Blocking in the oil sands

by Milan on September 25, 2011

in Climate change, Oil sands

In reporting on the protests against the Keystone XL pipeline, some news sources have argued that since there will be other routes for exporting the oil from the oil sands, there is no sense in opposing this particular one.

What this ignores is the reality that every time a potential export route is closed down, the total quantity of oil burned is likely to diminish. If there are two pipelines – one from the oil sands to the Pacific coast for export (Northern Gateway) and another down to the U.S. Gulf Coast for refining (Keystone XL) – the greenhouse gas pollution related to oil sands production will be greater than in a scenario where only one pipeline gets built, or none at all get built and the industry has to rely on less economical means like shipping bitumen by rail.

If the government of Alberta will not impose limits on the quantity of greenhouse gas pollution being produced by their industries, it will be up to more responsible neighbouring jurisdictions to block the export of the dirty, dangerous fuels being produced.

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. September 25, 2011 at 11:49 am
. September 25, 2011 at 1:02 pm

British Columbia’s commodity boom

The piper pays

Aborigines oppose an oil pipeline

THE northern two-thirds of British Columbia have long lagged behind the province’s populous, temperate south economically. In recent years the region has had a boost from Asia’s appetite for natural resources. Construction projects in the province worth C$12 billion ($12 billion) have either begun or been announced. They include natural-gas and oil pipelines, a liquid-natural-gas terminal, a hydroelectric transmission line, four copper and gold mines, the renovation of an aluminium smelter and the expansion of rail and container facilities. Yet an outbreak of nimbyism is threatening the commodity boom.

The most controversial initiative is the C$5.5 billion, 1,172km (728-mile) Northern Gateway Pipeline. It would transport 525,000 barrels of oil a day from Edmonton, near Alberta’s tar sands, to the Pacific coast, where tankers would deliver them to Asia. Businessmen and the government see it as both a political and an economic opportunity, since it would reduce Canada’s dependence on the American market as well as increasing the price it receives per barrel. Enbridge, the energy company backing it, says that over 30 years it could increase Canada’s GDP by C$270 billion.

. November 3, 2011 at 8:40 pm

Battle brewing over pipeline plans in B.C.

ROD MICKLEBURGH

Last updated Thursday, Nov. 03, 2011 10:48AM EDT

So far British Columbia has been spared the kind of intense pipeline fight that buffets the proposed Keystone XL project to carry Alberta crude from the oil sands to Texas.

But not for much longer. Pipeline politics in this province are heating up.

This week, the pivotal Tsleil-Waututh Nation declared its strong opposition to the potential expansion of Kinder Morgan’s existing oil pipeline to Burrard Inlet and the increase in oil-tanker traffic it would bring to their traditional waters.

. November 5, 2011 at 7:23 pm
. November 7, 2011 at 9:19 pm
. November 13, 2011 at 11:20 pm

Canada’s oil industry faces an urgent search for new markets

Nathan Vanderklippe

CALGARY— From Monday’s Globe and Mail
Published Sunday, Nov. 13, 2011 9:18PM EST
Last updated Sunday, Nov. 13, 2011 9:52PM EST

The lengthy delay in a U.S. decision on the controversial Keystone XL pipeline has created sudden soul-searching for Canada’s energy and political leaders, who have now turned their attention to opening the way for oil exports to Asia.

Without new pipe of some form, it will only be a few years before Canada’s oil gets backed up and begins selling at a deep discount, a prospect that stands to erode corporate and government revenues by billions of dollars a year.

For that reason, the pressure on British Columbia to allow oil to flow across its land and water – for exports to China – is likely to be intense. But the difficulties that sidelined TransCanada Corp.’s Keystone line portend an equally tough future for sending oil to the Canadian West Coast, since the new pipelines required in B.C. are likely to face equally volatile protests – and an even thornier set of legal threats from first nations.

