Wednesday, 11 October 2017

'What Trudeau won't tax' hashtag pokes fun at PM

Published: IPOLITICS
By: Janice Dickson


As the Trudeau government continues to defend its controversial tax proposals in the face of fierce private sector criticism, a new hashtag has emerged on Twitter poking fun at the things Trudeau "won't tax."

Conservative MP Michelle Rempel appeared to help initiate the conversation.

"This is just begging for a hashtag. I'll go first. His cabinet Minister's taxpayer funded limo rides to hockey games. #whattrudeauwonttax," tweeted Rempel.




The hashtag emerged after it was reported that a document on the Canada Revenue Agency’s website indicates that employee discounts for merchandise should be treated as a taxable benefit. The document, known as a tax folio, states that when an employee receives a discount on merchandise because of their employment, the value of the discount is “generally included in the employees income.”
But while the Conservatives and lobby groups say the government is targeting retail workers, National Revenue Minister Diane Lebouthillier insisted that’s not the case.
“Our government recognizes the important role that the retail sector and those working in it play in our communities and in our economy,” Lebouthillier said in a statement Tuesday.
“There have been no changes to the laws governing taxable benefits to retail employees. We are not targeting individuals working in retail. The Agency issued a guidance document to mainly provide assistance for employers and is committed to further clarifying the wording of the guidance to reflect this.”


With files from Canadian Press.

Tuesday, 19 September 2017

OH, FOR GOD's SAKE!

By: Kevin Turko
Published: Oilfield Pulse


        If one takes the time to surf through all the news and the NEB website, I've got to tell you, it is tough not to get depressed with the state our country is in these days. Before I jump into the middle of this pool, a thought occurred to me the other day which made me wonder how all the politicians, eco-activists and concerned environmentalists would react to the following scenario. I know this is more than a little far fetched as it would cripple the Canadian economy for years to come, but work with me for a few more minutes.
       Let's say, just hypothetically or perhaps hysterically, that we gave in entirely to all the carbon-free warmongers and decided to kill the oil & gas industry in Canada. As they say, we capitulate totally and leave it in the ground. After all, that is what they are dreaming of, and that is what they are being funded for! Nothing less is acceptable in their minds. No amount of dialogue, monetary appeasement or technological innovations seems to matter. The 3rd largest proven oil reserves in the world, somewhere north of 170 billion barrels. Damn the torpedoes, let's just leave those n nasty and carbon infested fossil fuels in the ground. But the world keeps on spinning, and the demand for oil & gas doesn't diminish for decades to come.
         Fast forward to year 2100, and the rest of the world is running out of reserves and we're still sitting on over 100 billion barrels tucked away comfortably across Canada. OK, maybe Western Canada. The UN and other less fortunate countries, now starving for energy, plead with Canada to re-open the flood gates. People around the world will die if we say no! Would we stick to the moral high ground and say no, or would we live up to our renowned friendly reputation and compassionate ways and simply say yes. Of course, we would. But what if we say no? How long do you think it would take some other rogue or desperate state, or our might neighbors to the south, to forcefully and militarily come and get it?
       Perhaps for-fetched today, but in the year 2100, who knows!
        This leads me to the nonsense that we are experiencing with pipeline approval process here in Canada. The NEB is becoming a joke and now a political pawn for our oh so wonderful climate change gurus., and self-proclaimed planet protectors, federal Liberal government. So much for being an independent regulator! This is rapidly turning into a great way to defer the Energy East decision until after the next federal election, or better yet, to delay the Cabinet decision to say NO so long as these companies simply run out of money, give up on Canada and move on. Before you come over the top rope, and this is directed completely to those who disagree with my opinions, yes, I do firmly believe we must protect the environment and be utterly responsible in how we explore, extract, build pipelines, and ship this stuff. But the demand for oil & gas isn't going away anytime soon. Any decade soon! In fact, the entire crop of carbon naysayers and carbon tax supporters will be long gone, turned into ashes, and will be part of the world's eco-system before this ever happens.
  ON AUGUST 23RD THE NEB ISSUED A NEWS RELEASE ON THE EXPANDED FOCUS FOR ENERGY EAST ASSESSMENT. FOR THE MOST I GUESS IT READS OK UNTIL YOU GET TO A COUPLE OF STATEMENTS. 

  " In addition, the NEB will consider upstream and downstream greenhouse gas emissions (GHGs) in determining whether these projects are in the public interest. The NEB also wants to examine the potential market impacts of GHG reduction targets embedded in laws and policies on the economic viability of the projects."

    " Today's decision establishes the foundations for a thorough assessment based on science, traditional knowledge of Indigenous peoples, and other relevant evidence."
 
    Oh, for God's Sake! So now TransCanada is also responsible to defend debatable and unsettled climate change science around GHG emissions. Poor souls! I wonder how much more money and time this will cost them? Irving Oil, in a letter to the NEB said, its customers will use "relatively the same" amount of fuel,

       ALBERTA WAS THE FIRST JURISDICTION IN NORTH AMERICA TO LEGISLATE        INDUSTRIAL GREENHOUSE GAS EMISSION REDUCTIONS


and produce the same level of greenhouse gas emissions, whether the Irving-refined oil comes from Alberta through the Energy East Pipeline, or from other sources in the U.S. or overseas. "The scale of downstream GHG emissions will not be influenced by the Project". Bang on! And of course, any surplus oil shipped out of the Bay of Fundy, once refined, will eventually create GHGs. So now the new and improved NEB also needs to consider the downstream GHG emissions in far away countries around the world, to which we have no control nor influence. Whether it's our oil, or oil sourced from another country, the downstream emissions are the same.
    As for the upstream side of the NEB's thorough assessment based on science, let me do the quick math. We have about 170 billion barrels of proven reserves, whether it's shipped through Energy East or not, or whatever other pipeline or rail car or not, will create GHG emissions to get it out of the ground. Fact of life! This project is doomed if TransCanada needs to belly up to the bar and defend every producer in Canada and the GHG emissions they are creating. Again, Oh, for God's Sake!
    And don't shoot me for saying this, but what does the "traditional knowledge of Indigenous peoples" lend to "better understanding the risks associated with potential accidents and system malfunctions that may, for example., lead to an oil spill into the environment" or "upstream and downstream greenhouse gas emissions"? I suspect their traditional knowledge is about as valuable to the subject of pipeline approvals and climate change as is about 99.9% of all other Canadians.
     Rather than the NEB and Federal governments spending all this time and money on determining whether these pipelines are in the public's interest, perhaps they should devote all their time to determine how to get these pipelines built and flowing as safely, environmentally soundly, and expeditiously as possible. They're just not in Canadians public interest, they are in the world's public interest.
     The world needs our oil & gas, maybe not as much today, but that day is coming. When will we finally stop, and replace this constant industry vs. eco-activist infighting, and endless NEB navel gazing with Federal Cabinet leadership to simply get on with the show!
    Oh, For God's Sake!
   

Wednesday, 2 August 2017

Wake up Canada! Get behind energy megaprojects or get ready for the consequences

By: Terry Etam
Published: Fort Nelson News // BOE Report

 
        Not many commodities are hot anymore; investors are quite comfortable shunning the segment. But perhaps you may want to know about a commodity that in contrast is particularly overheated these days.
        Natural gas firm service transportation out of Alberta, for the upcoming winter season.
        Firm service prices are being bid up to unusual levels, even in the face of a relatively low commodity price forecast. Producers appear somewhat panicked about their ability to access markets for their natural gas. This is understandable; current market conditions for AECO-priced gas are extremely shaky with some forecasts of sub $1 gas for the next few weeks due to capacity constraints. This happens not infrequently whenever there is a pipeline outage for western Canadian production, which has few markets that are in the shadow of potential US shale output, which could spring to life at the sign of any price increases. That's not normal behaviour, it's an indication of how few options gas producers have.
         This might seem an inconsequential irritant to the industry, the only by-product of which would be cheaper gas for consumers. But it's actually a big red flag warning of underlying problems. And then, right on top of this fiasco, lands the news that the $36 billion Pacific North West LNG export terminal will not proceed. Petronas, the major partner in the project, politely blamed market conditions, which might be believable were it not for the numberous US LNG export facilities marching towards completion.
         Canada is about to have two of its major economic engines strangled into near oblivion while we stand around and watch. First was the oil sands, and now natural gas development is being throttled. As a country, we are playing with fire. Or maybe more accurately, putting out a fire that we've been relying on.
        We all know that oil sands investment has pretty much stopped dead, knocking out one of the bigger lights in the Canadian economy. Natural gas might follow a similar path if it becomes a stranded commodity that can only be sold at ridiculous discounts. It is true that both the Alliance and TransCanada Pipe Line systems are working to handle substantially more gas in the next few years, but that gas will still be destined for highly competitive US markets that already are digesting growing shale production. The result will be reduced net backs all the way to Canada.
          Capital will not flow into Canadian natural gas developments indefinitely when the only markets are severely discounted ones; at some point investors will tire of pumping money into a sector whose product sells at 20 year lows (and they maybe already have). Lower corporate net backs and decreased investment levels may not make headlines immediately, but those factors surely will prick up ears when people hear about government deficits growing by tens of billions.
         The Canadian economy is under attack on multiple fronts. The softwood lumber industry is once again getting slapped around by the US. If one removes lumber, and oil and gas from Canada's economic equation, or large parts thereof, there will be a massive government revenue gap and the only way the economic equation can be balanced will be to slash the spending side, such as on our vaunted social safety nets.
        Oil, gas and lumber are tough shoes to fill for the nation. Manufacturing is big for southern Ontario, but not so much for the rest of the country. Hydroelectric energy is great, now that it's been built, but creating any new dams will (or should) trigger the same blizzard of outrage that any petroleum based mega project now does. Please don't point to other green energy sources for economic salvation; Ontario's fiasco of subsidizing renewable energy sources has created an unsustainable and bizarre power market where consumers can't afford the power bills and renewable energy sources reap huge benefits, all through the miracle of unsustainable mountains of government debt.
      Canada is a resource-based nation. We may want to get away from that, and at some point we will, but if we decide to make the big switch in the near future we'd better be ready for the pain that will be part of the ride. We can't continue in half hearted manner where we accept low returns by keeping our product from markets where it will be welcomed. That only serves to make our production schemes uncompetitive in a global marketplace, and we've seen recently how quickly capital can evaporate when better opportunities exist elsewhere.
       The environmental movement cheers these sorts of things, because any hindrance to petroleum development is a good thing in their eyes. If they get their wish, the world will go to witness firsthand the effects of strangling one of the world's strongest, safest, cleanest, and most progressive economies, because the debt fairies won't hand around forever to watch it all implode. And on the flip side, for those who think strangling Canada's energy sector will save the planet, remember that Canada in total is responsible for about 2 percent of global greenhouse gases. There is nothing Canada can do short of shutting itself down that will have a meaningful impact on global emissions.
        Wake up, Canada! We are presently a resource-based economy. Every resource based economy on earth tries to diversify, but it's not easy. It won't be for us either. No matter how green you see the future, the path to get there must be a gradual on to avoid economic chaos. For now, our social infrastructure and standard of living are financed by natural resources, and we are accepting a fraction of the value we could be getting by strangling ourselves in red tape and second guessing. To get to a green future, we must first not kill the golden goose.
       Either get behind energy megaprojects by demanding more of our politicians, or be prepared for a substantially reduced standard of living. The death of these developments, one by one, impacts us all.

