Oil field innovation: Talking in multiples of ten
Special to The Globe and Mail
Published Tuesday, Apr. 22 2014, 3:39 PM EDT
Last updated Tuesday, Apr. 22 2014, 4:00 PM EDT
Whether you love or hate fossil fuels, there is no debating that oil and gas is one of the most technologically sophisticated industries in the world. These days, new high-tech processes are being introduced at a staggering pace – so much so that the economics of oil and gas are being fundamentally altered in the global energy complex.
Few conferences can reveal the future of new oil and gas technologies with as much excitement as the Schlumberger Information Solutions (SIS) Global Forum. Held once every two years, the showcase event was held last week in Barcelona. More than 1,000 energy technophiles gathered to learn and share their experiences with the latest and greatest advances in hydrocarbon exploration and development. Schlumberger, the world’s leading oil field services company, also showcased its sci-fi capabilities to the eager crowd of participants.
The SIS forum was replete with the latest computing hardware, information technologies and engineering marvels. Innovation from oil field service companies is going to be a much bigger theme that we will focus on going forward. For now, there is no need to review the whiz-bang specifics. Only three words are needed to describe the consequences of the technological advances that are in play: Clarity, speed and scope.
This means that new tools and processes are inducing step changes along three dimensions of the upstream oil and gas business: A step change in the quantity, resolution and accuracy of information; a step change in the time it takes to explore, develop and produce oil and gas (much shorter); and a step change in accessing greater acreage at “the ends of the earth” that have hitherto been inaccessible to development.
Geoscientists and engineers have magnified their ability to “see” oil- and gas-bearing formations; drill and complete wells faster and more effectively; monitor and optimize production; and increase the amount recoverable from reservoirs. Every node along what Schlumberger calls the “Hydrocarbon Pathway” – from the subsurface rocks, to the wells, to the processing facilities, to the pipelines – is undergoing radical change facilitated by information technology, robots, computing horsepower and engineering systems.
Technical people are routinely speaking in multiples of 10. “Ten times as much information as before.” “One-tenth the time it used to take.” “Ten times the accuracy.” And even, “Ten times the depth.” For example, engineers can now build subsea production and processing equipment at depths of 10,000 feet, compared to only a 1,000 feet not long ago. That means that large tracts of the ocean bottom are now accessible, broadening the scope of development.
Few mention the most important multiple of ten: Cost. Implementation of some of these new tools requires an order-of-magnitude of more capital. The economics to justify a step change in upfront investment are evolving with the technology.
I casually polled attendees: “How far along are we in this innovation renaissance?” With few exceptions, the answer was pitched to me in the obligatory baseball metaphor, “We are in the second inning.”
Over the next few years, the upshot of all this new technology will be to reduce risk, expand resource potential and speed up cycle times. On the surface, that implies more oil and gas at lower cost. Yet all this new technical glitz begs a chicken-and-egg question. “Which is coming first: The technology or the need for the technology?”
There isn’t a quick, slap-the-buzzer answer to this question, but the response will dictate the direction of oil and gas prices over the next few years. A pull for costlier, more sophisticated technologies to produce oil and gas from the ends of the earth argues for higher commodity prices. On the other hand, if the technologies are being pushed into the industry with clear productivity gains that justify the expense, then the outlook is for greater abundance with stable (or lower) prices.
Right now, oil and gas growth trends in North America suggest the latter. The jury is out in the rest of the world. But give it a few more innings and we should know.
Peter Tertzakian is chief energy economist at ARC Financial Corp. in Calgary and the author of two best-selling books, A Thousand Barrels a Second and The End of Energy Obesity.
From wasteland to parkland: Mining greens up
Special to The Globe and Mail
Published Tuesday, Apr. 22 2014, 5:00 AM EDT
Last updated Monday, Apr. 21 2014, 4:53 PM EDT
Today, the aerial view of the historic Coniaurum gold mine, owned by Goldcorp Inc. since 2002, more closely resembles a putting green on a golf course than an old mine site.
But it didn’t always look like this.
Past practices did not call for any closure or clean up of these sites, so for more than 30 years the Timmins, Ont.-based mine site sat almost untouched. But through a mergers and acquisition deal, Goldcorp Inc. inherited the historic mine (along with almost 20 others) and in 2005 the company began its multimillion-dollar reclamation project. It took three years and between $10-million and $12-million to complete, but the current property now grows plant life and even acts as home to a colony of beehives that aid in Coniaurum’s revegetation.
“The goal, with this property in particular, is to bring us back as close as possible to the original vegetation that would have been there before mining,” says Marc Lauzier, manager of Goldcorp’s Timmins property.
“We have to do what’s right and do a complete mining cycle, which ends when you can return the land to its original state,” he adds.
Mining makes up more than 20 per cent of Canada’s exports (totalling more than $92-billion) with more than 200 mines scattered across the country. These reclamation projects are part of the industry’s effort to make ore extraction more eco-friendly through lowering energy costs, investing in research and development of more environmentally friendly extraction technologies, and enforcing reclamation initiatives.
“Legislation has brought things forward and has advanced a lot of the requirements to do rehabilitation and be more responsible,” says Rick Francoeur, Goldcorp’s environmental manager.
For Mr. Francoeur, projects like Coniaurum show what can be achieved.
“Yes we are the mining industry and by nature it is invasive and it does have an effect on the surface,” he says, “but if it’s done responsibly, this is the result.”
Current federal regulation also aims to push the industry in a greener direction, starting with the Green Mining Initiative, launched in 2009 by Natural Resources Canada, designed to eventually get the industry to a place where it “leave[s] behind only clean water, rehabilitated landscapes and healthy ecosystems.”
Meanwhile, some miners have looked to clean energy as both an economic and environmental alternative to electricity and diesel. The mining industry is a massive energy consumer, requiring huge amounts of electricity, water and other energy sources to power extraction and production.
One example is Barrick Gold Corp.’s 10-turbine wind farm, completed in 2011 at its Punta Colorada mine in northern Chile.
But the installation process on this scale can be a serious logistical undertaking, says Carl Weatherell, executive director and CEO of the Canada Mining Innovation Council. He notes that beyond the actual installation, the main challenge is that clean energy sources such as wind and solar don’t “provide consistent energy and that’s part of the challenge the industry is having.”
However, research and development is constantly being done to find newer, more efficient and environmentally friendly ways of mining, Mr. Weatherell says. “It’s a continuous process; it’s not like it stops and starts.”
Some miners may not have the cash flow to spend on clean energy infrastructure, but there are other, potentially less costly, green mining methods.
Companies such as Cypher Environmental – which specializes in dust reduction, along with water and soil treatment products – also contribute to greener mining practices. Todd Burns, the company’s owner, says the mining industry is its biggest client and he has travelled all over the world to help mines lessen the dust on hauling roads and on mining sites with its Dust Stop product.
“That dust can float kilometres away from the actual source and depending on what sort of minerals are in the dust … can create environmental issues and contamination of environmentally sensitive areas,” Mr. Burns says.
Demand for the company’s products is increasing and Mr. Burns believes mining companies are happy to pay for these solutions because “minimizing [environmental] threat is of high value to mines that are always under the microscope.”
Fission Hits Continuous 102.5M @ 5.98% U3O8; Widest High-Grade Interval to date at PLS
KELOWNA, BRITISH COLUMBIA–(Marketwired – April 22, 2014) - FISSION URANIUM CORP. (TSX VENTURE:FCU)(OTCQX:FCUUF)(FRANKFURT:2FU) (“Fission” or “the Company“) is pleased to announce assay results from nine holes drilled in the R780E zone at its Patterson Lake South (PLS) property in Saskatchewan’s Athabasca Basin, Canada. Of exceptional note is hole PLS14-187, located on line 660E. With intermittent mineralization starting at the shallow depth of just 58.50m, and continuous mineralization from 63.0m, the hole returned a continuous 102.5m interval of 5.98% U3O8 – the widest high-grade interval to date at PLS. A lower interval of substantial mineralization followed, yielding 1.63% U3O8 over 15.0m.
