Canada's Oil Sands | Part 4: Environment and the Facts

The future of Canada’s oil sands industry is changing – and we are excited about it. Like the entrepreneurs who established our industry and helped fuel our world over the past 100 years, we share Canadian values and have built our industry focused on solutions and continuous improvement.

We are going to be using oil for a long time to come – both in Canada and around the world. Canada has a tremendous resource base combined with a stable political environment and skilled people that make it the ideal place to develop our natural resources responsibly.

We know we have an impact on the planet. Just as we are committed to growing our businesses, we are equally committed to improving our environmental performance. We collaborate on our biggest environmental challenges, and develop technologies that lessen our impact on air, land and water, and provide benefits for our country.

We know that our innovation and technological advances will help Canada achieve its global environmental commitments and move towards a cleaner energy future. We know it, because we are working on tomorrow’s energy, today.

So, when it comes to helping the globe meet the need for increasing demands for energy – all forms of energy – we believe the world needs more Canada.



About the Author

The Canadian Association of Petroleum Producers (CAPP) is the voice of Canada's upstream oil and natural gas industry. We enable the responsible growth of our industry and advocate for economic competitiveness and safe, environmentally and socially responsible performance.


If you enjoyed this article, please consider becoming a patron of The Visionable


Mexican President announces bailout for state-owned Pemex to counter fuel theft gangs

As part of a government package to provide a revenue boost following fuel theft by gangs, Mexican President Andres Manuel Lopez Obrador announced USD $3.9 billion bailout for the state-owned oil company Friday and an additional USD $1.6 billion in revenue, totalling USD $5.5 billion. The President is determined to rescue Petroleos Mexicanos, or Pemex, which was nationalized in 1938, as a centerpiece accomplishment during his first 100 days in office. He has launched an offensive against fuel theft gangs that drill illegal taps into Pemex pipelines.

President Lopez Obrador considers Pemex to be a national symbol and engine for the economy. The government package includes assuming pension debt, injecting cash, and cutting taxes for the company, which pales in comparison to the staggering USD $43.8 billion in debt the company has incurred since 2013. The extra revenue is expected to come from increased sales for the company as sources of stolen fuel dry up. “In Pemex there has been bad management and a lot of corruption, looting. If we end the corruption, Pemex will be reborn and that will apply to the country, as well,” he said while announcing the bailout.

The Fitch ratings agency lowered Pemex’s credit rating one step to “AA,” with a negative outlook in January and said the company is essentially insolvent, with negative cash flow and a debt exceeding the value of proven oil reserves. Following the announcement on Friday, Fitch said the bailout “would likely not be enough to prevent continued deterioration in company’s credit quality. The announced support measures are less than the $12 billion to $17 billion of additional annual cash requirements Fitch estimates Pemex needs to halt production and reserve level declines.

Mexico City-based oil analyst and consultant David Shield believes that to regain its position as a viable business, Pemex needs to invest more in exploration and production even though it has limited funds, saying, “Somebody will have to bring it (money) in and that somebody will probably be private.” However, President Lopez Obrador has been highly critical of oil and gas concessionary contracts granted under the energy reform of former President Enrique Pena Nieto, saying that private companies have been slow to make promised investments or produce much oil.

President Lopez Obrador said his goal is to raise crude output 45 per cent by 2025 to 2.4 million barrels per day, from the current 1.65 million barrels per day and stressed the importance of investing government money in doing things like building refineries to reduce Mexico’s dependence on imported gasoline, although those plans involve huge investments that don’t immediately boost the company’s output.

The President has also been unwillingness to tackle the oil workers’ union, which has kept Pemex payrolls swelled with more workers than needed, siphoned off money, and saddled the company with huge liabilities. A dissident group formed earlier this month to try to organize a new union at the oil company. “I think there is still a battle to be fought there. I think the union issues may be coming to a head in the short term,” said Mr. Shields.

IEA reports 2019 global oil supply will be higher than demand despite OPEC cuts

The International Energy Agency (IEA) said in a report this week that they have left their demand growth forecast for 2019 unchanged from January’s report of 1.4 million barrels per day, citing “lower prices and the start-up of petrochemical projects in China and the U.S. Slowing economic growth will, however, limit any upside.” The IEA said the global oil market will struggle to absorb fast-growing crude supply despite OPEC production cuts and American sanctions on Venezuela and Iran.

The sanctions have ended supply of crude that tends to yield larger volumes of higher-value distillates, as opposed to gasoline. Despite some disruption for refiners this did not result in a dramatic increase in the price of oil. “In terms of crude oil quantity, markets may be able to adjust after initial logistical dislocations [from Venezuela sanctions]”, the Paris-based IEA said, “Stocks in most markets are currently ample and … there is more spare production capacity available.”

In the last two years, Venezuela’s production has nearly halved to 1.17 million bpd due to a government-induced economic crisis that along with every other industry decimated energy, and U.S. sanctions have now crippled its exports as long as President Maduro refuses to hand over the government to interim President Guaido.

The agency also lowered its forecast for demand for OPEC crude, of which the cartel claims to have cut production by 800,000 bpd this year as part of an agreement with Russia and other non-OPEC producers including Oman and Kazakhstan. The “call” on OPEC crude is now forecast at 30.7 million bpd in 2019, down from the IEA’s last estimate of 31.6 million bpd in January.

Brent crude futures rose 20 percent in 2019 to approximately USD $63 a barrel based on early January, however, the price has largely plateaued since then. “Oil prices have not increased alarmingly because the market is still working off the surpluses built up in the second half of 2018,” the IEA said. “In quantity terms, in 2019, the U.S. alone will grow its crude oil production by more than Venezuela’s current output. In quality terms, it is more complicated. Quality matters.”

Provinces’ lawsuit against Trudeau’s carbon tax argues it is unconstitutional

Last week lawyers representing the provincial government were in a Regina courtroom for two days of hearings as Saskatchewan opposes the Prime Minister Justin Trudeau’s threat to force a carbon tax on the province and plans to argue it is unconstitutional because it’s not applied evenly in all jurisdictions. The Saskatchewan government has asked the province’s Appeal Court to rule on whether a federally imposed tax is constitutional. Arguments were given to a panel of five judges, including from sixteen interveners on both sides of the dispute.

The governments of New Brunswick, Ontario, and Alberta’s Opposition United Conservative Party were among the presenters supporting the Saskatchewan government. The government of Ontario, which has filed its own legal challenge. Applicants in support of the federal government’s position include the government of British Columbia, The David Suzuki Foundation, and the Athabasca Chipewyan First Nation.

