Written by Administrator
- Thursday, 14 February 2013
Read this column from Mike Smyth in The Province on the BC Liberal's Throne Speech and the outsized promises it made to wipe out BC's debt with a $100 Billion windfall from a yet-to-be-developed Liquified Natural Gas (LNG) industry. (Feb 13, 2013)
If a political party’s desperation is directly proportional to the scale of its election promises, then Christy Clark’s Liberals are about as desperate as you can get.
Pay off the province’s debt. Eliminate the provincial sales tax. Pour billions into health care and education.
All were floated Tuesday as potential benefits of a $130-billion “Prosperity Fund” fuelled by a booming natural-gas sector in the province’s north.
With a government capable of this many miracles, the Liberals had better keep all this stuff secret from the Vatican. If the conclave of cardinals gets wind of this, they might elect Christy Clark pope before she gets re-elected premier.
Just think how huge this all is.
The debt of the province stands at $56 billion and is projected to soar to more than $60 billion in the next few years. Yet Clark is talking about wiping out the entire debt with just six years’ worth of natural-gas profits.
The provincial sales tax? Appropriately set to return on April Fool’s Day, the PST brings in more than $5 billion a year to government. But that massive burden on B.C. consumers could also be lifted by the Prosperity Fund miracle.
Billions for health and education? Incredible for a government that’s currently so broke it can barely afford to pay its $15-million partisan advertising bill.
Amazing, isn’t it? The only surprise is the government didn’t throw in world peace, a cure for cancer and a solution to global warming for good measure.
That’s not to say the potential profit from liquefied natural gas is anything to sneeze at. British Columbia is well positioned to take advantage of Asian demand for LNG and Clark is absolutely right to push hard to make it happen.
But Tuesday’s throne speech left me looking for an ice-scream scoop to go along with all the pie-in-the-sky being served up.
It was all very reminiscent of an earlier premier with the same last name, who once promised voters the streets would be paved with gold on the strength of B.C.’s natural resources.
“Three — count ’em — three aluminum smelters!” Glen Clark promised back in 1996.
But exactly zero — count ’em — zero aluminum smelters eventually materialized.
With the election looming in May, get set for lots more of this kind of excessive tub-thumping.
MP John Weston's office responds to Rafe Mair's recent column on the Harper Government's sham environmental "process". "Regrettably, [Rafe] has adopted an extremist position, rejecting a Northern Pipeline in principle, no matter what the cost to the community, to jobs, to our country, or to our economy. When asked at a gathering in North Vancouver where heard him speak, he rejected out of hand that a Northern Pipeline should be built, under any circumstance. For my part, I maintain an open mind..." Read Weston's letter and Rafe's subsequent response here.
Billions of litres of water a year. Thousands of expensive wells. New roads. Many hectares of trees felled and land cleared. Camps to house thousands of workers.
At the same time, the West Coast export of Canadian natural gas carries the promise of so many billions in new revenues that its government has taken to comparing it with Alberta’s oil sands. Some of the final regulatory obstacles to large-scale gas exports have been settled, and recently a small project called BC LNG said it had signed gas sales agreements that could allow it to start construction soon.
But the province has spent less time discussing the scale of industrialization that will be required, for many decades, to enable those exports of gas from B.C.’s northeast to ship to Asian customers. Natural gas is promoted as a clean-burning fuel – but getting it out of the ground remains a potentially messy process. The spectre of large tracts of boreal forest carved up by intensive gas drilling has already prompted one local first nation to prepare to do legal battle against new gas pipelines.
It’s an early warning that, like oil, natural gas exports stand to prompt a showdown over the environment.
“We are not going to let them get away with it,” said Lana Lowe, director of land and resources for the Fort Nelson First Nation, whose traditional territory encompasses much of the Horn River shale gas play, which is likely to serve as a major source of gas for export. She added: “The major concern is what happens in five years when it’s all systems go and we have 10 oil companies drilling our land and taking all our water.”
