Category Archives: political
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 .
Climate change researchers cancel expedition because of climate change
Icebreaker CCGS Amundsen diverted from science mission, continues search and rescue work
By Laura Glowacki, CBC News
Posted: Jun 12, 2017 2:06 PM CT Last Updated: Jun 12, 2017 4:41 PM CT
The CCGS Amundsen, an icebreaker with 40 scientists on board, was diverted from the first leg of a journey through the Arctic on Sunday to help search and rescue efforts off the coast of Newfoundland in the Strait of Belle Isle. (Canadian Department of Fisheries and Oceans)
A team of scientists had to abandon an expedition through Hudson Bay because of hazardous ice conditions off the coast of Newfoundland caused by climate change.
About 40 scientists from five Canadian universities were scheduled to use the icebreaker CCGS Amundsen for the first leg of a 133-day expedition across the Arctic. It’s part of a $17-million, four-year project led by the University of Manitoba that looks at both the effects of climate change as well as public health in remote communities.
Their trip began May 25 in Quebec City, but due to bad ice conditions off the coast of Newfoundland, the icebreaker was diverted from its course to help ferries and fishing boats navigate the Strait of Belle Isle, said David Barber, a climate change scientist at the University of Manitoba and leader of the Hudson Bay expedition called BaySys.
Thick, dense ice had travelled to the area down from the High Arctic, said Barber, which caused unsuspecting boats to become stuck and even take on water.
“The requirements for search and rescue trumped the requirements for science,” said Barber. “The search and rescue calls were coming in quite fast and furious.”
‘Very severe ice conditions’
According to the Canadian Coast Guard, the conditions were unlike anything ever seen before in the area.
“It was just extreme ice conditions that required everything that we’ve got in order to make sure we were able to provide the services,” said Julie Gascon, the coast guard’s assistant commissioner for the central and Arctic region.
Strong northeastern winds started packing in ice in late April and never stopped, said Gascon. The result was sea ice conditions treacherous for even an icebreaker to navigate.
“We never had any issues in the past of this nature,” she said. “Very severe ice conditions.”
A photo taken on June 8 shows ice on the water near Newfoundland. (Environment Canada)
Eventually Barber decided leaving the area for Churchill would put lives in danger so he called off the first leg of the expedition.
“It was an extremely difficult decision to make but I believe it was the right one to make,” he said.
While assisting the Canadian Coast Guard with search and rescue, the scientists took advantage of their diversion to the Strait of Belle Isle, a waterway between Labrador and Newfoundland.
Barber and his team began using their equipment on board the icebreaker to take samples and analyze the ice.
They determined it was multi-year ice, not typical of the northeast coast of North America and most likely from the High Arctic. Chunks measured between five and eight metres thick.
“This is the first time we’ve actually seen ice from the High Arctic,” said Barber, who has studied the impacts of climate change on sea ice for decades.
“What happens in the Arctic doesn’t stay there. It comes south.”- David Barber, climate scientist
Typically when people think about climate change they think about thinning ice, but Barber points out the warming action also loosens ice and broken icebergs can travel long distances on ocean currents.
“It’s very much a climate-change driven phenomenon,” said Barber. “When you reduce the extent of the ice and reduce the thickness of it, it becomes more mobile.”
Environment and Climate Change Canada said ice conditions improved slightly on Monday in the Strait of Belle Isle but continue to be troubling off the northeast coast of Newfoundland, which is seeing a higher than normal concentration of ice.
“Typically there would be very little or no ice left in either of these areas at this time of year, let alone the thick ice pack we are currently seeing off the northeast coast of Newfoundland,” a spokesperson for the federal department said in an email.
Barber said the experience off Newfoundland’s coast provides a valuable lesson about climate change to the Canadian government.
“What happens in the Arctic doesn’t stay there. It comes south,” he said. “We’re simply ill-prepared.”
Barber hopes to resume the Quebec City to Churchill journey next year, while other scientists still plan on boarding the Amundsen for the second leg of the expedition, Churchill to Iqaluit, July 6.
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.
James Smith Cree Nation chief wants meeting with Shore Gold executives
Alex MacPherson, Saskatoon StarPhoenix
Published on: June 9, 2017 | Last Updated: June 9, 2017 5:10 PM CST
An aerial view of Shore Gold Inc.’s proposed diamond mine in the Fort à la Corne forest east of Prince Albert. Shore Gold Inc. / Saskatoon
The chief of a First Nation near a proposed diamond mine in the Fort à la Corne forest east of Prince Albert says he is “not impressed” with communication from the company behind the project, and wants to meet with its executives to discuss the project’s potential environmental impact.
James Smith Cree Nation Chief Wally Burns called for the meeting with Shore Gold Inc. days after the company announced it was in “preliminary negotiations” with an unnamed third party over its mineral properties and as a separate six-month consultation process with the provincial government comes to a close.
“All I’m asking is for them to come to my community and come and express their thoughts with my people,” Burns said, adding that the last Shore Gold executive he met with was its former vice-president of corporate affairs, who left the Saskatoon-based company in early 2012 as it worked to reduce costs in the face of global economic uncertainty.
Burns said while he is not opposed to the $2.5 billion-mine going ahead, the ongoing effects of the Husky Energy Inc. pipeline spill into the North Saskatchewan River last July made him more aware of the importance of preserving his band’s traditional hunting and fishing lands.
“I think my people have known this forest for a long, long time,” he said.
Shore Gold staked its first claim in the forest in 1995. The mine project received environmental approval from the federal government in 2014; former environment minister Leona Aglukkaq said at the time it was “not likely to cause significant adverse environmental effects when (proposed) mitigation measures … are taken into account.”
The company has not, however, received environmental approval from the provincial government.
Earlier this year, the Saskatchewan government committed $137,000 to a second round of consultations with James Smith Cree Nation after a public review uncovered what a government official described as “issues that had not been addressed.”
Ministry of Environment spokesman Darby Semeniuk said in an email this week that the consultations began in early 2017 and are “on track.” Once the consultations are concluded, the ministry will “evaluate all pertinent information” before deciding whether to issued environmental approval for the mine, Semeniuk said.
Shore Gold president and CEO Ken MacNeill said the company has not heard from the James Smith Cree Nation since the groups exchanged letters earlier this year. However, MacNeill continued, “we can understand that because they’re doing an awful lot of work with the government and we fully support both sides on that.”
MacNeill did not specifically commit to meeting with Burns, but said the company is looking forward to hearing from James Smith Cree Nation. Shore Gold is also looking forward for a response from the Ministry of Environment, which has not to date made any further requests for information, he added.
Shore Gold’s communication efforts have also been criticized by some of its shareholders. At its annual meeting last June, a contentious proxy vote engineered by concerned shareholders came within a few percentage points of ousting three of the company’s directors. Shore Gold’s chairman deemed the vote illegal but allowed the results to stand.
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.
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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: