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Curtain Closing on Canadian Crude

By Daniel J. Graeber | Thu, 31 May 2012 22:54 | 6

Shell announced plans to expand its oil sands operations in Alberta province by as much as 90,000 bpd and said similar efforts were under way to make the country's western coast a major export hub for liquefied natural gas. The company's chief executive said Canadian regulators need to act quickly or lose out to similar developments in the Middle East and Australia. With mass protests spilling out of Montreal, and opposition leaders quickly getting under the skin of the conservative Canadian government, the supermajor better move fast before time runs out.

Peter Voser, chief executive officer at Royal Dutch Shell, told reporters in Alberta this week that his company aims to expands operations in the region by as much as 30 percent by the end of the decade. Canadian oil and natural gas accounted for more than 10 percent of Shell's production last year and Voser said that, if all goes well, its Athabasca Oil Sands Project would be producing at least 335,000 bpd by 2020.

Shell has billions of dollars set aside for Canadian operations. The focus would be divided between oil and natural gas, but move closer to LNG within the next five years with an eye on export hubs in British Columbia. Canadian regulators, said Voser, are in a race against time because similar developments are expected in Australia and the Middle East soon.

"If Canada wants to compete with those projects when they come into the Asia Pacific, there is a certain time window," he said.

That window may soon be closing. In early may, Adrian Dix, a leader from the opposition New Democrat Party, complained to Canada's National Energy Board that there was a "high-risk, low-return" approach to Prime Minister Stephen Harper's pro-oil sands platform. Now, NDP leader Thomas Mulcair is ruffling the feathers of Natural Resources Minister Joe Oliver for touring Alberta oil sands projects. The NDP, said Oliver, has an "anti-resource" agenda, while Mulcair said, as did Dix, that the oil boom was killing jobs elsewhere outside of Alberta and artificially inflating the Canadian dollar.

Elections are three-years away in Canada. The end of the decade, Voser's benchmark for expansions in Alberta, is eight years away. Given mass protests in Montreal, coupled with mass arrests, it seems Canadians are getting frustrated with the status quo. If Shell is worried about windows closing, it should act quickly before the curtains close on the Canadian oil boom.

By. Daniel Graeber of Oilprice.com

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  • Lawrence Croft on June 01 2012 said:
    What do protests about provincial (equivalent of State) increases to tuitionave to do with energy prices? Especially when the increased rates would remain the lowest in Canada?

    I'm also wondering when 30% of a student population suddenly qualified as a "mass protest".
  • Bump on June 01 2012 said:
    Like all of a sudden the world will just not need new oil markets in the future, it all comes down to being able to rip of Canadains, times running out for them to get it cheap and at the cost of Canadains because of the useless corporation loving government in charge atm.
  • Peter on June 02 2012 said:
    The demand for LNG is because of its low price, Japan and its nuclear shutdown.
    Natural gas at higher prices is less atractive.

    Pipelines, bulk tanker by rail and track are ways to get fuel to market.

    There are hige projects underway now building plants, pipelines, refinery operations including trans canada pipe.
    You should note that some large areas of growth are in Northern Alberta, BC areas too including perhaps Alaska amnd in years to come, the arctic seas.
    The proximities are a distance to shipping.
    Foreign oil may lobby for rail, pipelines and other leans to sell oil.
    Exxon mines bithus=men for $3/ barrel.
    That is why they are there. The politics, Fed, provence are not the main players, promoters in the practical and realistic sense. Foreign oil holds many of the firms that will produce big.
    Thety are there for the long term.
    A 6 billion investment is a serious move of investment. Those firms have there own ways that differ.
    RDS is there because its cheap and volumes of a depsoit exist. Mining is also an aspect of the tar sands.
    Firms like BP, hasexpanded the refinery in Indiana to accomodate more.
    Now prairie farms are discovering oil below.
    Other nations too have made a huge investment. They are lesser known but are seriopus oil people.

    .
  • Gloria on June 02 2012 said:
    The BC citizens are 75% and counting, we are supporting the F.N. to keep the atrocities of the Enbridge pipeline and the dirty tar tankers, out of BC. Their food sources are under dire threat. Not one of the greedy bunch, have said one word about the F.N. concerns. It's just too damned bad about them.

    We in BC, have a great respect for our F.N. people. They are the guardians of, our lakes, rivers, streams, sea, lands and all of our woodland wildlife and our beautiful marine life. They are our friends, and we are grateful to them.

    BC is a province of, avalanches, mudslides, rock slides, earthquakes, recently swarm earthquakes, and swift running rivers, that take out houses and highways. To string a pipeline to Kitimat BC is madness. The chemicals put in the oil to make it flow freely, are 60% worse that was stated. The extremely caustic chemicals eat through the pipes, until they rupture. Enbridge hasn't cleaned up their, last 604 spills.

    The seas into Kitimat BC, are the most treacherous seas in the world. Every other day, there are hurricane force wind warnings. There are waves 40 to 50 feet high. There are rogue waves, of 70 feet high. The channel narrow, the tankers massive, that have to do hairpin turns. It takes three miles to stop one of those behemoth tankers.

    Recently, there were three freighters caught in one of BC Coasts atrocious storms. One freighter had the storm tear off the top of their load of logs. They sent out a distress. They were really afraid, if the bottom load shifted, the ship would capsize. It took literally hours, to reach the stricken ship. The other two freighters also lost their cargo's to the storm. They had to turn back, and pray they could limp back, to BC harbors.

    Besides which, Harper moved the oil cleaning crew out of BC. He also shut down, search and rescue stations, on BC's coast. It wouldn't even be safe, for any tanker or ship. Time is of the essence, for any kind of ship or pleasure craft, under duress on the sea. Fires and storms are the worst and the most frequent causes of disaster. There will be loss of life, because of Harper's stupidity.
  • Lawrence on June 04 2012 said:
    Gloria.....
    Your comments are so outrageously exaggerated I don't really know where to start. I could say that there are many aboriginal people(F.N.'s in your words)who are in favour of pipeline/port development but they don't get the heated drum-bashing vocalization of the anti-development lobby that the aboriginals who are in oposition.
    I might mention that there already is, and has been for over 60 years various pipelines both oil and gas running throughout BC. Did you know there is an oil refinery in Prince George? And it's connected via pipelines from the north of the province all the way to the lower mainland. That's right, pristine valleys and oil/gas pipelines co-existing for all these years....who knew!
    As for your ludicrus statement of "Every other day, there are hurricane force wind warnings." I counter with take a look at the East coast where there are hideously stormy seas along with the added bonus of icebergs....ships and drill rigs manage the risk.
    There is risk in any environment.
  • Bojan on September 03 2012 said:
    An interesting pteipecrsve, and a well written opinion. I offer a few observations:1.I would like the citations for your facts, so that I can verify them. 2. Your best point is in the last paragraph - conservation and efficiency are the keys. Renewable energy is a misnomer.3. Until our public is willing to put up, I say, there are benefits to drilling off shore. (1) Each and every spill will show the oil consumers of the impact of their decisions. Currently the environmental degradation that we perpetrate with our oil lust is out of sight and out of mind - very selfish, and a crooked ledger (we benefit while others suffer). (2) If the reserves were really that small, no oil company would sink the capital to extract the oil. So, every barrel that we generate is one less bullet we spend to secure other oil reserves.

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