With a composite Grade %U3O8 x Thickness in meters (GT) value of 613 for the upper interval, PLS14-187 is the second strongest mineralized hole to date at PLS. It is surpassed only by hole PLS14-129 which included intervals such as 38.0m @ 13.66% U3O8 and 31.5m @ 11.19% U3O8 (see NR March 24, 2014). All nine holes returned wide intervals of mineralization.
|PLS14-187 (Line 660E)|
|•||102.5m (63.0m to 165.5m) @ 5.98% U3O8, including:|
|3.0m (68.0m to 71.0) @ 27.20% U3O8, and|
|10.5m (78.0m to 88.5m) @ 12.93% U3O8, and|
|6.0m (108.5m to 114.5m) @ 14.12% U3O8, and|
|2.5m (143.5m to 146.0m) @ 16.92% U3O8, and|
|4.5m (152.5m to 157.0m) @ 16.14% U3O8|
|•||15.0m (216.5m to 231.5m) @ 1.63% U3O8, including|
|9.0m (218.5m to 227.5m) @ 2.59% U3O8|
|PLS14-146 (Line 915E)|
|•||47.0m (132.0m to 179.0m) @ 2.18% U3O8, including:|
|3.0m (163.0m to 166.0m) @ 4.30% U3O8, and:|
|2.0m (171.5m to 173.5m) @ 14.27% U3O8|
|PLS14-145 (Line 825E)|
|•||22.5m (132.0m to 154.5m) @ 0.97% U3O8, including:|
|7.5m (144.0m to 151.5m) @ 2.24% U3O8|
Ross McElroy, President, COO, and Chief Geologist for Fission, commented,
|“This is a superb set of assays, which highlights the remarkable growth rate of the PLS discovery so far and the continued potential of its mineralized system. With 102.5m at 5.98% U3O8, PLS14-187 in particular is an exceptional hole and represents a tremendous amount of high-grade mineralization. We are delighted by these results.”|
Composited % U3O8 mineralized intervals are summarized in Table 1 below. Samples from the drill core are split in half sections on site. Where possible, samples are standardized at 0.5m down-hole intervals. One-half of the split sample is sent to SRC Geoanalytical Laboratories (an SCC ISO/IEC 17025: 2005 Accredited Facility) in Saskatoon, SK for analysis which includes U3O8 (wt %) and fire assay for gold, while the other half remains on site for reference. All analysis include a 63 element ICP-OES, uranium by fluorimetry and boron. All depth measurements reported, including sample and interval widths are down-hole, core interval measurements and true thickness are yet to be determined.
Composited Mineralized Intervals (Down-hole measurements)
|Zone||Hole ID||Grid Line||From (m)||To (m)||Interval (m)||U3O8 (wt%)|
|1.||Minimum Thickness: 0.50m|
|2.||Grade Cut-Off: 0.05 U3O8 (wt%)|
|3.||Maximum Internal Dilution: 2.00m|
PLS Mineralized Trend Summary
Uranium mineralization at PLS has been traced by core drilling over 2.24km of east-west strike length in five separate mineralized “zones” from line 615W (PLS13-124) to line 1620E (PLS14-196). From west to east, these zones are; R600W, R00E, R780E, R1155E and R1620E. The former R390E, R585 and R945E zones have been merged into the R780E zone by successful winter drilling. Mineralization remains open along strike both to the western and eastern extents. Mineralization is both located within and associated with a metasedimentary lithologic corridor, bounded to the south by the PL-3B basement Electro-Magnetic (EM) Conductor.
Fission has received and released assay results on 22 holes from its winter 2014 drill program at PLS. Updated maps and files can be found on the Company’s website at http://www.fissionuranium.com/project/pls/overview/.
Patterson Lake South Property
The 31,039 hectare PLS project is 100% owned and operated by Fission Uranium Corp. PLS is accessible by road with primary access from all-weather Highway 955, which runs north to the former Cluff Lake mine and passes through the nearby UEX-Areva Shea Creek discoveries located 50km to the north, currently under active exploration and development.
The technical information in this news release has been prepared in accordance with the Canadian regulatory requirements set out in National Instrument 43-101 and reviewed on behalf of the company by Ross McElroy, P.Geol. President and COO for Fission Uranium Corp., a qualified person.
About Fission Uranium Corp.
Fission Uranium Corp. is a Canadian based resource company specializing in the strategic exploration and development of the Patterson Lake South uranium property and is headquartered in Kelowna, British Columbia. Common Shares are listed on the TSX Venture Exchange under the symbol “FCU” and trade on the OTCQX marketplace in the U.S. under the symbol “FCUUF.”
