|Oil Sands resource, Alberta Canada
|The Business Insider (June 17, 2013) observed that, if TransMountain's "expansion is approved, TransMountain will be the only available outlet for Alberta crude. If Keystone XL is killed, it will leave TransMountain as the only game in town for transporting oil directly from the oil sands to export terminals, up to 900,000 barrels a day. And most of that oil will be shipped west to China."
No wonder Steyer has not breathed a word of criticism about TransMountain, which is functionally the same as Keystone. No wonder he lobbied against the Northern Gateway pipeline which would take oil from Edmonton to the west coast. It, too, would compete with TransMountain.
Steyer does not speak of his own profit, however. When the Washington Post (April 22, 2014) compared Steyer to the conservative billionaire Koch Brothers, who donate millions toward election campaign, he reportedly "chuckled." Then, he replied "Their policies line up perfectly with their pocketbooks, and that's not true for us," he said.
But, then, Steyer is used to misrepresenting facts. The Washington Post Fact Checker awarded Steyer four Pinocchios - its highest 'honor' - for the depth of his inaccuracy about Keystone.
mer på link
Europe softens stance on Canada's oil sands as relations with Russia sour
Yadullah Hussain, Financial Post
May 6, 2014
|Mer om Canadisk eksport fra oljesand-industrien.
Noen få skipninger av bitumen er gjort.
De ble transportert til Gulf'en på jernbane, lastet ombord på tankskip og skipet til kunder i Europa og Asia.
Canadiaks eprodusenter skiper nå ca. 160k f/d olje til USA på jernbane.
Canada's Chamber of Commerce har estimert at dersom Canada hadde eksportmuligheter, kunne industrien oppnådd $50mill/d høyere salgspris enn pr.idag.
Canada Aims to Sell Its Oil Beyond US
Producers Want to Diversify but Are Stymied by Poor Access to Ocean Ports
Chester Dawson, WSJ
June 5, 2014
Last fall, Canadian oil producer Husky Energy Inc. (HSE.TSE) sent a batch of crude on a journey to India. It was just a drop in a sea of global oil transactions, but a step toward reshaping North American energy trading.
The million-barrel shipment to Indian Oil Corp. (530965.BY), described by Husky as a test sale, foreshadowed what Canadian producers hope will become many new overseas markets for their oil.
"We are doing it opportunistically to have the wheels greased" for more exports far afield if they become feasible, said Asim Ghosh, Husky's chief executive. Recently, Husky also shipped a batch of oil to Italy's Eni (ENI.MI) SpA.
While the US debates whether to loosen a decades-old prohibition on shipping its oil overseas, Canada is quietly positioning itself to become a significant exporter of North American oil beyond the continent.
Canada's producers long ago came to rely on the US to buy almost all of their exports, in an era when the American appetite for imported oil seemed sure to continue growing steadily. But that appetite is easing, thanks to the US oil-shale boom, even as Canada's rich oil sands keep producing ever more oil. That leaves Canada a country with too much oil and not enough buyers.
Overseas markets could solve this problem, and probably bring higher prices to boot. But there is one major obstacle. Canada's long reliance on the U.S. market has left it with few ways to get its oil to ocean ports.
A half-dozen new or expanded pipelines are planned, but are years from being built. These include the proposed Keystone XL tying Alberta's oil sands to the Gulf of Mexico, a project that remains uncertain amid environmental and political opposition.
Some Canadian producers are so intent on finding new markets they are looking to a loophole in the US rules against oil exports. The rules apply only to US-produced oil, so Canadian producers can apply for licenses to ship oil to the US Gulf Coast and then re-export it to distant lands from there.
"This could be the next big game changer for the North American crude-oil markets," said Martin King, vice president of institutional research at FirstEnergy Corp. (FE.N), an investment bank in Calgary, Alberta. "Re-exports of Canadian crude, mostly out of the Gulf Coast, are going to change the industry," he said.
mer på link
Og EU er i ferd med å dempe motstanden mot import av produkter fra Alberta's oljesand industri.
Oil sands development in Northern Alberta.
Canadian oil sands not dirty: EU
Cecilia Jamasmie, Mining.com
June 6, 2014
The European Union is withdrawing its proposal to label Canada's oil sands as "dirty" in a decision that would open the European market to fuel generated in Alberta.
mer på link
Endret 09.06.2014 10:07 av OldNick
|TransCanada opponents not as poor as they pretend - Part I
by Stockwatch Business Reporter
A shadowy cabal of billionaires, hiding behind tax-advantaged charitable foundations, is showering money on purportedly homegrown green groups, according to a report by the Republican minority of the U.S. Senate Committee on Environment and Public Works (EPW).
The 92-page EPW report, released on July 30 and entitled "The Chain of Environmental Command: How a Club of Billionaires and Their Foundations Control the Environmental Movement and Obama's EPA," tears apart a common illusion about green groups: that they are grassroots citizens' efforts to bring down corporate bogeymen. The David-versus-Goliath angle is a core part of their fundraising. Yet these groups, says the report, are little more than willing mouthpieces for their billionaire backers, who rely on tax loopholes and an unknowing public to influence environmental policy.
The EPW report outlines how a group of incredibly wealthy far-left donors, which it dubs the "Billionaire's Club," finances many prominent environmental activists and nearly all the major environmental non-government organizations (NGOs), as well as several media outlets. In 2011 alone, says the report, 10 foundations linked to the Billionaire's Club donated $577-million -- over half a billion dollars. (Figures are in U.S. dollars unless otherwise noted.)
The report further describes a revolving door between radical environmentalists and the executive branch of the U.S. government, specifically the Environmental Protection Agency (EPA).
"These entities propagate the false notion that they are independent, citizen-funded groups working altruistically," says the EPW report. "In reality, they work in tandem with wealthy donors to maximize the value of the donors' tax-deductible donations and leverage their combined resources to influence elections and policy outcomes, with a focus on the EPA."
Part 1 of this two-part series of articles introduces the billionaires' machinations, their headline-grabbing puppet activists, and the way they aim to influence policy both at home and abroad.
The money trail outlined in the EPW report begins with a select group of well-known environmental foundations. These are either 501(c)(3) private foundations or 501(c)(3) public charities. (Section 501(c) of the U.S. Internal Revenue Code exempts some types of non-profits from some federal income taxes.) The foundations meet and co-ordinate through the Environmental Grantmakers Association (EGA), the secretive "funding epicenter of the environmental movement," says the report. EGA members gave $1.13-billion to environmental causes in 2011. The identity of those members is not clear; the association withholds its membership list from the public and has even refused to disclose it to Congress.
According to the EPW report, the members of the Billionaire's Club have established about a dozen influential private foundations between them, including the Rockefeller Brothers Fund, the Park Foundation and the Sea Change Foundation. By doing this, the billionaires can make large contributions to their private foundation and enjoy a tax break of up to 30 per cent of their adjusted gross income. The foundation itself does not pay tax on the income. As well, the billionaires who attach their name to their organization (as most do) enjoy significant reputational boosts.
Private foundations also have substantial discretion over how to spend their money. The ones created by the Billionaire's Club do not generally donate altruistically, says the EPW report, but rather employ a "prescriptive grant-making" technique in which they seek out beneficiaries that will comply with a tightly defined agenda. Organizations that fit the bill are invited to come and get money; the rest need not apply.
Endret 18.09.2014 08:46 av OldNick
|Examples of prescriptive grant-making by some of the Billionaire Club's foundations include a $200,000 grant from the William and Flora Hewlett Foundation to the Union of Concerned Scientists "for coal retirement and removing market barriers to renewable energy projects," as well as $50,000 grant from the Park Foundation to the New York Public Interest Research Group for the "continuation of its widespread public education campaign on the issue of gas drilling in New York." ("Education" is a misleading word for the work that activists do, as will be discussed in Part 2.)