. November 13, 2011 at 11:32 pm

“Companies are now wondering where they can ship future volumes of oil that won’t stir new hornet’s nests. It’s a pressing question: Keystone XL had been expected to begin shipping oil by 2013. Now, it’s unlikely to move oil before 2015, if at all, though TransCanada says the project remains intact. The very soonest an alternative can be built is 2014. By that time, Canada’s oil exports, which are expected to grow by 1.5 million barrels a day in just 10 years, will start growing pinched enough that companies will, according to an analysis from IHS CERA, “face steeper and steeper price discounts for their crudes, as oil-sands production growth will outstrip new demand in existing markets.””

. November 14, 2011 at 7:31 pm

What does this mean for Alberta? Will we be landlocked in bitumen?

No, or at least not any time soon. Current export capacity out of the Western Canadian Sedimentary basin is just under 3.5 million barrels per day, with about 2.2 million barrels per day of that on Enbridge’s mainline system, 300 thousand barrels per day (kbpd) to the West Coast and 280 kbpd to the US midwest via Kinder Morgan’s Transmountain and Express pipelines, and 600 kbpd via the already-operating portion of TransCanada’s Keystone system. If you consider the ERCB’s 2011 forecast for oil production (oilsands and conventional), and net out domestic demand, total oil removals from Alberta are forecast at just over 3 million barrels per day by 2020. With a lot of the growth in exports forecast to come between 2018 and 2020, at that point things get to start pretty tight with existing capacity.

There is significant room for expansion in the current network. Enbridge’s Clipper pipeline could be expanded to add another 350 kbpd without significant regulatory hurdles since the pipeline is already in place. When combined with Enbridge’s 400kbpd Flannagan South and 800 kbpd Wrangler expansion projects, this could provide significant additional effective capacity from Alberta through to the Gulf Coast with limited greenfield development. Other expansion projects face significant regulatory hurdles – this document from the Alberta government lists 2 million barrels per day of potential future capacity, over and above Keystone XL.

. November 14, 2011 at 7:37 pm

COLUMN-If Keystone XL dies, does China win? No – Campbell

Nov 10 (Reuters) – Despite what you may think, the delay or even cancellation of the Keystone XL pipeline project from Canada to the United States does not ensure that China will become the go-to customer for Canada’s vast oil sands.

U.S. President Barack Obama has opted to avoid a tough decision by allowing the government to take more time to study changes to the proposed Keystone XL route to avoid environmentally sensitive areas.

But any delays could kill the project if customers grow impatient and seek release from their binding shipping commitments or if the cost of the line goes up substantially.

Doubtless this theme will be dredged up by Keystone’s backer, TransCanada and other oil industry lobbyists in Washington with an eye to fanning Americans’ fears about oil supply security should the Obama Administration opt for further study of fresh routes for the pipeline.

. November 15, 2011 at 7:16 am

Gateway hearings to test oilsands battle plans

The lasting impact of Obama’s Keystone delay may well be that the environmental movement has a blueprint on how to successfully fight the oilsands.

The pipelines that deliver the ultraheavy oil to market are the pinch point of vulnerability.

Essentially, a group of committed environmentalists, a handful of farmers in Nebraska and a small number of celebrity activists were all it took to derail a $7-billion energy infrastructure project that got caught up in election-cycle politics in the United States.

With Keystone on hold, they can now focus on Gateway.

Enbridge faces a similar coalition of critics to Keystone. Essentially, a sophisticated environmental lobby (i.e., well-funded) working with an aggrieved local party – substitute the Nebraska farmers associated with Keystone for First Nations along the Gateway route.

The fact there are more than 40 scheduled public hearings across Alberta and British Columbia beginning in January with more than 4,000 people registered to speak means this will be months of public blasting of oilsands development. That the hearing by a joint panel of the National Energy Board and Canadian Environmental Assessment Agency has allowed people from anywhere in the world to speak will give the hearings an international flavour, but make the logistics more challenging.