Friday, 28 July 2017

A Few Questions for Canada's NIMBY Crowd

By: Mark Scholz - President of CAODC
Published: The Hitch - Summer 2017

President's Message

Locals and globally-funded environmental groups who oppose the Kinder Morgan Trans Mountain expansion project object to any infrastructure that might result in a proliferation of tankers that would disturb the beautiful Saelish Sea ecosystem. This position, while seemingly well-intentioned, is not rooted in fact; and it has presented one of the most compelling threats to Canadian federalism since the Quebec referendum of 1995.

Let’s look at a few facts. To date, there have been no major tanker incidents off of the coast of British Columbia, largely due to developments in double-hulled tanker technology and thoughtful marine planning and cooperation on the part of companies and municipal governments. About 250 large commercial vessels enter the Port of Vancouver every year, five of which are tankers destined for the Westridge Marine Terminal.1 The Trans Mountain expansion is projected to increase that tanker traffic to 34 tankers. That seems like a significant increase, except when you consider the fact that the increased total represents just 14 percent of all marine traffic in the Port of Vancouver.2

Canada is a world-class producer of oil and with new investments in energy infrastructure – namely pipelines – we can increase our potential to be a world-class supplier in a globally competitive market. Currently, less than one per cent of Canada’s oil is exported to markets outside North America, yet world demand for oil will continue to grow.3 Canadian oil production meets the highest standards among producing nations. We should aim to be the global choice in terms of oil and gas. Energy infrastructure is critical to reaching that goal.

So what about those who oppose pipelines in principle, on the grounds that their contents promote catastrophic climate change? Well, they should be encouraged by the fact that Canadian oil and gas are less GHG-intensive than ever.
When will enough be enough for you to divest yourselves of the notion that we need to “leave it in the ground”?
It’s commonly known (but no less remarkable) that the volume of GHGs released by every barrel of oilsands crude has been reduced by an average of 30 percent since 1990. But did you know that technologies such as molten carbonate fuel cells reduce the greenhouse gas intensity of in situ steam generation methods such as steam assisted gravity drainage? In the drilling industry, the time it takes to drill an extended-reach horizontal well has been reduced by up to 70 percent, resulting in significant GHG emissions cuts through dramatic reductions in the use of diesel fuel on site. In terms of the safety record of the existing Trans Mountain pipeline, it has transported oil products with a 99.9 percent spill safety rate since 1956.

Canadian industry will keep making impressive strides toward achieving perfect emissions, safety and conservation outcomes.

So here are a few questions for Canada’s NIMBY (Not In My Backyard) crowd:
  • When will enough be enough for you to divest yourselves of the notion that we need to “leave it in the ground”?
  • Are your objections to Canada’s regulatory processes rooted in conservation and consultation issues, or are they just a stall tactic to prevent investment in Canada’s oil and gas industries?
  • Do you believe that Canadians are really better-served by hobbling our opportunities to participate in the global energy transition by shutting down the production and transportation of our oil and gas resources?
These questions matter. They will determine our country’s energy future, our contribution as global thought leaders in innovation and excellence, and our ability to uphold a cohesive Canada. 
Mark Scholz is president of the Canadian Association of Oilwell Drilling Contractors. He can be reached at mscholz@caodc.ca.
Sources:

1 Transport Canada

2 Kinder Morgan

3 CAPP

Tuesday, 18 July 2017

HEY HEY! HO HO! THE CARBON TAXES HAVE GOT TO GO!

Published: Oilfield Pulse
By: Kevin Turko - CEO - Oilfield Hub Inc

   
       It's almost impossible these days to watch an cable news network or national news broadcast without encountering some sort of story covering a protest rally or group shouting out or marching for their favorite or latest causes. Up until November of last year, there was a constant barrage of environmental groups and eco-activists out there at every opportunity chastising the oil and gas industry, chanting their vocal support to fix climate change and rid the planet of the new demon called 'carbon pollution'. Then, thank God, along came President Donald Trump who, right or wrong, has shifted both the medias and protestors' focus away from the energy sector. Here are just a few of my personal favorite chants:

THE PEOPLE! UNITED! WILL NEVER BE DEFEATED! NO BAN! NO WALL! THE TRUMP REGIME HAS TO FALL! SAY IT LOUD! SAY IT CLEAR!REFUGEES ARE WELCOME HERE!WE WANT A LEADER! NOT A CREEPY TWEETER! HANDS TO SMALL! CAN'T BUILD A WALL! YOU'RE ORANGE! YOU'RE GROSS! YOU LOST THE POPULAR VOTE! HEY HEY! HO HO! THIS PRESIDENT HAS GOT TO GO!

      Whether you love the man and support his policies, or detest the man and despise his policies, President Trump has single handily polarized the political landscape well beyond the borders of the United States. By the way, it's a lot more fun when you read these chants out loud in a raised and rhythmic voice! Give them a try again; but to truly get into the agitated protesting spirit you should also read each of the chants 3 times in a row. Again, all thanks unwittingly or purposely to The Donald.
       In the last eight months or so, this has remarkably taken the pressure off the oil and gas industry. The boogeyman of climate change, Mr. Carbon Pollution, has taken a second seat to a whole host of other social justice causes on both sides of the border and opposite sides of the political landscape. Not to be out-done, I thought a little reminiscing was in order so we don't lose sight of the past and ongoing fine protesting efforts of our foreign funded environmental activist groups. Again, here goes with some of my personal global warming favorites.

NO MORE COAL! NO MORE OIL! KEEP YOU CARBON IN THE SOIL! NO PIPELINES! NO TAR SANDS! NO DESTRUCTION OF OUR LANDS! KINDER MORGAN! ENERGY EAST! NOT IN THE WEST, NOT IN THE EAST! GIVE US CLIMATE TARGETS! NOT DIRTY TAR SANDS MARKETS! HEY HEY! HO HO! CANADIAN PIPELINES HAVE GOT TO FLOW!