Despite the advantages of private foundations, public charities are generally the vehicle of choice. They provide greater tax benefits -- up to 50 per cent of adjusted gross income -- and, unlike private foundations, public charities are not required to disclose donors. A public charity may be characterized as a foundation, such as the Tides Foundation or the Energy Foundation, or as another kind of non-profit, which will generally bill itself as an activist group. Examples mentioned in the EPW report include Greenpeace, the Sierra Club, the World Wildlife Fund, the Natural Resources Defense Council and the Center for Biological Diversity.
Greenpeace, the Sierra Club and other activist groups are the "public face" of the environmental movement. It is the Center for Biological Diversity, not the Wallace Global Fund, that sent a polar bear mascot to rap against TransCanada's proposed Keystone XL pipeline at a protest outside the White House. It is the Sierra Club and Bold Nebraska, not the Tides Foundation, that made headlines while building a so-called clean-energy barn in Keystone's path through Nebraska. (The barn was later found to get some of its energy from coal-fired power plants.) In Canada, it is members of Greenpeace, not the Rockefellers, who have frequently been arrested during protests in Ottawa or at the oil sands. These and other antics are regularly covered by Canadian outlets including Stockwatch's Energy Summary.
The U.S. billionaires, of course, are careful to avoid the cameras and goofiness. Their work goes on behind the scenes. Yet even in Canada, their influence is deeply felt.
Following the money
The EPW report does not discuss the funds that the billionaires send across the border, but that has been the focus of continuing research by Vivian Krause of North Vancouver, B.C. Over the past five years, according to articles she has published in the Financial Post and the Alberta Oil Magazine, she has examined over 100,000 pages of U.S. tax returns and traced over 2,000 grants from U.S. foundations to Canadian environmental and Indian groups bent on stopping all things oil sands, including pipelines.
By Ms. Krause's calculations, over three dozen U.S. foundations have granted over $425-million since the late 1990s, including at least $75-million between 2009 and 2013, to fight Canadian energy development. She notes that this figure understates the real amount of money. It does not include grants for general or unspecified purposes, or for large-scale land conservation initiatives, such as a $100-million donation from the Rockefellers Brothers, the Gordon and Betty Moore Foundation, the Hewlett Foundation, and the Packard Foundation to create the Great Bear Rainforest no-trade zone on the North Coast of British Columbia.
The Great Bear Rainforest, the Yukon to Yellowstone Initiative and the Canadian Boreal Initiative are Canada's three largest conservation initiatives. They seek to block roads, mining, forestry, and oil and gas development on more than one-third of Canada's territory. For all three, writes Ms. Krause, the main financier is a U.S. foundation, and the initiatives were financed in conjunction with efforts to stymie Canada's oil and gas sector.
Major U.S. backers of Canadian anti-oil groups include the Tides Foundation and the Rockefeller Brothers Fund. Since the late 1990s, calculates Ms. Krause, at least $10-million (U.S.) has been granted from the Rockefeller
Endret 18.09.2014 08:47 av OldNick
|Fund to Indian and green groups in Canada. The Tides Foundation paid at least $25-million (U.S.) between 2009 and 2013 to 75 groups. The groups have specifically sent the money for such purposes as: "to campaign to support a moratorium on offshore oil and gas exploration [on the B.C. coast]" (from a Rockefeller grant to the David Suzuki Foundation) "to strengthen opposition to tanker expansion on the B.C. coast" (Tides to the Sierra Club), and to "build public opposition to tar sands and pipelines," "cultivate indigenous opposition," and "advance the narrative that tar sands expansion is problematic" (Tides to various).
Tides has even begun financing Canadian groups to try to influence European policy. In September, 2013, it paid $55,000 (U.S.) to a numbered company based in the Fort Chipewyan hamlet of Alberta "to build the case for rejecting the Shell and Teck Frontier mines; participate in regulatory processes and use legal tools to increase regulations; work with groups in Europe to support the Fuel Quality Directive; and build public opposition to tar sands and pipelines" [emphasis added]. The next frontier has been signalled.
TransCanada foes just "arm" of billionaire U.S. backers - Part II
by Stockwatch Business Reporter
The previous article in this two-part set, "TransCanada opponents not as poor as they pretend," introduced the U.S. Senate Committee on Environment and Public Works' (EPW) July 30 report on the "Billionaire's Club," a shadowy group of ultrawealthy Americans who shower money on environmental groups to promote supposedly grassroots causes, while enjoying generous tax breaks in the process. This second and final article discusses how the billionaires take advantage of loopholes in the U.S. tax code to turn their tax-advantaged donations into political outcomes. Figures are in U.S. dollars unless otherwise stated.
The billionaires send their funds through 501(c)(3) private foundations or 501(c)(3) public charities. (Section 501(c) of the U.S. Internal Revenue Code exempts some types of non-profits from some federal income taxes.) Public charities are generally the preferred vehicle because they provide greater tax benefits and are not required to disclose donors. Under U.S. law, public charities are not supposed to engage in political activities except for non-partisan voter education, and may not use more than 10 per cent of their resources for lobbying activities. Such rules are not a problem for the ultrarich. According the EPW report, the Billionaire's Club has found a sophisticated workaround.
Nearly all the public charities discussed in the EPW report have an affiliated 501(c)(4) group with which it typically shares staff and board members. Such groups have almost no restrictions on political activities, or at least no restrictions that the Internal Revenue Service (IRS) seems to enforce. The 501(c)(3) group receives money from the Billionaire's Club and transfers it to its affiliated 501(c)(4), which may itself pass money to other 501(c)(4) organizations. In this way, the billionaires gain political influence while enjoying a significant tax benefit. The tangled route also helps obscure the original donors.
Intermediary public charities through which Billionaire's Club money is funnelled are either fiscal sponsors or pass-throughs, explains the EPW report. Fiscal sponsorship enables private foundations to circumvent their own requirement that grantees be recognized as tax-exempt by the IRS. That would eliminate a lot of activist groups, but fortunately for them, they can simply rent another entity's 501(c)(3) status for a fee, meeting the qualifications. Those entities are called fiscal sponsors.
The EPW report says Tides Inc. "sets the standard" for the fiscal sponsor relationship. Tides Inc.'s most recognizable 510(c)(3) affiliates are the Tides Foundation and
|the Tides Center. Both receive money from prominent foundations, such as the Rockefeller Brothers Fund and Sea Change, and both support each other heavily. Between 2010 and 2012, the Tides Foundation gave over $10-million to the Tides Center and the Tides Center gave over $39-million to the Tides Foundation. (The report is at a loss to explain the transfers except as a means of obscuring the money trail.) The Tides Center uses its money to act as "the leading fiscal sponsor in the nation," as it promotes itself. It has over 200 sponsored groups. Each of them is subject to the Tides Center's hands-on oversight and direction, which can include forming a governing board, managing payroll and monitoring risk.
The Sustainable Markets Foundation (SMF) is another illuminating fiscal sponsor, this time of Bill McKibbens's 350.org. In 2010, Mr. McKibben said that in 2009, his group was a "scruffy little outfit" with "almost no money." Yet 1sky.org, 350.org's predecessor, reported expenses of over $2.6-million from Oct. 1, 2008, to Sept. 30, 2009, and net assets of over $2.1-million. From 2011 to 2014, 350.org collected hundreds of thousands of dollars from the Park Foundation, the Rockefeller Brothers Foundation, the Tides Foundation and others, all through grants to SMF. The EPW report notes that Jay Halfon is on the board of directors of both 350.org and SMF, although Mr. Halfon does not mention his SMF affiliation on his 350.org biography. (He is also a director of the Park Foundation, a significant financier of SMF.)
A pass-through foundation also collects money from other sources but then, unlike a fiscal sponsor, passes it on to recognized charities. The EPW report points to the Energy Foundation as a perfect example. In 2011, the foundation received $13.9-million in grants from the Sea Change Foundation alone. It sent money to activist groups such as the National Resources Defense Council and the Sierra Club, which received nearly $3-million and around $1.25-million in 2011, respectively. The foundation does not always send money directly to these groups. It has also been known to transfer millions of dollars to them through yet another intermediary, such as the Green Tech Action Fund. As before, this seems designed to create distance between the donors and the ultimate recipients.
