yes, according to the IVL Swedish Environmental Research Institute, manufacturing every kilowatt-hour of lithium-ion battery storage — the Model S has up to 100 kW-hr — releases 150 to 200 kilograms of carbon dioxide into the atmosphere. In other words, a Model S has accounted for about 17.5 tons of C02 even before it has used a mile of coal-fired electricity.

In other words, the American — and certainly the Chinese — government might be better off spending those hard-to-come-by tax dollars on cleaning up its coal production rather than converting all our cars to batteries.

 

On Trans Mountain opposition, Burnaby doesn’t have a case

Yedlin: On Trans Mountain opposition, Burnaby doesn’t have a case

DEBORAH YEDLIN, CALGARY HERALD
Published on: November 4, 2017 | Last Updated: November 4, 2017 9:06 AM MDT

Trans Mountain pipes
Pipes are seen at the Trans Mountain facility in Edmonton, Alta., Thursday, April 6, 2017. JONATHAN HAYWARD / THE CANADIAN PRESS

When TransCanada officially announced it was abandoning the Energy East project, which would have transported 1.1 million barrels of oil per day to the East Coast, a significant amount of discussion took place in the days that followed, suggesting the pipeline quagmire could push the country toward a constitutional crisis.

That prediction took one step closer to reality last week, when Kinder Morgan Canada filed a notice of motion regarding its Trans Mountain expansion project, challenging the City of Burnaby on constitutional grounds as it seeks to block the project’s advancement by delaying the issuance of permits.

There is no way Burnaby should be doing this.

The project has received the requisite approvals — even after additional reviews and assessments — from the National Energy Board and the federal government. Since when is that not enough for the public, or other governing jurisdictions, to rely on?

It’s instructive to look at the TMX project in the context of what is going on in China.

It is a country on the move — spending billions in infrastructure to facilitate investment, development and opportunity. There might be valid disagreement about methods and process, but there is a goal and a plan; to become an economic powerhouse and eventually establish the yuan as the global reserve currency.

And in Canada, we can’t even get a pipeline built that would be important for economic growth and business investment.

No, the building of the Three Gorges Dam wasn’t pretty — but it now generates 22,400 megawatts of much-needed, clean electricity. Still, that’s only two per cent of the country’s electricity needs. That presents a huge opportunity for Canada to supply China with liquefied natural gas – but we’re stalled in that department, too.

This is all about playing for the long game, something China has figured out but Canada has long forgotten.

There is no denying the challenges in a “command and control” economy — but our system of laws, contracts and approvals should be enough to move projects, such as TMX, forward.

Burnaby, in failing to grant Trans Mountain the required permits, and which were part of the comprehensive review process that took place at the NEB and on which the federal cabinet relied, is grasping at straws, not to mention causing additional delays.

Here’s why:

Municipalities exist by virtue of provincial legislation. And there is established case law that shows when there is a conflict between federal and provincial laws, federal law takes precedence.

The notice of motion submitted by Trans Mountain to the NEB late last month refers to a B.C. Supreme Court ruling in 2016, which stated provincial governments must issue provincially required permits that are necessary to carry out a federal undertaking; failure to do so conflicts with a federal purpose.

And the NEB has jurisdiction to act on behalf of the federal government by virtue of the NEB Act.

It doesn’t get more complicated than that.

The mayor of Burnaby likes hyperbole.

When there were protests against Kinder Morgan conducting geotechnical tests it had been ordered to do, the mayor famously said, “This is war.” The citizens of Syria and Iraq know what war means — Derek Corrigan does not.

When Kinder Morgan Canada chief executive Ian Anderson paid Corrigan a visit last week, the response was that he was being bullied by Anderson.

While Corrigan can technically say Burnaby has not turned down the requests for permits, because it hasn’t, the fact Kinder Morgan has been waiting 22 weeks compared with the standard six-week timeframe clearly suggests the city is obfuscating.

Missing is the understanding that when a project is approved, it includes both approval for the project itself and the timing; they are not mutually exclusive.

As stated in the notice of motion, and supported by prior Supreme Court rulings at both the provincial and national level, “A municipality cannot lawfully deny a permit application for a federal undertaking … allow them to manoeuvre out of their duty to issue permit by imposing unreasonable requirements and delays allows them to impair the core of the federal authority thereby doing indirectly what they cannot do directly ….

“Burnaby is improperly exercising control over whether and when the project (TMX) will proceed. The timing of the project was clearly a part of the public interest determination. This amounts to an unconstitutional exercise of its power.”

As Premier Rachel Notley said this week, when the Alberta government announced it would be intervening at the NEB to force Burnaby to issue the requisite permits to Kinder Morgan, one jurisdiction – and a municipal one at that – has no right to obstruct the construction of a project this important to the country.