      Ok, ok , ok, if you are paying attention I made the last one up! From where I am leaning, all these folks just don't have to be so damn negative. Why can't we start some cool chants of our own to help modify, in a much more positive manner, the climate change and carbon pollution narrative! Give it a try! I rather like the HEY HEY! HO HO! chants. Snappy little jungles and pretty easy to make up by yours truly and by the countless number of seemingly paid and well funded eco-activists. Several of which are thinly veiled or cloaked as so called charitable organizations, at least for the time being in Canada as long the Trudeau Liberals are in power. But hey hey, ho ho, that's a whole other article! Sorry, couldn't resist.
    These climate change and carbon pricing debates are such divisive issues right now, but what I find fascinating are the unfortunate parallels to the political climate we are being subjected to. If you watch channels like the CBC or CNN you get bombarded with countless hours of 'the world is ending' reporting, and if you watch Fox News you're being swayed for an equal number of hours that its all 'fake news' and that nothing wrong is happening. All in search of higher ratings and increased revenues. Most people just don't have time nor inclination in their daily lives to search out the truth which undoubtedly lies somewhere closer to the middle of our daily news spectrum.
     There's so much time, effort and dollars being spent on indoctrinating everyone on what's wrong and precious little time, effort, and dollars are being devoted to educating the public on what we, our business leaders and politicians, can do to make it right. Let's use pipelines as an example. If we are all so concerned about carbon pollution on a global scale, why no get these pipelines built now! As a first step, doesn't it make more sense to get countries like China, India and other high emitting countries off their dependence on coal and onto clean burning natural gas. Wouldn't this be a massive positive step toward lowering GHG emissions now, versus by 2030?
      The life blood of the oil and gas industry in Canada is access to foreign investors. These investment dollars won't return to Canada until significant and meaningful progress is made on getting our oil and gas to tidewater. On the home front, we seem to care little about making Canada truly energy independent with our own natural resources. Instead we are blocking pipeline construction with petty local and domestic issues. I say petty, because our industry detractors have lost sight of the greater good. Let's get our clean burning natural gas to China, and many other countries, so we no longer have to watch news reports of Chinese people with face masks walking thought their cities under a smoggy and hazy skyline.
      Instead we slap our citizens and businesses with meaningless carbon taxes which don't in any way change consumer behaviours. We distract our people into thinking this is the answer to tackle climate change. We allow civic politicians in cities like Vancouver to ban clean burning natural gas furnaces. These same politicians and local protestors are hurting our Canadian economy, and unwittingly, or stupidly, denying access to LNG to the worst polluting countries of the world. This is small-ball crap and just plainly hypocritical!
    So the next time you see a protestor in your neck of the woods, think of our less fortunate global neighbors and throw back a chant of your own. You're always welcome to use mine as well.

   HEY HEY! HO HO! CANADIAN PIPELINES HAVE GOT TO FLOW!

   

Monday, 17 July 2017

Pipelines for Peace

By: C. Kenneth Reeder
Published: Pipeline Observer - CAEPLA

Why supporting Canadian energy transport projects can mean fewer wars and refugees

We generally think of the pipeline debate in terms of economy and environment, but pipelines can be a war and peace issue as well. 
     An American diplomat once said, "If goods cannot cross borders, armies will." If people can't get what they need through cooperation and trade, then they must resort to violence and plunder. 
     That is why most of history's wars have been fought over land and resources. In the modern era we basically accept that oil and gas have something to do with many conflicts. We know why so many "strategic interests" include the Middle East and not the Congo. 
      We can see this in Syria. The war-torn country is ground zero for clashing foreign interests. There are many layers to the conflict but one of these is competing gas pipelines. 
       It's nearly impossible to understand the irrationality of Middle Eastern politics, and Syria's civil war is no different. We have a nasty secular dictator fighting a hodgepodge of terrorist-rebel factions (including ISIS, Al-Qaeda, and others). Whatever they're fighting over, it's a brutal struggle with no good guys to cheer for. 
       How do pipelines fit in? The Syrian Civil War started in 2011. In 2009,. Syria's leader Assad rejected a pipeline project with Qatar and Turkey, while supporting an Iranian pipeline project through Syria. 
      The Qatar-Turkey pipeline would have gone from Qatar's North gas field through Saudi Arabia, Syria, and on to Turkey with future access to Europe. Qatar is a major gas producer and its rulers want to be main providers of gas for Turkey, which otherwise depends on Russia and Iran for energy. They also have their eyes on Europe, which will be thirstier than ever for natural gas imports as its own production wanes. 
      Now here's a question: who are the main backers of fundamentalist Sunni rebels forces in Syria? Interestingly, it is the fundamentalist Sunnis in Saudi Arabia and Qatar, with help from Turkey. 
      Now on the flip side of this, who is supporting Syria's regime against the terrorist-rebels? Russia and Iran. 
      Both are key Syrian allies. The rejected project would have been a problem for Russia and Iran's own pipeline related goals through Syria and Turkey because they need to preserve market share and economic power. Assad reportedly said he would not sign off on the Qatar-Turkey pipeline to protect Russia's economic interests. 
     All this foreign interference has greatly aggravated the Syrian conflict, leading to hundreds of thousands dead leading to hundreds of thousands dead and a refugee crisis that has spilled into Europe and elsewhere. 
     When politicians point to the tragedies of Syria and tell us to open our arms and wallets for refugees, we should reflect a bit on how we can alleviate conflicts over petroleum resources.  
      Building more energy infrastructure and exporting more oil and gas is a huge part of this.
      Peace isn't created by vapid, sloganeering politicians, nor by pompous bureaucrats making sleazy deals in the halls of the UN. 
      Peace comes through trade. Civilized people know it's better in the long run to have economic relationships, not violent ones. People don't even have to like each other to do business together and make deals. That is the beauty of commerce. 
     Oil and gas are the lifeblood of modern civilization and thankfully there is no problem of running out anytime soon. The challenge instead is actually making our abundant supplies available to those who want to buy the stuff. 
     When Canada's major pipeline projects get stonewalled by political interference, it's bad for the world. It creates smaller global supply for purely political reasons. Having fewer sources of stable supply empowers the world's bullies to leverage their economic power where supplies are constrained. This is especially true with natural gas, which was mostly stuck in its local market before the advent of LNG transportation. 
     And so Canada's restrictive pipeline policies will stimulate more conflict than otherwise. Some of these conflicts will be bloody and make people flee their homelands. 
    Let's be clear about what we're saying here. Ottawa can't end the Syrian civil war and solve the refugee problem just by approving pipeline projects in Canada. 
   But increasing Canadian supply could help reduce demand for product from those who resort to instigating war to promote their exports. 
    So, Canada can do its part for peace and win small victories by selling more oil and gas to the rest of the world. By doing so can we help ease a major conflict on earth. 
    A pretty good reason to end the political paralysis of pipelines in Canada. 



Tuesday, 11 July 2017

We can wage our own battle (against the naysayers)

By: Scott Jeffrey
Published:  Roughneck Magazine

The Global Petroleum Show wrapped up on June 15, and we need no further evidence that the industry is not back from its glory days. Less than 600 exhibitors were signed up for the three day event, about 1/3 of record numbers when the show was held every two years. As an exhibitor, we also noticed the number of attendees was down, and a view of cards gathered indicated that many producers didn’t take the time to attend the show.

It’s still a great event, and the exhibitors were enthusiastic, selling oil and gas equipment and services with their usual aplomb. Activity is up, oil prices are stable(ish), and demand for product is strong and rising throughout the globe. We are sitting on reserves that put us in the top five in the world, and we may actually see increased pipeline deliverability in the next five years.

However, it is now time for every individual who makes a living from the industry, or who is a proponent of the industry, to wage their own information campaign with the naysayers who enjoy the benefits provided by the sale and use of oil and gas.

How many times have you sat around a dinner table, listening in outraged silence while some white wine socialist holds forth on the evils wrought by the industry that is the foundation for our modern society? Or, how many times have you been able to take no more, exploding in outrage against falsehoods or half-truths spun by men or women who came to dinner in their gas guzzler, enjoyed the comfort of a heated or air conditioned home, and chowed down on a delicious steak prepared on a natural gas or propane barbecue? If you finally do speak up in such a fashion, you’re seen as a hothead, in no way objective, a destroyer of the planet.

And so, in the certain knowledge that revenge is a dish best eaten cold, you can again invite those individuals to dinner, either singly or as a group, and destroy them with five, and only five, unassailable facts. You won’t need any more than that to have THEM sputtering in outrage, while you remain calm and stick to your guns.

Fact #1- Almost 500,000 people in Canada are employed by the oil and gas sector.
Just using an average salary per individual of $75,000/year, wages paid out to the industry amount to $37.5 billion, at least 35% of that taxable. You then factor in royalties on the sale of oil and gas. The economic benefits to Canada, and to government coffers, are enormous. Whether the money is misspent or not, our current standard of living comes in large part from the oil and gas industry.

Fact #2- Pipelines are by far the most efficient and safe way to transport petroleum products.
In Canada we have over 800,000 km of pipelines, transporting about three million barrels of crude per day. In the last 15 years, pipelines have delivered 99.9995 per cent of product safely. Canadians spill more on the ground when they fill up. In B.C., where new pipelines are debated and often vilified, 43,000 km of existing pipeline could be displaced by using about 4,200 railcars. Who wants that amount of rolling stock passing through their community?

Fact #3- Canada’s oilsands produce 0.13% of global greenhouse gases (GHGs).
Environmentalists all over the world rail against our “tarsands,” which by the way is an absolute misnomer. Tar is produced by the distillation of coal, not to be confused with the oil that is entrapped in sand up in northern Alberta. If you want a real fight on your hands, take on King Coal, which is responsible for 44% of global GHGs.

Fact #4- Over 6,000 household items are produced from petroleum based products.
There is no need to mention the obvious uses for our petroleum products, but when you realize that cleaning products, medicines, cosmetics, synthetic rubber, plastic, fabrics, and foodstuffs are made from petroleum, people tend to get very quiet. If you find a product not made from a petroleum base, you probably chopped it down and carved it yourself.

Fact #5- Canada can supply all its oil and gas needs, but imports over 600,000 bbl/day.
This is ridiculous. We spend about $25 billion a year importing Saudi and other crude, and we are held up by about 1,000 km of new pipeline construction. To the detriment of the rest of Canada, a few Quebec mayors will try to halt Energy East until they get paid. The benefits of using our own natural resources are so obvious that only the most obtuse would object.

So there you have it. In my simplistic way, I’ve presented five facts that are not subject to interpretation. If your dinner guests still dispute the need for oil and gas, ask them to put their money where their mouth is. Ask them to think globally, as they no doubt believe they are doing, but act locally. They can walk to your house, ask you to turn off the furnace or the air conditioner, wear less mascara, and otherwise reduce their consumption of products produced from the oil and gas molecule.

And most important of all, remain calm, and let them do the sputtering for a change.
#Canada #oil #OilandGas #TheRoughneck #Roughneck #Canada150 #import #Export #industry #oilsands #pipelines #environment

Thursday, 29 June 2017

Energy For Tomorrow

By: David Coglon
Published: Context Magazine


Five reasons why Canada's oil and natural gas resources are an essential part of the future energy mix for our nation and the world.

Energy runs the world. It meets our most basic needs, such as having a warm place to live, lights to read by, and a means of cooking food. It also underlies our ability to travel great distances, transport goods for trade, and build amazing products from smart phones to artificial hearts.

Oil and natural gas have formed the backbone of an energy revolution that has transformed the lives of billions for the better. Oil and natural gas have the promise and opportunity to transform the lives of billions more, with Canada at the lead as a sustainable, responsible and innovative energy producer.

As the world moves to a lower-carbon future, some have pronounced the doom of the hydrocarbon industry. This does not stand up to scrutiny. Oil and natural gas have a critical role to play in meeting the world’s energy needs for the foreseeable future. We examine five reasons why.

Reason 1: We need more energy

“If you look at any forecast, we’re going to see growing energy demand,” says Jackie Forrest, director of research at the Calgary-based ARC Energy Research Institute.

Forrest’s comment is backed by the latest energy outlook from the International Energy Agency (IEA). The IEA’s World Energy Outlook 2016 projects that by 2040 the world will need 31 per cent more energy than we use today. Others draw similar conclusions. BP in its latest report estimates global energy demand to grow around 30 per cent by 2035, while the U.S. Energy Information Administration says this could even reach 48 per cent by 2040.

“We’re going to see a huge increase in the energy system because we’re seeing a growth in population, more countries increasing their wealth and many people demanding mobility,” Forrest says.

The IEA numbers make for serious reading. According to the agency, 1.2 billion people still lack access to electricity. And 2.7 billion are without clean cooking fuels, instead depending on wood, charcoal or animal dung for fuel. It’s clear many people around the world are looking to low-cost, efficient energy sources simply to boost their quality of life to standards we in the West have long taken for granted.
So if more energy is required, what’s it going to take to get us there? In practical terms, it’s going to take all forms of energy—and that includes oil and natural gas.
“People often hear about the rapid growth rate of renewable energy. But even if this happens, at the end of 2040, renewables will still make up only seven per cent of the world’s entire energy mix,” says Terry Abel, CAPP’s executive vice-president. “Most people would be surprised to learn that hydrocarbons—oil, natural gas, coal—together will still make up more than three-quarters of the future energy mix in 2040.”
This forecast is part of the IEA’s central or “New Policies” scenario, which incorporates countries getting serious about meeting climate pledges made in Paris in December 2015.
“If government leaders stick on the path today, even including the agreements signed in Paris, this future still implies growth in oil and gas,” Forrest says.

Reason 2: Oil and natural gas: plentiful, powerful, transportable

We don’t have to go far to realize what’s behind continued demand for oil and gas: They pack a lot of energy punch within their molecules.

“Nothing can compete with oil and natural gas in terms of economics or their utility. At $50 a barrel, it’s fairly cheap to use oil versus other alternatives,” says Forrest. “Liquids fuels have a lot of energy density. When you get a tank of gas, you can travel really long distances—and that’s a big advantage,” Forrest says.

There’s also their abundance. It used to be that society worried about peak oil. But through innovation, we’ve found plenty more. That’s true especially today, as unconventional technologies have unlocked new shale gas and tight oil reserves, vastly growing the world’s hydrocarbon reserves. In fact, according to BP’s latest energy outlook, there’s enough technically recoverable oil in the ground to meet double the world’s needs by 2050.

Alternatives to oil and gas are becoming more viable. Improvements to solar technology are allowing this energy source to take on a larger role, specifically in electricity production. As well, more electric cars are entering the market. Even so, they do not spell an end to hydrocarbon-driven energy.

“There are still a lot of cars that run on gas and diesel in the world,” says Forrest, who estimates there are more than a billion light duty vehicles (LDVs) on the road currently. As well, while more cars may be electric, hydrocarbons are often used to generate the electricity needed to charge up these vehicles. For example, both the U.S. and China currently depend on hydrocarbons for at least two-thirds of their electricity production.

Another important advantage for hydrocarbon energy sources—particular in supplying developing and emerging economies—is they can be efficiently transported over large distances via tankers and pipelines. Places like Canada with plentiful energy resources and modern energy infrastructure can export these resources to places elsewhere where energy is in short supply and high demand. This option isn’t possible for most alternative energy sources where you need to be relatively close to the source (as is required for hydro) or build significant infrastructure to access or create the energy supply (think nuclear, solar and wind).

As well, energy sources such as natural gas can be counted on to fuel electricity generation backstopping more wind and solar.

“When the wind isn’t blowing or the sun isn’t shining, we will still need a backup. That can come from natural gas, which is always available when you need it and is economic,” Forrest says.

Reason 3: Innovation can solve the carbon dilemma

To meet the world’s growing energy demands while shifting towards a lower-carbon future requires innovation. This applies to renewable energy sources which today cannot meet the burden of providing energy security to large populations without improvements that deal with the high cost, large land footprints and intermittency of these sources.

By the same token, innovation will enable oil and natural gas to continue as an important part of a growing energy mix within a lower-carbon future. Canadian producers are already working hard to find ways to significantly reduce carbon emissions associated with the production of oil and natural gas.

Groundbreaking research, for example, is taking place through Canada’s Oil Sands Innovation Alliance (or COSIA). Five years ago, 13 oil sands companies formed COSIA—a unique partnership that’s committed to better environmental performance in key areas, including greenhouse gases. To do that, they’ve set aggressive targets. They’re pooling their resources and sharing knowledge, best practices and even intellectual property. Already they’ve shared more than $1.3 billion of intellectual property representing more than 900 technologies and innovations. This is a magnitude of intellectual property sharing unique in the world.

“Through literally hundreds of projects, the companies are achieving environmental performance goals they’ve set for themselves. And the improvements through innovation are translating into new value for the companies involved and the industry,” says Gordon Lambert, a former vice-president of sustainability at Suncor Energy and one of the founders of COSIA.
“To be positioned for success in the 21st century, our industry has to be resilient in a carbon-restrained future."
Gordon Lambert
Elsewhere, industry is partnering with research institutions, like the University of Calgary, to create environmentally effective technologies. Armed with a $75-million grant from the Canada First Research Excellence Fund, a team of 270 researchers at the university is working with producers to find lower impact ways to extract energy from unconventional oil resources with less energy and less water.

Lambert, who’s also a former member of the Alberta government’s climate change leadership panel, calls these and similar efforts “mission critical” to the industry’s future.

“To be positioned for success in the 21st century, our industry has to be resilient in a carbon-restrained future. And the way in which we can do that is through innovation. Innovating to produce hydrocarbons with less energy inputs, which in turns translates into less GHG outputs and lower costs, will be the essence of our industry’s future carbon competitiveness,” he says.

Reason 4: Canadian energy: abundant, reliable, sustainable

While we’re still very much a continental oil and gas player supplying mostly our neighbor to the south, new pipelines and export facilities could change all that, putting us on the world stage. When that happens, the “made in Canada” sticker on oil and gas products could carry a lot of weight with foreign customers.

“I think we’ll find that the world will welcome Canadian oil and gas production. Our resources come from a stable political regime. The sources are consistent and constant, and we have long, steady-producing entities,” Abel says.

Add to that, Canada's oil and natural gas is produced under a world-class regulatory system. A 2014 study by Worley Parsons comparing Alberta’s environmental policies, laws and regulatory systems with other oil-producing regions, ranked Canada near the top.

“Canada undergoes quite a bit of scrutiny in the development of its resources. We have some of the most stringent environmental regulations, and the transparency to go with it,” says Abel, who previously worked as a senior executive at the Alberta Energy Regulator.

Abel says Canada, with its responsibly produced oil and gas, has the opportunity to make a difference on the world stage. Alberta has introduced a carbon leadership plan with a hard cap on oil sands GHG emissions. And the industry already invests heavily in technology and innovation.

“If the world wants to see cleaner, more responsible oil and gas, then they will want Canada to be in the mix of suppliers,” he says.

Reason 5: Petrochemicals and almost everything you own

We shouldn’t forget that oil and natural gas are needed to create petrochemicals, the building blocks used to manufacture many of the products we count on every day.

Walk into any home, and there’s something made using petrochemicals: the paint on the walls, the lightweight winter jacket, the smartphone in our pockets. Petrochemicals are also behind carbon fibre and other advanced materials that make airplanes lighter (and more fuel efficient) and wind turbine blades stronger, while allowing for breakthroughs like lightweight and flexible artificial limbs.

“Our chemistry industry touches many aspects of our society, and petrochemicals are a big part of that,” says David Podruzny, vice-president of business and economics for the Chemistry Industry Association of Canada (CIAC). CIAC represents Canada’s $53-billion chemistry sector, which relies on natural gas liquids and oil for high-value feed stocks.

According to Podruzny, just under five per cent of oil and about 20 per cent of Canada's natural gas consumption gets converted to petrochemicals. And that’s an application he doesn’t see disappearing soon.

“Nor should it disappear,” he adds, noting there are close to $12-billion in investment decisions under consideration for Canada that would use natural gas or biomass as raw material to make petrochemicals. “We make petrochemicals with the lowest carbon footprint on the planet,” says Podruzny, “Who will benefit if these investments move elsewhere?”

“Even as society talks about decarbonizing our economy and some talk about even eliminating the use of oil and natural gas, I challenge that. I see new value from hydrocarbons 50 years from now where they are used to make new materials that add to our quality of life,” Podruzny says.

It’s a broader outlook for oil and natural gas that ultimately challenges industry to capture even more value from the resource, yielding new products and applications for now, and well into the future.

Thursday, 15 June 2017

THE OIL SERVICE INDUSTRY OF THE FUTURE LOOKS THE SAME AS THE PAST

By: David Yager
Published: OilWeek July 2017


            Reams have been written about how the oil and gas industry of the future will be different. For many, it has no future. Fossil fuels are environmental suicide. Solar-powered airplanes, wind-driven automobiles, and plant-based substitutes for all plastic and petrochemical products are imminent.

           If people in the battered oilfield services (OFS) industry thought the last two and a half years were awful, the future is worse. Except in Alberta, where maybe you get one of those government jobs installing efficient light bulbs or low-volume show heads.
           Fortunately, a world without oil is utter fantasy. The only reason so many dream about life without petroleum and its derivatives is because they have no conception of how big or integral it is. The U.S. Energy Information Administration figures global oil consumption will bust through 100 million bbls/d sometime next year. This is one-third more than the 76 million bbls/d at the turn of the century, shortly after Ottawa ratified the Kyoto Protocol to get on with replacing fossil fuels in 1997.
          Yes, there is indeed a great divergence between what we humans say and what we do. Which means OFS is going to be around in some form or another for the foreseeable future. 
           Therefore, discussions continue on how to keep the Canadian oilpatch competitive in a world of low oil and gas prices. We're repeatedly told exploration and production (E&P) companies must focus on technology to keep costs down. What is discouraging is the premise that nothing has advanced or improved recently. In the real OFS world, everything is continually changing with such meteoric velocity, most struggle to remain employed, solvent or adaptable. As deep thinkers opine on the need for change, anybody who actually works in this business knows nothing else.
            Take drilling. When I got my start on the rig floor in the 1970s, it used to take three months (if everything went well) to a year (with the customary fishing jobs and sidetracks)) to drill a 5,000-metre wellbore in the foothills, the only place anybody had to drill that far at the time. In an employment study I did for the Petroleum Services Association of Canada and MNP in 2014, I found our industry was drilling 6,000-metre horizontals in 20 days from spud to rig release. It's surely faster now. In the old days, a well required dozens of rock bits. Now, most of the hole is drilled with one. Most of the rigs that paid the rent for decades are racked and obsolete and will never drill again.
          The same thing goes for completions. Early in the multistage horizontal revolution, a big completion had 16 stages. Last fall, a JWN article reported NCS Multistage provided the equipment for a 92-stage frac in the Montney in northeastern B.C. Anybody who built anything new a decade ago for frac fluids, sand, cuttings-handling and disposal, solids control, mud motors or MWD systems has likely seen technology eclipse the commercial value of what used to be their bread and butter assets. Several times.
          And we're still lectured on the on the need to adapt, embrace technology and get with the program to stay relevant.
          The only thing Canada's upstream oil and gas industry needs to stay competitive is reduced finding and development (F&D) costs, whereby operators can replace and add production profitably at current prices. In the face of relentless tax increases and non-operational operating cost pressures, this is the economic definition of technology. OFS cannot survive without successful clients. E&P cannot succeed without a robust, supportive, adaptive and innovative supply chain.
         But the financial contribution OFS has made in recent years to its clients succeed has been incredible and unsustainable. Billions in new equipment, billions in new technology, billions in price cuts, billions in credit extended to customers who see no need to pay invoices promptly.
Appalling. 
         The lasting solution is a new business model, abandonment of the historically uneven relationship and the creation of new commercial relationships in which everybody succeeds. E&P and OFS companies understand the only path to success is lower F&D costs, which cannot be achieved in an environment that remains predatory and abusive. This goes both ways: terrible work and service at high prices when things are busy and purchasing policies that don't care if vendors go broke on the job when they are not.
         With no material changes in the way business is conducted three years after WTI last saw US$100/bbl, the future for OFS looks exactly the same as the past.


Friday, 2 June 2017

Trudeau's oil tanker ban a damaging double standard for Canada's economy

By: Alan Yu - Fort St. John resident and founder of FSJ for LNG
Published: Fort Nelson Newspaper


      Issuing a ban on oil tankers on the West Coast, Prime Minister Justin Trudeau is creating an economically-damaging double-standard that has the potential to steer the Canadian economy onto the rocks.
     Trudeau is fulfilling his campaign promise by having his government introduce legislation banning oil tanker traffic along British Columbia's north coast. While it may be laudable for a politician to keep a campaign promise once elected, some sober second thought would have shown the Prime Minister that such a ban would effectively landlock the third largest oil reserves in the world.
     Next to Saudi Arabia and Venezuela, Canada has the third largest known reserves of oil. Our currently landlocked oil and gas reserves contribute a fifth of Canada's total exports. As noted by prominent economist Patricia Mohr, crude oil exports remain the biggest trade category yielding a positive trade surplus. This is a critical component of the overall Canadian economy that Trudeau and his government would be foolish to imperial.
     Not only do our oil and gas exports keep the Canadian economy humming, they could easily be further developed to double or triple their financial impact on our country by opening up exports on both coasts. This, in turn, would pull in more foreign currency into Canada's tax coffers to finance our schools, health care, infrastructure, and other social programs. The world will not reduce its craving for fuel just because Canada won't export it. The world would simply source its oil from other countries.
     It's little comfort that the federal Liberal government's proposed legislation exempts LNG tanker ships from this ban. Canadian oil and gas producer must compete on a decidedly-uneven playing field against countries with vastly different tax regimes. Oil-rich and LNG-exporting Brunei has no personal taxes. The United Arab Emirates government does not impose income taxes on companies or individuals living in the country. In contrast, Canadian oil and gas producers contribute significant amounts to our country in corporate and personal taxes.
     The federal willingness to play ducks and drakes with our economy for the sake of harvesting green-leaning votes is also reflected in the results of the last BC provincial election. An already-deep urban-rural divide got deeper with both the NDP and the Greens concentrating their campaigns in the Greater Vancouver and Greater Victoria urban centers of the province while ignoring the rural, resource-rich Interior. They now have more combined seats than the pro-resource development BC Liberals.
     This troubling trend shows every sign of growing nationally. Some 80 per cent of Canadians live in urban areas near the US border removed from resources and resource towns. They have no contact with the resources they rely upon for their standard of living every day. Two decades of intense campaigning by eco-activists has convinced these 80 per cent to oppose natural resource development despite the fact that it is still a major contributor to the national economy. The B.C. coastal tanker ban and the popularity of the not-so-resource friendly NDP and Greens in the urban areas of BC are signs that many Canadians have forgotten that their economy was first built on -- and is still dependent upon - natural resource development.
     Pressure from urban-based environmentalists has led to hurdles and delays in approving and developing new resource projects. This is a sharp contrast to what is happening in the United States, where President Donald Trump is tearing down hurdles against oil and gas exploration and development while putting up what appear to be trade barriers to protect local US production.
      Prime Minister Trudeau's tanker ban legislation is clearly aimed at consolidating support among the urban 80 per cent, who comprise a huge voting bloc. And as yet, there are no public consultations scheduled to hear about how Canadians feel about the ban.  Voices have already been raised in opposition -- voices Trudeau would do well to heed, including those of First Nations backing the $14-billion Eagle Spirit Energy Project who said in a press release on May 12:
      " As Chiefs from British Columbia and Alberta, we are very disappointed with the inappropriate actions taken today by Prime Minister Trudeau and the Federal Government by introducing a tanker ban on Canada's West Coast. We feel strongly that a blanket tanker moratorium is not the answer. Once again, government and international environmental lobby groups want to make decisions for out communities."
      If indeed the reason for the tanker ban is to preserve the environment, why single out the West Coast? The East Coast welcomes Saudi Arabian, Nigerian and Venezuelan oil tankers in its ports all year round. Eastern Canada imports more than $35 billion of oil per year, taking money out of Canada, paying for the wages of workers overseas when we have the third largest deposits of oil in the world.
       So the question to the Prime Minister is this: why the double-standard? Why ban tankers in the West and not the East? Why cripple our oil export potential, which could balance our budget, provide jobs to thousands of Canadians while generating funds for our health care, education, and infrastructure? Why is the eastern part of Canada not using Canadian oil and gas? My suspicion is this ill-advised ban is based on counting votes, not the good of our economy.


Sinking the myth of dangerous West Coast oil tanker traffic

By: Gywn Morgan
Published: Fort Nelson News
Columist, Troy Media

As a change in government looms in British Columbia puts the Kinder Morgan expansion project in jeopardy, we need to realize just how safe oil tankers are.       


 Victoria - The expansion of the Kinder Morgan Trans Mountain pipeline system, to ultimately move Alberta crude oil by tanker through the Port of Vancouver, was a high-profile issue in the recent B.C. election.
       Liberal Premier Christy Clark agreed to support the federally-approved project in exchange for Ottawa's commitment to a substantially upgraded emergency spill response plan and financial compensation from Kinder Morgan that would see the province paid as much as $1 billion over the next two decades.
       This didn't appease spill-fearing Vancouverites, who shifted their votes to NDP Leader John Horgan in the May 9 provincial election after he vowed to use "every tool in the toolbox" to fight the project. Green Party Leader Andrew Weaver also voiced strong opposition.
        Now that a New Democrat/Green coalition looms as strong possibility to be B.C.'s next government, the federal government's resolve to enforce its approval of the project will be sorely tested.
        Prior to the election, Vancouver Mayor Gregor Robertson stated that expanding Kinder Morgan's tanker traffic from five to 35 per month isn't worth the "disastrous risks" of a spill.
       But does the project actually pose such risks?
        Let's move beyond the rhetoric to some hard facts.
       While there has never been a serous il tanker spill on Canada's Pacific coast, the truly disastrous environmental impact of the 1989 Exxon Valdez accident in Alaska's Prince William Sound is the most often cited reason to oppose the Kinder Morgan expansion.
        Paradoxically, the Exxon Valdez spill proved to be a powerful catalyst that set off a spill-prevention movement in the global oil shipping industry. Investigators concluded that the spill wouldn't have happened if the Exxon Valdez had been a double-hulled vessel. As a result, 150 countries mandated a 25-year phase-out of single-hull tankers and a requirement for all new vessels to be double-hulled by the end of 2014. That phase-out began soon after with new, greatly improved ships progressively replacing older ones. The new double-hulled ships, combined with advanced navigation systems and other safety measures, have resulted in a precipitous drop in global seaborn oil spills from an annual average of 2,340 barrels per day in the 1980's to just 110 barrels per day sine 2010. That staggering reduction has been achieved despite a doubling of tanker shipments to 60 million barrels per day.
      As a result, hundreds of times more petroleum from leaking vehicles, trucking spills, illegally disposed used oil and other land-based sources runs down municipal storm drains into the world's rivers and oceans than from tanker spills.
       That's the global picture.
What about in Canada?
      Let's start on our eastern coasts. Transport Canada data shows that more than 1.6 million barrels of petroleum is safely moved from 23 Atlantic Canada ports each day. Another 500,000 barrels per day moves up the St. Lawrence to Montreal and other Quebec ports. Overall, Eastern Canada's ports berth some 4,000 inbound petroleum tankers each year without any major incidents.
      Due to the proximity of the Vancouver and Seattle areas, analysis of tanker movements on the West Coast must include Canadian and American traffic. Essentially all tankers must transit the Strait of Juan de Fuca bordered to the north by Vancouver Island and to the south by Washington State.
      Of the approximately 1.2 million barrels per day of oil that goes though the Strait of Juan de Fuca, about 500,000 barrels per day of mainly Alaskan oil similar in grade to Canada's diluted oilsands crude moves south to the Seattle area.
      About 700,000 barrels per day moves from the Vancouver region transported by various means, including tugboat-towed barges, refined fuel tankers and, five days a month, an outbound tanker carrying crude from Kinder Morgan's Vancouver pipeline terminus. Despite hundreds of millions of barrels of seaborn petroleum movements over many decades, the only significant spill on the West Coast didn't come from a tanker. It occurred when the BC Ferries vessel Queen of the North foundered near Prince Rupert with 1,750 barrels of fuel on board.
      The Kinder Morgan capacity expansion would see its tanker shipments grow to 35 per month. The company's spill prevention measures go far beyond employing the strongest and safest double-hulled tankers. Certified Marine Navigation Pilots will be on the bridge until the ships reach open ocean. Powerful ocean tugs, one of which will be tethered to the tanker and the other available to assist, will keep the ships safe, even in the highly unlikely event of engine failure.
      Like many West Coasters, my wife and i treasure the unique and beautiful environment of the region, spending time kayaking its waters and anchoring our boat in its myriad coves. I'm not worried about adding one more oil tanker per day. But i do worry about the boat diesel, heavy bunker fuel ad chemical pollutants pumped from the bilges of the other 6,000 large ships that travel our waters each year, ships that are not nearly as closely scrutinized as those 35 Kinder Morgan tankers are sure to be.
   

Thursday, 18 May 2017

CARBON STEW

Published: Oilweek
By: Gordon Jaremko

POLICY

CARBON STEW
Dining habits cook up greenhouse gas storm

On the air-pollution scale, consumers have a counterpart to the oilsands, only bigger—much bigger. Call it the skeleton in the kitchen. The United States Department of Agriculture (USDA) exposes the startling results of rich eating and drinking habits in a report titled The Role of Fossil Fuels in the U.S. Food System and the American Diet.

     “Use of fossil fuels to produce the foods and beverages consumed by Americans in 2007 accounted for 13.6 per cent of economy-wide CO2 emissions from fossil fuels,” says the 90-page document.
     “Domestic fossil fuel use linked to U.S. food consumption produced 817 million of the nearly six billion metric tons of CO2 emissions economy-wide,” it says.
      The role of everyday American grub in the exhaust blamed for global climate change is 12 times the current annual oilsands contribution of 70 million tonnes and exceeds the Canadian total from all sources of 730 million tonnes.
     “The consumption of fossil fuels, nuclear power and renewable energy by the U.S. food system was on par, in 2002, with the entire national energy budget for India and exceeded the combined energy budgets of all African nations,” reads the report.
      The report, released this winter, summarizes the results of an epic research effort that developed a mammoth scorecard titled the Food Environment Data System (FEDS). No Canadian counterpart has surfaced, but the U.S. results are food for thought north of the border.
     California, with a similar population and standard of living to Canada, blows 70 million tonnes/year into the FEDS accounts of annual U.S. dietary contributions to greenhouse gas emissions—a tie with Alberta’s oilsands exhaust.
     The American ledger covers all aspects of food and beverages, from crop and livestock production through to processing, packaging, transportation, storage, retail and use. The immense information archive enables comparisons of regions down to the scale of counties and between types of consumption, such as homecooked or restaurant meals.
     Of the 817-million-tonne U.S. total yearly emissions tab for eating and drinking, 332 million came from burning coal, 282 million from natural gas and 202 million from oil products. Thermal power generation for electrical equipment accounts for 57 per cent of food-related energy use.
     FEDS also enables an educated guess at the consequences of policy and lifestyle changes. “Both the measurement of social costs from fossil fuel use and the appropriate mechanism for internalizing this cost in energy markets are the two great challenges facing the United States and other nations seeking to reduce their carbon emissions,” says the USDA.
     FEDS calculations raise doubts about the environmental usefulness of carbon taxes. Uncertain data points to a need for much further research into the effectiveness of financial action as an environmental reform tool, say the researchers.
     Levies ranging from US$6/tonne to US$123/tonne of emissions would only raise meal costs by 0.2 to five per cent. The average increase would be a marginal 1.7 per cent, which would not likely make a big difference to greenhouse gas output.
    Changing consumer taste would have larger effects.
    A moderate behaviour turn to a model “realistic healthy diet”—less meat, fats and sweets and more legumes, nuts and seeds—would cut energy use for food by three per cent. “This reduction is equivalent to the annual gasoline consumption of 3.7 million U.S. vehicles,” says the report.
    It would take an extreme switch to an “energy efficient diet”—a pescatarian or semi-vegetarian menu that drops steak and chicken altogether and piles on beans, nuts, fish and eggs—to achieve greenhouse gas cuts on the grand scale preached by eco-evangelists. This Spartanstyle diet would cut food-driven carbon emissions by 74 per cent, equivalent to scrapping 90 million vehicles or 35 per cent of American cars.
    FEDS inspires little comment or publicity from environmental factions. The silence is predictable. The U.S. research thinks about the unthinkable: serious lifestyle changes implied by eco-cleanup ideas as opposed to moves on energy corporations that the political left and Hollywood demonized long before global warming soared to the top of reformer agendas.
    The Alberta oilsands industry has no such luck of limiting its debate over its future to neutral specialists. About half of potential production growth will be lost unless thermal extraction plants curb their appetite for natural gas, shows the latest annual supply cost review from the Canadian Energy Research Institute (CERI).
    Barring a clean up by new technology still in experimental stages, the northern bitumen belt will hit the 100-million-tonne carbon emissions cap set by the Alberta government in 2026, CERI forecasts.
    The institute calculates that improving project economics in the increasingly efficient industry will enable oilsands output to reach 5.5 million bbls/d in 2036, up by three million from the current 2.5 million. But the emissions lid stops growth using current methods at about four million bbls/d, up only 1.5 million.
    For CERI and oilsands operations, the big question is whether the bitumen belt’s energy appetite can change more easily than the North American diet.

UPITFOS AND THIRTY YEARS OF OILFIELD SAFETY PROGRESS

Published: Oilweek
By: David Yager




It was early 1987 when Jim Dinning, Alberta’s then–minister of community and occupational health, blew a gasket and started phoning oil company chief executive officers, telling them if the oilpatch didn’t clean up its appalling safety record on its own, the government would do it for them.


