oilsands

After much noise, a quiet approval

There’s no debate over the Northern Gateway pipeline.
There’s been plenty of talk – much of it impassioned, some of it belligerent – but in the dictionary sense of the participants in a discussion legitimately considering the different sides of a question, there really isn’t a debate over the oilsands pipeline Ottawa approved Tuesday.
The “noise” is drowning out actual dialogue.
The issue is about getting Alberta’s landlocked oilsands resources to overseas markets so that projected growth to 4.8 million barrels a day production by 2030 occurs. Or, it’s about coming up with ways to stop that scenario from playing out.
Pipelines – Enbridge’s Northern Gateway and TransCanada’s Keystone XL, in particular – have become the focal point of the war of words.
Both sides talk a good game for their supporters – defiance by the environmentalists and First Nations in British Columbia and accommodation by the oil industry and the federal government – but their narratives are all part of well-orchestrated messaging campaigns.
After six months of speculation since a federal environmental review panel approved the 525,000-barrel-a-day-pipeline – subject to Enbridge meeting 209 conditions – Prime Minister Stephen Harper’s cabinet quietly signed off on the decision. It was released with little fanfare after business hours Tuesday.
“Today constitutes another step in the process,” Natural Resources Minister Greg Rickford said in a statement.
“The proponent clearly has more work to do to fulfil the public commitment it has made to engage with Aboriginal groups and local communities along the route.”
Enbridge agreed it has “work to do” before a final investment decision on the $7-billion project. For the pipeline’s proponents, the heavy lifting ramps up as opponents dig in for a long fight. Litigation could hold development up for years.
There was no media availability with Harper or Rickford similar to the prime minister’s widely applauded news conference to explain the government’s decision to halt takeovers of Canadian oilsands producers by state-owned companies after the Chinese company CNOOC’s takeover of Nexen in 2012.
Ottawa contends pipeline bottlenecks cost the economy $20 billion a year and has made export infrastructure a priority in its goal of Canada becoming an energy superpower. Critics contend the risks of a spill – from either a pipeline or an oil tanker – outweigh the projected benefits.
It didn’t take long for the outrage at Ottawa’s widely expected decision to erupt. Nature Canada’s Stephen Hazell compared the potential for a spill from Northern Gateway to “playing Russian roulette.”
The Pembina Institute complained approving pipelines that encourage oilsands expansion “is not in the public interest” without regulations to curb GHG emissions in the sector.
Politicians and First Nations vowed to stop Northern Gateway in its tracks.
Presumably, Harper saw no upside in adding to the politically charged discourse. That’s understandable.
Both sides are deeply entrenched in their positions and that’s not likely to change.
In an era when the industry’s focus on gaining a “social license to operate” has been corrupted to mean everybody believes they are entitled to a veto, there isn’t going to be a consensus on any new pipeline. There is no level of trust nor any sense of common purpose on energy policy.
And deference to authority has largely disappeared among everyday citizens empowered with unprecedented information and the means of communication in an increasingly polarized society.
This isn’t the pipeline debates of parliament in the 1950s. (That being said: want to oppose?? Click on the following link: http://www.greenparty.ca/no-to-enbridge?utm_campaign=C14.ERP&utm_source=massmail&utm_medium=email)
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It’s more akin to the endless abortion arguments – two groups diametrically opposed and unwavering. Both sides in the Northern Gateway dispute claim to be speaking on behalf of a greater public good.
The proponents cite its importance to Canada’s economy while opponents point to the threat from GHGs to the environment globally.
Both have expended a lot of effort to win over public opinion to their side.
Doug Eyford, who was appointed Ottawa’s special representative on West Coast energy infrastructure and aboriginal relations in December, has said “it’s never too late to engage,” but that optimism seems like a pipe dream at this point.
For all the talk, it is evident neither Enbridge nor the oil industry is counting on one or two disputed projects to get oil to markets.
The International Energy Agency predicted Tuesday that Canada could ship 300,000 barrels a day of oil to China by 2019 whether there is a West Coast pipeline or not, citing the increase in oil moving by rail and growing re-exports of Canadian oil through the United States.
“These volumes do not depend on the commissioning of new pipelines to … the Pacific coast,” the IEA said.
Whether oilsands opponents can muster the support to block all those routes is debatable.