The EPW report notes that another source of money for the activist groups is the government. Far-left environmentalists who want a change of scenery seem to have wonderful luck at the EPA, where they funnel government money through grants to their former employers and co-workers. Under President Obama, the agency has given more than $27-million in taxpayer-financed grants to major environmental groups. The report identifies seven former activists currently holding senior positions in the agency, as well as six former Obama EPA officials are now (back) in the far-left environmental movement. Many of them worked for the movement before coming to the EPA.
Whether delivered by the EPA or through the murky machinations of the Billionaire's Club, the money is soon put to work. The EPW report details the ways by which a network of donors, activists and bureaucrats go about "manufacturing phony 'grassroots' movements and ... promoting bogus propaganda disguised as science and news." Pseudoscientific studies are used to confirm an existing agenda and justify a predetermined policy outcome. The results are then trumpeted by far-left media outlets such as the Huffington Post or Mother Jones, which also receive money from the Billionaire's Club. For example, a story on a Park Foundation-supported anti-fracking study was carried by a Park-financed news outlet through a Park-backed media collaboration, and was further promoted on Twitter by the maker of Park-supported anti-fracking films.
(Far-left environmentalist filmmakers seem particularly nonchalant about where their money comes from. Project Veritas recently released an investigative video in which Hollywood producers of an
Endret 18.09.2014 08:49 av OldNick
|anti-fracking film met with a man believed to represent rich Middle Eastern oil interests. Such a man would have his own reasons for opposing fracking, namely American energy independence. An unconcerned film producer shrugged this off: "This is not the first major project that we've had funded through a funding source which ... we didn't disclose.... It's money, so in that sense we have no moral issue.")
To gain credibility with the public, and to hide their large backers and the influence those backers exert, recipient groups pretend to be organic, disparate citizens' initiatives. In New York and Colorado, a faux-grassroots attack on fracking stemmed from massive contributions from three large foundations. In Virginia, an ostensibly local group battles coal mining. In Nebraska, the main target of ire - and indeed the political symbol for the entire green movement - is TransCanada Corp.'s Keystone XL. This fight has created some of the most famous players in the anti-fossil-fuel game. Two prominent names mentioned in the EPW report are Tom Steyer and Jane Kleeb.
Mr. Steyer, a Californian billionaire and former hedge fund manager, began making his fuss over Keystone early last year. This was a few months after he departed his hedge fund, which invested hundreds of millions in fossil fuel companies while he was in charge. Since then he has tried and continues trying to strong-arm politicians into opposing Keystone, has co-produced social media campaigns that flooded Facebook and other platforms with anti-pipeline videos, and has even financed (through his NexGen Climate group) a report claiming that Keystone would prove an irresistible target for terrorists. His antics make him a regular feature in Stockwatch's Energy Summary and other media outlets.
The EPW report notes that Mr. Steyer has a strong conflict of interest in opposing Keystone because of his financial stake in a competing pipeline company called Kinder Morgan. Although he claimed that he would sell his interest in Kinder Morgan by late 2013, this cannot be verified.
Ms. Kleeb, another frequent figure in the Energy Summary, is the voice and founder of Bold Nebraska, a 501(c)(4) non-profit that opposes Keystone's planned route through Nebraska. It promotes itself as a local initiative by and for Nebraskans. "Nebraskans are bold," proclaims the website. "We are pioneers. We are reformers. We are independent." The proud declarations belie the fact that Bold Nebraska is just an "arm of the Billionaire's Club," says the EPW report. Much of the group's money does not actually come from Nebraskans. In 2012, the San Francisco-based Tides Foundation gave it $50,000 and Tides' San Francisco-based 501(c)(4) group, the Advocacy Fund, gave $15,000. These two donations represented one-third of the contributions Bold Nebraska received in 2012. In 2013, the Tides Foundation gave $90,000. Ms. Kleeb works hard to attract other out-of-state donors to Bold Nebraska. A New York Times Magazine profile on her in May, 2014, noted that she was "in the middle of a fundraising call with progressive donors, including the California billionaire Tom Steyer."
If nothing else, Ms. Kleeb is quick on her feet. Bold Nebraska wasted no time using the EPW report as ammunition for fundraising. An e-mail to supporters was sprinkled with let's-prove-them-wrong exhortations for money, with readers asked to "Chip in $25 now if you're a pipeline fighter" and "Help us fight back against this GOP attack by giving $25, $10, $5 or whatever you can." The group claimed that it takes its "marching orders" from regular citizens, who "are the ONLY reason that Bold Nebraska exists." It did not actually deny receiving money from non-Nebraskan sources; the best defence it seemed able to muster was that pro-pipeline groups receive non-local donations, too. A few days later, Ms. Kleeb wrote that "yes we got a grant from the Tides Foundation" but Bold Nebraska is still "state-based," which apparently makes all the difference.
Endret 18.09.2014 08:50 av OldNick
|Time to drop the act
"There aren't a lot of functioning democracies around the world that work this way," Mr. Obama said in a speech last fall, "where you can basically have millionaires and billionaires bankrolling whoever they want, however they want, in some cases undisclosed." The quotation applies just as well to the original context of campaign limits as it does to the Billionaire's Club. This cozy relationship between wealthy donors, far-left environmentalists and Mr. Obama's EPA is nothing less than collusion, accuses the EPW report.
What is even more troubling is that the EPW report "only scratches the surface." It would be incredibly arduous to track all the funnelled donations, EPA grants and dodgy foreign contributions that make their way to the pockets of far-left radicals, who masquerade as climate scientists or local heroes. In reality, they are part of a mature, well-financed and highly sophisticated network whose incentives and machinations are deliberately kept shrouded in mystery.
It is time for Big Green to drop David-and-Goliath pretense and let the world know who really finances the movement and what they really represent.
Det republikanske partiets stab i 'U.S. Senate Committee on Environment and Public Works' (EPW) publiserte July 30, 2014 en rapport om hvordan miljøbevegelsens motstand mot oljesand-industrien i Alberta, Canada ble hovedsaklig finansiert av en gruppe velstående, amerikanske familier og personer som gjerne kanaliserte bidragene sine gjennom ideelle organisasjoner i USA, organisasjoner som nyter godt av lav/ingen skatt og kan normalt holde sine bidragsytere anonyme overfor publikum og presse.
Pressemelding: The Chain of Environmental Command
REPORT: The Chain of Environmental Command: How a Club of Billionaires and Their Foundations Control the Environmental Movement and Obama's EPA (PDF, 92s.)
Endret 18.09.2014 08:51 av OldNick
|Alberta's oljeprodusenter begynner å se på eksport fra Quebec via rørledninger og jernbane-transport fra Alberta.
Herfra kan olje bil eksportert over hele verden, men det er primært Europa og USA (gulf-raffinerier) som er målet.
Pris-discount (differanse) for Alberta's S-rike tungolje - Western Canadian Select (WCS) mot WTI lettolje har blitt betydelig redusert siste året, og er nå bare ca. C$16 per fat, noe som indikerer bedre markedstilgang.
Go East, Canadian Crude
Ari Charney, InvestingDaily.com
Sept. 26, 2014
When we talk about Canada's resource story, naturally we focus on Alberta's abundance of energy commodities and the export infrastructure planned along the coast of British Columbia. In other words, much of our attention is necessarily fixated on Western Canada.
But it's important not to overlook what's happening on Canada's Atlantic coast.
While the US currently absorbs the vast majority of Canada's energy exports, the glut of production resulting from prolific shale plays means Canada must diversify its export markets to ensure continued demand at economic prices.
Of course, long-term contracts with importers in fast-growing Asian emerging markets are the big prize for North American energy producers, particularly when considering the significant spread between natural gas prices in the US and Canada and those overseas.
Canada's west coast should be the point of departure for liquefied natural gas (LNG) and crude oil destined for Asia. But given the ongoing political clown show in British Columbia, Alberta-based producers are starting to look east as well.
According to the Financial Post (FP), earlier this week Canadian oil major Suncor Energy Inc (TSX: SU, NYSE: SU) transported 700,000 barrels of Western Canada Select (WCS) crude by rail to a port near Montreal. From there, it will be shipped to Italy, via the Saint Lawrence River, which ultimately connects with the Atlantic Ocean. The company told FP that this is its first waterborne shipment of WCS from the east coast.
And next month, Enbridge Inc (TSX: ENB, NYSE: ENB) is expect to complete the reversal of its Line 9B pipeline, bringing up to 300,000 more barrels a day to the Saint Lawrence. The company notes that the pipeline originally flowed eastward, but was reversed in 1998 thanks to an influx of cheap foreign oil.
But times have changed.
Enbridge touts the reversal, which is part of its Eastern Canadian Refinery Access Initiative, as a critical step toward ensuring the future of Quebec's refining industry. The province's two major refineries-one is owned by Suncor, the other by Valero Energy Corp (NYSE: VLO)-account for 20 percent of Canadian capacity, but 90 percent of the crude they currently process is higher-priced oil sourced from overseas.
WCS tends to trade at a persistent discount to other oil benchmarks, such as West Texas Intermediate (WTI), which is the North American benchmark, and Brent North Sea crude, which is the global benchmark.
That's because WCS, which is extracted from Canada's oil sands, is a heavier grade of crude, so it's costlier to refine. It also has to travel a great distance to reach key refineries in the US, so transportation expenses also factor into the differential.
However, the differentials between WCS and the two aforementioned benchmarks have narrowed considerably as of late, owing to a decrease in transportation bottlenecks and the depreciation in the Canadian dollar, among other factors.
As such, WCS offers potentially greater margins than foreign crude for Canada's domestic refiners. For instance, WCS recently traded near USD76.90, about USD18.26 below the price of Brent, or a discount of about 19.2 percent.
Endret 27.09.2014 14:18 av OldNick
|The FP quoted Simon Jacques, an energy sector shipping consultant, as saying that it costs about USD12 per barrel to ship crude by rail from Alberta to Montreal. Based on recent prices, that leaves a substantial $6.26 spread between the price of WCS and Brent from the standpoint of domestic refiners, before factoring in any transportation costs for the latter.
And shipping overseas adds another USD3.50 per barrel, for a remaining discount of USD2.76 per barrel, from the perspective of importers based in Europe.
According to Jacques, the economics offered by WCS could mean that, "The Saint Lawrence River is going to become a little Mississippi River." Indeed, both Enbridge and TransCanada Corp (TSX: TRP, NYSE: TRP) have proposed to build new pipelines to transport WCS to Canada's Atlantic coast.
Of course, British Columbia's proximity to Alberta and access to Asia means that it should ultimately handle the vast majority of energy exports headed overseas. But given the extent to which provincial leadership has taken this situation for granted, it's nice to have an alternative outlet should their recalcitrance continue.
One more time: Canadian Western Select crude oil headed Montreal to the US Gulf
Esa Ramasamy, Platts blog
Sept. 23, 2014
The Greece-registered Minerva Glory oil tanker is expected to load another parcel of Western Canadian Select from Sorel, Montreal, Quebec.
This is the second parcel of WCS heavy sour crude to move out of Montreal. The destination of the Minerva Glory is not clear but players say it is most likely bound for the US Gulf Coast. The first parcel of WCS was shipped end-July to Louisiana .
Suncor has confirmed it is the seller of the parcel. Its need for the crude is probably diminished; it has begun maintenance work at its 137,000 b/d Montreal refinery. The maintenance is scheduled to last 11 weeks.
The Minerva Glory's previous port of call was Corpus Christi, Texas, leading players to believe that this vessel's last journey was to ship US domestic light sweet crude into Quebec's 265,000 b/d Jean Gaulin refinery outside Quebec City.
Canadian crude oil players are convinced that the longer it takes to build the Alberta to Texas Keystone XL pipeline, the Edmonton, Alberta, to Kitimat, British Columbia Northern Gateway pipeline and the Energy East (Alberta to New Brunswick) line, ports like Montreal will be used to capitalize on any opportunity that arises to export crudes.
Montreal is getting into the spotlight also because Enbridge's reversal of Line 9 from Montreal to Westover, Ontario, will be completed before the end of the year. This development will result in 300,000 b/d of mostly heavy sour crudes and some light crudes, including Bakken crude produced in Canada, having the ability to move into Montreal.
"Depending on economics and refinery operations there will be opportunities to export heavy sour crudes as there will be more heavy sour crudes pumped into Montreal than is required," said a Canadian crude oil source. "With the Montreal refinery down for maintenance, this will enable more heavy sour crudes to sail out of Montreal."
"The most important (question) is thing will Montreal become another export center for Canadian heavy sour crudes or will the Quebec government clams down on crude oil exports out of Montreal?" asked a Canadian refiner.
Development Of Oilsands Projects Still Economic, Says Statoil Canada Chief
Lynda Harrison, DailyOilBulletin.com
Sept. 26, 2014
Statoil Canada Ltd.'s chief executive says yesterday's announcement that it will delay building its proposed 40,000 bbl-per-day Corner SAGD project for at least three years does not mean oilsands projects are uneconomical.
Endret 27.09.2014 14:37 av OldNick
|Yesterday the Norwegian firm said rising costs and market access issues convinced it to postpone development of Corner, part of the Kai Kos Dehseh project, which - until early this year (DOB, Jan. 30, 2014) - was a partnership between Statoil and PTT Exploration and Production.
"The fact is, the changes we have been doing lately, when we split the partnership in two, increased our production at Leismer, and infill wells increased production at Leismer, and we still think Canada is a wonderful place to invest," Ståle Tungesvik, Statoil Canada country manager, said in an interview with the Daily Oil Bulletin this morning.
The company is operating Leismer, a SAGD project whose production is currently about 18,000 bbls per day. Tungesvik said capacity of 20,000 bbls per day is on schedule to be reached next year with the drilling of new pads.
Tungesvik said Statoil had seen "quite an uplift in net present value" for Corner and has been looking into a leaner concept.
"That doesn't mean it's not profitable," he said. "It just means we have a rich resource base at Statoil and there are other projects that right now, in the global portfolio, were more attractive so we can delay this one. Remember, when you're in the oilsands you're in for the long term. This is just a timing issue. It's not like it's being taken away; it's just delayed. It will come later on."
He couldn't say which of Statoil's projects are more attractive right now.
He also declined to provide the estimated cost of Corner and how much Statoil had spent on it so far.
Yesterday he said Corner faced rising costs for labour and materials, and market access issues. Today he said it would be difficult to estimate how much costs have increased.
"Our main focus has been how we can make this project more profitable. I think in the oilsands and also globally, we are facing a new business reality. I think in general we need to look at our assets and our operations to make them more profitable, to make them more cost efficient.
"I'm pointing more to myself this time, saying I need to find different solutions so I think that the reality to me is we need to look into smaller building blocks, see how we can be more flexible and do things more by smaller steps than having a big greenfield project. I don't think the big greenfield projects will be out but I think we have to build alternatives, too, by smaller building blocks."
Tungesvik said Statoil is still investing in Canada and its oilsands, splitting this year's spending about 50-50 between oilsands and East Coast Canada where it has recently finished an exploration campaign in the Flemish Pass.
It is also bringing in a rig in mid-October to start drilling exploration and delineation wells in the Flemish Pass area.
Pembina Pipeline Corporation had an agreement to build a pipeline for Corner's production, called Cornerstone (DOB, June 28, 2013).
The engineering support agreement between Pembina and Statoil for the pipeline expires at the end of September and no additional capital will be spent on the pipeline project.
Pembina will retain the right to use the engineering for other commercial discussions.
"While we are disappointed about the Cornerstone pipeline not proceeding at this time we have approximately $6 billion of committed projects underway and another $1.7 billion of projects we are looking to commercially secure," said Mick Dilger, Pembina's president and chief executive officer. "We believe this suite of projects will continue to drive shareholder value in the years to come."
But the delay of Corner won't necessarily mean it will now spend more on renewables, said Tungesvik.
"All our decisions are made upon the economy of each project and each project has to stand on its own merits.. We don't mark the money and say this will be used in a specific place. Every project has its own merit and has to fight for capital on equal terms."
Earlier this year, Total E&P Canada Ltd. put i
Endret 27.09.2014 14:38 av OldNick
|Oil overflow: As prices slump, producers grapple with a new reality
Shawn McCarthy, Jeff Lewis, Globe and Mail
Sept. 27, 2014
Not only is supply soaring, there is talk in the Alberta oil patch of 'peak demand' as China's economy slows and countries look to alternative energy sources to deal with climate change.
Operations manager Dan Jones barks a simple rule to visitors entering Plant 300, the bitumen factory at the centre of Suncor Energy Inc.'s operations about 30 kilometres north of Fort McMurray: "Don't touch the froth," he says. "It's hot."
Inside the cavernous facility, boiling vats of the oil sands slurry mark the first stage of a high-cost extraction process that is undergoing an aggressive makeover. With global crude prices softening, Calgary-based Suncor is scouring its massive production complex in search of efficient ways to squeeze more oil from existing assets rather than plow money into expensive new projects.
"It's a very sophisticated science," says Mark Little, Suncor's executive vice-president in charge of upstream operations. "In some cases, I've seen one valve in a very complex facility get changed and the throughput go up 8 per cent."
Through such moves at existing operations Suncor expects to dramatically increase its oil production, adding roughly 100,000 barrels a day by the end of the decade at a fraction of the cost of new projects.
The hunt for cheaper ways to wring crude from northern Alberta's oil sands started long before the recent slide in oil prices began, Mr. Little said. But the work today has become more urgent, as global oil markets are buffeted by the sharp rise in U.S. shale oil production and weaker-than-expected demand from China and Europe.
Oil prices started to hit the skids this summer. In June, North Sea Brent topped $115 (U.S.) a barrel - the price had fluctuated between $105 and $115 all year - but it retreated all summer to a low of $95.60 this week. After peaking at $104 in June, North American benchmark West Texas intermediate fell below $93 this week.
The recent slide in prices reflects fundamental changes in supply and demand trends that are upsetting a long-held expectation of ever-tightening crude supplies, a conviction that prevailed for much of the past decade.
Today, the global market is awash in crude. Abundant supply is increasingly evident around the world: Europe's inventories are bulging; China's strategic oil reserve is nearly full; U.S. Gulf coast refineries are increasingly filled with U.S. crude as their need for imported oil plummets; and global oil prices have largely failed to respond to extended conflicts in the Middle East, Ukraine and other areas, traditionally a trigger for higher prices.
And on the high seas, tens of millions of barrels of oil are currently being stored in massive oil tankers, as traders aim to earn better prices on future delivery rather than sell into the current weak market. The Chinese trading firm, Unipec, a subsidiary of oil giant China Petroleum & Chemical Corp. (Sinopec), has booked the world's largest crude tanker, the TI Europe, to store oil for future delivery.
For the Alberta energy industry, weaker prices mean oil sands companies can no longer count on constantly rising prices to cover ever-increasing costs of massive megaprojects. As with high-cost producers around the globe, the new mantra in Calgary is capital discipline.
There is a sense of foreboding in the city's oil towers. Energy giants are pushing hard to export more Alberta oil abroad, but rapidly shifting supply-and-demand factors threaten to keep p
|pressure on global prices. They include booming unconventional production in the U.S.; the likelihood of its spread to other oil-producing regions; slower demand growth in China; and a global climate change agenda that could dramatically curtail the world's demand for crude. The notion of "peak demand" is gaining currency in an industry where the theory of "peak oil" supply was hotly debated just a few years ago.
It adds up to a less exuberant outlook for oil sands growth, as major companies take stock of ambitious production targets set when oil prices were expected to rise inexorably and the future appeared limitless. Plans for investment in the oil sands - expected to run at a $30-billion (Canadian) clip for the next few years - will be revisited when producers set their 2015 budgets.
Much of the planned investment will proceed, but high-cost projects are already foundering. Just this week, Norway's Statoil ASA shelved plans for a major oil sands project in northern Alberta called Corner, citing high construction costs and extensive delays building new export pipelines designed to boost the value of Canadian oil. The move followed Total SA's decision to mothball its $11-billion Joslyn mine earlier this year.
"I think what people are realizing is that you can't place your bets on multiple areas here. You have to be selective," said James McLean, a Calgary-based partner in PricewaterhouseCoopers LLP's energy practice. While foreign investors still see long-term potential in the oil sands, "some of the growth expectations that were placed on those businesses originally may not come through as quickly as was originally foretold," he said.
Prime Minister Stephen Harper, in a televised interview with Wall Street Journal editor-in-chief Gerard Baker in New York this week, played down the impact that sliding commodity prices - and crude in particular - would have on the Canadian economy. "Everything I know says to me we're not going to see rock-bottom [oil] prices in my lifetime," Mr. Harper said.
Certainly no one is predicting a crash that would send prices below $50 (U.S.) a barrel. But there are increasingly plausible scenarios that projected crude prices could slump to the $70-to-$75 range and stay there for years.
Citigroup Inc. economist Edward Morse said the global oil markets hit a "tipping point" in 2014.
"The world is becoming significantly less energy intensive," said Mr. Morse, Citigroup's global head of commodities research in New York. "For the world as a whole, the historic relation between economic growth and petroleum product demand growth has slipped, and we think it is going to slip further for structural reasons." On the supply side, Citigroup economists expect the light, tight oil boom that is driving production growth in the United States to expand to other countries, including Russia, Mexico and Argentina, as improving technology keeps production buoyant in North America.
At the same time, the global economy has slowed. Citigroup economists this week cut their forecast for the second time in two months, and now see the global economy growing by a mere 2.8 per cent in 2014 and 3.3 per cent next year. They cited weakening conditions in the key BRIC countries - China, Brazil and Russia - for the more pessimistic view.
Global crude demand - once expected to grow by 1.5 million barrels a day this year - will likely rise by only 600,000, said Amrita Sen, chief energy economist at Energy Aspects Ltd. in London. With the slower demand, global inventories have climbed, with storage at sea and on land. Ms. Sen estimates there are now 50 million barrels in storage that will flood into the market at the first sign of a price increase.
The International Energy Agency says China will account for half the growth in world oil consumption over the next two decades. But that's not a sure bet - the pace of Chinese growth could be much slower than many expect. "We think there are really fundamental changes in the demand
Endret 30.09.2014 09:09 av OldNick
|outlook for China and the rest of the world," Mr. Morse said.
The Asian behemoth is the world's second-largest consumer of oil and is expected to surpass the United States this year in net imports. But like the Americans before them, the Chinese are increasingly nervous about energy security and their reliance on the politically volatile Middle East for crude. Beijing is also determined to reduce pollution in major cities and cut its carbon dioxide emissions as part of the fight against climate change. It is leading the world in the development of mass transit and alternatives to oil-fuel transportation, including natural gas for trucks, buses and electric vehicles. China's demand for diesel - which is roughly half its oil consumption - has flat-lined for the past two years.
A significant portion of the growth in Chinese oil demand has come from its determination to build strategic reserves, a testament to its insecurity over rising imports. But that stock building will soon end. Its vast array of holding tanks is expected to be full some time in 2015 or 2016. Analysts say China's strategic reserve alone sucked up 100,000 to 200,000 barrels a day. Last year, the entire country's oil demand grew by 295,000 b/d.
New sources of oil supply
Oil sands producers are also competing with new sources of supply.
The flood of light, tight oil pouring out of the North Dakota prairie and from the scrub land of south Texas has dramatically altered the landscape for companies in northern Alberta. Suncor and Total last year mothballed their $11.6-billion (Canadian) Voyageur upgrading plant, saying the project was uneconomic in the face of roaring Bakken output, which blew past 1.1 million b/d this summer. The partly built project is now being converted to a tire-recycling plant.
And there is potential for other new sources of oil supply - or old sources that could turn around long-term production declines. Mexico and Venezuela have been experiencing significant production declines in recent years. But Mexico has pushed through aggressive energy reforms that could transform it into a more muscular producer - adding competition for Alberta to supply U.S. refineries.
So far, Canadian producers have largely weathered the price slump, as the glut of light crude in the U.S. alongside steady refinery demand for heavy oil has shrunk the price gap between West Texas intermediate and Western Canadian Select, the leading benchmark for lower-quality oil sands crude. In recent years, that differential has mushroomed to as much as $40 (U.S.) a barrel, but this week sat at $14.50 for crude destined for November delivery.
"Heavy oil pricing is holding in there quite nicely," said Peter Tertzakian, chief economist at ARC Financial Ltd. He said Canadian oil and gas producers were expected to post sales of $161-billion (Canadian) this year, a figure that has declined slightly to $156-billion due to the summer swoon. That's still a "blowout year," he added.
But the Calgary-based economist said there is still concern. "Canada is not as weak as other markets for a change, but that doesn't mean there isn't nervousness. Capital spending is based on expectations. So people are watching it pretty closely," he said. There will be plenty of money still flowing into the oil sands, Mr. Tertzakian said, but likely at a slower clip.
The U.S. Energy Information Administration released its long-term forecast this week, showing a base-case forecast for international light crude prices declining to $92 (U.S.) a barrel over the next three years, and then rising steadily to $141 (in constant dollars) by 2040. It's that long-run optimism that oil sands producers are banking on; their projects typically have 40-year time horizons and they can withstand some temporary price drops, even if their shareholders get queasy.
But U.S. government forecasters also published a "low-price" scenario in which world prices fall to $70 by 2016 and remain at or below $75 over the long term. Under that scenario,
|only investment in the lowest-cost oil sands projects could be justified.
The Canadian Energy Research Institute recently calculated that a new mining project would need a $100 oil price to earn a reasonable rate of return, while a steam-driven project would need $85. Peters & Co. calculated break-even economics for a steam-driven plant at $75.
Dark clouds in Calgary
Energy Aspect's Ms. Sen visited Calgary last week and found a litany of concerns: the lack of pipeline access, challenging relations with aboriginal Canadians, drying up of foreign investment - all compounded by rising costs and falling prices. "I think the mood in the U.S. is a lot more positive," she said. "There does seem to be a lot more cautiousness when it comes to Canada and Canadian production. Which really surprised me."
Still, Fort McMurray and its oil sands industry has kept the allure as a place where money flows easily and jobs are plentiful for workers from across Canada, even if more residents are dependent on the food bank - usage spiked 43 per cent last year - as locals report a cooling labour market.
The prospect of a high-paying job in the sector was enough to convince Gordon Watson to buy a 1970s-era motorhome for $3,800 and drive 852 kilometres from Saskatoon. The 53-year-old former pizza shop owner is optimistic about the future. "I'm hoping to get in at one of the mines," he said on a recent afternoon, standing in a Wal-Mart parking lot that now doubles as his front yard. "I wish I would have come here 20 years ago and bought 20 houses for $80,000 a piece," he says.
He may be too late. In a bid to keep a lid on costs, some companies are looking to ship project-related work beyond Fort McMurray and even North America.
Husky Energy Inc., which is developing the Sunrise project with BP PLC, has set up a procurement office in China to understand where large oil sands modules could be developed, a person with direct knowledge of the strategy said. A Husky spokesman said procurement decisions are made from Calgary and co-ordinated with field offices.
Woodbridge, Ont., metal shop Alps Welding Inc. is benefiting from that search for cheaper production work outside Alberta. Alps president Dennis Dussin said half his company's fabricating orders are now oil sands-related as Ontario's lower wage rates help him stay competitive.
And the oil sands production complex north of the city still hums with activity. At the site of Suncor's $13.5-billion (Canadian) Fort Hills mine, giant earth movers and trucks are sculpting the next phase of the company's growth plans from the boreal forest. The joint venture with France's Total and Teck Resources Ltd. will add 180,000 b/d of fresh capacity in the region starting in 2017.
Suncor's Mr. Little said the energy giant is looking to markets outside Alberta for some equipment and project-fabrication work.
"These are big projects" with the risk of "hyper-inflation," Suncor's Mr. Little said. "That's what we're trying to avoid."
|Citi oppgraderer de store, kanadiske integrerte oljeselskapene, med hovedsaklig oljesand-basert oppstrøms aktivitet.
Suncor Energy upgraded as Citi bullish on Canadian oil
Jonathan Ratner, Financial Post
Oct. 01, 2014
Suncor Energy Inc. was upgraded to buy from neutral at Citi Research as part of its bullish call on Canadian integrated oil companies.
Citi analyst Mohit Bhardwaj noted that Suncor has enhanced returns on its existing $25-billion of capital-in-place oil sands assets over the past 18-24 months. The company is also streamlining its operations to lower sustaining capital spending and operating expenses, while producing more from its existing project.
Suncor has lowered its 2014 capex by about $1-billion, but Mr. Bhardwaj estimates further cuts to annual spending of $500-million to $1-billion annually through 2020 should generate another 20% to 25% in free cash flow. That should allow the company to achieve its return on capital employed (ROCE) goal of 15%.
"We believe the potential increase in ROCE is a free option on Suncor stock," the analyst said, adding that the company has more than doubled its dividend since Q1 2013.
He also suggested that Suncor could use an income fund to house its midstream assets in order to fully realize their value.
Citi now has buy ratings on all four major integrated oil producers in Canada, which also includes Cenovus Energy Inc., Husky Energy Inc. and Imperial Oil Ltd.
Mr. Bhardwaj expects they will grow production by roughly 7% per year between 2015 and 2020 and generate an average free cash flow yield of about 8%. That compares to a free cash flow yield forecast of approximately 5.6% for the global oil majors.
"We believe the free cash flow inflection for Canadian oil is 6-18 months away compared with Big Oil where the key inflection is 24-36 months away," Mr. Bhardwaj said in a research note.
Falling crude prices have negatively impacted Canadian oil companies on the top line, but the analyst noted that a weakening loonie and tightening crude differentials versus global benchmarks should serve as buffers against a broader decline in global prices.
He highlighted the start of the Flanagan South oil pipeline from Illinois to Oklahoma and the reversal of Enbridge's Line 9B as near-term factors keeping differentials tighter.
"The key difference from the past is that rail will act as an important buffer until Keystone XL, Energy East and/or the Transmountain Expansion are online (2018+)," Mr. Bhardwaj said.
|Nytt forslag fra EU-kommisjonen:
Europeiske raffinerier som vil importere bitumen fra oljesand-industrien vil ikke bli pålagt å merke den "highly polluting".
Men, det planlegges å pålegge industrien å rapportere "gjennomsnittlig karbon-intensitet" for den råoljemix'en de føder til sine raffinerier.
Europe may kill rule that would label Canada's oil sands crude dirty
Oct. 7, 2014
The European Commission on Tuesday proposed scrapping a mandatory requirement to label tar sands oil as highly polluting after years of industry opposition.
The new proposal abandons one obstacle to Canada shipping crude from tar sands to Europe.
It is suggested in a revised draft law on how refiners report the carbon intensity of the fuel they supply.
The debate about labelling tar sands, also known as oil sands, dates back to 2009 when EU member states approved legislation with the aim of cutting greenhouse gases from transport fuel sold in Europe by 6 per cent by 2020, but failed to agree how to implement it.
In 2011, the Commission, the European Union executive, agreed tar sands should be given a carbon value a fifth higher than for conventional oil, but member states could not agree and the Commission has been reconsidering the proposal ever since.
Confirming a draft seen by Reuters earlier this year, the proposal released on Tuesday only requires refiners to report an average of the feedstock used. They do not have to single out tar sands.
It retains, however, a method for calculating the carbon intensity of different fuel types over their life-cycle.
"It is no secret that our initial proposal could not go through due to resistance faced in some member states," Climate Commissioner Connie Hedegaard said in a statement.
"However, the Commission is today giving this another push, to try and ensure that in the future, there will be a methodology and thus an incentive to choose less polluting fuels over more polluting ones like, for example, oil sands."
Oil sands crude, being exploited by the major oil firms, such as BP Royal Dutch Shell and ExxonMobil , costs more to produce than conventional crude and uses more energy, water and emits more carbon over its life-cycle.
Found in clay-like sands, it has to be dug up in open-pit mines with massive shovels, or blasted with steam and pumped to the surface, before oil can be extracted.
The revised proposal still has to be debated by member states through a fast-track procedure meant to take less than two months and it also needs a sign off from the European Parliament.
Meanwhile, a summit of EU leaders this month is expected to decide in outline on a new set of 2030 climate and energy goals to follow on from the 2020 targets.
They include a proposed 40 per cent cut in greenhouse gas emissions, compared with a 2020 goal to cut emissions by 20 per cent versus 1990 levels. The six per cent 2020 transport target is meant to contribute to the overall 20 per cent emissions goal.
|Bare trøbbel for Keystone XL?|
Ihvertfall skal man tro denne tema-artikkelen fra Bloomberg...
Men, Canada, Alberta og oljesand-industrien trenger alternative eksport-ruter, så noe kommer til å bli bygget. Keystone XL er antageligvis fortsatt beste alternativet, ikke minst når EU har redusert sin motstand mot å importere råolje/bitumen fra Canada pga. det problematiske forholdet til Russland.
Keystone Foes Energized as Price Pinches Oil Sands Allure
Jim Snyder, Bloomberg
Oct. 27, 2014
Environmentalists oppose developing oil sands because the process releases more greenhouse gases than other types of crude. President Barack Obama has said he won't approve the $10 billion project if it would significantly exacerbate carbon pollution.
Falling oil prices have energized opponents of the proposed Keystone XL pipeline.
U.S. benchmark crude has tumbled 10 percent this month, closing at $81.01 a barrel in New York trading last week, and further declines are forecast. At $75, a government analysis said producers may be discouraged from developing Canada's oil sands without pipelines like Keystone.
"It changes the narrative quite a bit," Anthony Swift, an international lawyer at the Natural Resources Defense Council in Washington, said of the tumble in crude prices.
The pace of oil-sands production is key in the debate over Keystone, a Canada-to-U.S. line TransCanada Corp. (TRP) proposed in September 2008 when oil was more than $100 a barrel.
Environmentalists oppose developing oil sands because the process releases more greenhouse gases than other types of crude. President Barack Obama has said he won't approve the $10 billion project if it would significantly exacerbate carbon pollution. It only would do that if it promotes more oil sands production.
An environmental analysis released by the State Department said oil prices would have to fall to $75 a barrel for Keystone XL to affect development of Canadian heavy crude. The report said higher transportation costs might have a "substantial impact on oil sands production levels" at that price, a scenario they deemed as unlikely.
When crude prices are higher, producers would find another way to get the heavy, tar-like bitumen delivered to refiners -- by trains, for example -- even if Obama blocked the link, a January environmental assessment from the department said. The State Department is overseeing the review because the pipeline would cross an international border.
Now that prices are lower, environmental groups are renewing their argument that Keystone is a linchpin to oil-sands development and rail isn't a reliable option. At the very least, they say, the tumble shows the State Department's assumptions aren't reliable.
Kevin Book, an analyst at ClearView Energy Partners in Washington, said falling oil prices may help environmentalists make a case that alternatives like rail, which cost more, aren't viable. But he called the current price drop a "blip" that probably won't affect the U.S. review of Keystone.
Photographer: Scott Dalton/Bloomberg
"I don't believe you have too many people making the case that oil is going to fall in the $70 range and stay there for five years," Book said in an interview.
Some analyses predict a rebound, and the State Department said its assumptions are based on long-term price models not short-term swings. For this year, crude reached $107.26 on June 20, and fell to $80.52 on Oct. 22 -- the lowest since late June 2012.
Bank of America Corp. predicts West Texas Intermediate could fall as low as $75 a barrel in the next three months, according to an Oct. 23 note.
Philipp Chladek, an analyst for Bloomberg Intelligence, said the Organization of Petroleum Exporting Countries is likely to cut production to avoid a further fall in prices.
|Analyserapport fra BMO, Canada om oljesandindustrien og deres konkurranseevne i et lav-pris scenario.
Oil Sands Production More Re silient Than Some Think
Research Comment, BMO Capital Markets
Randy Ollenberger, (403) 515-1502
Jared Dziuba, CFA, (403) 515-3672
Nov. 18, 2014
Summary & Highlights
1. Oil Sands Equities Show Resilience
Oil sands equities fell 6.8% in October, underperforming the TSX Composite, which dropped 2.3%, but outperforming the S&P/TSX Producers, which declined 14.4%. Relative performance was no doubt helped by the performance of Western Canada Select (WCS) crude oil prices, which modestly outperformed light crude oil prices in October, falling 8.9% compared to a 9.5% drop for West Texas Intermediate (WTI). We believe the outlook for heavy crude prices remains favourable on a relative basis to light crude in 2015 due to increased demand from the BP Whiting refinery, additional pipeline capacity to the Gulf Coast once Flanagan South commences deliveries and the ramp of new crude-by-rail terminals in Western Canada.
2. Effect of Lower Crude Prices on Oil Sands Production
The recent drop in benchmark crude prices has sparked discussion among investors on what the impact will be on the viability of current production and future oil sands projects. We dove into some of the details in our Oil Sands Economics: Facts and Fiction report published earlier this month, which concluded that existing production is unlikely to be shut in at the current (or weaker) crude price environment given that cash costs are well below current pricing levels. Project costs also tend to change with crude prices and the lower Canadian dollar increases revenue and provides a buffer against lower crude. Similarly, we do not expect many growth projects to be cancelled or deferred due to short-term weakness in pricing given that investment decisions are based on full-cycle economics with 20- to 50-year project lives in mind. We estimate full-cycle supply costs in the oil sands average ~$70/bbl, including <$65/bbl for in situ, $50-60/bbl for existing mines and $70-90/bbl for mine expansions.
3. Sector View.
We recommend that investors focus on high-quality oil sands developers with solid balance sheets with internal capacity to fund current growth plans in a depressed crude price environment. Our top oil sands recommendations are Canadian Natural, MEG Energy and Suncor.
Link til analyserapport (PDF)
Endret 02.12.2014 09:44 av OldNick
|En Toronto Star-artikkelserie om Alberta's oljesand-industri.
Et kritisk blikk er nødvendig, men er det skrevet av en personer med tydelig forutinntatte meininger, slik som denne forfatteren viser, blir det mindre interessant.
Atkinson 2015: Shifting Sands
Alberta's oilsands trade-off
Despite plummeting oil prices and climate concerns, extraction of Alberta's oilsands is expected to increase in coming years. The industry has transformed the province's economy, but at what price?
Gillian Steward, Atkinson Fellow, Part of the 2015 Atkinson Series on public policy.
Aug. 28, 2015
Corporations rule in Alberta's oilpatch
In Alberta, industry decides when, where and how fast oilsands projects are developed. Part of the 2015 Atkinson Series on public policy.
Gillian Steward, Atkinson Fellow, Part of the 2015 Atkinson Series on public policy.
Aug. 28, 2015
First Nations bear the risks of oilsands development
Aboriginal communities fear environmental contamination and health problems related to oilsands mining, but say few people are listening to their concerns. Part 2 of the 2015 Atkinson Series on public policy.
Gillian Steward, Atkinson Fellow, Part of the 2015 Atkinson Series on public policy.
Aug. 28, 2015
Unlike Alberta, Norway's economy insulated from falling oil prices
Norway has reaped huge dividends from its oil reserves, but it has saved far more of that money than Alberta. It is also making plans for a future beyond oil. Part of the 2015 Atkinson Series on public policy.
