January 31, 2007
TransCanada set to boost Keystone pipeline
Turns up the heat on rival Enbridge as it aims to add oils sands link to key U.S. hub
DAVID EBNER
Globe and Mail
31-Jan-2007
CALGARY -- TransCanada Corp. increased the intensity of its competition with archrival Enbridge Inc. yesterday, saying it is ready to spend $700-million (U.S.) more on a proposed oil sands pipeline to expand and extend a project that is already budgeted at $2.1-billion.
TransCanada's Keystone pipeline would be a 3,000-kilometre link connecting Alberta with southern Illinois. The firm yesterday said it is ready to see whether oil producers want to support an added link to a key hub at Cushing, Okla., as well as back total capacity of 590,000 barrels a day, up from 435,000.
Last week, Enbridge said it had "industry support" to spend $2-billion for a new pipeline to move an additional 450,000 barrels to carry increasing output from the oil sands in northern Alberta. It would be on the same route that Enbridge's mainline follows, Canada's largest oil export connection that can carry almost two million barrels a day from Alberta to the U.S. border with a link to Chicago.
TransCanada, Canada's biggest natural gas pipeline company with significant power generation assets, is headquartered across the street in downtown Calgary from Enbridge, an oil pipeline company with some gas pipeline assets. Both are fighting to build the first big new line to handle anticipated oil sands production.
If the Keystone expansion and extension is successful, as much as 200,000 barrels a day of the total 590,000 could move to Oklahoma, with a further potential connection to Texas, TransCanada said on a conference call that discussed quarterly earnings.
"We've had very strong interest from the [oil] shipping community out of Alberta to get more of Keystone down to the Cushing hub and from there down to the Gulf Coast," TransCanada chief executive officer Hal Kvisle said on the call.
Canadian oil first started moving to the hub of Cushing last year when Enbridge's Spearhead connection with a capacity of 125,000 barrels a day linked the city with Chicago. The line immediately had a market impact, increasing prices for lower-grade oil from Canada -- typical of the country's output -- as the product was dispersed to more markets.
Cushing is the physical delivery point of crude oil for contracts of light, sweet crude -- also known as West Texas intermediate -- traded on the New Your Mercantile Exchange.
TransCanada said that if the expansion and extension of Keystone are not successful, it still plans to forge ahead with the original 435,000-barrel-a-day Keystone plan, which is supported by long-term shipping deals of 340,000 barrels a day, led by ConocoPhillips Co.
In the fourth quarter, TransCanada profit fell 23 per cent to $269-million (Canadian) or 55 cents a share from $350-million or 72 cents a year earlier. Excluding a one-time gain in 2005's fourth quarter for the sale of assets, profit in 2006's fourth quarter was up 14 per cent from $235-million or 48 cents.
In all of 2006, excluding the gain from asset sales, profit was $1.05-billion or $2.12 a share, up from $852-million or $1.75.
Stock of TransCanada rose to $39.22, up 16 cents or 0.4 per cent, and is near an all-time intraday high of $41.35 reached early this month.
In a presentation with its conference call, TransCanada said it has produced a total shareholder return, including stock gains and dividends, of 15 per cent in the past year and 20 per cent annually over the past five years.
January 27, 2007
January 26, 2007
Radio-Canada's oil sands 'scoop' dug up nothing
Radio-Canada's oil sands 'scoop' dug up nothing
Radio-Canada's oil sands 'scoop' dug up nothing
Konrad Yakabuski
The Globe and Mail
Jan 25, 2007
Canada's public TV network is a two-headed, English-French creature with a mandate to foster a "shared national consciousness." Just how it's supposed to do this when it speaks out of two mouths, in two languages and to two different audiences is one of those great Canuck incongruities that gets shuffled under the carpet in Ottawa, where the myth of a benevolent bilingual broadcaster lives on.
This would be forgivable enough if all it meant was that francophone Canadians were spared the piercings of George Stroumboulopoulos while anglophones missed out on the weekly celebrity skewering that is Tout le monde en parle .
The damage done by Radio-Canada's programming last week of a sensationalist documentary on the development of Alberta's oil sands makes it all much harder to excuse or ignore. The episode of Zone Libre -- a fifth estate -like show -- single-handedly (and unjustly) did far more to promote suspicion of Alberta than it did to inform Quebeckers about the stakes involved in developing the biggest oil reserves outside of Saudi Arabia.