Canada keeps up pitch for Keystone

Natural Resources Minister Joe Oliver landed here Monday to sell the Keystone XL pipeline only to find a capital awash in a rising political crisis over Syria that has flushed the contentious pipeline, along with most other issues, into the deep beyond.
Oliver met for an hour with Ernest Moniz, a nuclear physicist and environmentalist who became U.S energy secretary in May. Among the topics of discussion were Keystone XL, reducing the environmental footprint of non-conventional oil production such as the oilsands and sharing energy and environmental technological research, Oliver said.
Keystone XL, which is expected to transport more than 800,000 barrels of oil a day primarily from the oilsands, remains key to the oilsands expansion strategy. This visit marked Oliver’s fifth official trip to sell the project.
Once again, Oliver contended at a subsequent news conference that Canada is doing its best to reduce oilsands greenhouse gas emissions. While he emphasized that emissions per unit of production have decreased, he acknowledged overall emissions continue to rise.
He again noted Canada has aligned its overall reduction goals with those of the U.S. These include a 17 per cent reduction of 2005 levels by 2020. Oliver said Canada is about halfway there, adding oilsands companies are working to reduce to zero the emissions difference between oilsands and conventional oils.
He said the discussion involved technologies, not policies, that could reduce its greenhouse gas footprint. “Our goal is to reduce entirely that differential,” Oliver said. “We don’t regard the proposed policies as concessions.” He refused to comment on a recent letter sent to U.S. President Barack Obama by Prime Minister Stephen Harper that purportedly offered greater emission reductions should Obama approve the Keystone XL project.
Oliver said Canada must improve its greenhouse gas record so it can obtain society’s support – what he called a “social licence” – to continue to develop oilsands resources. He denied that any new commitments amount to “concessions” to the U.S. With or without Keystone, Oliver said Canada will “continue to aggressively pursue the markets to assure that the Canadian energy industry can take advantage of the world’s fastest growing economies.”
Despite rising U.S. oil production, U.S. energy figures predict the U.S. will still need to import 7.4 million barrels a day by 2035. “The Keystone pipeline will help meet that demand,” he said. “For America the Keystone XL represents a secure, stable source of energy.”
He said North America “can be energy independent within the next 20 years.”
TransCanada Pipelines has been seeking approval for the $5.3-billion Keystone XL project since 2008. The final approval rests with Obama.
Oliver said he did not ask about when Obama will make the final decision. Reports suggest it will not be before 2014.
 