Meanwhile, the Prime Minister was in Saskatchewan announcing a major green energy investment. Shifting the language from “carbon tax” to “price on pollution”, Prime Minister Justin Trudeau had previously said, “Our focus on bringing forward a price on pollution is very simple; there is too much pollution in our atmosphere, because for too long pollution has been free.” Ottawa says the constitution gives it the power to impose a carbon price because climate change and greenhouse gas emissions are national concerns.

Saskatchewan Attorney General Don Morgan has said challenging the constitutionality of Ottawa’s carbon tax is the right thing to do for his province’s residents and its energy sector. University of Alberta law professor Eric Adams said he expects where Saskatchewan will want to keep the court focused on the federal-provincial division of powers, Ottawa is likely to steer its argument towards the issue of climate change itself. “There’s no question that it’s a monumental decision in the life of the Canadian Constitution. The court hasn’t yet grappled explicitly with climate change as the background context to a constitutional question,” Mr. Adams said.

Starting this April, the federal government’s carbon price starts at a minimum at $20 a tonne and rises $10 each year until 2022. Saskatchewan, New Brunswick, Ontario, and Manitoba are without a carbon pricing plan and will therefore be subject to the carbon tax. The government’s Saskatchewan Party has always been opposed to the idea of a carbon tax, which the province says would hurt the economy and regardless believes its own plan for emissions reductions goes above and beyond what will be mandated federally. Prime Minister Trudeau said greenhouse gas emissions do not observe political borders and the environment is federal responsibility. Saskatchewan argues it is unconstitutional to impose a tax on some provinces, but not others.

In court filings, both Canada and Saskatchewan point to the Constitution to show that neither the province nor the federal government has explicit control over the environment, but that it overlaps both jurisdictions. Saskatchewan argues a federally imposed carbon tax is “constitutionally illegitimate” because it only applies to some provinces: “Under our Constitution the federal government has no authority to second-guess provincial decisions with respect to matters within provincial jurisdiction.

Ottawa argues climate change is a national concern and the federal government’s power to impose a carbon tax comes from Section 91 of the Constitution, which states laws can be made “for the peace, order and good government of Canada.” Mr. Adams said that branch of jurisdiction is not often cited in constitutional disputes because it’s difficult for courts to define the limits of a “national concern.

Last week, Saskatchewan released regulations under Prairie Resilience that will require industry to reduce methane emissions by 4.5 million tonnes annually by 2025, including penalties for non-compliance. Prairie Resilience focuses on performance standards for heavy emitters and growing renewable power generation. The federal government accepted the provisions of Prairie Resilience when announcing the carbon tax framework, but still said all pollution needs to be priced. “Our plan is actually broader based and more comprehensive than anything that the federal government has put forward,” said Innovation Minister Tina Beaudry-Mellor, adding, “I think Saskatchewan people want to see we are standing up for very important resource industries in this province.

European companies bought a record amount of wind energy in 2018

European aluminum producers and technology companies sought greener ways to drive their machinery and data centers last year, buying a record amount of wind power capacity. In a PR push to market a cleaner image to customers, large companies are securing renewable energy to manage costs and reduce their carbon emissions.

The biggest buyers of wind power were aluminum producers Norsk Hydro and Alcoa, which both signed big deals to buy power from farms in Norway and Sweden. In July, Hydro signed the world’s longest corporate PPA at 29 years with Green Investment Group (GIG), a unit of Australian investment bank Macquarie. Wind firms are looking for new ways to secure their income as the subsidies that have underpinned the industry come to an end.

According to new data from industry body WindEurope, wind power has become more price competitive compared with conventional energy in many countries and new wind deals through so-called corporate power purchase agreements (PPAs) were signed in Europe last year for 1.5 gigawatts (GW) of capacity, up from 1.3 GW in 2017. Wind power PPAs signed by companies in Europe have now reached a total capacity of 5 GW, almost the same as Denmark’s total wind energy capacity. The PPA market was traditionally driven by the IT sector to power data centers, but other industries have since joined in. In the United States, Google, Facebook, and Walmart have already developed a mature market for corporate PPAs. According to data from the American Wind Energy Association (AWEA), corporate and other non-utility customers signed nearly 40 percent of capacity contracted in the United States in the third quarter. Mercedes-Benz announced its first PPA deals in Poland and Germany in 2018, with the latter set to power its electric vehicle and battery manufacturing.

However, Germany’s onshore wind industry recently warned of a sharp drop in new turbines installed last year and said there was little prospect of a recovery without government help. According to Fraunhofer Institute research, wind power is one of the most important drivers of Germany’s transition to renewable energy, accounting for nearly 30 percent of total power generation sent to public grids in 2018. However, the rapid expansion in onshore wind energy achieved from 2013 to 2017 came to a halt last year due to red tape, opposition from local communities, and uncertainty among operators after the government abandoned 20-year fixed payments for new projects in favor of an auction system.

Germany installed 2,402 megawatts (MW) worth of onshore wind turbines in 2018, down 55 percent from 2017, engineering group VDMA and wind energy association BWE said in a joint statement. The groups had expected 3,300 MW of additional capacity. “The stop and go must end. A sustained and faster expansion of renewables would be logical, given that costs have been reduced and a plan to go without brown and hard coal-to-power generation has just been announced.” said Matthias Zelinger, managing director at VDMA Power Systems, of government policy towards wind power. VDMA represents companies such as Siemens Gamesa, Nordex and Senvion.

Two months ago, Germany parliament approved special 8,000 MW tenders for wind and solar energy plus an unspecified amount of offshore wind between 2019 and 2021, on top of regular tenders. The legislation compensates for the coalition government’s decision to throw out strict emissions targets for 2020 and instead push for more aggressive ones by 2030.

Indigenous supporters say Canada’s oil and gas industry is vital for them

Several pro-energy rallies and truck convoys have been held across Alberta in recent weeks to protest the federal government’s lack of support and action on building pipelines to access new markets. Last weekend in Lac La Biche, Alberta the Region One Aboriginal Business Association (ROABA) organized a convoy of more than 100 trucks who gathered for the first Indigenous-led rally for energy resources to highlight that Alberta's northern Indigenous communities support pipelines and oppose Bill C-69 — federal legislation that will overhaul the way energy projects are approved.

ROABA promotes Indigenous-owned businesses in northern Alberta and facilitates networking opportunities between businesses and industry. "We can't get anything to market. We are limited to one client, which is the Americans. We need more. We are gridlock," said ROABA president Shawn McDonald. Attendees were instead asked to wear blue fire-retardant coveralls and hard hats. Organizers stressed the event was non-partisan and not affiliated with “yellow vest” events, where participants wear yellow, high-visibility vests similar to recent protests in France against high levels of taxation for workers and the middle class.