The show's primary "scoop" was its claim to have obtained secret minutes from an early 2006 meeting in Houston between oil industry types and Canadian and U.S. government officials in which the participants promised to pull out all the stops -- including streamlining environmental reviews -- to facilitate a fivefold increase in oil sands production. The show suggested this was to be accomplished by 2015 -- all to satisfy George W. Bush's desperate quest to reduce U.S. reliance on Mideast oil.
If viewers were still too dumb to figure out this would be an environmental calamity, they were treated to menacing music and images of northern Alberta's scarred landscape. When journalism needs a musical score to gets its message across, can you still call it journalism?
Radio-Canada would not have had to look too far to find an expert to explain the logistical and economic impossibility of expanding oil sands output so rapidly. Doing so would send the price of a double-double at the Fort McMurray Tim Hortons outlet higher than a barrel of West Texas intermediate.
What's more, the show didn't state that the "secret" report had been available for months to anyone with an Internet connection and, more important, had set out no timetable at all for the said increase in oil sands production. What the broadcast did establish in the viewers' mind was the indelible impression that the Conservatives' eagerness to scrap the previous Liberal government's Project Green -- its plan to reduce its greenhouse gas emissions -- stemmed from their own indebtedness to Big Oil, Republican advisers, and the C.D. Howe Institute.
The Toronto-based think tank's list of members, journalist Guy Gendron pointed out, "reads like the telephone book for the Alberta oil industry." The report then credits a C.D. Howe study released last spring for providing the ideological underpinning for the Tories' decision to abolish a string of Liberal environmental programs.
Did Mr. Gendron and his researchers read the report? Titled Burning our Money to Warm the Planet, the study does indeed denounce the ineffectiveness of the Liberal measures. Why? Because the Liberals relied on voluntary compliance and did not sufficiently crack down on Big Oil by imposing mandatory limits on carbon emissions. What's more, the report's lead author was Mark Jaccard, the Simon Fraser University professor and carbon tax proponent who inspired Liberal leadership candidate Michael Ignatieff's environmental proposals.
The oil and gas industry is no different than any other. It seeks to maximize profits with a minimum of government interference, unless, of course, that intervention involves subsidies. So, a healthy suspicion of its lobbying objectives is an essential journalistic tool.
Likewise, there is much to criticize in the Conservatives' early attempts at an environmental policy. The problem is that the Tories were very publicly restoring a series of Liberal programs at the very moment Radio-Canada was airing the Zone Libre documentary -- excerpts of which were fodder for Le Téléjournal nightly news for three days running.
Why are the Conservatives restoring those programs? Because no issue gets as much ink these days as the environment. The result is that even the Tories may soon succumb to the wisdom of a carbon tax. As for Big Oil, it can count on endless scrutiny by its official opposition, Big Environment, and experts such as Prof. Jaccard. And so it should be.
Zone Libre did neither Quebeckers nor that elusive "shared national consciousness" any favours with such a lopsided exposé.
January 22, 2007
LNG projects hit supply snags
COMMENT: Gateway Pipeline down. Kitimat LNG not far behind ...
Proposed terminals in B.C.’s north stalled as gas competition grows and costs head skyward
Krisendra Bisetty
Business in Vancouver
January 16-22, 2007
The future of close to $1 billion worth of liquefied natural gas projects in B.C.’s north is being threatened by acute commodity supply constraints and upwardly spiralling capital costs.
Kitimat LNG’s $500 million plant was scheduled to have broken ground in the northwestern B.C. city this spring, but the project has been pushed back at least until the fall. The company now expects to come on stream in 2010, a year later than planned.
“Really that’s due to the fact that we’re still working on our commercial arrangements to get the LNG supply secured for the terminal,” company president Rosemary Boulton said in an interview from Calgary, where parent company Galveston LNG Inc. is based. “Without that we’re really a little bit on hold.”
Kitimat LNG has secured only one relatively small potential contract with Australia’s Liquefied Natural Gas Ltd. for the supply of 1.8 million metric tonnes per year of LNG to its natural gas terminal and regasification facility.
The volume would fill only about 25 per cent of the proposed terminal in Bish Cove, which is south of Kitimat.
Meanwhile, rival WestPac LNG Corp., a privately-held Calgary company, is yet to secure any firm commitments because suppliers will consider serious discussions only after WestPac gets its environmental permit, something Kitimat LNG obtained in 2006.
