Canadian/International Media Resource Articles

The National Post is Canada’s second largest national paper.

North American producers may fret about market access, but they are not showing any signs of slowing down their production cycle.

A new report by the International Energy Agency notes American and Canadian oil fields will lead the non-OPEC brigade next year to crank up a record 1.3 million barrels per day of new production — its highest combined effort in 20 years.

“North American production will remain robust in 2014 with U.S. crude production forecast to add 530,000 bpd and oil sands projected to add 140,000 bpd,” the IEA said in its monthly report published Thursday.

Key Canadian projects expected to come on stream over the next 18 months include Brion Energy’s (formerly Dover) 100,000-bpd Mackay River Commercial project, the 45,000-bpd first phase of Canadian Natural Resources Ltd’s Kirby project and Korean National Oil Corp.’s first Canadian oil sands venture of 30,000-bpd.

Other non-OPEC producers are stepping up too, with Brazil expected to add more than 200,000 bpd and Kazakhstan and South Sudan ramping up production in 2014. Even OPEC is resigned to the rise of its rivals, and is expecting a 300,000 bpd decline in demand for its crude in 2014, on top of the 400,00 bpd decline it expects this year.

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The National Post is Canada’s second largest national paper.

Even as the town of Lac-Mégantic picks up the pieces after a fatal disaster involving oil-laden trains, there are few signs the crude-by-rail expansion will start to slow. In fact, rail is finding new pockets of opportunities and may even facilitate the transfer of Canadian crude to Asian markets – if regulations allow.

Nearly a dozen plans to accelerate oil shipments via rail to the North West United States are focused on sourcing North Dakota and Alberta oil shipments to a string of refineries dotted along or near the U.S. western coastline, according to a report by Seattle-based Sightline Institute.

“In Oregon and Washington, 11 refineries and port terminals are planning, building, or already operating oil-by-rail shipments,” Eric de Place, an analyst with Sightline Institute, said in an interview. “The projects are designed to transport fuel from the Bakken oil formation in North Dakota, but the infrastructure could also be used to export Canadian tar sands oil.”

The combined oil-by-rail projects could add up to 720,000 barrels per day — that’s more oil capacity than Enbridge Inc.’s Northern Gateway pipeline or Kinder Morgan Inc.’s Trans Mountain expansion, both of which are proposing the West Coast access for Alberta crude.

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The National Post is Canada’s second largest national paper.

In Whitby, Ont., just blocks from our house, the freight trains roll by day and night. Car after cylindrical car ferries unknown liquids past a neighbourhood park, over an old stone bridge and through a new housing development. My preschool daughter calls it the “juice train,” convinced the cylinders are full of apple juice. She often waves to the conductors as the cars trundle by; they wave back, a quintessential slice of ex-urban Canadian life.

But after the horror of Lac Megantic, it is impossible to look at those trains the same way again. For residents of the small Quebec town, Saturday’s devastating derailment truly was the “end of the world,” an inferno that consumed the heart, if not the spirit, of their community. And after the initial shock and sadness, the next thought on many Canadians’ minds was: could it happen here?

The unpleasant truth is that there is something nasty lurking in everyone’s backyard. Canada’s communities grew up around railroads, many of whom have been affected by the transport of dangerous cargo, though none with such horrific consequences as Lac Megantic.

In 1979, a 106-car train loaded with propane and chlorine derailed in Mississauga, Ont.; one car exploded but miraculously no one was killed, though the city’s then population of 200,000 people had to be evacuated.

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The National Post is Canada’s second largest national paper.

Regulators have approved a giant expansion of an oil sands project proposed by Royal Dutch Shell PLC – but included an unprecedented list of warnings about the negative impacts on the environment and on Aboriginal communities.

While finding the 100,000-barrel a day expansion of Shell’s Jackpine mine is in the public interest based on economic benefits, the panel, representing the Alberta Energy Regulator and the Canadian Environmental Assessment Agency, dedicated large parts of its 405-page ruling to the cumulative environmental costs, some of them irreversible.

The takeaway: With the oil sands industry under growing public scrutiny, the regulators are signalling they are not willing to take responsibility for broader societal choices and want governments to step up and take the heat for them.

“Politicians have used regulators to insulate them from the political aspects of ongoing development, and it would appear that this ruling is saying: ‘This is going to be a political decision and we need direction’,” said David Yager, national leader, oil field services, at MNP LLP, in Calgary.

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