The rally began with an elder's prayer and blessing, followed by a bannock and soup lunch, before the convoy travelled 80 kilometres around Lac La Biche's namesake lake, passing through the communities of Owl River and Plamondon. Speakers included four First Nation and Métis leaders, the MP for the area, David Yurdiga, and MLAs and municipal leaders. “It doesn’t matter if you’re a business owner or a worker or an aboriginal community. We’re all in this together,” said Lee Thom, a councillor from Kikino Metis Settlement.

We would not have a proper living. We would not have a meaningful way of life, a healthy way of life. Alone, our First Nation would not be able to generate that,” said Rene Houle of the Whitefish Lake First Nation. He said the energy industry generates spinoff businesses that employ hundreds of people in his community and the bottom line is the oil and gas sector helps keep people from becoming burdens on the social-welfare and justice systems.

Organizers and speakers also argued Bill C-69, the federal legislation which critics argue will make it more difficult for new pipelines and energy projects to get approval, needs to be amended to better balance economic development and the need to protect the environment, traditional Indigenous lands and harvesting rights. “The way it is right now, in its current state, is devastating for oil and gas,” Mr. McDonald told the crowd.

Lac La Biche Mayor Omer Moghrabi said Canadians need to resist critics from south of the border who believe the country isn’t doing enough to protect the environment while developing its oil and gas sector. “We have 150 bodies of water in our town. We are environmental stewards and so are our producers.

Founder and CEO of Canada Action Cody Battershill, a pro-oil and gas activist organization that partnered with ROABA to organize the rally, said, "It is powerful. I think it is representative that most First Nations support the pipeline. This is an important conversation." Canada Action followed up yesterday with a Pro-Resource Rally in southern Saskatchewan at the Moosomin Chamber of Commerce with federal Conservative party leader, Andrew Scheer, Saskatchewan Premier Scott Moe, and New Brunswick Premier Blaine Higgs as speakers.

Economic Report | Part 4: Toward a Shared Future, Canada's Indigenous Peoples and the Oil and Natural Gas Industry

CAPP’s Vision for the Future of Canada’s Oil and Natural Gas Industry

For more than 150 years, Canada’s oil and natural gas industry has been a reliable and affordable supplier of energy for all Canadians, and has improved the future of our nation. From spurring economic growth to developing major nation-building energy projects, our country’s energy sector is woven into the fabric of our nation, and is as much a part of Canada as the maple leaf.

The Canadian Association of Petroleum Producers (CAPP) represents an energy industry that is looking to the future – one that values sustainable development practices and lower-carbon processes. With a growing world where many emerging economies need a variety of energy products, we want to help create a vision for Canada’s oil and natural gas industry that recognizes the significant role our resources play in the world’s future energy mix.

Canada has taken a leadership role in becoming one of the world’s most responsible oil and natural gas producers, recognizing resource development needs to be done in a responsible manner. The onus is on all Canadians to ensure we remain the world’s energy supplier of choice.

Our joint vision for the future needs to look at the big picture – a global view of the long term that includes access to world markets, effective regulatory outcomes, commitments to innovation, global climate leadership, and enabling a strong, reliable and dynamic fiscal framework.

We need collaboration between industry and all levels of government to rebalance the playing field and restore our country’s competitiveness to benefit all Canadians, not just the oil and natural gas industry. We can satisfy the world’s demand for energy but to do so we need to work collectively to create an ambitious plan for the future.

Together we can provide the world with the energy of tomorrow.

Sincerely,

Tim McMillan

President and CEO, Canadian Association of Petroleum Producers



About the Author

The Canadian Association of Petroleum Producers (CAPP) is the voice of Canada's upstream oil and natural gas industry. We enable the responsible growth of our industry and advocate for economic competitiveness and safe, environmentally and socially responsible performance.


If you enjoyed this article, please consider becoming a patron of The Visionable


Democrats' Green New Deal is compared to Mao's Great Leap Forward

The United States Congress will soon debate a non-binding resolution introduced by fundamentalist Democrats Representative Alexandria Ocasio-Cortez and Senator Ed Markey to adopt their so-called Green New Deal. "More like the world is going to end in 12 years if we don't address climate change and your biggest issue is how are we going to pay for it? And, like, this is the war -- this is our World War II,” is how Rep. Ocasio-Cortez framed the urgency for the U.S. to eliminate greenhouse gas emissions from the burning of fossil fuels such as coal, oil, and natural gas by 2030. Republican Senate Majority Leader Mitch McConnell announced he is bringing the resolution to a vote.

The Plan outlines the transition of the U.S. economy to become greenhouse gas emissions neutral and to significantly draw down greenhouse gases from the atmosphere and oceans. The Plan states it will be “executed in no longer than 10 years from the start of execution of such Plan; (d) provide opportunities for high income work, entrepreneurship and cooperative and public ownership; and (e) additionally, be responsive to, and in accordance with, the goals and guidelines relating to social, economic, racial, regional and gender-based justice and equality.”

Like the Green New Deal, the Great Leap Forward would “guarantee economic security... Like the Green New Deal, the Great Leap Forward would answer the question of “what will we do with our new shared prosperity.” Government would collect and distribute wheat, rice, and industrial products across the country, taking care that everyone’s needs were met, discouraging overconsumption and hoarding. Wealth inequality would fall. China would not be “a system that allows billionaires to exist” side-by-side with rural poverty.Unfortunately — but predictably — the Great Leap Forward failed. Steel production did increase. But China’s factories focused on government-imposed production quotas: they delivered quantity instead of quality. Chinese steel was too brittle for industrial purposes. Much went unused. China’s farms were collectivized. But with farm labor being diverted to factories and private trade being banned, land went fallow. Yields dropped. Bureaucrats collected the harvest, but failed to move it where it was needed. Grain rotted in silos while several Holocausts worth of people starved to death.China suffered until the government reversed itself.
— Lew Olowski, who likened the Plan to Mao Zedong's Great Leap Forward in poor, agrarian China through government mandate to create an industrialized country.

Fossil fuels currently account for 80 percent of American energy consumption. The Green New Deal would entail a profound and rapid “decarbonization” of the energy economy to alternative fuels, which would require a complete transformation of the country over to a centrally planned government, well beyond the scope of what was done in the Communist China or the Soviet Union. The proposal aims to transform the U.S. economy to combat climate change and promises a job to “all people of the United States”, including money to those “unwilling to work”. The plan calls for phasing out air travel within a decade to be replaced by a network of high-speed rails. Cows, as the released document acknowledges, have flatulence, so they must be totally eliminated from the earth and meat from the U.S. diet.