     In addition to bringing about a devastating oil price collapse, 1986 had been a brutal year for accidents and fatalities. There was a terrible condensate explosion on a completion operation near Edson, Alta., leaving several workers with severe burns. When the province introduced drilling incentives that expired on December 31, a bunch of rigs with green crews went back to work in a hurry over the Christmas holidays, resulting in multiple fatalities. 
     Nowadays every rig that can shut down at this time of year does.
     In 1986, the lost-time-accident claim rate was 3.9 per 100 man-years worked, 13.3 per cent lower than in 1985. But for drilling and service rigs, it was 16 per 100, down marginally from 16.4 the prior year. This was after 30 per cent reduction in man-years worked because of the oil price slump. You’d think only the best hands would be working. Something was seriously wrong.
    The minister quickly got everybody’s attention. A good conservative, Dinning told this writer at the time he’d rather have industry fix itself than have the government intervene. But if nothing changed, the heavy hand of government enforcement was on its way.
   The result a year later was a remarkable report from the Upstream Petroleum Industry Task Force on Safety (UPITFOS), tabling 42 recommendations. The task force was negotiated then enacted in 1988 by the Canadian Petroleum Association, Independent Petroleum Association of Canada, Canadian Association of Oilwell Drilling Contractors, Petroleum Services Association of Canada and the Small Explorers and Producers Association of Canada. Three decades later, the results of UPITFOS are absolutely phenomenal.
    What the UPITFOS process agreed upon was, as the Canadian Association of Petroleum Producers would write 26 years later, the industry “strongly believes that the ultimate responsibility for improved safety performance lies with senior management of individual companies in the industry.” This included the oil companies, as they had significant influence on the behaviour of their service contractors on location.
     What the participants negotiated and agreed upon was the first set of industrywide standards and procedures under which it would operate to ensure everyone on a location was properly trained and properly equipped. This is when workers first became unable to get on a location without appropriate safety tickets, orientation and personal protective equipment. Industryrecommended practices were developed for higher risk operations like well testing and pressure pumping. What also emerged was the basic minimum standard safety program called Certificate of Recognition (COR). Responsible operators wouldn’t hire vendors without a COR, which forced every company, big and small, to ensure safety was a culture, not just a manual. Ongoing independent audits were also required.
    Thirty years later, the results have been spectacular. According to Alberta’s occupational health and safety report for 2015, mining and petroleum development was the safest industry in the province. The provincial rate for disabling injuries was 2.36. The oilpatch was 0.88. The provincial average for lost-time accidents was 1.26. Oil and gas reported 0.25, down 96 per cent from 1986. “The mining and petroleum development sector continued to have the lowest lost-time claim rate in 2015 at 0.25. Provincial and municipal government, education and health services had the highest lost-time claim rate in 2015 at 1.98,” the report reads.
    It was safer in the oilpatch than in the government. Industrial sectors with much worse safety performance than oil and gas, which is everybody, includes agriculture and forestry, business personal and professional services, construction, manufacturing processing and packaging, transportation communication and utilities, and wholesale and retail.
    What the heck are they doing to each other in the offices, plants, stores and warehouses while oilpatch crews are working in the field?
    What is unique about UPITFOS is this is the only major industrial sector that has chosen to develop industry-wide standards—above and beyond provincial rules and regulations—that are almost uniform across all locations and operations. The only exception is companies that demand more, not less.
    The result is a safety culture that has evolved to the point that a good safety record is a commercial necessity if you want to work for the most responsible operators, invariably those able to write the biggest cheques.
    Despite this compelling data, the oilpatch is still tarred with the brush of not working safely enough. But having set the standard, it would be nice if our critics could start improving their own safety performance.

Monday, 8 May 2017

B.C. Election Results Loom Large: Much On The Line For The Future Of Northeastern B.C. Resource Development And Environmental Policy

By: Paul Wells
Published: Daily Oil Bulletin


With British Columbians set to go to the polls Tuesday, the Bulletin continues its look at election issues of relevance to the oil and gas industry as they relate to the platforms of the two front-running parties — the B.C. Liberals and the NDP.

Gary Leach, president of the Producers and Explorers Association of Canada (EPAC), said the Liberals would be the oil and gas industry’s party of choice, noting the party’s promise to introduce a deep oil well drilling credit targeted at B.C.’s emerging Montney light oil resource that they say “will be competitive” with Alberta.

“This is something EPAC has been advocating for several years now so we were pleased to see that in their campaign pledges. The Liberals say that 50 per cent of the oil revenue they receive from the Montney would be put into a ‘Prosperity Fund’ for future generations,” he said.

“The B.C. Liberals also say they will freeze the carbon tax in the province until 2021 whereas the NDP platform says they will phase in the federal $50 per tonne carbon tax over three years starting in 2020. The NDP also say they will convene a panel to review the science behind hydraulic fracturing.”

Duane Bratt, a political science professor at Calgary’s Mount Royal University, agreed with Leach in terms of which party—the Liberals under incumbent Christy Clark, or the NDP-led John Horgan — would work better with industry to fulfill the vast promise of B.C.’s oil and gas bounty.

“The Liberals would be better for the oil and gas industry, absolutely,” he said.

Bratt said he’s been somewhat surprised that oil and gas-related issues have not been more of a focus on the campaign trail, where debate has been centred around the housing market, environmental policy and other Vancouver and Lower Mainland-centric issues.

“There really hasn’t been a lot of dialogue in this election regarding oil and gas, especially on LNG as it was Christy Clark’s big move last election [in 2013],” Bratt said.

“She said then that LNG was going to be the real economic revival of British Columbia. It hasn’t fizzled out, but it’s nowhere near what she was promising in 2013. Not even close.”

Yet the LNG issue, for the most part, has taken a backseat during the election campaign, he added. And that’s despite it being a focal point, an issue of prominence, for voters in northeastern B.C. and elsewhere in the province.

“You’re seeing the different views of the electorate in the Lower Mainland and areas like northeastern B.C. with Trans Mountain and LNG,” Bratt said.

“Even though there are a huge number of jobs at stake in Burnaby [part of the greater Vancouver area], most of the opposition is centred in Burnaby yet supported in the rest of the province, except maybe [Vancouver] Island.”

Bratt said parallels between the current B.C. provincial election and the next Alberta election can be drawn. In fact, he believes an NDP victory Tuesday could have ramifications that could impact the political scene on the other side of the Rockies.

And despite sharing the same party name and initials, he believes Alberta Premier Rachel Notley isn’t likely rooting for a B.C. NDP win come election night.

“The B.C. election could very well be a preview of the next Alberta election because it truly is a two-party election and that looks to be where we’re going [in Alberta]. I think Notley is a clear example of the difference of being the NDP in opposition and the NDP in government. I’ve been saying for a while, and for that matter the same with Prime Minister [Justin] Trudeau as well, they really don’t want to see the NDP in power in B.C.,” Bratt said.

“It’s interesting at how closely the Alberta and B.C. parties were until Notley was elected. There’s no love lost now because Notley knows that a B.C. NDP victory might cause her to lose power here. There’s no guarantee that if Clark wins that Notley would win. But I would suggest that there’s a really good chance that if Horgan wins, Notley would not.”

The first installment in the Bulletin’s B.C. election coverage, (DOB, May 3, 2017), looked at the respective platforms regarding the Trans Mountain pipeline expansion project and LNG development in the province.

The Montney and other northeastern B.C. natural gas and oil development

The Liberal Party under leader Clark plans to continue promoting and encouraging “responsible development” of the Montney and other petroleum-prone areas in northeastern B.C.

“For decades, British Columbia has benefitted from extracting natural gas resources. Communities like Fort Nelson, Dawson Creek and Fort St. John have seen jobs, economic growth and infrastructure created as a result of the natural gas industry,” the party platform states.

“Technological advances have vastly increased the supply of natural gas in British Columbia. Hydraulic fracturing has allowed producers to unlock previously unknown reserves and ensure B.C. has a strong and stable supply of natural gas for the next hundred years. Nowhere is hydraulic fracturing more important than in the Montney Basin, and nowhere in the world is it done more safely.”

The Liberals note that in just the past four years, “massive investments” have been made in pipeline and gas processing infrastructure to ensure natural gas resources are able to be extracted, shipped, and processed. Examples include:
  • A partnership between Encana Corporation and Veresen Inc. has committed $2.5 billion in three gas processing plants.
  • Painted Pony Petroleum Ltd. and AltaGas Inc. have invested $350 million in a gas processing plant just north of Fort St. John. In January, AltaGas announced a $475 million propane export facility in Prince Rupert.
  • TransCanada Corporation has received federal and provincial approval for their $1.7 billion North Montney Mainline project creating approximately 2,500 direct construction jobs.
  • Spectra Energy Corp. invested nearly $600 million to expand its natural gas collector pipelines.
The B.C. Liberal Party said that not only are there massive world-class gas deposits in the Montney, there are huge opportunities to create a new light oil industry in the Peace. The Montney deposit in British Columbia contains gas, oil, condensate, and other liquids such as butane and propane, making it an incredibly attractive reserve.

The Grits note that companies like ARC Resources Ltd., Crew Energy Inc. and Encana are currently drilling and evaluating the potential opportunity to extract this vast energy resource.