. November 17, 2011 at 9:40 pm

Route Proposals May Ease an Oil Pipeline Bottleneck

OTTAWA — With the timing, and perhaps the future, of the Keystone XL pipeline project from Canada’s oil sands to the Gulf Coast now uncertain, two alternatives to the hotly contested project have begun emerging.

Both would try to solve one of the problems that the Keystone project was meant to address: the shortage of pipeline capacity for carrying oil from a main terminal in Cushing, Okla., to refineries in Texas and other parts of the Gulf Coast.

Enbridge, a Canadian pipeline company that is not involved in the Keystone project, said on Wednesday that it had bought a 50 percent interest in the Seaway Crude Pipeline, which runs from Freeport, Tex., to Cushing, for $1.15 billion from ConocoPhillips. Enbridge and Enterprise Products of Houston, the pipeline’s other owner, plan to reverse its flow next year to carry crude southward from Cushing. The pipeline is little used at the moment.

And TransCanada, the Canadian company proposing the Keystone XL project, said it might seek permission from the Obama administration to begin construction on the southern portion of the pipeline as early as January, which also would run from Cushing to Gulf Coast refineries.

. November 17, 2011 at 10:12 pm

Pipeline giants rush to feed Gulf Coast refineries

SHAWN McCARTHY AND NATHAN VANDERKLIPPE

OTTAWA AND CALGARY

From Thursday’s Globe and Mail

Last updated Thursday, Nov. 17, 2011 7:41AM EST

Enbridge Inc. and TransCanada Corp. are racing to win support for rival pipelines to feed the massive oil-refining hub on the Gulf Coast, and help erase a price discount that has cost the Alberta oil industry billions in lost revenue.

Enbridge is spending $1.5-billion for a half interest in the Seaway crude pipeline, which connects the oil distribution hub of Cushing, Okla., with oil refineries on the Texas Gulf coast. Enbridge, along with partner Enterprise Product Partners LP, plans to reverse the flow of oil in the underused pipe to provide much-needed crude supply to the Texas refineries. The Seaway line was originally designed to ship oil from Texas to the small refining hub in Cushing.

At the same time, TransCanada says it is pursuing plans to quickly construct the most southerly leg of its controversial Keystone XL project – connecting Cushing to the Houston area – even as it fights to win approval for the full $7-billion, 2,700-kilometre project planned to run from Alberta to Texas.

The latest pipeline plans highlight the United States’ growing need for Canadian oil even as Keystone XL is caught up in regulatory scrutiny and political wrangling. Gulf refineries have been built to process heavy oil from foreign sources such as Mexico and Venezuela, but those supplies are in decline, stoking demand for product from other sources. Canadian heavy oil, including oil sands output, is a natural fit.

. November 29, 2011 at 1:16 pm

The price of West Texas Intermediate oil jumped sharply after a Canadian company agreed to buy a stake in a pipeline that helps feed an important storage hub at Cushing, Oklahoma, and reverse the flow in order to relieve a build-up of oil there. The glut of oil in Cushing has dragged down the price of WTI, causing it to diverge from other oil prices. The pipeline’s oil will in future flow to refineries in the Houston area. See article

. December 2, 2011 at 11:20 am

First nations claim alliance is barrier that pipelines won’t break

Save the Fraser Gathering of Nations says it has support of 130 first nations

By Derrick Penner, Vancouver Sun

As government and the oil industry increase their focus on British Columbia’s coast to build pipelines and tanker terminals to expand Canada’s oil exports into Asia, first nation groups are ramping up their opposition to all of those efforts.

On Thursday, signatories to the initiative called the Save the Fraser Gathering of Nations, said they had increased their roster to 130 from 61 western Canadian first nations that oppose not just construction of Enbridge Inc.’s Northern Gateway project, but any project to increase Canada’s exports of oilsands crude, on the grounds that they infringe on aboriginal title.