Not all Democrats support the Plan, drafted upon a profound ignorance of basic economic concepts. Senator Joe Manchin said, “The Green New Deal is a dream, it’s not a deal. It’s a dream. And that’s fine. People should have dreams in the perfect world what they’d like to see. I’ve got to work in realities and I’ve got to work in the practical, what I have in front of me.” In his interview with news anchor Chris Cuomo, he continued, “And you have to understand also that climate -- we talk about global climate, it’s the globe. It’s not North American climate, it’s not the United States’ climate. It’s the globe. How do we bring on China and India and everybody else who are great users of carbon right now and polluters of carbon to be carbon-free also?” Earlier this month, House Speaker Nancy Pelosi was dismissive about the Green New Deal. “It will be one of several or maybe many suggestions that we receive,” Pelosi said in an interview with Politico, “The green dream or whatever they call it, nobody knows what it is, but they’re for it right?

Decarbonization would mean reversing the historical transition from less dense to more dense energy sources and has already been demonstrated unrealistic contrasted with renewable energy. Rapid decarbonization assumes all economic sectors and services can be electrified and that electricity can be delivered by intermittent renewable energy sources. These technologies, especially affordable grid-scale electricity storage, do not exist, particularly when it comes to transportation, where the high energy density of oil products makes them the ideal source of motive power. In Germany, the costs of transition from coal and nuclear energy to wind and solar plants has already exceeded USD $1 trillion, with only modest reductions in greenhouse gas emissions.

If the environmental fundamentalists were genuinely concerned with doomsday projections regarding the climate, they should look to China, which is the world’s biggest physical polluter, creating more than twice the amount of carbon into the atmosphere than the U.S., and dumps almost as much non-degradable plastic into the oceans as the rest of the world’s combined.

Despite history in the twentieth century offers countless examples of the failure of government economic regulation, industrial planning, and central planning of the economy, an August Gallup poll revealed that 57 percent of Democrats said they held a positive view of socialism, compared with just 47 percent who support capitalism. A new Fox News poll that gauged support for capitalism versus socialism revealed that capitalism was preferred among all those polled, however, more Democrats (43 percent) had a favorable view of socialism than an unfavorable view (39 percent). According to the poll, 50 percent of self-identified liberals, 43 percent of Clinton voters, and 36 percent of people under the age of 30 had a favorable view of socialism.

Larry Kudlow, Director of the U.S. National Economic Council, pointed out on ‘America’s Newsroom’, “You’ve got all these...people talking about socialism all of a sudden. I think that right now your poll is showing that working folks want to embrace capitalism not some state-run, state-controlled socialism that will set our economy back a hundred years or more.” He continued, "This crazy [New Green Deal] plan is going to cost a fortune. You’re going to roll back one of the most important things that has contributed to this recovery and that is President Trump ended the war on business and he ended the war on success.’” President Trump is expected to warn of “the dangers of socialism” in a speech he plans to deliver this week in support of Venezuelan opposition leader and interim President Juan Guaido.

Rep. Alexandria Ocasio-Cortez said she has no qualms about acknowledging the New Green Deal will mean unprecedented governmental intrusion into the private sector. “As you know, congresswoman, one reason that people are politically conservative are skeptical of efforts to combat climate change is that it sounds to them like it requires massive government intervention, which they just don’t like,” NPR’s Steve Inskeep asked her in an interview, “Are you prepared to put on that table that, ‘Yes actually they’re right, what this requires is massive government intervention’?

Rep. Ocasio-Cortez quickly replied, “It does, it does, yeah, I have no problem saying that. Why? Because we have tried their approach for 40 years. For 40 years we have tried to let the private sector take care of this. They said, ‘We got this, we can do this, the forces of the market are going to force us to innovate.’ Except for the fact that there’s a little thing in economics called externalities. And what that means is that a corporation can dump pollution in the river and they don’t have to pay, but taxpayers have to pay.

The Plan naively assumes that all that needs to be done is for government to “finance” these projects through huge increases in taxes, borrowing, and printing money, and that such infusions of money will enable the government to “pay” for all of these new projects. Rep. Ocasio-Cortez said, “Yeah, I think the first move we need to do is kind of break the mistaken idea that taxes pay for 100 percent of government expenditure. It’s just not how government expenditure works. We can recoup costs, but oftentimes you look at, for example, the GOP tax cut which I think was an irresponsible use of government expenditure, but government projects are often financed by a combination of taxes, deficit spending and other kinds of investments, you know, bonds and so on.

Canada's Oil Sands | Part 3: Transporation and Economy

The future of Canada’s oil sands industry is changing – and we are excited about it. Like the entrepreneurs who established our industry and helped fuel our world over the past 100 years, we share Canadian values and have built our industry focused on solutions and continuous improvement.

We are going to be using oil for a long time to come – both in Canada and around the world. Canada has a tremendous resource base combined with a stable political environment and skilled people that make it the ideal place to develop our natural resources responsibly.

We know we have an impact on the planet. Just as we are committed to growing our businesses, we are equally committed to improving our environmental performance. We collaborate on our biggest environmental challenges, and develop technologies that lessen our impact on air, land and water, and provide benefits for our country.

We know that our innovation and technological advances will help Canada achieve its global environmental commitments and move towards a cleaner energy future. We know it, because we are working on tomorrow’s energy, today.

So, when it comes to helping the globe meet the need for increasing demands for energy – all forms of energy – we believe the world needs more Canada.



About the Author

The Canadian Association of Petroleum Producers (CAPP) is the voice of Canada's upstream oil and natural gas industry. We enable the responsible growth of our industry and advocate for economic competitiveness and safe, environmentally and socially responsible performance.


If you enjoyed this article, please consider becoming a patron of The Visionable


Supreme Court’s abandoned well ruling for bankrupt energy companies is ‘credit negative’

The Supreme Court of Canada says the trustee for a bankrupt Alberta energy company cannot simply walk away from unprofitable wells on agricultural land without having to clean up. The ruling overturns an Alberta Court of Appeal ruling that upheld a 2016 decision in the Alberta Court of Queen’s Bench that allowed a bankrupt energy company to sever its connection with unprofitable and unreclaimed wells when the company’s assets were sold off to creditors, as if the wells were debts that the company couldn’t cover.

At the heart of the case was the question of whether federal bankruptcy laws conflicted with, and therefore superseded, provincial environmental regulations, or what lawyers and judges call “the doctrine of paramountcy.” The decision was highly anticipated across Alberta, where hundreds of thousands of inactive oil and gas wells dot the landscape, and at corporate offices in Calgary where oil and gas companies are under mounting pressure to remediate old wells. The largest oil producers in the province applauded the ruling, but financial analysts and lawyers acting for insolvency firms say it will have a chilling effect on financing for smaller companies — especially those that have not actively remediated existing wells and have sky-high environmental liabilities.

In a victory for landowners and the Alberta government, the Supreme Court of Canada has ruled trustees for bankrupt oil and gas companies cannot refuse to pay environmental clean up costs for uneconomic oil wells. However, financial analysts and lawyers acting for insolvency firms say the ruling will have a chilling effect on financing for smaller companies.

The 5-2 ruling came with a recommendation from Chief Justice Richard Wagner for Parliament to clarify the confusion between the federal bankruptcy law and the regulations provinces rely on to protect the environment. Since the case came to court, an estimated 1,800 wells representing more than CAD $100 million in liabilities have been abandoned.  “Bankruptcy is not a licence to ignore rules, and insolvency professionals are bound by and must comply with valid provincial laws during bankruptcy,” Justice Wagner wrote.

The Supreme Court ruled that Redwater Energy Corp.’s bankruptcy trustee, Grant Thornton Ltd., cannot walk away from the company’s obligations to render abandoned wells environmentally safe. When Redwater went bankrupt, Alberta’s provincial energy regulator ordered Grant Thornton to comply with end-of-life requirements to render Redwater’s abandoned properties environmentally safe. The trustee did not comply and filed its own counterclaim that included a challenge to the regulator’s action, citing the paramountcy of federal bankruptcy law.

The end-of-life obligations the Regulator seeks to enforce against Redwater are public duties. Neither the regulator nor the Government of Alberta stands to benefit financially from the enforcement of these obligations,” Justice Wagner wrote. “These public duties are owed, not to a creditor, but, rather, to fellow citizens, and are therefore outside the scope of ’provable claims’.

Moody’s Investor Services says the Supreme Court of Canada ruling on abandoned wells creates a “super priority position” for payment of such liabilities over repaying other creditors. It says the decision potentially reduces how much a lender could recover in the event of an insolvency and, therefore, how much it will be willing to lend to companies. That could potentially lead to a reduction in how much money oil and gas companies will be able to call upon to fund their exploration and development programs.

Moody’s says the ruling is also credit negative for banks and other creditors but adds it’s unclear how it will affect other industries and provinces going forward. “The ruling favoured the Alberta energy regulator, but the Supreme Court’s statement that Alberta’s regulations must be followed in bankruptcy could mean that bankruptcy trustees in other provinces would have to follow similar regulations, with unclear effects on how environmental regulations would affect recoveries for creditors elsewhere,” the agency said in a report.

Alberta’s Orphan Well Association

Redwater’s uneconomic wells, pipelines, and facilities would be handed over to the province’s Orphan Well Association, which is already struggling with a backlog of wells to remediate. There were 3,127 orphan wells in the province as of January 28 and the problem “will take several years to address,” Orphan Well Association executive director Lars De Pauw said in a release, adding that he was encouraged by the court’s decision.

The Orphan Well Association should be “a last resort,” said Brad Herald, Canadian Association of Petroleum Producers (CAPP) Vice-President Western Canada, in a release, adding the industry group was pleased with the decision. “CAPP has argued on behalf of industry that when a company declares bankruptcy, the value of any assets should go to abandonment and reclamations costs first,” he said.

Alberta’s energy regulator and the Orphan Well Association, an industry-funded group that cleans up wells that nobody else will, appealed the ruling to the high court. The Association’s last annual report said low oil prices had meant a sharp increase in the number of unprofitable wells it has had to take on from bankrupt companies. In 2012, it had 74 dud wells in its inventory; by the end of 2017, the number was 1,778. “The work we do varies from straightforward to highly complex,” that report said. “On one side of that spectrum is restoring the land on an orphan property that may, for example, have a low impact in a rural area. On the more complex side, we have safely decommissioned wells with potentially dangerous levels of hydrogen sulphide gas near more densely populated residential areas.

Orphaned wells are often on rented agricultural land and a group with the support of thousands of farmers also wanted to see the high court reverse the decision. The Action Surface Rights Association intervened in the case because it believes rights of landowners have been overlooked in the case.

Alberta’s 'drastic, dramatic' oil curtailment has made crude-by-rail uneconomic

In December, Alberta Premier Rachel Notley announced large oil producers would need to scale back production by a total of 325,000 barrels of oil per day in a bid to lift Western Canada Select heavy oil prices, which at the time were subject to crippling USD $40-per-barrel discounts relative to U.S. benchmarks.

Canadian oil companies need a discount of between USD $15 per barrel and USD $20 per barrel to justify the cost of shipping oil by rail but the discount has been below that range since the order came into effect. Last Thursday, AltaCorp Capital data shows the discount between WCS and West Texas Intermediate is an average of USD $9.44 per barrel.

Imperial Oil, which has invested in refineries that can profit from the spread between heavy blends and gasoline or diesel prices, opposed the order, alongside integrated companies such as Suncor Energy Inc. and Husky Energy Inc. On Friday, Imperial criticized the Alberta government for forcing companies to curtail oil production in the province, calling the move a “drastic, dramatic manipulation in the market” that has made crude-by-rail shipments uneconomic.

With the stroke of a pen, the government began picking winners and losers,” CEO Rich Kruger said, adding curtailment affects 28 out of 421 producers in the province. Most significantly, he said the curtailment order would have the unintended consequence of keeping more oil in storage because companies such as Imperial would ship less on railway cars. Output cut has caused Imperial to reconsider the timing of its CAD $2.6-billion Aspen oilsands project.

We think investor confidence in Canada is damaged at a time when we already had confidence issues in Canada,” Mr. Kruger said, adding the curtailment order has caused Imperial to reconsider the timing of the $2.6-billion Aspen oilsands project it green-lighted last year.

Before the curtailment order came into effect, Imperial was shipping about half of the total volume of crude on railway cars out of Canada. It shipped 168,000 bpd on rails in December but has since “unwound” its crude-by-rail volumes. The company shipped an average of 90,000 bpd on rails in January and expects to ship “at or near” zero barrels on railways cars in February. “Crude by rail should be helping to alleviate this situation in the province but because of the drastic, dramatic manipulation in the market, takeaway capacity is now being idled,” Mr. Kruger said.