ON BEHALF OF THE BOARD
Ross McElroy, President and COO
Cautionary Statement: Certain information contained in this press release constitutes “forward-looking information”, within the meaning of Canadian legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur”, “be achieved” or “has the potential to”. Forward looking statements contained in this press release may include statements regarding the future operating or financial performance of Fission and Fission Uranium which involve known and unknown risks and uncertainties which may not prove to be accurate. Actual results and outcomes may differ materially from what is expressed or forecasted in these forward-looking statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Among those factors which could cause actual results to differ materially are the following: market conditions and other risk factors listed from time to time in our reports filed with Canadian securities regulators on SEDAR at http://www.sedar.com. The forward-looking statements included in this press release are made as of the date of this press release and the Company and Fission Uranium disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Keystone pipeline may be big, but this is bigger
WASHINGTON — The New York Times News Service
Published Monday, Apr. 21 2014, 5:59 PM EDT
Last updated Monday, Apr. 21 2014, 6:06 PM EDT
The Keystone XL pipeline is a great political symbol. The proposed 1,700-mile pipeline, which would carry 830,000 barrels daily of carbon-heavy crude from Canada’s Alberta oil sands to Gulf Coast refineries, has galvanized environmental activists, who call it a litmus test for President Barack Obama’s commitment to fighting climate change. It is a political weapon against Obama for Republicans, who call it a symbol of job creation and energy security. It has motivated liberal donors, led by the California billionaire Tom Steyer, who has personally urged Obama to reject the pipeline.
On Friday, in what was widely viewed as an acknowledgment of just how potent the politics of Keystone have become, the State Department announced that it would delay the decision on the pipeline for several months, almost certainly until after the midterm elections.
The move was seen as a political punt that would allow pro-Keystone Democratic senators from oil states to court voters by calling for construction of the pipeline, while still keeping Steyer’s money in the campaign.
But when it comes to the pipeline’s true impact on global warming, energy and climate change experts – including former Obama administration officials – say Keystone’s political symbolism vastly outweighs its policy substance.
Protesters rallying with plastic pipelines around the White House draw television spotlights. But the real climate policy work is being done four blocks away, where a squadron of Environmental Protection Agency lawyers is shaping regulations to cut emissions from coal-fired power plants – the nation’s largest source of carbon pollution – while at meetings in Beijing and Brussels, State Department officials are slogging through negotiations to get other countries to agree to similar cuts.
Experts say Obama’s eventual decision on the pipeline will have a marginal impact on global warming emissions, while those dull-sounding EPA rules and treaty talks will determine his environmental legacy.
Consider the numbers: In 2011, the most recent year for which comprehensive international data is available, the global economy emitted 32.6 billion metric tons of carbon pollution. The United States was responsible for 5.5 billion tons of that (coming in second to China, which emitted 8.7 billion tons). Within the United States, electric power plants produced 2.8 billion tons of those greenhouse gases, while vehicle tailpipe emissions from burning gasoline produced 1.9 billion tons.
By comparison, the oil that would move through the Keystone pipeline would add 18.7 million metric tons of carbon to the atmosphere annually, the EPA estimated. In other words, the carbon emissions produced by oil that would be moved in the Keystone pipeline would amount to less than 1 per cent of United States greenhouse gas emissions, and an infinitesimal slice of the global total.
Within that context, “the Keystone pipeline is a rounding error,” said Kevin Book, the founder of ClearView Energy Partners, an energy analysis firm.
Experts say that to make a serious dent in American carbon emissions, Obama’s administration would have to enact policies that would force the two most polluting sectors of the nation’s economy – cars and coal plants – to slash their emissions. Obama has already signed a United Nations accord pledging that the United States will cut its greenhouse gas emissions 17 per cent from 2005 levels by 2020 and 83 per cent by 2050; there is simply no way to hit those targets, experts say, other than by going after cars and coal. And he then would have to make the case to other nations that the United States had taken action – and that they must, too.
He is making some headway on those fronts. In his first term, Obama’s EPA used the authority of the Clean Air Act to issue tough new vehicle fuel-economy standards of 54.5 miles a gallon by 2025. The regulations forced automakers to build fleets of fuel-sippers, and according to the EPA they will lead to a cut of about 180 million tons of carbon a year by 2020, rising to 580 million tons by 2030 and 1.1 billion tons annually by 2050.
The agency is now drafting a regulation, expected in June, to slash pollution from existing coal-fired power plants. Details aren’t yet available, but experts estimate that it will cut an average of 200 million to 500 million tons of carbon emissions annually within a decade. And the EPA estimated that regulations on building and appliance efficiency have cut or prevented the annual emission of 350 million tons of carbon.