“I have news for you [Prime Minister Stephen Harper], you’re never going to achieve your dream of pushing pipelines through our rivers and lands,” said Chief Jackie Thomas, of the Saik’uz First Nation, and head of the Yinka Dene Alliance, a key spokeswoman for the group in B.C.’s interior.

. December 4, 2011 at 6:17 pm

First Nations group signs deal with Enbridge

WENDY STUECK
VANCOUVER
From Saturday’s Globe and Mail
Last updated Friday, Dec. 02, 2011 10:49PM EST

A day after native groups rallied in a show of force against the Northern Gateway project, a hereditary chief announced that the Gitxsan people had signed on as a partner in the $5.5-billion proposal – allowing Enbridge to make good on its contention that native opposition to the company’s plans is far from unanimous.

But even as Enbridge welcomed the support of the Gitxsan nation and praised the vision of its leaders, dozens of native groups remained staunchly opposed, insisting that the pipeline-and-tanker project poses an unacceptable risk of oil spills and other problems.

. December 6, 2011 at 10:54 am

Enbridge faces delay on bid to partly reverse flow of Ontario oil pipeline

Nathan VanderKlippe
Calgary – Globe and Mail Update
Last updated Monday, Dec. 05, 2011 11:56PM EST

Battles over pipelines have created troubles for Canada’s oil sands producers looking to export more product south and west.

Now, a decision by the National Energy Board creates new obstacles for sending oil east, too, to markets in Ontario and the Atlantic coast.

Canada’s energy regulator said Monday that it will launch an oral public hearing for the partial reversal of Line 9, an Enbridge Inc. pipeline that currently delivers crude from Montreal to Sarnia, Ont. In August, Enbridge had applied for an exemption from such scrutiny.

. December 16, 2011 at 7:56 pm

Blocking pipelines to B.C. would entail loss of billions: study

Carrie Tait
Calgary – Globe and Mail Update
Last updated Thursday, Dec. 15, 2011 7:43PM EST

Canada will forgo billions of dollars in gross domestic product and government revenue if oil companies are unable to access markets off the Pacific coast, according to a new study.

Moving Canadian heavy oil to the West Coast, where it can be shipped to markets in California and Asia, could add up to $131-billion (U.S) to Canada’s GDP between 2016 and 2030, according to a new study prepared by researchers at the School of Public Policy at the University of Calgary. This translates to $27-billion in federal, provincial and municipal tax receipts, the academics calculated.

. January 9, 2012 at 10:21 am

‘Radical groups’ spur Tories to speed pipeline review process

The Conservative government will bring forward new rules to greatly shorten environmental reviews of pipelines and other major projects, arguing that “radical groups” are exploiting the reviews to block proposals vital to Canada’s economic future.

On the eve of hearings into the proposed Northern Gateway oil pipeline from Alberta to the Pacific coast, Natural Resources Minister Joe Oliver released a strongly-worded open letter Monday condemning some opponents of the pipeline. A copy of the letter was provided in advance to The Globe and Mail.

“The objective should be that these reviews would no longer go on for many, many years. They would have a definitive timeline that would provide certainty to the participants who are sponsoring the project.”

. January 19, 2012 at 8:27 pm

Enbridge Announces Athabasca Twin Project: Enbridge announced a $1.2 billion plan to twin its pipeline from Kirby Lake near Fort McMurray to the Hardisty crude oil hub. The energy company wants to increase capacity to accommodate the rapid growth of production in the Kirby area and the Athabasca region further north. The addition of 345 km of 91.4-cm pipeline will boost transmission from 570,000 barrels per day (bpd) by 450,000 bpd the potential to increase up to 800,000 bpd. Two new pumps stations will be installed at the Kirby Lake and Bonnyville facilities. The project will boost the local economy, creating 545 person-years of jobs and generating additional revenue for communities along the pipeline from taxes. A regulatory application to the Energy Resources Conservation Board (ERCB) is expected by spring of 2012. With approval, construction would begin early in 2014 to begin operation by 2015, reaching full capacity by 2016 (September 13).