“Today’s B.C. Liberals want to responsibly develop the Montney for British Columbians. These deposits have the ability to generate jobs, revenues, and economic benefits for decades to come, provided the right regulatory, policy, and royalty frameworks to allow for environmentally sustainable development is in place,” the party said.

Moving forward, the Liberal Party pledges to “unlock the oil resources contained in the Montney Basin” through a new oil, deep-well royalty credit that is competitive with Alberta. It will also place 50 per cent of all oil revenues produced from the Montney Basin in the Prosperity Fund to benefit future generations.

During an editorial board sit down with Business in Vancouver, a sister publication to the DOB, Liberal leader Clark doubled down on her support for Montney development, highlighting the play’s growing light oil potential.

“We have some of the best reserves of light oil in the Montney, and we are going to get that going. I know the NDP and Greens don’t support oil. We have some of the best light oil anywhere in the world, and we are going to get that industry going, should we be elected,” she said.

The NDP platform didn’t dive deep into the party’s plans for development of the Montney resource and associated infrastructure.

However, the party noted that most of B.C.’s natural gas is produced using hydraulic fracturing, a process that has been used in northeastern B.C. for decades.

“With the potential of a significant expansion of gas production in the years ahead, we will appoint a scientific panel to review the practice to ensure that gas is produced safely, and that our environment is protected,” the NDP said in its platform.

“This will include assessment of impacts on water and, given recent minor earthquakes in the area, what role gas production has in seismic activity.”

The NDP platform also calls for a review of oil and gas subsidies.

Overall, the cost of doing business in B.C. would increase under an NDP government.

The NDP would raise corporate taxes to 12 per cent from 11 per cent — but shave half a percentage point off the small-business tax — and increase the minimum wage to $15 per hour by 2021 from the current $10.85.

When asked where he sees the province’s resource sector going in the next five years, NDP leader Horgan offered the following:

“I believe that there is an opportunity for our natural gas sector to continue to grow. The premier made some fairly outlandish commitments before the last election. None of them have been realized. Market conditions weren’t there five years ago,” he said.

“The world is awash in natural gas. We have it in abundance. It’s a natural resource that belongs to all British Columbians and I’m anxious to get that to… higher priced markets. So on the natural gas side, I’m very optimistic that, over the long term, I think there’s opportunity there.”

Bratt said Clark is “clearly” on the pro-development side and Horgan “is not.”

“It’s almost like Horgan sees the biggest opponent not as Clark, but [Green Party leader Andrew] Weaver. He [Horgan] is attacking on a lot of environmental issue and does not seem overly supportive, at all, of oil and gas development.”

Climate change and environmental policy

The NDP’s climate policies include new greenhouse gas (GHG) reduction targets and carbon tax increases.

“We recognize that climate change is among the most significant challenges we face. Countries around the world are taking action to modernize their economies, improve transportation and lower their impact on the environment. B.C. is well positioned to be a leader in these efforts with a government that will act, like John Horgan and the B.C. NDP. Under Christy Clark, B.C. is lagging behind,” the party platform reads.

The NDP believes that protecting the environment and taking action on climate change will build a sustainable economy and create good jobs in every sector and every region of our province, now and going forward.

“Christy Clark and the B.C. Liberals have chosen to pit jobs against the environment. It shouldn’t be that way, but the Liberals have shown over and over again that they are living in the past, and won’t do what’s right for the future,” the party said.

“We will take action to create tens of thousands of new, sustainable, permanent jobs, while reducing B.C.’s climate change emissions and growing the low carbon economy.”

Horgan said that Clark struck a panel on Climate Leadership and then “proceeded to ignore it.”
“The panel worked hard to identify innovative action that would support sustainable growth in our economy, reduce our carbon pollution and make life more affordable for families. Its work should be valued and implemented,” he said.

“We will renew the Climate Leadership panel within our first 100 days, and work towards implementing their full suite of recommendations under our core principles for climate action. We will put B.C. on a path to meeting B.C.’s legislated 2050 greenhouse gas emission reduction target of 80 per cent below 2007 levels and will set a new legislated 2030 reduction target of 40 per cent below 2007 levels.”

The NDP would introduce a federally mandated carbon price of $50 a tonne by 2022, but do it over three years, starting in 2020.

“It’s going to be a gradual implementation and we’re going to make sure that almost 80 per cent of British Columbians will get some form of a rebate so they can have less money out of their pocket than before,” Horgan said.

The NDP said its plan was built on solid principles: carbon tax revenue neutrality, affordability for British Columbians, and competitiveness with other jurisdictions to ensure B.C. citizens and employers “are not unfairly treated as we grow our economy.”

Working within the parameters of the federal government’s mandate, the NDP said it will work to provide predictability for B.C. businesses and protect B.C. families from facing another hit on their pocketbook, while taking action to further reduce carbon emissions. As outlined in its Clean Growth, Climate Action plan, the NDP would:
  • Phase in the federally mandated $50 per tonne carbon price by 2022 over three years, starting in 2020.
  • Create a new climate action rebate cheque for low and middle income families. This cheque will go to 80 per cent of B.C. households, with a majority receiving more back from this rebate than they pay in new carbon taxes. The rebate will be issued at the start of each year, so families aren’t out of pocket.
  • Provide certainty to stimulate investment and protect trade exposed businesses, maintaining the province’s competitiveness, by establishing separate sectoral reduction goals and sectoral reduction plans for transportation (30 per cent reduction by 2030), industry (30 per cent reduction by 2030), and buildings and homes (50 per cent reduction by 2030).
  • Update environmental assessment legislation and processes to ensure that they respect the legal rights of First Nations, and meet the public’s expectation of a strong, transparent process that results in the best outcomes as part of a made in B.C. assessment process.
  • Improve environmental assessments to provide certainty to project proponents, First Nations, and all British Columbians, faster.
The federal government is set to implement a national carbon price floor in 2018, as part of the 2016 federal-provincial-territorial Pan-Canadian Framework on Clean Growth and Climate Change. The carbon price floor will start at $10 per tonne in 2018 and escalate annually to $50 per tonne by 2022.

The NDP platform would match the $50 floor in 2022, but proposes a faster implementation of carbon tax increases than the national minimum: to $36 in 2020 and $43 in 2021.

Clark and the Liberals are campaigning on a “made in B.C.” climate plan.

“Clean energy is a vital part of British Columbia’s global leadership in climate policy. We were the first jurisdiction in North America to put a price on carbon, through a transparent and revenue-neutral carbon tax,” the party said in its platform.

“Last August, we released our Climate Leadership Plan that builds on the work started in 2008 and charts a course to hitting our target of reducing greenhouse gas emissions by 80 per cent of the province’s 2007 emissions by 2050.”

B.C.’s carbon tax was launched at $10 per tonne in 2008 by then-premier Gordon Campbell. It moved up to $30 per tonne and Clark froze it when she took office three years later and the tax currently still sits at the $30 per tonne level.

During the campaign, Clark said contrary to Horgan’s criticisms the Liberals accepted many of the Climate Leadership panel’s recommendations.

“We did not, though, accept the key recommendation in the minds of some of the folks from the environmental movement, which is that we double the carbon tax,” she said.

“Is now the time to double the carbon tax, to hike business taxes, to hike personal income taxes, when we are facing a rising tide of protectionism and a tax-cutting government down south of the border? I think it would be disastrous for jobs in our province.”

In December, the Clark-led provincial government signed onto the Pan-Canadian Framework on Climate Change and agreed to do its part to achieve the Canadian commitment on greenhouse gas emissions.

“The federal government agreed to help assist the province with funding to reduce our greenhouse gas emissions and store carbon. From converting energy sources in our natural gas fields from diesel to clean electricity, to helping fund the refurbishment of electricity transmission lines between Alberta and B.C. to help Alberta transition from coal fired power to clean electricity, British Columbia has a plan to help fight global climate change.”

Despite the NDP’s claims to the contrary, Clark is adamant that B.C. remains a leader on climate change.

“Nobody else in North America is paying a $30-a-tonne carbon tax, nobody,” she said. “And we should be very proud of our leadership position. As other people catch up we’ll be in a position to rethink that policy. But we are going to freeze it.”

Mount Royal’s Bratt says there’s a stark contrast between the two parties’ environmental/climate change platforms.

“Horgan plans to be more aggressive, absolutely. But the B.C. record, and Clark has been campaigning on her record, is not bad. They were the first jurisdiction to bring a carbon tax in and I wonder if that’s tied into her coal announcement to sort of remind people of the existence of the carbon tax and how it existed well before the Alberta carbon tax,” Bratt said.

“What Horgan is promising in regard to the carbon tax in B.C. goes well beyond what the requirements of even the Trudeau government are where Clark is saying there’s nothing wrong with the policy we have in place.”

At the end of the day, Bratt said the B.C. provincial election is taking on the tone and tenor of the last Alberta election.

“The real issue here, and I’m not in B.C., but what I’m seeing is that the strength of the NDP campaign is not about the issues of the day and the policy directions of the two parties, rather it’s almost like it’s the ‘time for a change’ approach,” he said.

“The Liberals have been in power a very long time, and it’s perceived by some that they have a sense of entitlement and are perceived to be arrogant by many — it’s reminiscent of what happened in Alberta during the last election. With potentially the same consequences.”