WestPac is proceeding with plans to build a trans-shipment terminal at Ridley Island near Prince Rupert. But Stu Leson, the company’s Vancouver-based vice-president for business development, conceded that, with about a dozen competing LNG projects proposed for the North American west coast and one already being built in Baja, Mexico, gas supply is an issue.
“Certainly there is not enough supply to fill all the terminals if they were all built,” he said.
“Our position is on the West Coast there is potentially enough supply perhaps for two terminals.”
As well, WestPac and others are contending with ballooning capital costs.
Initially projected at $350 million, WestPac’s Prince Rupert project costs could jump by as much as 50 per cent by 2011 when construction is in full swing, said Leson. He added that the increase is due primarily to the price of nickel-content steel needed for LNG infrastructure rising by as much as 400 per cent in the past few years.
But Boulton regarded the supply constraints as more of a challenge than a setback.Things could look a little better around 2010, she said, when more LNG supply is expected to come on stream.
Global LNG supply, according to Vancouver energy expert Brian Moghadam, is expected to increase to about 44 billion cubic feet (bcf) a day by 2012 compared with current levels of around 22 bcf a day. About 13 bcf per day would then be available for North America’s needs.
Almost all North American LNG projects are having difficulty in sourcing supply, said Moghadam, not because there’s a shortage of gas but because of delays in building LNG liquefaction facilities overseas.
“These are huge multibillion-dollar projects, mired often in political risk (Russia, Nigeria, Iran, for example), environmental challenges and so on,” he said. “So for the time being, it’s an LNG sellers market.”
But there’s lots of customer interest, said Boulton.
“It’s a nice combination of utilities and some industrial customers in the oilsands area in Alberta.
“What we need to do is be able to match them with potential suppliers.”
The company initially was looking to source gas from Sakhalin Island north of Japan, a seven-day voyage to Kitimat, but it’s now scouring the rest of the world.
WestPac’s project will have a total capacity to transship the equivalent of up to one billion cubic feet of natural gas per day by LNG barges, trucks, railcars and an existing pipeline system, to the Pacific Northwest, Vancouver Island and Lower Mainland markets.
It’s looking to import LNG from Asia Pacific sources –Australia, Malaysia and Indonesia – as well as the Middle East, and sees Terasen Gas Inc. and BC Hydro as among potential local customers.
WestPac is aiming to supply between 150 million and 200 million cubic feet of natural gas per day, representing 15 per cent to 20 per cent of Terasen’s peak daily volumes.
January 20, 2007
PM's energy plan hailed
GREEN POWER I
Renewable energy projects to get incentives
Scott Simpson
Vancouver Sun
Saturday, January 20, 2007
Debra Brash, CanWest News Service
Prime Minister Stephen Harper views
a model of a turbine that is being used
at the tidal energy project at Race Rocks.
Independent power producers in British Columbia on Friday lauded a $1.5-billon renewable-energy initiative announced in Victoria by Prime Minister Stephen Harper.
The program offers long-term incentives for new green power projects, up to a total of 4,000 megawatts of new power coming from a wide array of sources including wind, biomass, small hydro and ocean energy.
That's an amount of power roughly equivalent to one-third of the total generating capacity of British Columbia's sprawling network of hydroelectric dams and reservoirs.
The program is comparable to a series of announcements made by the former Liberal government, but shelved when the Conservatives took power.
The Tories are calling their plan, which commences April 1, the ecoEnergy Renewable Initiative.
As a replacement for coal or natural gas-fired generation projects, it would deliver greenhouse gas emissions equivalent to taking one million cars off the road over the lifetime of the green generating facilities.
"There is no end to the potential of alternative, non-polluting energy sources," Harper said in a statement. He added that the initiative "will harness the power of our environment to help protect the environment for all Canadians."
Funds would be disbursed over a 10-year period for eligible projects built over the next four years.
Steve Davis, president of the Independent Power Producers Association of BC, said the incentives are "opportune" for project developers in B.C.
BC Hydro announced in August it had selected 38 projects with a total value of $3.6 billion to join the provincial electricity grid -- and is in the midst of developing another open call for power later this year.
Davis noted that many details of the program will be determined later in consultation with power producers -- including the manner in which the incentives will be allocated among provinces and project types.