But it gets better, because Burnaby and its mayor appear to be suffering from amnesia.

When Kinder Morgan was prevented from carrying out its geotechnical work in 2014, it took similar action: submitted a notice of motion to the NEB seeking an order for Burnaby to allow the geotechnical work to proceed. Then, like now, it included notice of a constitutional question.

The NEB ruled in favour of Kinder Morgan. The work took place.

All this calls into question the response by former justice Thomas Berger submitted this week. Berger is seeking to dismiss the Kinder Morgan request for the timely issuance of permits – but in doing so is blatantly ignoring the fact the timing of the project was part of the national interest determination; Kinder Morgan is seeking certainty of process. One could argue Berger is the reason we have been hamstrung on pipelines since his 1977 report that effectively killed the Mackenzie Valley pipeline.

A constitutional crisis triggered by a pipeline? Sadly, it’s entirely in the realm of possibility.

Deborah Yedlin is a Calgary Herald columnist.

 

 

 

Hot oil markets ignite speculation around Cenovus deal – in Weyburn SK for $1-billion or more

Hot oil markets ignite speculation around Cenovus deal

CENOVUS ceo Nov 2017
Last week, departing Cenovus CEO Brian Ferguson, shown in this file photo, would not say when asked how many parties have looked at the property.

CHRIS BOLIN/THE GLOBE AND MAIL

JEFFREY JONES AND JEFF LEWIS

CALGARY

NOVEMBER 6, 2017

 

Cenovus Energy Inc. is expected to announce a deal shortly to sell its interest in a major Saskatchewan oil project just as surging crude prices rekindle industry interest in attractive energy properties.

The Weyburn project, with a price tag estimated at $1-billion or more, is the last of four large assets Cenovus had earmarked for sale to reduce debt taken on to fund its acquisition earlier this year of ConocoPhillips Co.’s Alberta oil sands and natural gas assets.

Several companies that have their production skewed to oil, rather than natural gas, are thought to be possible bidders for the assets – some as sole entities and others in partnerships with private-equity sources or pension funds.

Such investors covet the long-term, steady returns and low rate of production declines that the enhanced oil project delivers.

A 16-per-cent rise in U.S. oil prices over the past month is seen as supportive to potential buyers and their financing plans.

Deal interest is said to be picking up as oil prices climb to more than two-year highs amid a string of high-profile arrests in Saudi Arabia over the past weekend in an anti-corruption crackdown, and as markets tighten.

West Texas intermediate cruce closed up 3 per cent on Monday at $57.35 (U.S.) a barrel.

An improving oil market could open up capital markets for the oil patch, allowing financing for deals, after months of being out of favour.

Spartan Energy Corp. and Whitecap Resources Inc. have both been rumoured as bidders for Weyburn, though such a deal would be a big undertaking, especially for the former, whose market capitalization is about $1.2-billion (Canadian).

Spartan did not respond to a request for comment on Monday. It gained an ownership interest in Weyburn last year as part of a $700-million acquisition of oil assets from ARC Resources Ltd.

For its part, Whitecap, with a market cap of about $3.6-billion, is one of few companies to have successfully raised large sums in equity issues during the downturn. Whitecap chief executive officer Grant Fagerheim did not respond to a request for comment.

On Monday, GMP FirstEnergy analyst Michael Dunn speculated that Husky Energy Inc., with $2-billion of cash in hand and a strong balance sheet following its own asset sales, could also be in the running. A Husky spokesman declined to comment.

Cona Resources Ltd., led by former investment banker Adam Waterous, is also said to have made it to the final stages of bidding.

The Weyburn project, located in southeastern Saskatchewan, produces about 24,000 barrels of oil a day, with the aid of carbon dioxide that is piped in from North Dakota. It is known as the world’s largest CO2 capture-and-utilization storage project. Cenovus is operator and has a 62-per-cent stake in the complex venture, and its share of output is around 15,000 barrels a day. Several analysts have pegged the interest’s value at $1-billion or more.

Last week, Brian Ferguson, Cenovus’s departing CEO, would not say when asked how many parties have looked at the property. But he described the sales process as very competitive. Bids were due in mid-October and industry sources said the company was in talks with the winning bidder.

“It’s a very attractive asset,” Mr. Ferguson told analysts on a conference call. “And all the parties that are in the process I would characterize as substantive parties that are well-financed.”

The company has said it is targeting a deal to be announced by the end of this year. Spokesman Brett Harris declined to say Monday if an agreement is imminent.

So far, Cenovus has garnered $2.8-billion from sales of its Pelican Lake, Suffield and Palliser oil-and-gas properties, helping to rebuild investor confidence, which took a hit following the $17.7-billion ConocoPhillips deal owing to the sudden build-up of debt.