That means the combined impact of the current and forthcoming EPA regulations could lead to cuts of over 1 billion tons of emissions annually.
That’s an order of magnitude more than the 18.7 million tons of carbon that would be added by burning the tar sands oil – and it’s likely that oil will be brought to market regardless of whether the Keystone is built. That was the finding of a State Department environmental impact study on the project released in January.
Some nongovernmental analysts question that report, saying that if Obama rejected the pipeline it would at least slow production of the oil. But experts say even if that is true, it just doesn’t matter much.
“Rather than focus on a single piece of infrastructure whose climate change impact is quite limited, as the State Department found, we should focus on the steps the administration can take that would significantly reduce emissions, and by far the biggest is the use of the Clean Air Act to regulate power plant emissions,” Jason Bordoff, a former Obama administration official, wrote by email. Until 2013 he was senior director for energy and climate change on the National Security Council staff; he now directs Columbia University’s Center on Global Energy Policy.
Michael Levi, director of the energy security and climate change program at the Council on Foreign Relations, said that “with regulations on power plants and cars and trucks, you’re making a change that is likely to stick; with Keystone, you’re not.”
Secretary of State John Kerry is working aggressively on a 2015 global climate change treaty in which the world’s other major carbon polluters – particularly China and India – would also commit to cuts. And it is domestic actions on coal plants and cars, rather than Keystone, that will give negotiators the leverage they need to extract those pledges.
“The regulations on vehicles and power plants – that’s going be the centerpiece of what the U.S. can take to the next round of diplomatic talks,” said Adele Morris, an energy and climate change policy expert at the Brookings Institution. David Goldwyn, an analyst who ran the Bureau of Energy Resources under former Secretary of State Hillary Rodham Clinton, commented: “By comparison, the decision on Keystone is irrelevant or insignificant. It’s a drop in the bucket.”
But the EPA regulations come with a host of complications. They will be denounced before midterm elections this year and meet a wave of challenges. Republicans and the coal industry have attacked them as “job-killing” and a “war on coal,” and intend to challenge them in Congress and the courts. The rules could lead to closures of many of the nation’s 600 or so coal plants and imperil the livelihoods of the nation’s 78,000 coal miners.
And although the regulations are most likely to have a far greater environmental impact than a decision on the Keystone, they haven’t served to fire up the environmentalist base. The problem with the regulations and global talks is that they’re slow-moving and difficult to understand – they don’t come with a tangible physical symbol and a decision directly from the president. In other words, they’re not very good politics.
That’s why, say environmental advocates and donors, their focus on Keystone matters. They can use Keystone to fire up the environmentally minded voters – and to open donor wallets.
“Theoretically, the impact of these regulations is huge,” said Betsy Taylor, president of Breakthrough Strategies and Solutions, a Democratic consulting firm that works with political donors interested in climate change.
“But in practice, there’s a lot of indications that these things will end up with loopholes,” she said. “It’s got to play out at the state level. What’s really compelling about Keystone is that it’s up or down.”
Steyer, the former hedge fund manager who is largely behind putting Keystone on the political map, also founded a “super PAC,” NextGen Climate, which has spent millions of dollars opposing the pipeline, including television and digital ads targeting politicians who support it.
Steyer put it this way in an email: “The Keystone XL pipeline is a line in the sand that signifies whether our country has the courage, the commitment and the capacity to be a global leader in addressing the challenge of climate change before it’s too late.”
April 21, 2014
GOVERNMENT DISAPPOINTED WITH KEYSTONE DELAY
The Government of Saskatchewan is deeply concerned with the United States (U.S.) State Department’s announcement that it will delay its final decision on the proposed TransCanada Keystone XL Pipeline, even though the project has already passed the State Department’s own rigorous environmental impact assessment.
“This decision by the U.S. government is a major disappointment,” Premier Brad Wall said. “The Keystone XL pipeline has been studied long and hard. The pipeline will create thousands of jobs on both sides of the border, offers a safe and efficient method of moving large volumes of oil, and according to the State Department will not contribute to a net increase in greenhouse gas emissions. This delay represents a major blow to the energy industry in Saskatchewan and in Canada and will place unnecessary strain on relations with our largest trading partner.”