Spokesperson for Alberta Energy Minister Marg McQuaig-Boyd, Mike McKinnon, said Friday, “The decision to temporarily limit oil production was applied fairly and equitably, and has been instrumental in saving jobs across the energy sector. We expect the differential to settle at a more sustainable level and we continue moving forward with long-term solutions like our investment in rail and our continued fight to build pipelines.”

Many Calgary-based oil companies without downstream refineries supported the decision to curtail oil production in a bid to lift WCS prices, and therefore provincial government royalty revenues. On Wednesday, the province eased the curtailment order by 75,000 bpd, saying the order has had the effect of reducing the amount of crude in storage in the province by 5 million barrels to a total of 30 million barrels.

Mr. Kruger said the curtailment order has shaken his confidence in the market because there is no guarantee a similar order can’t be issued again. “We’re re-evaluating our assumptions,” Kruger said, adding that the timing for the company’s 75,000 bpd Aspen oilsands project could be reconsidered in light of the order.

Washington Governor and BC Premier will use legal tools to stop Trans Mountain

Washington’s Democratic Governor Jay Inslee says his state shares concerns with British Columbia about the Trans Mountain pipeline expansion and will continue to voice its objections any way it can. Asked how Washington could influence the pipeline project, Governor Inslee replied, “Every way that we can under Canadian law. We’ve done that so far by our Department of Ecology making a vigorous, robust statement of our concerns. I have exercised my rights as governor to speak publicly and vocally about our concerns about this project.”

The Governor made his comments at a joint news conference in Seattle on Thursday with B.C. Premier John Horgan, who is visiting the state to discuss partnerships on endangered killer whales, clean energy, and high-speed rail. “This (project) does not move us toward a clean energy future. For both short and long-term reasons, the state of Washington stands with, I believe, the people of British Columbia expressing concerns about this project,” the Governor said.

The pipeline’s expansion would triple the capacity of the Trans Mountain pipeline, which runs from near Edmonton to a waterfront terminal in Burnaby, B.C. Canada has purchased the pipeline and expansion project for CAD $4.5 billion. The Federal Court of Appeal struck down the project’s approval last August in part because of the National Energy Board’s failure to consider marine shipping impacts. The government ordered the board to conduct a review of this issue and report back by February 22.

Premier Horgan has said that B.C. would use “every tool” in its toolbox to fight the pipeline expansion. He would not explicitly say on Thursday what tools the province has left. “I’m not answering that question directly in British Columbia, so I would be remiss if I did that today,” he said. “We do have tools available to us.”

Premier Horgan admitted the federal government has jurisdiction over inter-provincial pipelines but said the province has filed a reference case in the B.C. Court of Appeal to see if it has jurisdiction to regulate the transport of oil through its territory. “The challenge is that Alberta is landlocked and it has a resource that it believes it needs to get to market and they’re struggling with that,” he said. “I appreciate those challenges but my obligation is to protect the interests of British Columbia.” He added the federal government is in a “difficult” position now that it has purchased the pipeline.

Canadian Prime Minister Trudeau has previously said the expansion of the Trans Mountain pipeline is in the best interests of all Canadians and his government has committed CAD $1.5 billion to an ocean protection plan that includes millions for research on B.C. killer whale populations.

Premier Horgan announced that B.C. will kick in another CAD $300,000 to help fund a study of a potential high-speed transportation service linking B.C., Washington and Oregon, after contributing the same amount last year. He said he envisions high-speed rail running from Seattle to B.C.’s Lower Mainland, with a terminus in Surrey that would connect to public transportation infrastructure to take riders to Vancouver’s airport, the city’s downtown core and the Fraser Valley.

Governor Inslee added that a preliminary review has shown the rail link could generate 1.8 million riders in the first few years and Washington has contributed over $3 million to the project. “It’s based on an optimistic vision of the growth that we’re going to have in British Columbia and Washington,” he said. “We are a world-class community across that border.

United States becomes top source for Britain’s oil imports as their own imports drop

According to data from cargo-tracking and intelligence company Kpler, January’s data showed crude oil imports from the United States to Britain overtook supplies from other countries for the first time since such shipments began in 2015, when the United States lifted an oil export ban.

British imports of U.S. oil reached 264,000 barrels per day (bpd) last month, compared with Norway's 181,000 bpd in second place and total imports of 738,000 bpd. Other top exporters to Britain include Algeria, Russia, Nigeria, and Canada.

At the same time, less foreign oil is reaching American shores, as OPEC production cuts kick in and U.S. sanctions on Venezuela curb its exports.

Crude shipments to the U.S. from OPEC and its partners fell to 1.41 million barrels a day in January, the lowest in five years, according to Kpler. Shrinking Iraqi imports and deep output cuts by Saudi Arabia fueled the decline. Venezuela’s exports to the U.S. dropped by nearly 30 percent: almost half of it has yet to discharge into U.S. ports and U.S. sanctions may keep the rest of it on the water, with nearly 7.6 million barrels of Venezuelan crude currently floating in the Gulf of Mexico.

Alberta Government contributes $3.3M for huge solar farm in remote Fort Chipewyan

The Alberta government is contributing CAD $3.3 million for a solar project with local Metis and the Athabasca Chipewyan and Mikisew Cree First Nations in the province’s remote northeast corner, which will be Canada’s largest off-the-grid solar power project. The total cost of the project is CAD $7.8 million.

Alberta Fort Chipewyan is not connected to Alberta’s electricity grid and must burn diesel fuel for heat and power. The plan is for 7,500 solar panels to be erected at the power plant near the airport at Fort Chipewyan. The solar farm is expected to be operational by next year and replace the equivalent of 800,000 litres of diesel fuel — about 25 per cent of the community’s energy use.

The project’s size and storage capacity is required because of the lack of sunlight in the winter at that latitude. Sunlight in the region swings from about six useful hours a day in winter to 18 hours in the summer. The battery capacity will allow excess energy to be stored for use at night and in winter periods. The project is expected to make roads safer by reducing tanker-truck traffic.

Athabasca Chipewyan Chief Allan Adam said his First Nation wants to be part of the solution to climate change. “While our regional economy depends on the oil industry, we feel the effects of climate change in our community and see the growing impacts on our delta lands,” he said. “In addition to reducing costs, this project helps make life better for residents by reducing pollution and increasing safety,” Indigenous Relations Minister Richard Feehan said Thursday.

Canadian crude price plummets after partial shutdown of two critical pipelines

Canadian crude prices weakened after two critical oil pipelines, TransCanada's Keystone pipeline and Enbridge's Platte line, remained partially shut amid an investigation into a possible leak in Missouri and threatened a pile-up of crude in Alberta.