Mr. Ferguson was replaced as chief executive of Cenovus on Monday by Alex Pourbaix, a onetime TransCanada Corp. executive. Despite the leadership change, executives indicated last week that a strategic pivot was not on tap.

Still, the company is likely to put more assets on the block to meet its targeted range of $4-billion to $5-billion in sales by the end of the year. It plans to unveil its budget for 2018 in December, while also providing more detail around potential asset sales in the Deep Basin region of Alberta.

Saskatchewan Attorney General Intervenes in Trans Mountain Pipeline Proceedings

Attorney General Intervenes in Trans Mountain Pipeline Proceedings

Released on November 3, 2017

Government of Saskatchewan logo

The Attorney General of Saskatchewan, concerned a British Columbia municipality is holding up a project that would create thousands of jobs for Canadians, has applied for intervenor status in the Trans Mountain Pipeline proceedings currently before the National Energy Board.

“We are disappointed the City of Burnaby is deliberately slowing down an important project for an industry that is only now recovering from the severe slowdown caused by low oil prices,” Justice Minister and Attorney General Don Morgan said.  “Saskatchewan has consistently taken the position that once an interprovincial pipeline has been approved by the federal government, provinces and municipalities should not be able to interfere.”

On October 26, 2017, the law firm representing Trans Mountain Pipeline filed a Notice of Motion and Constitutional Question with the National Energy Board, and served it on all Canadian Attorneys General.  The Constitutional Question alleges that the City of Burnaby has refused to issue permits to Trans Mountain that are required under its zoning bylaw and tree bylaw and that this has resulted in unreasonable delays in completing the project.

The pipeline is clearly an interprovincial project that falls under federal jurisdiction by virtue of The Constitution Act, 1867. Trans Mountain has asked that written submissions on this issue be provided to the National Energy Board by Monday, November 6, 2017.  Saskatchewan has asked the board for an extension on this.

“Our government will continue to advocate for an expansion of pipeline capacity across Canada,” Morgan said.  “Our energy companies need to get their product to tidewater to ensure they receive the best price possible.  All Canadians benefit from a thriving energy sector, including the citizens of Burnaby.”

-30-

For more information, contact:

Drew Wilby
Justice
Regina
Phone: 306-787-5883
Email: drew.wilby@gov.sk.ca

NWT premier says ‘offensive and patronizing’ for southern Canadians to call shots on northern oil and gas development

NWT premier says ‘offensive and patronizing’ for southern Canadians to call shots on northern oil and gas development

 By The Canadian Press

OTTAWA — Northwest Territories Premier Robert McLeod says it is offensive and patronizing for southern Canadians to tell northerners they can’t benefit from oil and gas development because it’s time to save the planet.

McLeod is in Ottawa this week hoping to start a national debate about the future of the North, a year after Prime Minister Justin Trudeau announced at least a five-year ban on new oil and gas development in the Arctic because an oil spill in the region would be “cataclysmic.”

McLeod has criticized the decision as one-sided and ill-informed from the start and says, with that one decision, “everything we have built is in jeopardy.”

This week, he said southern Canada has benefited for years from resource development that polluted the air and is causing the North significant environmental grief and yet it now wants to tell the territories they can’t develop their own fossil fuels while the South keeps pumping out oil and gas.

“The rest of Canada needs to realize we have people that live in the North as well with dreams and aspirations and hope for a better future and we shouldn’t be penalized because of where we live,” he said.

“We shouldn’t have to stop our own development so the rest of Canada can feel better.”

McLeod said pollution from decades of developing oil and gas reserves in places like Alberta and British Columbia and the ensuing pollution from burning those fuels to drive cars and heat homes, has wreaked havoc on the North. The Bathurst caribou herds 15 years ago were over a million strong and the latest count has them at less than 20,000, which means almost no hunting happens anymore.

Permafrost is melting, affecting roads and buildings and rivers. The Beaufort Sea used to be ice-free for just five weeks a year, said McLeod and now it’s ice-free for more than three times that, causing coastal erosion and more storms. Forest fires are more common and more devastating.

McLeod said $2.6 billion in planned investments in offshore exploration disappeared with the onset of Trudeau’s moratorium and yet Canada hasn’t come to the table with any aid to replace that.

He said welfare rolls grew in the time since and the population is declining as young people in particular head south to find jobs that don’t exist in the Northwest Territories.

Resources and the energy sector account for about 40 per cent of the economy of the Northwest Territories.

McLeod said climate change has changed how the North lives and northerners deserve to be able to develop their resources if they can prove it can be done sustainably. Instead Alberta will continue to increase its oil production and the North has to sit it out without even getting a chance to be part of the discussion.

“We need jobs. We need work. You want us to leave the North because we can’t work there. You want us to live in a large park. That’s essentially what’s happened.”

%d bloggers like this: