Canada

Oil Gains Spur Growth In Canada’s Oil Cities

18 Oct 2017   Canada

A modest rebound in oil and gas prices in international markets has given Calgary and Alberta the distinction of being the fastest growing metropolitan areas in Canada this year, according to a report by The Conference Board of Canada carried by Markets Insider “The worst appears to be over for Calgary and Edmonton. Alberta’s economy has been getting stronger thanks to a rebound in drilling and increases in oil production, which has helped to fuel renewed economic growth in the province’s largest cities,” said Alan Arcand, associate director for the Centre for Municipal Studies at the Conference Board of Canada. “But with oil prices struggling to rise above $50 per barrel, Edmonton and Calgary should expect to see more moderate growth in 2018.” Calgary will grow by 4.6 percent this year, but the jumpstart will slow to 2.1 percent by 2018. Similarly, Edmonton’s economy will expand by 3.9 percent […]

Canada Wants to Solve U.S. Nuclear Woes With Faraway Dams

14 Oct 2017   Canada, Hydro

Hydro-Quebec seeks to supply energy to New York, Massachusetts Power would help replace losses from closing nuclear reactors The key to replacing aging nuclear plants in the U.S. Northeast may lie 1,000 miles away, along a remote river tumbling through the Canadian wilderness. In boreal forests above the Gulf of St. Lawrence, Hydro-Quebec is building a series of dams that will generate enough electricity for more than one million homes. The $5.2 billion project on the Romaine River is part of a sweeping expansion the government-owned utility began in 2007, with the intention of selling power to the U.S. where nuclear reactors are closing. It’s not clear Americans will buy. While New York and Massachusetts want to avoid fossil fuels when they replace the soon-to-be-shuttered Indian Point and Pilgrim nuclear plants, wind and solar developers are also jockeying for the job. That’s left Hydro-Quebec, Emera Inc. , Nalcor Energy […]

Canadian regulator closes books on TransCanada project

7 Oct 2017   Canada, Pipelines

A federal regulator in Canada confirmed it closed its files on the Energy East oil pipeline after planner TransCanada folded its tent on the project. The National Energy Board was among the last in the line of official bodies in Canada to weigh in on TransCanada’s decision to shelve a multibillion dollar pipeline project for eastern provinces. The NEB confirmed late Thursday it received notice that TransCanada was withdrawing its applications. “The NEB has no further work to complete on these projects and the hearing record is now closed,” the regulator said. TransCanada last month called on the NEB to suspend its review of the project after the regulator published a lengthy list of issues ranging from greenhouse […]

Canada expects crude-by-rail boom as pipeline project collapses

7 Oct 2017   Canada

TransCanada Corp’s decision this week to scrap its $12 billion Energy East pipeline and delays to other export pipeline projects look set to increase producers’ reliance on costly crude-by-rail to bring barrels to market. Calgary-based TransCanada said on Thursday it will abandon Energy East, which would have taken crude from Alberta to the Atlantic Coast. The move came after Canada’s National Energy Board (NEB) on Aug. 23 announced a tougher review process that would consider indirect greenhouse gas emissions. Shipping crude by rail is more expensive than by pipeline for producers already struggling with weak global oil prices. It is also considered more dangerous than pipelines because of derailments like the 2013 Lac-Megantic, Quebec, disaster, in which 47 people died in a fiery oil train crash. Oil industry participants say regulatory requirements for major energy projects in Canada are now so stringent it is unlikely […]

TransCanada pulls plug on Energy East pipeline

6 Oct 2017   Canada

Canadian pipeline company TransCanada cancels plans for its Energy East pipeline after a regulatory review on potential emissions and spills. Map courtesy of TransCanada Oct. 5 (UPI) — Canadian pipeline company TransCanada said Thursday it was canceling plans for its Energy East pipeline overhaul after careful review. TransCanada submitted an application for its Energy East project three years ago, proposing the construction of a new 930-mile segment and converting 1,800 miles of gas line for oil service. It would’ve carried 1.1 million barrels of oil per day from Alberta and Saskatchewan to eastern Canadian refineries if built. The company said in a statement that “after a careful review of change circumstances,” it would tell Canadian energy regulators and those in Quebec it was no longer pursuing the project. “We appreciate and are thankful for the support of labor, business and manufacturing organizations, industry, our customers, Irving Oil, various governments […]

Canada’s Economic Growth Stalls In July As Oil Activity Drops

2 Oct 2017   Canada

Following an eight-month streak of increases, Canada’s real gross domestic product (GDP) was essentially flat in July, driven down by a decline in oil and gas extraction, Statistics Canada said on Friday. The mining, quarrying, and oil and gas extraction sector contracted 1.2 percent in July, dragged down for the most part by a 1.8-percent drop in the oil and gas extraction industry. Non-conventional oil extraction declined by 3.0 percent, for the fourth time in five months, Statistics Canada said. Conventional oil and gas extraction contracted for the first time in five months—by 0.8 percent—on the back of lower crude oil extraction. Support activities for mining, oil and gas extraction declined for the third month in a row, this time by 1.2 percent, as support activities for oil and gas extraction contracted on lower drilling services. The drop in mining, quarrying, and oil and gas extraction was the biggest […]

The oilsands at 50: How much life is left in the resource?

30 Sep 2017   Canada, Tar Sands

On Sept. 30, 1967, the Great Canadian Oil Sands facility opened north of Fort McMurray, Alta., with much fanfare, bunting and speeches by politicians. It was the first large-scale commercial operation of the oilsands, and the result of a gamble taken by Philadelphia’s Sun Oil and its chief executive, J. Howard Pew, and by 100,000 Alberta households who invested $1,500 each to buy a bond to fund construction of the facility. Alberta’s premier at the time, Ernest Manning, stood on a podium and declared, “This is a historic day for the province of Alberta, and it is fitting that we are here today to dedicate this plant not merely to the production of oil, but to the continual progress and enrichment of mankind.” While this is typical political hyperbole, Manning nailed at least the first part of his statement — it’s hard to think anything else that has so […]

Regulator: Duvernay Field Holds Canada’s Biggest Shale Oil Resources

28 Sep 2017   Canada, Shale Oil

The Duvernay field in Canada’s western province of Alberta holds the country’s largest marketable resources of unconventional light shale oil and condensate, according to a new report from the national energy regulator. It is the first time the National Energy Board has done a detailed study of resources in the 130,000 square kilometer (50,193 square mile) Duvernay play, which covers around 20 percent of Alberta, Canada’s main crude-producing province. The NEB report showed the Duvernay holds 3.4 billion barrels of marketable light oil and condensate and 6.3 billion barrels of natural gas liquids. It also holds nearly 77 trillion cubic feet (Tcf) of natural gas, equivalent to 25 years of Canada’s annual consumption. “This gives markets much more clarity in terms of how much oil and gas is available in the long term,” said Mike Johnson, the NEB’s technical leader of hydrocarbon resources, […]

Does Canada Need More Oil Sands Pipelines?

19 Sep 2017   Canada, Pipelines

The claim that building more pipelines to carry Canada’s oil sands production to ports for export will unlock significantly higher prices for bitumen is not supported by either past or current market conditions, a new study shows . According to Jeff Rubin, senior fellow at the Centre for International Governance Innovation, overseas markets pay even lower prices for bitumen than in North America, so there is no economic case for additional pipeline capacity to tidewater or expanded oil sands production. In his report , Rubin says that global agreements to reduce global carbon emissions over the next three decades will also reduce the size of future oil markets, not to mention the emerging push for electric vehicles. CIGI argues that there is no economic case for additional pipeline capacity to tidewater or expanded oil sands production. As expected, the government of the province of Alberta, Canada’s oil sands production […]

Trans Mountain oil pipeline in Canada short on safeguards

16 Sep 2017   Canada, Pipelines

The parties behind the Trans Mountain oil pipeline to Canada’s western coast haven’t yet completed what they need to for the environment, a regulator found. The National Energy Board approved of Kinder Morgan ‘s plans to triple the capacity of the network to around 890,000 barrels of oil per day in November, though vetting is still under way for some aspects. The project is part of a national effort to tap into markets outside North America as nearly all of Canada’s oil exports go to the United States. The NEB said it completed a pre-construction audit and found planners haven’t yet laid out plans regarding safety and environmental protection during the build process. “This pre-construction audit is one of […]

Alberta anticipates oil sands production boom

15 Sep 2017   Canada, Tar Sands

Through one of the largest investments in provincial history, expansions to an oil sands project in Alberta triggers big gains in output, its premier said. Alberta Premier Rachel Notley was on hand for a ribbon-cutting ceremony to mark the start of a $1.6 billion (USD) expansion project led by Japan Canada Oil Sands Ltd. At its Hangingstone project in Fort McMurray, the expansion will use steam to help improve oil production from the current rate of 1,000 barrels per day to 20,000 bpd by the middle of next year. “Good jobs for Albertans, billions of dollars in new investment and a growing economy — that’s what this expansion project means,” Notley said in a statement […]

Alberta Banking On An Oil Sands Boom

15 Sep 2017   Canada

Alberta Premier Rachel Notley cut the ribbon that marked the official opening of an oil sands expansion project near Fort McMurray on Wednesday. The new project is expected to produce 20,000 bpd of oil by mid-2018, thanks to a US$1.64 billion (2 billion Canadian dollars) investment. Japan Petroleum Exploration Co (Japex) and Nexen Energy ULC—a wholly owned subsidiary of China’s CNOOC— started last month the production of ultra-heavy crude oil from the Hangingstone Oil Sands Project. Japex and Nexen launched production using the Steam-Assisted Gravity Drainage (SAGD) method, at a current bitumen production rate of 1,000 bpd. After wells get switched to full production mode, the companies expect production volume at the Hangingstone project to reach 20,000 bpd by the second half of 2018. Japex’s subsidiary, Japan Canada Oil Sands Limited (Jacos), holds a 75- percent interest in the project and is its operator, while Nexen owns the other […]

Alberta Wildfires Shut Down 24 Shell Gas Wells

14 Sep 2017   Canada

Wildfires raging in southwestern Alberta have prompted Shell to shut down 24 natural gas wells and pipelines around them, Canadian media reported, adding that other companies, including Questfire Energy and West Lake Energy, were also shutting in gas-producing facilities. Shell’s Waterton sour gas processing complex remains in operation for the time being, but the company has a contingency plan to shut it down if the fires approach it, a Shell spokesman told media. The company, however, has reduced staff numbers at the site, including in the field and the processing plant, and has prepared plans for their evacuation in case the flames come too close. The Waterton facility has a processing capacity of 179 million cu ft of sour gas daily, and produces methane, ethane, propane, butane, and condensate. The wildfire, according to the latest data from Alberta authorities, had grown by 33,000 hectares since Monday and was still […]

TransCanada may abandon Energy East pipe facing tougher review

8 Sep 2017   Canada, Pipelines

TransCanada Corp ( TRP.TO ) will suspend the application for its Energy East pipeline for 30 days and may abandon the project, the company said on Thursday, weeks after Canada’s National Energy Board (NEB) regulator announced a tougher review process. TransCanada will do a “careful review” of the new assessment process to gauge its effect on the costs, schedules, and viability of the pipeline to the Atlantic coast, the company said in a statement. The NEB in August expanded the scope of Energy East’s review, saying it will consider the project’s indirect greenhouse gas contributions and will provide “more visibility” to the evaluation of risks associated with accidents such as oil spills. Energy East, which would take crude from […]

Insolvencies Jump In Canada’s Oil Country

5 Sep 2017   Canada

Canada’s oil-producing regions saw the highest increase in insolvencies over the 12 months to June 2017, according to the latest insolvency report by the federal government. Total insolvencies in Alberta were up 11.6 percent over the 12-month period to June, with actual bankruptcies up by 4.5 percent to 5,346, and bankruptcy proposals up by 16.9 percent to 8,015. In Saskatchewan, actual bankruptcies were up 5.5 percent to 1,504, and proposals were up 29.7 percent to 1,682. Total bankruptcies increased 17 percent, making the province the one with the highest increase in total insolvencies. Labrador and Newfoundland completed the top three with total insolvencies up 11.3 percent between June 2016 and June 2017, to 2,436. Actual bankruptcies were down by 7.2 percent, however, while proposals for insolvency increased by 59.7 percent. Excluding consumer insolvencies, where the pattern was the same as in total insolvencies, Alberta businesses had the worst record […]

Oil Firms That Cheered Regulatory Cuts Are Quaking on Nafta

1 Sep 2017   Canada, Mexico, USA

Energy companies that sat on the sidelines during other recent trade negotiations are getting more involved on Nafta. (Bloomberg) — The Trump administration is easing environmental regulations and opening up territory for drilling as part of the president’s bid to unleash the “vast energy wealth” of the U.S. Yet Donald Trump’s push to rewrite the North American Free Trade Agreement could have the opposite effect. As Nafta negotiations resume Friday, oil industry leaders are desperate to preserve the 23-year-old trade deal that drove a North American oil and gas renaissance and paved the way for $34 billion worth of energy exports to Canada and Mexico last year. “Any changes that disrupt energy trade across our North American borders, reduce investment protection or revert to high tariffs and trade barriers that preceded NAFTA could put at risk the tens of millions of jobs,” said the top oil and gas trade […]

An Energy Independent North America Needs NAFTA

1 Sep 2017   Canada, Mexico, USA

Last year, the bilateral trade of energy (including natural gas, oil and power) between the U.S. and Canada was about U.S $55 billion, with oil being 80 percent of the total. Its dollar amount dwarfs other industries, but negotiators may need to view this vital commodity using a different lens. Beyond size, the upstream oil business between America and Canada reveals big shifts in dollar and volume trade over the past few years. The United States has long been its northern neighbor’s biggest oil customer. Yet since 2014, it’s reciprocally grown to become Canada’s biggest supplier too. As a result of this bilateral exchange of barrels, the growth in the oil trade deficit (from the American perspective) has slowed down somewhat. That’s notable for negotiations. But of more interest is that both countries have pushed out a large portion of their “foreign oil” suppliers. So, the upshot of NAFTA […]

Canada band raises new issue in Kinder Morgan pipeline challenge

31 Aug 2017   Canada, Pipelines

A crude oil storage tank at Kinder Morgan’s Trans Mountain Pipeline terminal is seen in Kamloops, British Columbia, Canada November 15, 2016. Chris Helgren CALGARY, Alberta (Reuters) – A Canadian aboriginal band seeking to stop Kinder Morgan Inc’s Trans Mountain pipeline expansion has asked a court to consider the federal government’s position for a tougher review on a rival project. The west coast Tsleil-Waututh Nation made the request in a letter to the Federal Court of Appeal seen by Reuters this week. The request came after Canada’s resource regulator announced a tougher upcoming review for TransCanada Corp’s Energy East pipeline last week, but the request cites the federal government’s May recommendation for that review. The request was part of a legal challenge that, if successful, would quash the federal approval for the C$7.4 billion ($5.9 billion) Trans Mountain project and cause lengthy delays. Kinder Morgan and the federal government, […]

Canadian oil pipeline protesters launch new battle from the water

30 Aug 2017   Canada, Pipelines

On a sparsely populated island off the coast of the northwestern United States, more than a hundred environmental activists gathered last weekend to practice seaborne drills to disrupt construction on Kinder Morgan Canada Ltd’s Westridge crude oil terminal. In kayaks and sailboats they practiced forming blockades, raising banners and rescue techniques. Sunday culminated in a mass role play in which kayakers blockaded a large vessel and unfurled banners emblazoned with “Stop Kinder Morgan” while pretend law enforcement boats circled around creating noise, waves and simulating arrests. The three-day camp on Lopez Island in Washington state’s San Juan archipelago marks the opening of a new front in the campaign to stop Kinder Morgan’s Trans Mountain pipeline expansion, a C$7.4 billion ($5.90 billion) project through British Columbia that gained Canadian government approval last year. The proposed project would triple capacity on an existing pipeline and transport 890,000 […]

Offshore Canada oil development gains momentum

30 Aug 2017   Canada

French energy services company TechnipFMC said it would work with Canadian company Husky Energy to develop the reserves off the eastern Canadian coast. TechnipFMC will supply and install some of the subsea components that will connect to the West White Rose floating, production, storage and offloading vessel. Husky will use that facility to tap into the field about 200 miles off the coast of Newfoundland and Labrador in shallow waters. Husky in May announced its decision to move forward with the West White Rose development using the Sea Rose FPSO. The company said the project will cost about $2.2 billion to start production, which is expected in 2022 and have a peak rate of around 75,000 barrels per day. The first discovery […]

Heavy grades slip as traders eye Gulf Coast shutdowns

29 Aug 2017   Canada, Tar Sands

Canadian heavy crude differentials widened on Monday in quiet trade as some market players anticipated refinery shutdowns in the storm-hit U.S. Gulf Coast region backing up crude supplies in Canada. Torrential rain in the aftermath of Hurricane Harvey has caused catastrophic flooding along the Gulf Coast, prompting refiners in the region to shut operations as a precaution. In total, 2.45 million barrels per day, or 13 percent, of U.S. refining capacity is offline. Western Canada Select heavy blend crude for October delivery last traded at $10.35 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers, widening from $9.90 per barrel under the benchmark on Friday. One Calgary-based trader said there could be reduced demand for Canadian heavy from Gulf Coast refiners for the next few months, although […]

Can Mexico Absorb Texas’ Energy Glut?

29 Aug 2017   Canada, Mexico, USA

While the United States, Mexico, and Canada are due to meet for a second round of NAFTA talks on Friday, the Texas Association of Business welcomes proposed U.S. legislation that would expand the ability of a development bank created under NAFTA to invest in energy projects along the border, seeing the Mexican market as an outlet for excess natural gas from Texas. In June, U.S. Senator John Cornyn (R-TX) introduced the North American Development Bank Improvement Act of 2017, which was aimed at boosting the ability of the North American Development Bank (NADB) to continue investing in international land border crossings, natural gas projects, and environmental infrastructure along the U.S.-Mexico border. The bill is currently referred to the Committee on Foreign Relations. “Texas Association of Business and its NAFTA focused Texas-Mexico Trade Coalition believe that more investment in the NADBank could spur additional border infrastructure development across the state […]

Oil-rich Alberta shows early signs of economic recovery

25 Aug 2017   Canada

The provincial economy in oil-rich Alberta is expected to grow faster than expected, though some metrics paint a mixed picture of the recovery, data show. The provincial government forecast growth in terms of gross domestic product for 2017 at 3.1 percent, up from the budget forecast of 2.65 percent. With a push for diversification under way, non-energy exports were up 7.1 percent in the first half of the year. “There is good reason to feel optimistic about Alberta’s recovery and we will continue on the path to balance while supporting the needs of everyday Albertans,” provincial Finance Minister Joe Ceci said in a statement . In an annual review from earlier this year , the government said the […]

Canadian oil sands producers: Heady days may not last long

22 Aug 2017   Canada, Tar Sands

Canadian oil sands producers such as Cenovus and MEG Energy impressed investors in the second quarter as prices of heavy crude rose, but those gains are expected to be short-lived. Most of these companies are expected to book losses or post sharp drops in profit in the coming quarters as prices take a hit from a spike in oil sands production and costs rise due to a lack of pipeline capacity. Demand for heavy crude extracted from Canadian oil sands surged in the past few months as U.S. refiners sought alternatives amid supply disruptions in key exporter Venezuela and restricted exports by the OPEC. As a result, prices of Canadian heavy crude have shot up, […]

Canada’s Oil Industry Doomed If Prices Fall Lower

21 Aug 2017   Canada

Canada’s oil industry has faced a lot of strain lately. The list of oil majors selling off assets and withdrawing from high-cost oil sands is long. ConocoPhillips, Royal Dutch Shell, Marathon Oil, Murphy Oil and Statoil have sold upwards of $25 billion worth of oil sands assets this year. ExxonMobil also wrote down more than 3.5 billion barrels of oil reserves in Canada at the beginning of 2017. The companies viewed Alberta’s bitumen and heavy oil as no longer competitive in a $50 market, and many of them are focusing on other types of production, such as shale. Of course, that doesn’t mean that those projects are getting shut down. The purchasers were some of the same Canadian-based oil sands producers that have long dominated the market, such as Cenovus Energy and Suncor Energy. And by all accounts, Suncor Energy is actually doing pretty well . It will actually […]

Ahead of NAFTA talks, Canada looks to U.S. Midwest

12 Aug 2017   Canada

Alberta Premier Rachel Notley hails the start of construction of an Enbridge oil pipeline feeding U.S. states as representatives gear up for NAFTA negotiations. Photo courtesy provincial government of Alberta Aug. 11 (UPI) — Canadian leaders said they were keen to build trade ties in the U.S. Midwest in the days leading up to negotiations on the North American Free Trade Agreement. Chris Nielsen, a member of the legislative assembly from Edmonton, Alberta, leads a delegation on behalf of Trade Minister Deron Bilous to Minnesota to discuss the partnership with the 11 states that compromise the U.S. Midwest: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin. “This program is an important opportunity to learn more about how our largest trading partner is making decisions and developing policy — as we work together to continue growing our economies and creating jobs,” Nielsen said in […]

British Columbia Vows to Block Pipeline Expansion

11 Aug 2017   Canada, Pipelines

The government of British Columbia, Canada’s westernmost province, vowed Thursday to use every legal option to stop construction of Kinder Morgan Inc.’s planned expansion of a pipeline connecting the Alberta oil sands with the Pacific Coast. Under new, left-leaning leadership and citing risks to its environment and food supply, the province began to detail its plan to halt the energy project that Prime Minister Justin Trudeauapproved…

OPEC Cuts: A Curse For U.S. Refiners, A Blessing For Canadian Oil Sands

3 Aug 2017   Canada, OPEC, USA

The lowered exports of OPEC heavy crude grades to North America are tightening the price spread between WTI and Western Canadian Select (WCS), cutting into the refining margins of U.S. refiners and at the same time helping Canadian oil sands producers sell their heavy oil at a higher price, Fitch Ratings said in a release this week. OPEC has been mostly cutting heavy grades since the start of the production curbs. After the cartel extended the cuts into March next year and after it saw that oil prices continue to be depressed due to the persisting glut, OPEC is now deliberately targeting lower supplies to the U.S. to draw down the stockpiles, which the industry and market monitor most closely for signs of where the global demand/supply is going. OPEC’s biggest exporter and de facto leader, Saudi Arabia, has pledged to cut its total August exports to 6.6 million […]

PSAC increases its Canadian drilling forecast for 2017

3 Aug 2017   Canada

The Petroleum Services Association of Canada (PSAC) has updated its 2017 Canadian Drilling Activity Forecast to reflect an increase in its projected total number of wells to be drilled during the year to 7,200 from 6,680. SAC based the update on average natural gas prices of $2.75/Mcf (Can.) for AECO, crude oil prices of $49.00/bbl (US) for West Texas Intermediate, and the Canada-US exchange rate averaging $0.77. On a provincial basis for 2017, PSAC now estimates 3,604 wells to be drilled in Alberta, up from 1,900 wells in the original forecast. It is expected 580 wells will be drilled in British Columbia this year, with PSAC’s revised forecast up 300 wells from the original forecast. The revised forecast for Saskatchewan now sits at 2,794 wells compared with 1,940 wells in the original forecast. Manitoba is forecasted to count 206 wells. “One of the events that played out that was not well understood at the time of the original forecast was the relatively quick impact of the transfer of investment out of the oil sands into the conventional sector and, more specifically, towards liquid rich natural gas and light tight oil, which ultimately provide a faster return on investment dollars than the longer-term investment oil sands projects,” explained Mark Salkeld, PSAC president and chief executive officer. “This investment shift played an important role in taking a rig count from what we thought would be closer to 200 active rigs to well over 300 in first-quarter 2017,” he said. “The cost reductions from the services sector demanded by their customers are also still playing a significant role in helping with activity levels enabling [exploration and production] companies to drill more wells at less cost,” Salkeld noted. “The downside to this is that slim services sector margins mean less funds available for new [research and development] and innovation.

Canadian oil struggling for world position

2 Aug 2017   Canada

The Canadian oil sector should expect growth in exploration and production, but its place on the global stage is still uncertain, a trade group said. The National Energy Board said that, as of July 7, it expected total production of crude oil and equivalent will be 4.05 million barrels per day for the year , which, if the forecast proves accurate, would be about 5 percent higher than last year. Crude oil prices are up more than $10 per barrel from this time last year and Western Canadian Select, the nation’s benchmark for the price of oil, is moving higher in early Tuesday trading, while rival benchmarks lose ground. WCS is trading about $10 lower than West Texas Intermediate, […]

Fight Over Abandoned Oil Wells in Canada May Go to Top Court

2 Aug 2017   Canada

A battle over whether energy-company creditors should help pay for cleaning up thousands of abandoned oil wells in Canada may be heading to the country’s Supreme Court. At the center of the dispute is Redwater Energy Corp., a small publicly traded oil producer in Alberta that filed for bankruptcy in late 2015. The receiver that’s liquidating the company argues it should be able to sell its best wells and leave the worst behind for an energy industry-funded group to clean up. The province’s regulator argues that buyers should have to take both good and bad wells, even if it means that the sale proceeds will be lower. A court in Alberta sided with the receiver in May 2016, reducing companies’ […]

Canadian heavy oil plugs gap left by OPEC, Latam

31 Jul 2017   Canada, Tar Sands

Canada’s struggling oil market has found something of a lifeline as traders scramble for heavy crude due to OPEC production cuts and sinking Latin American output. Output has fallen in Organization of the Petroleum Exporting Countries and non-OPEC Latin American countries such as Mexico and Colombia, leading refiners as far away as China to look to Alberta’s oil sands to fill the gap. The interest has boosted the price for heavy Western Canada Select (WCS) oil, which is within range of its tightest discount to U.S. crude ever. Canadian heavy oil is an easy substitute for Middle Eastern and Latin American grades, and the rising demand represents a rare bright spot for the oil sands, which have been hit hard by falling prices and the high cost to produce and blend Alberta’s heavy, tar-like bitumen. “We’ve been seeing a structural change (in the market) since […]

A Worldwide Gas Glut Claims $27 Billion Victim in Canada

27 Jul 2017   Canada, LNG

A $27 billion energy project in Canada just became the latest casualty of a worldwide glut of natural gas. Malaysia’s Petroliam Nasional Bhd abandoned on Tuesday its plans for the Pacific Northwest LNG terminal, a plant that would have liquefied Canada’s gas and sent the fuel by tanker from the western shores of British Columbia to buyers in Asia. Petronas cited market conditions in its decision. Pacific Northwest LNG joins a growing list of projects that have been killed in recent months by plummeting LNG prices, throwing the economics of export terminals from Australia to Russia to Mozambique into question. Prices have crashed as increasing volumes of gas from Australia and America’s shale formations hit the water, inundating the market with so much supply that analysts say demand […]

After LNG project scrapped, TransCanada looks for more export options

27 Jul 2017   Canada, LNG

Canada stills needs to find ways to get its gas assets out of North America, TransCanada says after a project slated for British Columbia was scrapped. File photo by Stephen Shaver/UPI July 26 (UPI) — There’s still a need to get Canadian natural gas out of North America, energy company TransCanada said after an export option for British Columbia was scrapped. Malaysia energy company Petronas said that, as the head of a partnership, it was no longer pursuing a liquefied natural gas project at Port Edward in British Columbia. Anuar Taib, the company’s CEO, said the decision was made because of an “extremely challenging environment” brought on by a weak market. Pipeline and energy company TransCanada, which was involved with a Petronas affiliate on the project, said it was disappointed with the decision, but would be reimbursed for costs associated with the development. “There is still a strong need […]

A Worldwide Gas Glut Claims $27 Billion Victim in Canada

26 Jul 2017   Canada

Petronas drops high-profile LNG plans in British Columbia Plummeting prices threaten projects from Australia to Russia A $27 billion energy project in Canada just became the latest casualty of a worldwide glut of natural gas. Malaysia’s Petroliam Nasional Bhd abandoned on Tuesday its plans for the Pacific Northwest LNG terminal, a plant that would have liquefied Canada’s gas and sent the fuel by tanker from the western shores of British Columbia to markets in Asia. Petronas cited market conditions in its decision. Pacific Northwest LNG joins a growing list of projects that have been killed in recent months by plummeting LNG prices, throwing the economics of export terminals from Australia to Russia to Mozambique into question. Prices have crashed as increasing volumes of gas from Australia and America’s shale formations hit the water, inundating the market with so much supply that analysts say demand may not catch up until […]

The End of Growth in the Tar Sands. So Now What?

5 Jul 2017   Canada, Tar Sands

A managed decline of the tar sands isn’t a popular idea in Alberta, or in Canada for that matter. The idea of sunsetting the tar sands industry is about as polarizing as it gets. The problem is that people have been led to believe that a managed decline undercuts a booming oil industry that is on the cusp of bouncing back after a few bad years. It’s not. The only real alternative to a managed decline is something much worse: an unmanaged decline. Almost everyone understands that the world will eventually wean itself off of fossil fuels, hopefully sooner than later. A rarely discussed consequence of this is that there is no reasonable scenario in which the high cost tar sands sector remains the last man standing as the transition takes hold. Indeed, this dynamic appears to be already in play. In a new briefing note published Thursday, we […]

Legal action deters KRG crude sales to Canada

4 Jul 2017   Canada, Iran

After Baghdad obtained a Canadian warrant to seize a tanker of Kurdistan exports, the Neverland has sailed back into the Atlantic Ocean. A tanker loads Kirkuk crude at the Turkish port of Ceyhan in May 2015. (STAFF/Iraq Oil Report) Iraqi legal action has prevented oil exports from Kurdistan from being offloaded in Nova Scotia, after a Canadian court issued a warrant to seize the cargo of the Neverland oil tanker. The federal government’s intervention is a sign that unresolved oil policy disputes between Baghdad and Erbil continue to complicate the Kurdistan Regional Government’s (KRG) attempts to establish a fully independent oil sector. This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

The Mysterious Tanker Full Of Kurdish Oil Reappears Off Canada

1 Jul 2017   Canada, Iraq

The oil tanker loaded with crude from Kurdistan and thought to be headed to the U.S. before it turned off its tracker after exiting the Strait of Gibraltar a week ago has reappeared 300 miles off Halifax, or around 600 miles from Boston, the FT reported on Friday, citing satellite ship tracking data. The tanker Neverland was thought to be headed for the United States, further buttressing the semiautonomous region’s economic independence as Erbil prepares for a referendum on political independence later this year. An estimated 650,000 barrels of oil, mostly extracted from the Kirkuk field located in Kurdistan, departed the Mediterranean Sea on June 20th, according to Bloomberg data. The oil tanker’s route indicated a dash towards the American East coast, after a three-year hiatus—caused by a dispute with Baghdad over Washington’s true loyalties—had ended the transatlantic shipments. For more than a week no signal was detected from […]

Canada oil output threatens to derail Opec plan

30 Jun 2017   Canada, OPEC

As Opec glares at the surge in US shale production that is threatening to derail its attempt to balance the oil market, it may also want to cast an eye north. Canada, home of the world’s third-largest oil reserves, might have seen producers slash capital spending during the three-year-old oil decline, but earlier investments in the country are set to keep pushing output higher for at least the next 18 months. A forecast released this month by the Canadian Association of Petroleum Producers sees the country’s output increasing by 270,000 barrels a day in 2017 and another 320,000 b/d next year. That combined two-year Canadian increase is equal to almost a third of Opec’s production cuts that it made with allies like Russia at the beginning of this year in an effort to raise prices. Kevin Birn, senior director at IHS Markit, says that over the next few years Canadian growth “will only be surpassed by the United States and its tight oil machine,” referring to the US industry’s unlocking of tightly packed oil deposits in shale and similar rocks.

Pipeline Pinch Adds to Oil-Sands Woes as Keystone Wait Drags

Producers have little choice but to move those extra barrels by train, with costs two to three times higher than pipeline shipping. (Bloomberg) — Call it the pipeline pinch, or maybe the Keystone quagmire. While plans by Canadian companies from Suncor Energy Inc. to Canadian Natural Resources Ltd. to boost oil output are racing to fruition, the construction of three pipelines needed to move that product to market, including the infamous Keystone XL, is lagging years behind. The end result: Producers have little choice but to move those extra barrels by train, with costs two to three times higher than pipeline shipping. It’s an unwelcome added expense after oil plunged about 20 percent from this year’s peak. Futures prices have settled in below $45 a barrel, after many predicted it would rise to $60. “We’re not going to see significant new pipeline capacity until late 2019 or 2020,” said […]

Methane Reduction Plan Could Seriously Harm Canadian Oil & Gas

20 Jun 2017   Air Quality, Canada

The old saying goes, “ The road to hell is paved with good intentions”. And so it goes for the myriad of new regulations, taxes and restrictions forced upon the oil industry to attempt to make it something it is not, which is a zero-carbon and environmentally benign source of hydrocarbon fuel. Carbon taxes. Corporate taxes. Emission caps. The premise is the upstream oil and gas industry is so shamelessly profitable that governments and regulators can pile on more rules and costs that somehow this industry can accommodate, absorb and survive. And still provide fuel, taxes and jobs. The newest elephant in the room the industry has not yet had to deal with is the commitment made by the governments of Canada, Alberta and U.S. to reduce methane emissions by 40 to 45 percent by 2025 with the major culprit being the usual suspect; the oil and gas industry. […]

Innovators toil to revive Canada oil sands as majors exit

19 Jun 2017   Canada, Tar Sands

In the boreal forests and on the remote prairies of Alberta, a handful of firms are running pilot projects they hope will end a two-decade drought in innovation and stem the exodus of top global energy firms from Canada’s oil sands. They are searching for a breakthrough that will cut the cost of pumping the tar-like oil from the country’s vast underground bitumen reservoirs and better compete with the booming shale industry in the United States. If they fail, a bigger chunk of the world’s third-largest oil reserves will stay in the ground. Canada’s oil sands sector has become one of the biggest victims of the global oil price crash that began in 2014 when top OPEC producer Saudi Arabia flooded the market with cheap crude to drive […]

Oil Sands Output Growth Second Only To Shale

19 Jun 2017   Canada, Tar Sands

Canada’s Mordor, as environmentalists like to call the oil sands, is notorious for how “dirty” oil extraction is there. It’s also notorious for how expensive it is to extract. The dirt argument, which concerns the energy intensity of oil sands production compared to other oil extraction methods, has been partially refuted : some oil production in California is dirtier than oil sands. The price argument is also being refuted by the producers themselves: oil sands extraction is becoming cheaper, and it is rising. Oil sands production has historically had some of the highest production prices in the industry due to the complexity of the process that turns bitumen into fluid crude oil. Like their peers in the shale patch, however, oil sands miners were motivated to increase their efficiency during the recent price crash. The results from this boost are now becoming evident. Earlier this week, the Canadian Association […]

North American Pipeline Capacity Crisis Looms Large

14 Jun 2017   Canada, Pipelines

Canada’s problem with its oil pipeline capacity is becoming increasingly serious as opposition to new pipelines is growing in intensity. The situation will only worsen in the coming months as production continues to grow. Despite opposition, Canada’s PM Justin Trudeau last year approved Kinder Morgan’s Trans-Mountain expansion project, which will see the twin pipe transport almost 900,000 barrels of crude daily to Canada’s Pacific coast. U.S. President Donald Trump also approved a crucial new pipeline project that was shelved by his predecessor: the 830,000-bpd Keystone XL that has been the target of vocal environmentalist and Native American opposition for years. Together, the two pipelines would relieve the pressure on the existing pipeline network—but there is just one problem: the expanded Trans-Mountain will take two years to become operational. For Keystone XL, there is no deadline yet. In the meantime, Canadian exporters are resorting to increased shipments by rail to […]

Can Canadian Crude Compete In Asia?

6 Jun 2017   Canada

Will the Canadian oil producers rake in higher prices for their crude oil if they sell to Asia? Is the U.S. unfairly discounting Canada’s heavy crude oil stream – the Western Canadian Select (WCS)? Will the Kinder Morgan Trans Mountain project be a game changer for the Canadian producers? The Ottawa and Alberta government certainly thinks so. However, scientist and energy resources expert David Hughes is of a different opinion. In his new report titled “ Will the Trans Mountain Pipeline and tidewater access boost prices and save Canada’s oil industry? ”, he argues that “ Canada’s oil is not being unfairly discounted by the U.S.” “Oil prices internationally and in North America are now nearly identical. That means Canadian crude producers are likely to receive lower prices overseas than in the U.S. because of the higher transportation costs involved in transporting bitumen by pipeline to B.C.’s coast and […]

Regional tensions flare over fate of Canada pipeline project

31 May 2017   Canada

FILE PHOTO — Dump trucks are parked near crude oil tanks at Kinder Morgan’s North 40 terminal expansion construction project in Sherwood Park, near Edmonton, Alberta, Canada November 13, 2016. REUTERS/Chris Helgren/File Photo Canada’s energy-rich province of Alberta on Tuesday warned its neighbor not to block a Kinder Morgan Inc ( KMI.N ) pipeline project, ratcheting up political tension that helped undermine the stock market debut of the firm’s Canadian unit. Kinder Morgan plans to more than double the capacity of its Trans Mountain pipeline from Alberta to the Pacific province of British Columbia, where two political parties which oppose the project on Monday struck a deal to take power. British Columbia Greens and New Democrats – seeking to unseat Liberal premier Christy Clark – will unveil details of their plans for Trans Mountain at 2 p.m. Pacific (2100 GMT) on Tuesday. The project would increase Pacific exports of […]

Canadian Oil Sands Brace As Oil Majors Dump Shares

31 May 2017   Canada

Royal Dutch Shell and ConocoPhillips struck deals in March to sell Canadian oil assets to two Canada-based producers. In both deals, parts of the consideration for the transactions were shares of the Canadian companies that Shell and ConocoPhillips received. Although the share transactions are subject to lock-up periods of up to six months following the closing of the deals, Shell and ConocoPhillips are getting ready to sell those shares—possibly months after acquiring them—regulations and agreements permitting. The potential sale of billions of dollars worth of shares in Canadian Natural Resources and Cenovus Energy may see the Canadian equity market flooded with company stock, according to analysts quoted by Reuters. Hedge funds, private equity firms, or institutional investors may be interested in the stakes, if shares are priced at discount to market prices, analysts reckon. The possible sales, however, could also rekindle concerns over how confident investors are in placing […]

Oil-rich Alberta lands energy agreement with Japan

6 May 2017   Canada

A deal with a Japanese oil and gas company was among agreements reached during a recent trade visit to Asia, the provincial leader of Alberta said. Alberta Premier Rachel Notley concluded a recent tour of Asia alongside Economic Development and Trade Minister Deron Bilous. Three of 10 days were spent in Japan, where she met with representatives from sectors ranging from energy to agriculture. During her visit, Notley signed an agreement with the Japan Oil, Gas and Metals National Corp. to collaborate on components related to oil and gas exploration and production. “A stable and resilient economy needs a diversity of products and a diversity of markets. Asia is hungry for the world-class products and services Alberta businesses offer,” […]

Oil-Sands Operators Bet on Local Advantage as U.S. Partners Flee

21 Apr 2017   Canada, Tar Sands

Now that multinational energy producers have sold their stakes in Canada’s oil sands, local companies are hatching plans to make some real changes.  Cenovus Energy Inc. and Canadian Natural Resources Ltd. are betting they can exploit new technologies and their deeper understanding of Canadian-specific issues, such as environmental rules and relations with native communities, to profit from one of the world’s biggest hydrocarbon reserves without their former partners.  “The oil sands require a focus on environmental issues like carbon pricing, indigenous issues, things like that, that are very specific kinds of skills that companies need to have for Alberta, for Canada,” said Harrie Vredenburg, a professor at the University of Calgary’s Haskayne School of Business. “Some of the multinationals are not necessarily particularly suited to that. In all those things, it does favor the Canadian firms.”

China talks clean energy with Canada

20 Apr 2017   Canada, China

Chinese officials discussed clean energy during talks with the Canadian prime minister as both economies look to diversify their energy sectors. File photo by Stephen Shaver/UPI April 19 (UPI) — Clean energy and technologies related to the fight against climate change are some of the ways to foster trade with Canada, the Chinese premier said. Canadian Prime Minister Justin Trudeau spoke by phone late Tuesday with his Chinese counterpart, Li Keqiang. A readout of the meeting from the official Xinhua News Agency stated that both sides discussed bilateral opportunities in energy. The two leaders expressed willingness to expand bilateral trade and investments, the official newspaper reported. “The two countries should also strengthen cooperation on tackling climate change and cooperate in new areas such as clean energy to create new growth points in the relationship,” Li said. Many of the export metrics trended lower for Canada in 2015 and unemployment […]