. January 19, 2012 at 8:32 pm

Through Access to Information Legislation, Canadian reporter Mike de Souza obtained letters exchanged between Alberta Environment, the U.S. Environmental Protection Agency (EPA), and Canada’s U.S. Ambassador Gary Doer. The correspondence shows Canada’s explicit lobbying efforts to persuade the U.S. to exclude climate change impacts from its final decision about the Keystone XL project.

However, the U.S. EPA pushed back and argued that the U.S. government should factor the entire footprint of oilsands pollution into the decision, since it affects its own citizens as well as the rest of the world:

“Given that the possible consequences of greenhouse gas emissions are global in nature, they include potential impacts on the United States, and we believe it is appropriate that the State Department consider these upstream greenhouse gas emissions in its evaluation,” EPA Administrator Lisa Jackson wrote on Dec. 7, 2010 in response to a letter from Doer.

Even Environment Canada agrees that “the oilsands are Canada’s fastest growing source” of greenhouse gas emissions, and by no means is this growth insignificant. Over the last two decades, greenhouse gas pollution from the oilsands has grown by over 150 per cent. From 2005 to 2020, Environment Canada’s number show, they’re going to keep right on growing, tripling from 30 million tonnes in 2005 to 92 million tonnes in 2020.

Milan January 23, 2012 at 4:58 pm

This is important:

With U.S. President Barack Obama’s extreme decision Wednesday to deny a permit to the Keystone XL oilsands pipeline, Canada’s oilsands industry, one of the few engines of investment and job creation in North America, stands on the brink of a slowdown.

Export pipeline capacity is expected to run out by around 2016, throwing today’s growth strategies into serious doubt.

Keystone XL, and its all-Canadian alternative, Northern Gateway, were supposed to be the main solutions to transporting growing oilsands production to new markets.

Both are stuck.

To be sure, Keystone XL proponent TransCanada Corp. has been invited to apply for a new permit with a revised route that avoids environmentally sensitive areas in Nebraska. But the reality is that there will be no pipeline decision – and it could still be a ‘no’ – until at least after the November Presidential election, and possibly longer.

“It’s back to the drawing board,” said Washington policy analyst Fred Cedoz, vice-president of Global Water & Energy Strategy Team. “It’s anybody’s guess, I suppose, when they reapply, what new hurdles they might have to jump..”

Meanwhile, Enbridge Inc.’s Northern Gateway, the only other significant option to accommodate oilsands crude, already seems a long shot due to First Nation and community opposition.

Blocking pipelines helps choke off the possibilities for growth in the oil sands. That reduces how much total oil will be burned globally, which reduces how much climate change the world will experience.

. January 23, 2012 at 5:01 pm

A high-stakes legal battle is underway in California over whether the state’s clean air agency can enforce a first-ever rule to slash carbon emissions in transportation fuels. The fight is being closely watched because the rule could choke global market demand for Alberta’s carbon-intensive oil sands at a very precarious time for the industry.

On Wednesday, the Obama administration rejected a permit for the controversial Keystone XL pipeline, which could have increased imports of the fuel into the U.S. by up to 830,000 barrels a day. It was a major setback for the oil industry and its allies and an unexpected victory for environmentalists and their allies. The two sides are now facing each other down in this court case.

California’s low-carbon fuel standard is the world’s first attempt to require oil suppliers to slash the carbon footprint of their motor fuels, measured not just by emissions from tailpipes but across their full lifecycle, from extraction to combustion. Eleven Northeast and Mid-Atlantic states, and the European Union, are closely tracking California’s case because they are working to adopt similar rules.

The state’s influential Air Resources Board, or CARB, adopted the Low Carbon Fuel Standard in 2009 as part of its landmark global warming law, A.B. 32. The agency was supposed to begin enforcing the rule on Jan. 1, 2012. But oil companies, which say it unfairly penalizes high-carbon fuels like oil sands crude, have fought furiously to kill the standard. And on Dec. 29, a federal judge in Fresno, Calif., handed them a victory by ruling that CARB can’t enforce the measure until an outstanding lawsuit by the oil industry and ethanol advocates is resolved in 2013.