The disruption comes as refiners seek alternative supplies of heavy crude on the U.S. Gulf Coast after sanctions on Venezuela effectively cut access to the country’s oil. Canada’s oilsands crude serves as a similar substitute, but Alberta has struggled with pipeline bottlenecks that have forced rationing on export pipelines and prompted the province to impose mandatory production curtailments.

The 590,000 barrels-per-day Keystone pipeline is a critical artery taking Canadian crude from northern Alberta to U.S. refineries. Canadian pipelines are already congested, due to expanding production in recent years, forcing the Alberta provincial government to order production cuts starting last month. Enbridge's Platte crude pipeline was also shut, according to a spokesman for the Missouri Department of Natural Resources.

The Keystone line runs from Hardisty, Alberta to Cushing, Oklahoma, with a segment also connecting Steele City, Nebraska to Patoka, Illinois. The Steele City-to-Patoka segment is shut, according to TransCanada. Keystone’s Hardisty-to-Steele City and Steele City-to-Cushing, Oklahoma segments are ramping up after resuming service Wednesday night, yet flows are still not back to full capacity.

Enbridge restored service on a segment of the Platte pipeline running between Casper, Wyoming and Salisbury, Missouri, yet the remainder of the line downstream of Salisbury remains shut, according to Devin Hotzel, an Enbridge spokesman, on Thursday. The Platte pipeline transports as much as 164,000 barrels a day of crude from Casper to Guernsey and 145,000 barrels a day from Guernsey to Wood River, Illinois.

The Missouri Department of Natural Resources official said the source of the leak had not yet been identified and the quantity of oil from the release is still unknown. "The release was contained to an area of approximately 4,000 square feet... excavation of the containment area will begin soon or is already in progress," an official said in an email, adding that there are no reports of other pipelines affected or closed.

Canadian heavy oil has attracted greater demand in recent days due to U.S. sanctions against Venezuela's state oil company. Heavy Western Canadian Select for March traded at USD $10.30 below the calendar average for West Texas Intermediate crude futures, compared with a USD $9.40 discount late last week, according to data from Net Energy Exchange.

Massive oil and gas deposit found in fuel-starved South Africa

South Africa, a country that has always been short of oil and is running out of its scant domestic supply of gas, is working to cut its reliance on imported fuels. Africa as a whole has seen an increase in drilling, with oil and gas rigs around the continent topping 100 in recent months, according to Baker Hughes data. The count was as low as 77 in 2017.

The discovery of South Africa’s first deep-water petroleum deposit, backed by a consortium that includes Canadian Natural Resource Ltd., may prompt a rush of activity offshore by competitors. The Brulpadda discovery is estimated at about 1 billion barrels by its operator Total ASA, which could be enough to supply South Africa’s refineries for almost four years.

The field of primarily gas-condensate — a light liquid hydrocarbon — was discovered about 175 kilometres off the country’s southern coast in the Outeniqua Basin. The area, where Exxon Mobil Corp. and Eni SpA also hold stakes, may now draw further interest, especially since South Africa is due to introduce new legislation later this year aimed at spurring exploration.

Block 11B/12B, covering an area of 19,000 square kilometers, is operated by Total with a 45 per cent working interest. Qatar Petroleum owns 25 per cent, Canadian Natural Resources International 20 per cent, and the remaining 10 per cent is controlled by Main Street, a South African consortium.

Minerals Minister Gwede Mantashe said the find “is potentially a major boost for the economy. We welcome it as we continue to seek investment.” President Cyril Ramaphosa is seeking to lure USD $100 billion of investments by 2023 to revive a struggling economy. The country’s energy supply is largely based on coal, while state power utility Eskom Holdings SOC Ltd. also runs turbines on costly diesel fuel. A failed exploration campaign in shallow waters has meant a gas-to-liquids refinery at Mossel Bay runs well below capacity.

The resource could be about three times the size of all South Africa’s gas finds to date, according to WoodMac’s Latham. Total, the operator of the licence, now plans to acquire 3D seismic data before drilling as many as four more exploration wells there, but it cautions that the operating environment offshore is tough. “The region is quite difficult to operate. Huge waves, the weather isn’t very easy,” said Total CEO Patrick Pouyanne.

Economic Report | Part 3: Competitive Climate Policy, Supporting Investment and Innovation

CAPP’s Vision for the Future of Canada’s Oil and Natural Gas Industry

For more than 150 years, Canada’s oil and natural gas industry has been a reliable and affordable supplier of energy for all Canadians, and has improved the future of our nation. From spurring economic growth to developing major nation-building energy projects, our country’s energy sector is woven into the fabric of our nation, and is as much a part of Canada as the maple leaf.

The Canadian Association of Petroleum Producers (CAPP) represents an energy industry that is looking to the future – one that values sustainable development practices and lower-carbon processes. With a growing world where many emerging economies need a variety of energy products, we want to help create a vision for Canada’s oil and natural gas industry that recognizes the significant role our resources play in the world’s future energy mix.

Canada has taken a leadership role in becoming one of the world’s most responsible oil and natural gas producers, recognizing resource development needs to be done in a responsible manner. The onus is on all Canadians to ensure we remain the world’s energy supplier of choice.

Our joint vision for the future needs to look at the big picture – a global view of the long term that includes access to world markets, effective regulatory outcomes, commitments to innovation, global climate leadership, and enabling a strong, reliable and dynamic fiscal framework.

We need collaboration between industry and all levels of government to rebalance the playing field and restore our country’s competitiveness to benefit all Canadians, not just the oil and natural gas industry. We can satisfy the world’s demand for energy but to do so we need to work collectively to create an ambitious plan for the future.

Together we can provide the world with the energy of tomorrow.

Sincerely,

Tim McMillan

President and CEO, Canadian Association of Petroleum Producers



About the Author

The Canadian Association of Petroleum Producers (CAPP) is the voice of Canada's upstream oil and natural gas industry. We enable the responsible growth of our industry and advocate for economic competitiveness and safe, environmentally and socially responsible performance.


If you enjoyed this article, please consider becoming a patron of The Visionable


Canada's role in the world's future energy mix

A new CAPP report finds rising global energy demand is a significant opportunity for Canada, if we address competitiveness challenges.

The world’s thirst for energy is on the rise and Canada has an opportunity to meet the growing global demand for energy in an environmentally and socially responsible manner. However, we can only take advantage of this opportunity with effective regulatory policies and increased market access, according to Canada’s Role in the World’s Future Energy Mix, the second in a series of economic reports released by the Canadian Association of Petroleum Producers (CAPP).