Last Friday, the State Department announced it would delay approval of the 2,700 kilometre pipeline in order to provide eight federal agencies additional time to review the proposed project and clear any legal challenges to the Nebraska leg of the pipeline.
A portion of the Keystone XL project would run through the province – providing jobs to Saskatchewan people and freeing-up pipeline capacity so that more Saskatchewan oil can enter the North American pipeline system.
Approval of the Keystone XL pipeline is especially important for Saskatchewan, considering the grain transportation challenges Saskatchewan producers are facing because a large number of rail cars have been diverted to ship oil.
“Saskatchewan grain, potash, and other commodities suffer every day the Keystone XL pipeline is not being built,” Wall said. “The United States needs to quit wavering and make a decision based on the facts, which support the construction of Keystone. These politically motivated decisions are hurting the Saskatchewan economy, the U.S. economy, and our ability to develop new markets and support North America energy sustainability.”
Wall noted that news of another delay in the Keystone approval process comes as rail shipments of crude oil throughout North America continue to grow, along with the environmental hazards associated with those shipments.
In the U.S., rail shipments of oil grew by more than 4,000 per cent from 2008 to 2013 – from 9,500 carloads to an estimated 400,000 carloads in just five years, according to the Association of American Railroads.
In 2013, more crude oil – 4.35 million litres – was spilled in U.S. railway incidents than in the past 37 years combined, according to the Pipeline and Hazardous Materials Safety Administration.
For more information, contact:
Kathy Young Executive Council Regina Phone: 306-787-0425 Email: email@example.com Cell: 306-526-8927
U.S. pipeline workers blast Obama for delaying Keystone
The Canadian Press
Published Monday, Apr. 21 2014, 5:10 PM EDT
Last updated Monday, Apr. 21 2014, 5:13 PM EDT
American pipeline workers are blasting a decision to delay the Keystone XL process, saying the move by the Obama administration has erased a few thousand high-paying jobs this summer.
One union – the Laborers’ International Union of North America – called the move gutless, and accused the government of announcing it on a holiday weekend in the hope fewer people would be paying attention.
One member of that union says his phone is ringing off the hook.
Ron Berringer says he has received more than 30 calls since Friday, when the U.S. State Department announced Keystone XL would be delayed indefinitely. A presidential permit is on hold, apparently until next year at the earliest.
Union members are calling to ask what the move might mean for their livelihoods – and Berringer cringes every time the phone rings.
“When they call, I almost dread even picking it up,” said Berringer, a semi-nomadic construction worker and shop steward for his Nebraska-based union local.
“I know what they’re gonna talk about, and I know what I’ve got to tell them. And what I’ve got to tell them is, ‘I just don’t know.“’ Berringer is among the thousands of workers who will build the rest of Keystone XL, if it ever gets approval.
Their role has become central to the debate, with pipeline proponents arguing it will create thousands of construction jobs. Opponents, however, insist it will only result in a few dozen permanent jobs once it’s complete.
The pipeline hardly seems like a macroeconomic game-changer in Nebraska, which has the third-lowest unemployment rate in the country – just 3.7 per cent last month. Even President Barack Obama has played down the project’s potential jobs impact, calling the claims of its proponents overblown.
Berringer, however, insisted the project would make a difference in thousands of lives.
Construction is an unpredictable business, and pipelines mean guaranteed income for an entire season, he said – not to mention tens of thousands of dollars in overtime pay, weekend bonuses and per diems as crews work extra-long hours in an attempt to get the bitumen flowing by winter.
Berringer is growing frustrated with having to tell his fellow workers year after year that the pipeline isn’t happening.
“They tell me, ‘Well, how am I gonna make house payments and car payments and stuff?’ And I felt sad for them, because I don’t have an answer for that,” he said.
“There’s a lot of Laborers who would’ve made sure they were able to pay all their bills. They could’ve got their head above water. Now their head’s gonna go below water.”
The Obama administration has cited the uncertainty in Nebraska, where the pipeline’s proposed route is currently the subject of litigation, as the reason it can’t make a decision on the pipeline for now.
Nearly one-quarter of landowners in that state are refusing to sign easement deals with Calgary-based pipeline builder TransCanada Corp., and they’re in court fighting a law that would have forced them to open up their property.