Gillian Steward, Atkinson Fellow, Part of the 2015 Atkinson Series on public policy.
Aug. 28, 2015
One First Nation reaps windfall from oilsands development
Despite concerns about air and water quality, the 600 residents of Fort McKay First Nation have negotiated lucrative agreements with petroleum companies. Part of the 2015 Atkinson Series on public policy.
Gillian Steward, Atkinson Fellow, Part of the 2015 Atkinson Series on public policy.
Aug. 28, 2015
Alberta's politics and petroleum companies are deeply entwined
For decades, petro-money has helped finance Alberta political parties. Premier Rachel Notley hopes to change that. Part of the 2015 Atkinson Series on public policy.
Gillian Steward, Atkinson Fellow, Part of the 2015 Atkinson Series on public policy.
Aug. 28, 2015
Why B.C. First Nations oppose the Northern Gateway pipeline
Aboriginal groups fear the consequences if bitumen from the Alberta oilsands were to spill into the sensitive ecosystem of Great Bear Rainforest. Part of the 2015 Atkinson Series on public policy.
Gillian Steward, Atkinson Fellow, Part of the 2015 Atkinson Series on public policy.
Aug. 28, 2015
2015 Atkinson Fellow
Atkinson fellow Gillian Steward is a
|Calgary-based journalist and a former managing editor of the Calgary Herald. She has covered politics, energy, business and labour in Alberta since the Lougheed era and writes a regular column on the West for the Star's op-ed pages.
Canadian Tar Sands Sticky Supply Curve - 500,000B/D Coming Onstream In Next Two Years
Jeremy Van Loon, Bloomberg
Sept. 04, 2015
The last place oil producers want to be when prices plummet to profit-demolishing lows is midstream on a billion-dollar project in one of the costliest parts of the planet to extract crude.
Yet that's exactly where half a dozen oil sands operators from Suncor Energy Inc. to Brion Energy Corp. find themselves with prices for Canadian oil now hovering around $30 a barrel. While all around them projects have been postponed or canceled, their investments were judged too far along when the oil game suddenly moved from offense to defense.
These projects will add at least another 500,000 barrels a day - roughly a 25 percent increase from Alberta - to an oversupplied North American market by 2017. For companies stuck spending billions in a downturn, the time required to earn back their investments will lengthen considerably, said Rafi Tahmazian, senior portfolio manager at Canoe Financial LP.
"But the implications of slowing down a project are worse," said Tahmazian, who helps oversee about C$1 billion ($758 million) in energy funds at the Calgary investment firm.
A general rule of thumb says new plants require a West Texas Intermediate price of $80 a barrel to break even. Western Canada Select, a blend of heavy Alberta crude, is currently selling at a discount of about $14 a barrel to the WTI benchmark.
This differential for Alberta's oil, based on such factors as quality and pipeline capacity, has ranged from $7 to $20 this year and exceeded $40 a barrel in late 2012 and part of 2013.
Cenovus Energy Inc., a Calgary-based producer that uses steam technology to melt bitumen and pump it to the surface, has postponed two new projects until the oil price recovers. But it's pressing ahead with expansions started before the downturn that will add 100,000 barrels of capacity by next year.
"We do not want short-term pricing to dictate our investment in long-life, high-return oil sands projects," Cenovus Chief Executive Officer Brian Ferguson told analysts in July, when WTI was trading near $50.
Oil companies plan for price variations during the lives of long-term projects. Cenovus "stress tested" its expansion down to a price of $50 a barrel, a level that will allow it to continue paying a reduced dividend and fund some further growth, Ferguson said in July.
Even $50 might appear optimistic now, with WTI briefly sinking below $40 in August and some analysts, including those at Citigroup Inc., forecasting prices in the low $30s. Cash flow for Cenovus can fluctuate by hundreds of millions of dollars with changing prices, but the company still aims for a 15 percent return over the life of its projects, said spokeswoman Sonja Franklin.
There are some silver linings for those still expanding. The Canadian dollar, which has fallen in tandem with oil, boosts the bottom line, as do reduced costs for skilled tradesmen and materials.
Canadian Natural Resources Ltd., Husky Energy and Japan Oil Sands are among those devoting precious capital to complete projects launched in better days.
Cost-conscious Suncor Energy Inc. is also proceeding with one of the largest bitumen mines in the oil sands at its C$13 billion Fort Hills site. Once completed in 2017, Suncor President Steve Williams expects to stick to small tuck-in projects. "I don't see the next mine being built quickly," he said in a
Endret 04.09.2015 17:39 av OldNick
Return on investment for the life of the Fort Hills bitumen mine will probably be less than 9 percent compared with the original target of 13 percent, said Sam Labell, an analyst at Veritas Investment Research Corp. in Toronto.
Returns on capital invested by Canada's largest oil-sands producers reached 20 percent at some points over the past five years, according to data compiled by Bloomberg. That figure is now closer to zero or negative for companies such as Athabasca Oil Co. and Cenovus.
Operators can more easily suspend projects in the "front-end" engineering phase, after which it becomes more painful because the money already in the ground produces zero return, said Labell. If a company has the capital available, it will tend to press ahead even though falling prices are eating into profits, he said.
"There's a lot of stress to come for the industry," he said.
Northern Alberta's oil-sands companies have been the single most affected region in the world since the global retreat on investment began last year, according to various analysts. All told, about 800,000 barrels a day of oil sands projects have been delayed or canceled, according to Wood Mackenzie Ltd., a research consultant.
After the last prolonged price downturn in 1986, no new major oil sands plants were started well into the next decade. The projects caught in midstream today may again be the last ones built for the foreseeable future, experts say.
"The economics have changed and there's no promise things will come back to the way they were," said Bob Schulz, a professor at the University of Calgary's Haskayne School of Business. Once the current round of projects is finished, the planning boards are empty, he said.
|Oljesands-operatørene funderer på hvordan de kan få produsert bitumenen sin med mindre bruk av energi, eller med andre former av energi som ikke direkte behøver like mye naturgass som idag.
To hoved-effekter ved en slik strategi;
1. De vil redusere CO2-utslipp (per fat bitumen/SCO), og
2. De vil kunne redusere produksjonskostnadene. og bli (enda) mer konkurransedyktige mot sine nære konkurrenter sør for grensen, skifer-olje produsentene.
Rachel Notley og hennes National Democratic Party (sosialdemokrater) har vedtatt i provins-regjeringen at det settes et tak på totalt utslipp fra oljesand-industrien i Alberta på 100 mill tonn CO2/år. De er vel på mellom ca. 80 nå (hvis jeg ikke husker feil).
Suncor, Cenovus Target Low-carbon Goals For Oil Sands
July 21, 2017
Savnet tråd er hentet frem fra arkivet.
Endret 05.01.2018 08:49 av Provence
|Takker for det provence.
Her følger første nye innlegg:
Suncor Energy og Teck Resources oppdaterer markedet om Fort Hills Oil Sands project, det største, pågående greenfield prosjekt i Alberta's oljesandindustri.
Dette er vel et ca. US$14 mrd. prosjekt, og skal produsere ca. 180k f/d bitumen for salg (ikke oppgraderingsanlegg).
- First oil forventet senere i Jan.
- Anlegget skal være på 90% av kapasitet ved utgangen av 2018.
- Suncor er seniorpartner (ca. 53% andel),
- Teck juniorpartner (ca. 21%). Dette er deres første prosjekt innen olje (oljesand). De er gruve-selskap med Zn, Cu og metallurgisk kull som hovedprodukter.
- Suncor (og kanskje CNRL) er blitt blueships innen olje i Canada (og begge kommer til å tre inn i klubben blant selskaps om produserere mer enn 1 mill f/d olje-ekv. globalt om få år).
Teck Provides Update on Fort Hills Project
Jan. 03, 2017
Canadian Association of Petroleum Producers (CAPP) er kanskje den mest autorative kilden til informasjon og forecasting av utviklingen innen oljesand-industrien.
Her finnes deres siste rapport om saken:
2017 Crude Oil Forecast, Markets and Transportation