It comes down to the size of development that is being proposed.
Estimates vary, but hundreds – and perhaps more than a thousand – wells will need to be drilled each year to support three mid-sized liquefied natural gas terminals, a number that seems a reasonable possibility given current global corporate interest. Three terminals – Kitimat LNG, LNG Canada and one in Prince Rupert, where both BG Group PLC and Petronas have projects – could handle roughly 4.5 billion cubic feet a day in gas.
Using current technology, the hydraulic fracturing extraction method required for each well sucks down roughly 20 million litres of water. At 450 wells a year, that’s roughly nine billion litres a year, enough to supply water to residents of a city the size of Calgary, with 1.1 million people, for more than a month. Companies such as Encana Corp.,Nexen Inc.,Apache Corp. and Devon Energy Corp. have already applied to the B.C. government for water licences totalling 11.1 billion litres a year – although the province says the largest of those, an Encana application for three billion litres, represents 0.024 per cent of annual runoff from the Fort Nelson River.
Still, B.C. needs to prepare before those volumes of water are pumped below ground, said Eric Swanson, a director with the Dogwood Initiative, a B.C. environmental group.
“Before any government gets too excited about [LNG development], they’ve got to sit down with the first nations and figure out what the pace and scale they’d like looks like and see how much water we actually have,” he said.
Written by Administrator
- Thursday, 07 February 2013
Read this story from the Canadian Press on the National Energy Board's decision to grant an export licence to a proposed Shell-led Liquified Natural Gas project in Kitimat. (Feb 4. 2013)
CALGARY - The National Energy Board has granted an export licence to LNG Canada Development Inc., a liquefied natural gas terminal proposed by Shell Canada Ltd. and three Asian partners in Kitimat, B.C.
Over a 25-year period, LNG Canada is allowed to export 670 million tonnes of natural gas, which will have been chilled into a liquid state, enabling it to be transported around the world via tanker.
Annually, LNG Canada will be able to export 24 million tonnes of gas.
The federal energy regulator says it's satisfied that the amount of gas to be exported doesn't exceed what will be needed within Canada.
The LNG Canada partnership includes Shell, South Korea's Kogas, Japan's Mitsubishi Corp. and China's PetroChina Company Ltd.
They have picked Calgary-based TransCanada Corp. (TSX:TRP) to build a 700-kilometre pipeline connecting prolific shale gas fields in northeastern B.C. to the port of Kitimat.
There are several projects in the works planned for both Kitimat and Prince Rupert, B.C., to export natural gas to lucrative Asian markets.
The North American price of natural gas has been depressed in recent years, as advances in drilling techniques unlock huge supplies from shale formations across the continent, leading to a supply glut.
Companies hope by connecting that fuel to higher-demand Asian markets, their product will fetch a much better price.
Last week, pipeline firm AltaGas Ltd. (TSX:ALA) and a Japanese company formed a partnership to explore shipping liquefied gas to Asia.
Read this story from theKelowna Daily Courier on a recent "People's Forum" dealing with proposed Emnbridge pipeline and other energy issues. The talk featured Green Party leader Elizabeth May, Grand Chief Stewart Phillip, NDP Environment Critic Rob Flemming and Damien Gillis of the Common Sense Canadian.(Jan. 28, 2013)
Enbridge's Northern Gateway pipeline has no chance in British Columbia if Green Party Leader Elizabeth May has her way. May was in Kelowna Saturday to speak to more than 300 people at the First United Church.
"Has Enbridge made a case? No they haven't. They have failed miserably in even putting together the evidence," she said.
May was joined by filmmaker Damien Gillis, NDP opposition environment critic Rob Fleming and Grand Chief Stewart Phillip in arguing the case against the proposed pipeline at The People's Summit.
Organized by the Council of Canadians' Kelowna chapter, the event was created to educate people about the pipeline before the National Energy Board's hearing today in Kelowna.