Berringer generally comes across as a pretty mild-mannered guy. But when asked to assess what’s happened, he emits a couple of curse words about what he considers the bovine-fertilizer political theatrics surrounding the debate.
His brother Jason is in a similar spot. He’ll be busy the next four weeks, helping to repair a Nebraska City power plant. Then he’ll add his name to a list of union members looking for their next job, hoping something comes up by summer.
“It’s not good,” Jason said.
“I wish these (pipeline opponents) would get online and actually look and see what it costs them in the end, whether putting it though Nebraska or buying it from a foreign country. I know Canada’s a foreign country, but they’re our neighbours, too.”
Jane Kleeb, an anti-pipeline activist in Nebraska, said a lot more jobs are at stake as a result of a Republican budget proposal currently before the House of Representatives that would strip $52-billion in spending on roads and infrastructure.
Kleeb is urging all sides of the Keystone debate to get together to press Congress to increase infrastructure spending.
As for pipeline workers, Kleeb said there are currently so many jobs in the sector that the Nebraska Laborers union has to bring in out-of-state employees like the Berringers.
“We know that pipe welders are in very short supply,” Kleeb said. “From what we understand, there is no huge lack of jobs like the Laborers have tried to portray.”
TransCanada: Keystone XL still has support
TransCanada says customers remain fully committed to Keystone XL, despite delay
Reported by Lauren Krugel, The Canadian Press
Posted Apr 21, 2014 2:40pm
CALGARY – TransCanada Corp. says its customers are still “100 per cent” behind its proposed Keystone XL oil pipeline, despite dimming prospects that shovels will be hitting the ground any time soon.
Company spokesman Shawn Howard says there’s even a waiting list, should more room come available on the proposed US$5.4-billion pipeline, which would enable oilsands crude to flow to the U.S. Gulf Coast, a lucrative market where refineries are thirsty for that heavy product.
“We announce and advance privately-funded projects like Keystone XL by understanding what the best business and market decisions are, not short-term political calculations. We will do the same here,” he said in an email, following Friday’s news that the Obama Administration is unlikely to decide on the project until next year at the earliest.
The U.S. regulatory process for the contentious project is in its sixth year. The latest setback caused TransCanada’s shares to drop about 3.7 per cent to $49.42 in Monday afternoon trading on the Toronto Stock Exchange.
TransCanada had hoped a legal dispute over the pipeline’s route in Nebraska would not further hold up a decision at the federal level, but the State Department on Friday said it needs more time to make a recommendation in light of the uncertainty.
“Energy infrastructure projects like Keystone XL are designed to meet a need — and that need has not has changed,” Howard added, noting the United States continues to import eight to nine million barrels daily.
While Canadian oil companies may still support the project, they’re not putting all of their eggs in the Keystone XL basket. Most are hedging their bets by committing to ship their crude on multiple proposed pipelines, as well as moving it to market by rail.
“The market’s going to continue to do what it’s been doing the last three years,” said Reynold Tetzlaff, national energy leader at PwC Canada. “The market continues to basically do a workaround where they use rail more; there have been some pipelines that have been reversed in the U.S. and some pipelines that have been added at a smaller scale.”
With the 830,000-barrel-per-day Keystone XL proposal stymied, outlets to the Gulf coast refining hub have opened over the past few years.
The Seaway pipeline between the Texas coast and a major oil storage hub at Cushing, Okla., has been reversed and expanded by Enbridge Inc. (TSX:ENB) and Enterprise Products Partners L.P., shipping about 400,000 barrels per day since early 2013. The companies aim to more than double that in the coming months.
Meanwhile, TransCanada started up its own Cushing-to-Texas pipeline in January, with the expectation of shipping an average of 520,000 barrels a day in its first year of operation.
The Gulf Coast line was originally pitched as part of the Keystone XL project, but the Obama administration rejected it a few years ago citing environmental concerns in Nebraska. The company decided to break the project up into two parts, going ahead with the southern leg first, as it does not cross an international border and therefore did not need the federal go-ahead to proceed.
The Gulf Coast line links up with TransCanada’s existing Keystone system, which has been delivering crude to the U.S. Midwest since 2010 and to Cushing since 2011.
“The market access situation is absolutely improving,” said Lanny Pendill, an energy analyst at Edward Jones.
“There’s no question about it. Rail has played a big role to date, and rail will continue to fill the void in the mid-term.”