William Marsden, Postmedia News, With Files From Bloomberg

Published: Tuesday, September 10, 2013

Entire country will pay price if oil logjam isn't cleared soon…

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It would be nice to think a visit to Alberta and the oilsands by New Brunswick’s premier would be all that is needed to significantly move the yardsticks on alleviating the impact of burgeoning oil supply in the absence of adequate transportation options.
It’s heartening to see a premier from a province other than Alberta or Saskatchewan personify what it means to be part of Confederation.
By coming to Alberta and visiting the oilsands, Premier David Alward sent the rest of Canada two very important messages.
One is that Alberta’s issue of too much bitumen and not enough export access is not just an Alberta problem – it’s a national one.
The second message implicit in his visit was, that as part of a Confederation, there are times when it’s important to work together to solve problems.
It all helps – but it’s not enough.
According to a study published by the TD Bank, energy sector investment accounted for 20 per cent of Canada’s economic growth in 2010 and 2011.
A 2012 report by the Canadian Energy Research Institute estimated if the pipelines currently planned are not built, Canada will forego $1.3 trillion in terms of economic growth and $276 billion in taxes between 2011 and 2035.
That’s not small change. As things stand right now, the differential is costing the sector, and the country, $75 million a day in lost revenue.
What does this mean? While Imperial Oil might have kicked off the ‘uh oh, costs are rising’ refrain last week when it revealed its Kearl Lake project will cost $2 billion more than expected, the announcement by Suncor late Tuesday hit a home run in the context of the longer term implications of being landlocked in bitumen.
Suncor’s $1.5 billion writ-edown on its Voyageur project shows the current economics don’t support the development of the resource.
This is all about rising costs and wide differentials that decrease the returns per barrel.
Ultimately this leads to a decline in investment.
It’s not a happy picture.
What could change it?
Sending oil eastward via TransCanada’s infrastructure and on to New Brunswick would help, however, the reality is this can’t happen overnight.
The pipe ends at Quebec, which means a new pipe would have to constructed from Quebec to New Brunswick. The time frame for this would extend into 2018 or 2019; not soon enough to narrow that gap, which has been as great as $42.50 per barrel in December.
As a reality check, oil traded at a level as big as that differential back in 2004, when West Texas Intermediate averaged $41.43 US per barrel.
Of course, if TransCanada’s Keystone XL Pipeline were to be approved by U.S. President Barack Obama – and he is the one ultimately responsible for giving it the green light – the issue of the differential would be addressed.
What Obama must wrestle with is that the approval of Keystone will stand as an acknowledgment that the United States is going to need oil as part of its ongoing energy mix.
The question, perhaps, that Canadians – and more specifically, Prime Minister Stephen Harper – should be asking is whether there is anything Canada should do to get Keystone approved?
One issue that has been raised, on which there is concern, is that of environmental impact.
Last week the journal Nature pointed out emissions generated by oilsands production is not something that should be taken into consideration in the Keystone approval process as they don’t occur in the United States.
However, is it time for Canada to look at a way to internalize that so-called cost of carbon as a way to neutralize the environmental opposition to oilsands development?
The Canadian government has long said it would follow the lead of the U.S. when it came to setting carbon policy.
But it might just be time, for the sake of the Canadian economy, to look at things from a different perspective and take the lead on an issue that the U.S. itself has successfully avoided. When examined from this perspective, it boils down to an issue of leadership at the federal level.
What is Prime Minister Harper prepared to do to ensure the long term economic prosperity of this country?
“Governments could also champion the economic opportunities that increased production and diversification of markets could provide,” said the TD Bank in its study.
Where is that ‘government championing?’
So far, there has been some support from provincial leaders – thanks in large part to Premier Alison Redford’s efforts, but the silence from the prime minister’s office on this issue, thus far, has been deafening.
On Wednesday, the University of Calgary’s School of Public Policy released a study addressing the challenges faced by the lack of export capacity.
What’s needed, said Michal Moore, one of the study’s authors, is a mechanism through which a plan for alleviating the constraints to continued growth.
“We’re not being coordinated in our responses … there is no forum to uniformly discuss all those (options). The eastern pipeline is attractive, but I don’t have a standard by which to weigh it today, but I don’t think anyone does either. And what our premier is pointing out … is the need for some sort of a common forum to discuss an energy strategy where we all can see what the facts are at the same time. It’s (the eastern pipeline) attractive, certainly stimulates public interest.
“I don’t have any numbers by which to vet it but it highlights the issue that we don’t have a common strategic forum by which to discuss it,” said Moore.
And so, the puck goes to you, Prime Minister Harper. The time has come for you to take a shot, and lead.
 
By Deborah Yedlin, Calgary Herald February 7, 2013 7:54 AM

Read more: http://www.calgaryherald.com/business/Yedlin+Entire+country+will+price+logjam+cleared+soon/7930463/story.html#ixzz2KEPZrigO