Oil and Gas Sector-Politics and Image

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

In a joint announcement two weeks ago, the United States and Japan (along with ConocoPhillips, the U.S.-based multinational oil company) announced the world’s first successful field trial (in Alaska) of a technology that uses carbon dioxide to free natural gas from methane hydrates – the globally abundant hunks of porous ice that trap huge amounts of natural gas in deposits, onshore and offshore, around the world. It’s a neat feat. You use CO2, which isn’t wanted, to produce natural gas, which is. But it’s more than neat – much more.

Methane hydrates constitute the world’s No. 1 reservoir of fossil fuel. Ubiquitous along vast stretches of Earth’s continental shelves, they hold enough natural gas to fuel the world for a thousand years – and beyond. Who says so? Using the most conservative of assumptions, the U.S. Geological and Geophysical Service says so.

The U.S. now produces 21 trillion cubic feet (tcf) of natural gas a year. But it possesses 330,000 tcf of natural gas in its methane hydrate resource – theoretically enough to supply the country for 3,000 years (give or take). Using less conservative numbers (for example, a methane hydrate resource of 670,000 tcf), the U.S. is good to go for 6,000 years (give or take).

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 Maclean’s is the largest circulation weekly news magazine in Canada, reporting on Canadian issues such as politics, pop culture, and current events.

Cross-border crime is only one of the issues affecting ‘the Fort McMurray of the U.S.’s north’

The strip clubs in Williston, N.D., are the rowdiest that Tatiana, an exotic dancer who has performed in Las Vegas and New York, has ever seen. Oil workers coming off the nearby rigs pack the city’s two clubs, Whispers and Heartbreakers, every night. They smell like work. They wear dirty T-shirts. They fall asleep face first on the bar. And then there are the prostitutes. Tatiana, who asked that her real name not be used, noticed them wandering though the crowd looking for customers on her first night in North Dakota. “They’re not in there to tip the dancers,” she says with a laugh.
 
Williston is the heart of Bakken oil country, the Fort McMurray of the U.S.’s north, for all the good, and bad, that brings. There are at least 3.1 billion barrels of recoverable oil trapped in the Bakken shale, a teardrop-shaped formation spread between North Dakota, eastern Montana and Saskatchewan, and likely many billions more. In recent years, new technology and high prices have made that oil both easier to get at and more valuable to sell. Today the race to pump it out—via a complex process known as hydraulic fracturing or “fracking”—is running at an Olympic pace.
 
As a result, North Dakota’s economy is the hottest in the U.S. Unemployment there was just three per cent in March, the lowest in the country. In neighbouring Montana, where oil exploration has been far more modest, the jobless rate stands at six per cent, well shy of the national average of nine per cent.

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

Philip Cross is the former chief economic ­analyst at Statistics Canada.

Jeff Rubin forgets that knowledge, not cheap oil, brings growth
 
Jeff Rubin is the kind of guy I want to like. He made a remark in 2005 about sheiks and mullahs controlling oil supplies that provoked his handlers at CIBC, where he was chief economist for 20 years, to send him on a course to heighten his sensitivity and political correctness. If my former employers at Statistics Canada had been nearly as skittish, I could have spent much of my 36 years there taking courses. Anyway, the course apparently had its desired effect on Rubin, as his new book on The End of Growth is as politically correct as it gets when it comes to decrying our addiction to autos and suburbs, our indifference to climate change, and ultimately our grubby materialism.

This book is an extension of his previous work, in which he predicted high oil prices were here to stay, and would fundamentally alter how and where we live and work. In this book, he extends this thesis to claim that permanently high oil prices will permanently cripple economic growth. The book notes that this may not be all bad, since the end of growth would reduce greenhouse gas emissions, although I think for most people that would not take the sting out of being unemployed.

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

CALGARY — Athabasca Oil Sands Corp.’s name change Thursday to Athabasca Oil Corp. reflects its new focus on tight oil – and industry’s rush to the new technologyintensive play type that could see Alberta emerge as another North American hot spot.
 
Only two years after expanding into tight oil in Alberta, the former oil sands pure play has been so successful unlocking oil from shale and sandstone formations it expects them to produce as much as 10,000 barrels a day by the end of the year – while its oil sands projects are still under development. 

Sveinung Svarte, president and CEO of Athabasca, said he sees huge tight oil potential in Alberta, where the geology is similar to prolific tight oil plays such as the Bakken in North Dakota and the Eagle Ford in Texas.
 
“The Duvernay, the Montney and the Nordegg are probably going to be one of the most active development areas in Canada, similar to activities in the Bakken, with similar results,” Mr. Svarte said after addressing the company’s annual meeting in Calgary.

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

China’s growing influence in oil sands development might be the most important issue facing Canada’s energy sector that nobody is talking about.
 
Canadian companies have happily accepted billions of dollars in investments from Chinese state-owned enterprises in recent years on the basis that the energy-hungry emerging Asian superpower will soon be their best customer.
 