But he added that the incentive would be valuable to B.C.'s independent sector -- particularly where green power producers find themselves with higher base-level costs than proponents of coal or gas-fired generation.
The incentive works out to a payback of one cent per kilowatt, or $10 per megawatt, for participants.
Hydro is currently paying an average 7.5 cents per kilowatt, or $75 per megawatt for new independent power projects joining its grid.
"On general pricing levels in British Columbia in the order of $75 a megawatt hour, a $10 lift is material. It will help them be ranked better when BC Hydro issues the next call," Davis said. "Each of these projects generates a significant amount of revenue for the provincial treasury. If it's small hydro, they pay a significant amount in water rentals each year.
"They have yet to define the edges of the definition, but they have clearly said wind, solar, geothermal and I'm confident the small-hydro sector would be in that."
Harvie Campbell, executive vice-president of Pristine Power, said the Tories' program was distinct from the Liberals' approach because it gives equal weight to all renewable technologies -- and indicated that the former government's program was weighted in favor of wind power.
"What's distinctive about the program is that it supports renewables no matter what kind of technology they are," Campbell said in an interview from Pristine's head office in Calgary.
The company has three projects in the works in B.C., including a biomass-fueled generating facility at Mackenzie in northern B.C.
"Wind doesn't yield any different benefits than for example small hydro -- and that's what's important to B.C.," Campbell said.
"B.C. is unlike the rest of the country in that there is incredible small hydro potential and it's every bit as environmentally friendly a power source as wind.
"By balancing out and saying 'We are not going to be technology-specific, what we want is renewable power, they are letting the developer choose what is the best technology to deliver that with."
Campbell said he expects a rapid takeup of the offer because sustainable power projects are getting bigger and bigger.
"It's a nice large first step but people are starting in other provinces to take 300, 600, 1,000 megawatt-type projects for this type of electricity so it will get eaten up very quickly."
© The Vancouver Sun 2007
January 19, 2007
Ranchers fear losses from project
COMMENT: BC's nascent wind energy developers evidently have to learn about public consultation, just like any other project proponents. The benign nature of the technology and project implementations is not immediately evident to many citizens, and it's certainly not understood by them as it is by the engineers and wind evangelists who have been immersed in it for years.
One tip the wind guys might take from the government and industry coalbed methane book: take residents and concerned citizens on a road trip. Let them see some wind installations, and meet people just like themselves who can speak first hand to the issues.
Government has paid to do many community information sessions promoting coalbed methane, and it has funded one or more of those junkets, again, for coalbed methane. Doesn't the wind sector have every right to expect the same treatment?
$140 million wind energy proposal will damage grazing areas if approved, they say
By Bruce Constantineau
Vancouver Sun
January 18, 2007
B.C. ranchers fear a proposed wind energy project near Chetwynd will cause major losses to their cattle operations by damaging summer grazing areas.
"We know we'll suffer a loss, it's just a question of how much," Mount Wartenbe rancher Monique Drinkall said in an interview. "Are we going to lose calves [after the project is built]? Are they going to get separated because they don't know where to go?"
Victoria-based Dokie Wind Energy Inc. wants to build a 70.5-megawatt wind energy operation on Wartenbe Ridge, about 10 km southeast of Chetwynd. The $140-million project received its approvals are required before it can go ahead.
The BC Cattlemen's Association has written a letter to the Peace River Regional District and several provincial ministers over concerns the project could displace ranching interests on Mount Wartenbe, Table Top Mountain, and Misery Ridge.
But Dokie Wind Energy president Ron Percival said only 12 cows will be displaced by the 10 hectares of Crown land the wind turbines will occupy.
"We're talking about taking up one per cent of the Crown land in question," he said in an interview. "We want to work with the [ranchers] to improve the capacity of the range. It's Crown land to be shared among many stakeholders."
Percival said the company has had 20 hours of meetings with the ranchers, but the two sides can't seem to agree on the issues.
Drinkall said it has been hard to get straight answers from Dokie Wind Energy, which doesn't seem to know exactly where the turbines will be located.
The timetable on the Wartenbe project is unclear because the company still doesn't have a contract to sell the power to BC Hydro, although it might obtain one this year.
But it expects to begin construction by late spring on a separate wind energy project located about 40 km west of Chetwynd. Dokie Wind Energy has a contract to sell 180 megawatts of power to BC Hydro annually, and completion of the project is expected by the end of 2009.