. January 23, 2012 at 5:28 pm

The lure of the oil sands is that they hold some of the world’s biggest petroleum reserves. The bad news is that getting this resource out of the ground and ready for refining is expensive, by some estimates the planet’s most costly major oil source. Oil prices have to stay lofty to make investments in the sector pay. Any faltering in prices could cause profits to be elusive, or evaporate.

Just how close new oil sands projects are to being a dicey investment proposition is an open question. For competitive reasons, some major companies – such as Imperial Oil Ltd., developer of the mammoth $30-billion Kearl megaproject – aren’t forthcoming on the oil prices needed to earn a decent return.

But the National Energy Board, culling through publicly available data from the industry, recently pegged the minimum price needed for new projects to be commercially viable at $85 to $95 (U.S.) a barrel.

“It’s the world’s most expensive oil,” said Andrew Logan, head of the oil and gas program at Ceres, a Boston-based organization that promotes sustainable investment and corporate governance.

He said prices wouldn’t need to retreat much from current levels around $100 a barrel to sting investors in new projects. “Starting from a point of the economics being sort of relatively marginal . . . it doesn’t take a lot to slip them into the red,” he said.

The NEB issued the price data in its Canada’s Energy Future report in November. The estimate included the costs of extracting the sticky bitumen from the ground and processing it in upgraders, along with a 10-per-cent to 15-per-cent after-tax profit margin for producers.

. February 3, 2012 at 10:56 am

Suncor downplays effects of pipeline delays, says plenty of Plan Bs on the table

Delays in building new oil pipelines from Alberta won’t be a cause for concern for about four or five years, and several alternate proposals could help avoid major slowdowns in the future, the head of Canada’s largest energy company said today.

“There’s plenty of Plan Bs on the table, and so my own view is that its not going to be a bottleneck,” Suncor Energy Inc. (TSX:SU) CEO Rick George told a conference call.

“I actually don’t see crude getting backed up into Alberta.”

George, who is set to retire in May, made his remarks after Suncor reported a 10 per cent increase in fourth-quarter earnings late Tuesday and announced crude has begun flowing out of its Libyan operations following the end a bloody civil war in the North African country.

Oil pipeline proposals, particularly those that would carry what environmentalists call “dirty” oilsands crude, have attracted vehement opposition. Regulatory reviews on projects connecting Alberta crude to both the U.S. Gulf Coast and Canada’s West Coast have been dragged out amid the controversy.

But George said the industry is looking at other options, citing two Enbridge Inc. (TSX:ENB) proposals to modify existing pipelines, rather than building new ones from scratch. One would reverse the Seaway pipeline, bringing crude from Cushing, Okla. to Gulf Coast refineries. Another would see part of Line 9 through Ontario reversed to bring Western Canadian crude eastward, though a review of that project is taking longer than expected, too.

. February 3, 2012 at 10:57 am

Alberta and N.W.T. First Nations sign Fraser Declaration against Enbridge and Kinder Morgan pipelines

Last week’s signing of the Fraser Declaration on the part of First Nations in Alberta and the Northwest Territories marks a high point in a series of actions directed at the National Energy Board hearings in Edmonton.
As described in the below press release, the Fraser Declaration was led by the Yinka Dene Alliance; it is a formal declaration opposing the Enbridge Gateway project and supertankers on the B.C. coast.
Over 130 First Nations chiefs have now signed the declaration to ban crude oil exports through their traditional territories. This past December 1st saw a celebration of the Declaration that included an expansion of the breadth of the document which now includes all crude oil exports across B.C. This includes Kinder Morgan’s attempts to turn Vancouver Harbour into a tar sands shipping port.

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