A healthy oil and natural gas sector creates jobs and prosperity for Canadians, but the positive impact of our energy industry on the global stage could, and should be, broader,” says CAPP president and CEO Tim McMillan.

The report notes that forecasts such as the International Energy Agency’s World Energy Outlook 2017 anticipates the demand for all forms of energy—oil and natural gas as well as renewables and nuclear – will continue to increase as the global population grows to 9.2 billion by 2040. Emerging economies and urbanization in countries such as India, China and throughout Southeast Asia, along with rising gross domestic product, will increase total energy demand by 30 per cent from today.

Although the world’s energy mix is changing, oil will continue to grow and be the predominant energy source to 2040, while natural gas production grows to become the world’s second-largest energy source overall, both essential to the development of emerging economies.

The report notes that rising energy demand offers Canada an opportunity to become the world’s energy supplier of choice—serving global markets with responsibly produced energy that displace production from countries with poorer environmental performance.

However, this can only be achieved if Canada’s oil and natural gas industry remains competitive—attracting investment, spurring innovation, and gaining access to global markets to leverage our leadership position in environmental stewardship and responsible energy production.

It’s time to be realistic about Canada’s future. We have an opportunity to be a global supplier but we are limiting our opportunity to meet global demand with policies that constrict future growth,” says McMillan. “Government costs and regulatory barriers are on the rise—making it harder to grow our industry and support employment for Canadians.”

Adds McMillan, “Competitiveness continues to be one of our biggest challenges. Investment in Canada’s energy industry, and jobs for Canadians, will continue to leave for other countries unless there are changes to regulatory policies to enable growth industry can build on.”

CAPP’s report calls on the federal government to help define Canada’s vision for the future of oil and natural gas to meet the world’s growing energy needs. This vision includes:

  • Collaboration between industry and government to create an effective policy and regulatory environment that encourages investment and access to world markets;

  • Cultivating support among Canadians for the responsible development of our natural resources; and,

  • Adopting environmental policies that compete favourably with other jurisdictions, encouraging the types of innovation and investment that grow our brand as the global energy supplier of choice.

We operate in one of the world’s most stringent regulatory environments. It’s important we have a robust regulatory framework that meets environmental goals, but we must pay attention to added costs, delays and inefficiencies so we do not risk falling behind,” says McMillan

Did You Know?

How much oil and natural gas will we need in the future?

Even with increasing use of renewables and nuclear energy, more oil and natural gas will be needed to meet the needs of a growing world.

Did you know that in 2016, the world consumed 94 million barrels of oil per day? That met about 32 per cent of the world's energy demand. According to the International Energy Agency's (IEA) 2017 World Energy Outlook, increasing production of other forms of energy, such as renewables, nuclear and natural gas will cause oil's share of the global energy mix to fall to 27 per cent by 2040. However, an overall increase in global energy demand means that we'll actually need more oil by 2040 than we produce today: about 105 million barrels of oil per day.

As well, in 2016, the world consumed about 129 trillion cubic feet of natural gas. Increasing use of natural gas, which is abundant and the cleanest burning hydrocarbon, means that global consumption of this energy source will jump 45 per cent to 199 trillion cubic feet of natural gas in 2040 according to the IEA. This will move natural gas past coal to become the second-most used energy source, meeting 25 per cent of the world's energy needs.


About the Author

The Canadian Association of Petroleum Producers (CAPP) is the voice of Canada's upstream oil and natural gas industry. We enable the responsible growth of our industry and advocate for economic competitiveness and safe, environmentally and socially responsible performance.


If you enjoyed this article, please consider becoming a patron of The Visionable


B.C. Oil and Gas Commission warns Coastal GasLink over pipeline construction amid Indigenous pushback

Coastal GasLink is building a natural gas pipeline from northeastern British Columbia to a liquefied natural gas (LNG) export facility at Kitimat, a CAD $40 billion project. Wet’suwet’en hereditary chiefs oppose the pipeline and fourteen people were arrested at a blockade last month as RCMP enforced a court injunction obtained by Coastal GasLink.

Now, the B.C. Oil and Gas Commission has said Coastal GasLink must submit a notice of construction at least 48 hours before it starts work under its permit to build the pipeline. The commission warned the Calgary-based company after it received complaints from the Office of the Wet’suwet’en that alleged that Coastal GasLink engaged in construction without an archaeological impact assessment and also destroyed traplines and tents.

A letter from the Commission dated Thursday says Coastal GasLink didn’t submit the required notification on January 22. In another statement, the Commission said the archaeological assessment report was reviewed and accepted by the province’s archaeology branch in September 2016 and that Coastal GasLink has met the requirements of its permit.

Hereditary Chief Na’Moks said the 48-hour notice won’t help because the process isn’t being followed. “There is no consultation with us,” he claimed, and said the ideal step would be to go back to the drawing board and talk to the proper rights and titles holders. He added that it should be the province and federal governments consulting with the Indigenous people, not industry. Na’Moks also said reconciliation should be led by the Indigenous people and not by industry or an elected official in response to the provincial government announcing is undertaking a process with the Office of the Wet’suwet’en focused on First Nation’s title, rights, laws, and traditional governance throughout their territory.

Canada in the race to build LNG export terminals and capture growing demand from Asian countries

Since 2011, 24 LNG projects have been issued long-term export licences in Canada. Canada only has one operational LNG terminal – Canaport LNG’s regasification import terminal located in Saint John, New Brunswick. Proposals for developing 18 LNG export facilities currently exist. They include five in eastern Canada – two in Quebec, three in Nova Scotia – and 13 others on its west coast, all in British Columbia.

The largest of the proposed LNG export terminals is LNG Canada’s export terminal, one of the largest ever infrastructure projects in Canada. Construction on the Can$40Bn terminal has already begun. In January, it awarded contracts worth Can$937M and it’s good news for communities.

For First Nations communities, it is delivering on the opportunities we have committed to that will help the Nations address issues of poverty, unemployment and skills development.” according to LNG Canada’s director external relations Susannah Pierce who adds “For local communities, it is the opportunity for young people to find employment that allows them to remain living in the North.”

Join us for a presentation about the LNG Canada export facility at the Petroleum Joint Venture Association’s Luncheon on February 14, 2019 from 11:15am to 1:00pm at the Calgary Petroleum Club with speaker Steve Corbin, Executive Project Director for LNG Canada speaking on the topic “Building on the promise of LNG in Canada”.


About the Author

BOE Report offers real-time news and analysis on the upstream and midstream oil and gas industry, macroeconomic price environment, and government energy policy.