If approved, the nearly 1,200-kilometre twin pipeline would carry about 525,000 barrels of petroleum per day from Alberta to the B.C. coast for shipment by tankers. The proposed pipeline has caused controversy because of its potential negative effects on B.C.'s environment.
"We're part of this big question that the planet faces - what kind of future do we want to have?" said Gillis. He said the pipeline would tarnish British Columbia's $14-billion tourism industry that prides itself on its natural beauty.
"It's contradictory. We can't be this and that and the new Saudi Arabia of the world," said Gillis.
May focused on environmental concerns surrounding the pipeline during her speech. She said Enbridge hasn't considered what would happen if there was a major spill.
"There is not one piece of evidence what the spill would do from a pipeline or a tanker in Enbridge's submission to the energy panel that deals with the product that they plan to move. They said what would happen if crude would spill, but not diluted bitumen which is a lot harder to clean up and does more damage." But according to Fleming, British Columbians have the power to stop the pipeline in the next provincial election. He said the equivalency agreement that the B.C. Liberals made with the federal government in 2010, which gives them the decision-making power for these projects, can be revoked.
"If you want to make the B.C. election in May a referendum on the Enbridge pipeline, be my guest. We can untie the hands of the province. If British Columbians don't stand up for our coastline, nobody will."
Major concerns about the pipeline have also been felt by First Nations communities.
"We, as people, realize the future of this planet depends on how we treat it," said Phillip.
Cenovus CEO Brian Ferguson, speaking at a Whistler investor's forum Jan. 24, 2012, claimed the double discount in crude prices from a lack of pipeline capacity is a "subsidization to the United States consumer by the Canadian economy" which he calculated is "$1,200 per Canadian."
The message he's sending? If each one of us wants to keep that $1,200 a year instead of providing income support for Americans, then get on the pipeline band wagon and become like him -- "in favour of all pipelines, going anywhere."
Ferguson's message is a variation of a theme we've been hearing from big oil for a couple of years -- echoed by the Canadian and Alberta governments. They get away with this tall tale because most of us do not understand how oil is traded and crude prices are set. Nor do we realize that the majority of crude oil produced belongs to integrated operations that own refineries too -- so if they lose on the one hand, they make it up on the other.
The narrative goes like this: resistance to oil pipelines like Keystone XL, Northern Gateway and Trans Mountain's twinning means an ever increasing supply glut in the U.S. Midwest, forcing the price of Western Canadian crude oil downwards as compared to the North American crude oil benchmark West Texas Intermediate -- WTI.
WTI is trading at about $96 US a barrel while key oil sands blended crude called Western Canadian Select -- or WCS -- is currently selling at a deep discount to WTI at $31 US per barrel. If Canadian oil could find its way to new markets it would command higher prices and improve producer revenues. But the problem, according to pipeline advocates, doesn't stop there...
...
Things have changed. Brent priced oil is selling at around $113 US a barrel -- a $17 US per barrel premium to WTI. When the oil sector talks about the double discount, this is what they are referring to -- WTI deeply discounted from Brent and WCS priced against WTI, deeply discounted again. They run the numbers as if western Canadian crude will command world prices once it finds its way onto new pipelines and into new markets -- even though they know this is false.
Oil sands crude takes more energy, and therefore costs more to process into finished products like gasoline, jet fuel and diesel. Even before there was any evidence of a glut in the U.S. due in part to the expansion of U.S. production from the Bakken, there was a natural discount for WCS related to product quality. Between 2005 and 2010 the discount of WCS to WTI ran at an average of $18 US per barrel.
Enbridge CEO Al Monaco told the Toronto Board of Trade last June that pipeline delays on projects like Northern Gateway is costing billions. He said our oil is "selling for $20 to$30 off world prices. If you do the math, that translates to lost value of some $60 million a day. A massive loss of value for Canadians." To get this figure, Monaco took Western Canada's crude oil exports by volume and pretended it captured Brent prices. The discount related to quality was ignored.