Percival understands the ranchers' concerns, but insists wind turbines are totally compatible with grazing animals.
"Go to Montana or Texas or Washington or California and you'll find cattle and turbines together," he said. "The cattle don't see them, and they don't care.
"Outside of B.C., the people who promote wind development are largely ranchers, and they're lined up to get projects done because having turbines on their ranches generates revenue."
Percival said his company has hired five agrologists who will try to meet with the affected ranchers this spring.
Chetwynd Mayor Evan Saugstad agrees the two sides can co-exist if they want to.
"The problem is they got off on the wrong foot and didn't really talk to each other at first," he said. "That can be a very hard thing to overcome."
bconstantineau@png.canwest.com
PM to boost funding for tidal power
COMMENT: The environmentalist flame that burns in Stephen Harper's Conservative government is fueled with coal and oil sands bitumen and nuclear energy.
The Conservatives, and the BC Liberals, confuse high tech fizz with green, but they are not the same thing. Where are the hard-nosed emission reduction targets? Where are the on-the-ground, in-your-town efficiency and conservation programs?
On Thursday Harper committed $2 million to rebuilding Stanley Park. Great, that'll fix the problem of climate change. Get those trees back to work sucking CO2 out of the atmosphere, I suppose.
On Friday he'll be announcing more money for alternative technologies.
But something is missing. Oh, yes, the sincerity. Like watching a vegetarian chew meat. No, maybe it's more like watching a steak guy eat tofu.
And you know that when your back is turned, he's going to spit it all out.
Trip to Metchosin will highlight new Tory support for alternative energy
Peter O'Neil and Richard Watts
Times Colonist; CanWest News Service
Friday, January 19, 2007
Prime Minister Stephen Harper will visit Race Rocks off Metchosin today to announce a major federal investment into alternative energy technology.
His visit to Victoria is seen as part of a new strategy to convince Canadians he's serious about environmental issues, and his stop at Race Rocks Ecological Reserve will highlight Tory support for a tidal-powered project there.
Yesterday, the Conservatives promised $2 million to help restore Vancouver's windstorm-ravaged Stanley Park.
Earlier this week, Harper's ministers announced a $238-million green science fund for fuel-cell, clean-coal and nuclear-energy research.
Harper has also agreed with the NDP to establish a special parliamentary committee to look at ways to beef up the Clean Air Act, ridiculed when it was announced in October.
Harper will be joined today by newly minted Environment Minister John Baird (who replaced Rona Ambrose), local MP and Natural Resources Minister Gary Lunn, and Indian Affairs Minister Jim Prentice.
They are expected to focus on a project by a small North Vancouver company, Clean Current Power Systems Inc., at Race Rocks, which is billed as "Canada's first free-stream tidal power project." While there, the ministers will encounter something lighthouse keepers and wildlife have only recently rediscovered -- silence.
Since late last year, power for the Race Rocks lighthouse, research station and eight-person dormitory -- all operated by Lester B. Pearson College of the Pacific -- has been supplied by tidal power.
The switch has allowed for the removal of decades-old diesel generators, along with their exhaust fumes, fuel consumption and noise.
"It's suddenly very quiet out there," said Pearson college director David Hawley in an interview yesterday.
Clean Current and Pearson College are partners in the project, which has received funding from Calgary energy giant EnCana Corp., and won a grant of just under $1 million in 2005 from Sustainable Development Technology Canada.
Today's announcement is expected to revive the 2005 Liberal budget's commitment of $920 million over 15 years for wind power. But the Tory government is saying its initiative is different because it puts more emphasis on other forms of energy generation, like solar and tidal power technology.
Harper, who didn't mention climate change last year in his election platform and has questioned climate-change science, is now trying to stress his government's commitment to the environment.
The policy switch came after the federal Liberals made the environment one of their top priorities, and a series of polls found global warming is a top public concern. This week, an Innovative Research poll obtained by the Vancouver Sun indicated that six out of 10 Canadians aren't convinced the Harper government cares about the environment.
But a clear majority also said they don't agree with Liberal Leader Stephane Dion's assertion that Canada must adhere to the 1997 Kyoto accord that calls on Canada to reduce greenhouse gas emissions by six per cent below 1990 levels.
Currently, annual environmentally harmful emissions in Canada from cars, factories and other sources are 28 per cent above 1990 levels.