But he said Keystone XL is still needed because it’s the more economical option.
Absent any viable alternative to get significant volumes of oilsands crude directly to the Gulf Coast, Pendill doesn’t see TransCanada or its supporters abandoning hope in Keystone XL.
The other major proposed export pipelines out of Alberta — not without their own significant political risks — are aiming at other markets, such as Asia and Europe.
“This is really the only major pipeline that is increasing capacity going all the way down to the Gulf Coast. And any alternative would likely be crossing the Canadian-U.S. border, just like Keystone, so I would not anticipate a close alternative to come up unless you’re talking about shipping oil from a different region other than the oilsands.”
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Canada wins, OPEC loses in post-shale U.S. oil market
The Globe and Mail
Published Monday, Apr. 21 2014, 3:11 PM EDT
Last updated Monday, Apr. 21 2014, 3:11 PM EDT
It only makes sense that as the United States becomes increasingly self-sufficient for its own oil supply needs, someone who exports oil to the U.S. market has to pay the price. But, it appears, that someone isn’t Canada. It’s OPEC that’s taking America’s shale oil boom on the chin.
In a research note Monday, National Bank chief economist Stéfane Marion noted that according to U.S. government data, Canada’s exports of crude oil and products hit a record 3.4 million barrels a day in the first quarter of this year – even as surging U.S. domestic oil production reached its highest level in 25 years. While U.S. oil production has surged almost 50 per cent since the middle of 2011 [see http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRIMXX1&f=M%5D, Canada’s shipments into the U.S. have risen by more than 30 per cent [see http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRIMUSCA1&f=M%5D.
But the same can’t be said for the Organization of Petroleum Exporting Countries; the oil cartel is losing its once-powerful grip on the U.S. energy market. In the past six years, OPEC’s exports to the United States have declined by nearly 50 per cent; more than half of that has occurred since the U.S. shale-oil production boom took hold in earnest in mid-2011.
Indeed, as Mr. Marion noted, Canada has surpassed OPEC as the biggest exporter of crude oil and petroleum products to the United States. If you just looked at crude, OPEC is still bigger – yet OPEC’s crude shipments have fallen by more than 40 per cent since mid-2011 – while Canada’s have risen more than 40 per cent.
This must be music to the ears of oil producers and certain political forces on both sides of the Canada-U.S. border, who have long talked about reducing U.S. reliance on OPEC as an energy supplier, citing concerns about the reliability, political stability and human rights records of many members of the cartel. Indeed, given the long-term unknowns surrounding the sustainability of U.S. shale oil production, Canada may still be the most reliable and stable long-term oil source for the U.S. market.
But more to the immediate point, as the Bank of Canada noted in its quarterly Monetary Policy Report last week [see http://www.bankofcanada.ca/wp-content/uploads/2014/04/mpr-2014-04-16.pdf%5D, the shale-oil boom hasn’t much hurt U.S. refineries’ appetite for crude from Canada’s oil sands, nor should it, at least over the relatively near term. Shale oil is a light grade, while many major U.S. Gulf Coast refineries are set up for heavier grades; as Mexican and Venezuelan production of heavier-grade oil has gone into decline over the past decade, Alberta oil sands heavy crude has filled the void (which, in case we’ve lost it in all the political rhetoric, was the logic behind the Keystone XL pipeline project in the first place). The result has been that as U.S. energy demand recovers along with the country’s economic growth, the demand for Canadian oil is growing in parallel with shale oil – while the lighter grades from OPEC are the ones being left out.
The latest U.S. oil numbers also lend support to a recent argument, put forth by CIBC chief economist Avery Shenfeld [see http://research.cibcwm.com/economic_public/download/eifeb14.pdf%5D, that Statistics Canada’s export data have been understating the strength of Canadian oil exports to the United States. In short, the energy sector may be more of a leader in Canada’s export recovery than we thought. And with the U.S. economy expected to accelerate this year and next, there’s good reason to expect this demand to be a key driver of Canada’s long-awaited export recovery over that horizon.
Follow David Parkinson on Twitter at @ParkinsonGlobe.
Posted by Brad Wall on Facebook 9:31 am, April 21, 2014
Here is the link to the story he refers to: http://www.nationalnewswatch.com/2014/04/18/no-keystone-xl-pipeline-this-year-following-new-delay/#.U1VOAGdOWM_