CIBC last March estimated the loss at $50 million a day or $18 billion a year. "We consider the current discounting of WTI vs Brent, and the more recent discounting of Canadian crudes vs. WTI (i.e., double discounted vs. global crudes) as a major issue."
Cenovus' Ferguson, in his talk to investors last week, pointed to the CIBC report and claimed "that number, I think is about double that given today's differentials" and raised the CIBC estimate to $36 billion a year.
But if you look at the differentials last March and compare them to today, they are almost the same. Last March Brent traded at about $124 US a barrel, WTI at $106 US and WCS at a discount to WTI of $31 US -- total double discount of $49 US. Awfully close to the current $48 US double discount Ferguson laments.
Not only did Ferguson double the hit, he took the tragedy to new extremes by suggesting this lost opportunity is tantamount to each Canadian handing over a cash subsidy to U.S. consumers.
How is it he could simply double the total, call it $36 billion, divide it by the population of Canada, and claim its costing us each $1,200? Great headlines, but not remotely true.
Read this story from CommonDreams.org on the pressure coming from several US Senators to approve the controversial Keystone XL amid growing public protests against the project. (Jan 24, 2013)
Ignoring warnings from the world's most prominent climate scientists who say that pursuit of mega-carbon projects like development of Alberta's tar sands will lead to 'climate chaos' and irreversible tipping points, 53 US Senators signed a letter on Wednesday urging fast-track approval of the controversial Keystone XL pipeline.
The letter, spearheaded by Sens. John Hoeven (R-N.D.) and Max Baucus (D-Mont.), employed what has widely been called a false dichotomy by asserting that protecting the environment and moving away from a fossil fuel dependent energy system was incompatible with job creation or economic prosperity.
“We ask you not to move the goalposts as opponents of this project have pressed you to do," the letter read. "We urge you to choose jobs, economic development and American energy security."
The letter proves that a majority of lawmakers in the upper chamber of Congress have not been swayed by the sizable groundswell of environmental activism around the Keystone XL project and climate change more broadly.
Read this story from Mike De Souza of Postmedia on Environment Canada's choice to send warning letters to industrial polluters, instead of handing prosecuting alleged environmental violations. (Jan 26, 2012)
OTTAWA – The federal government has given warning letters to several oil, gas and pipeline companies across the country instead of trying to prosecute them for alleged transgressions that include polluting air and water, inadequate emergency planning and sloppy record-keeping.
Environment Canada sent the written warnings, released to Postmedia News under access to information legislation, to a range of companies in Alberta, Saskatchewan and Quebec.
The warnings include letters to oilsands producer Devon Canada, and to Gibson Energy – a midstream company that manages pipelines and other related infrastructure – alleging that two separate oil spills at their respective facilities in 2010 were in violation of the federal Fisheries Act.
The violations are punishable by fines of up to $1 million or imprisonment of up to three years, said the warning letters.
Both companies said they had addressed the concerns raised in the letters, but Environment Canada also called out several other companies in writing, for failures to implement and test emergency plans and failures to properly report and identify the storage or management of regulated petroleum products.
Written by Kevin Logan
- Wednesday, 30 January 2013
In a recent "State of the Province" televised address, Alberta Premier Alison Redford outlined a "once in a generation" re-engineering of the province's fiscal framework. Suddenly, her constituents' long-cherished "Alberta Advantage" - a no provincial tax policy which has defined its sense of "self-reliance" - is on the chopping block. Yet little known to Albertans is the man behind the curtain, pulling the strings on an energy policy which favours largely-foreign corporate interests over the citizens who will be left holding the bag. Former Harper Trade Minister and Senior Chinese Government Advisor David Emerson is the chief architect of Canada-China trade and reshaping of Canada's resource economy.