Meanwhile, as the public grows increasingly concerned about the potential importation into Canada of questionable Chinese corporate practices and opposition politicians raise questions of possible interference with Canada’s national interests, industry associations, environmental groups and the government of Canada itself have stayed mute.

“Any enterprise that is owned by another nation state raises sovereignty issues, but in the case of China the security advisors to the government of Canada for a long time have expressed particular concern about Chinese influence,” Elizabeth May, leader of the Green Party of Canada, said in an interview this week.

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The Toronto Star, has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

When Tom Mulcair, then a prospective NDP leader, wrote in an influential magazine last winter that Alberta’s oilsands have artificially driven up the Canadian dollar and hurt manufacturing in central Canada, his remarks received scant notice.
 
Mulcair was largely adding his voice to a view espoused by Premier Dalton McGuinty and a number of commentators and analysts.
 
When he repeated an abridged version of his Policy Options argument on the CBC last weekend, the reaction in western Canada verged on the hysterical.

Stephen Harper surrogates in right-wing media and think tanks joined Saskatchewan Premier Brad Wall in hurling invective at the NDP leader, accusing him of trying to divide the country, demonizing the West, pandering to Quebec and misunderstanding history and politics.
 
It appears that in a matter of a few months two things had happened to turn an op-ed piece in a policy magazine into a civil war.

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

CALGARY — As if Enbridge Inc. could not hear the cries of protests over the Northern Gateway pipeline at its annual meeting in Calgary last year, what will hit the company in Toronto on Wednesday is expected to be even louder.
 
Public hearings into the $5.5-billion project to bring crude oil from Bruderheim, Alta. 1,172-kilometre west to the Pacific coast town of Kitimat, B.C. — and from there to energy-hungry markets in Asia — have since begun, serving as a focal point for criticism. Canada’s largest crude transporter has also opted to hold this year’s AGM in the country’s financial capital, where many groups opposing the pipeline command a strong presence and where the risk of a public relations backlash affecting the company’s share price is heightened.

As members of the Calgary-based Enbridge executive team make the trip to Toronto this week, a train carrying some of Northern Gateway’s most vocal critics is close behind. Hundreds of protestors are expected to rally outside the AGM, with a “Freedom Train” set to arrive Wednesday carrying dozens of members of the Yinka Dene Alliance, a group of British Columbia First Nations opposed to the project.

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

In the debate about whether Canada should welcome China’s growing investment in our energy, a couple of crucial points have been getting little air time: Canada’s energy isn’t as indispensible to China as some assume, and China is at least as motivated by learning how to operate in a Western market economy as it is by securing energy to fuel its future.
 
Junsai Zhang, China’s ambassador to Canada, drove those points home Friday — a rare attempt by the country to add its voice and bring back to reality a Canadian discussion it feels has gotten way ahead of itself.

“We haven’t imported one drop of oil,” Mr. Zhang said in an interview in Calgary. “It’s too early to say China imports your oil and gas. We are in a very good collaboration with Australia, with other Western countries. No problems. If we don’t import from here, we import from other countries. It’s OK.”
 
It’s a sobering and unexpected message. For all the concern about China’s increasing presence in Canada, not having the option of selling to that market would be a major setback. It would also be a missed opportunity to show global leadership.
 

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

Move over, Middle East: North America looks set to lead the global energy investment drive this year, with companies expected to spend $392-billion on upstream capital and operating expenditures in the region, according to forecasts of IHS CERA, an energy consultancy.
 
“Capex (alone) is expected to reach US$274-billion in 2012, driven by the region’s boom in unconventional production including oil sands, tight oil, shale gas, tight gas and coal bed methane, which are forecast to account for US$128-billion of the 2012 total,” noted IHS CERA in a report published Monday. “Driven by continued investment in unconventional resources, total North America spending is expected to reach US$528-billion in 2016.”
 
Capital spending in the oil sands sector is forecast to reach 28% to US$18.5-billion in 2012, rising US$28-billion by 2016 as high oil prices spurs expansion plans, the Cambride-based consultancy estimates. 

“The U.S. and North America currently make up 50% of all drilling activity in the world,” Candida Scott, senior director at IHS CERA told the Financial Post in an interview.

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

CALGARY — TransCanada Corp. said it’s taking a serious look at converting its underused mainline, Canada’s largest natural gas pipeline, to oil service, a prospect that would give a big boost to the idea of a Canadian solution to anti-oil sands activism by shipping more of Canada’s Western oil to Eastern consumers.
 
CEO Russ Girling said Friday refiners in Eastern Canada and oil producers in Western Canada are keen on the concept and have asked TransCanada to look into the feasibility of converting parts of the system.
 
“We are going to actively pursue it and see if we can turn it into an opportunity for both, the oil and gas industry and TransCanada,” Mr. Girling told reporters after addressing the company’s annual meeting.
 
The giant pipeline is TransCanada’s original business and is one of Canada’s nation-building infrastructures. For decades, it is has moved natural gas from Empress, Alta., down to the U.S. northeast and into Ontario and Quebec.

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