© Times Colonist (Victoria) 2007
January 18, 2007
U.S. urges 'fivefold expansion' in Alberta oilsands production
U.S. urges 'fivefold expansion' in Alberta oilsands production
CBC News
January 17, 2007
The U.S. wants Canada to dramatically expand its oil exports from the Alberta oilsands, a move that could have major implications on the environment.
U.S.and Canadian oil executives and government officials met for a two-day oil summit in Houston in January 2006 and made plans for a "fivefold expansion" in oilsands production in a relatively "short time span," according minutes of the meeting obtained by the CBC's French-language network, Radio-Canada.
The meeting was organized by Natural Resources Canada and the U.S. Department of Energy.
Canada is already the top exporter of oil to the American market, exporting the equivalent of one million barrels a day - the exact amount that the oilsands industry in Alberta currently produces.
A fivefold increase would mean the exportation of five million barrels a day, which would supply a quarter of current American consumption and add up to almost half of all U.S. imports.
But the current extraction of oil from the tarsands results in the spewing of millions of tonnes of greenhouse gases into the atmosphere: it's already the biggest source of new greenhouse gas emissions in Canada.
The news of call for the massive boost in oil production comes as Prime Minister Stephen Harper has pledged to make the environment one of his top priorities, vowing that Canadians deserve more action on climate change. Polls show the environment is the number one concern of Canadians.
Yet, according to the minutes of the Houston meeting, to multiply its output by five and to do it quickly, Canada would have to "streamline" its environmental regulations for new energy projects.
"We need to look at additional pipelines from Canada to the U.S. as a new source of supplier, a growing source of supply," said Bob Greco of the American Petroleum Institute.
But the current extraction of oil from the tarsands results in the spewing of millions of tonnes of greenhouse gases into the atmosphere: it's already the biggest source of new greenhouse gas emissions in Canada.
The news of the call for the massive boost in oil production comes as Prime Minister Stephen Harper has pledged to make the environment one of his top priorities, vowing that Canadians deserve more action on climate change. Polls show the environment is the number one concern of Canadians.
Yet, according to the minutes of the Houston meeting, to multiply its output by five and to do it quickly, Canada would have to "streamline" its environmental regulations for new energy projects.
No plans to 'streamline' environmental assessments: PMO On Thursday, a spokesman for the Prime Minister's Office said the federal Tories will not "streamline" environmental assessments to speed up oilsands development.
"Canada's natural resources will be developed but that will not be done at the expense of the environment," Dmitri Soudas told the Canadian Press.
Canada's main oil lobby group said there is no pledge to increase production five-fold for the Americans.
"There is no promise," said Greg Stringham of the Canadian Association of Petroleum Producers. "It's up to the market whether this thing goes fast or slow."
In his state of the union address in 2006, U.S. President George W. Bush set out a goal to drastically reduce oil imports from the Middle East and make American dependence on Middle Eastern oil "a thing of the past."
"America is addicted to oil which is often imported from unstable parts of the world," Bush said then.
Paul Michael Weaby, a Washington insider and an expert on the geo-strategic aspect of the oil industry, said Bush is counting on Canada to achieve the U.S. of goal to wean the country off Middle Eastern oil - a goal now defined as a national security objective.
"He wanted to have a reduction of 1.5 million barrels a day by 2015 from the Middle East. Although he did not mention Canada, that is in fact where the replacement supply will come from."
Pipeline demands mount
Canadian oil pipeline to U.S. East Coast planned
By David Ebner, Globe and Mail, 17-Jan-2007
Pipeline demands mount
Shaun Polczer, Calgary Herald, 18-Jan-2007
Canadian oil pipeline to U.S. East Coast planned
By DAVID EBNER
Globe and Mail
January 17, 2007
Enbridge Inc. wants to move Canadian oil-sands output all the way to the Philadelphia region, and is working on early plans for a $1.4 billion pipeline that would carry domestic crude to the east coast of the United States for the first time.
The plan is part of a larger effort by Enbridge to build a network of new oil-pipeline connections in the United States so that expected increases in oil-sands production do not flood any single market.
The connection could be in service as early as 2010, according to the company, with the pipeline carrying 300,000 barrels a day. The link would begin in the Chicago region, which is now the main destination for Canadian oil.
Enbridge considers the project a "potential initiative," describing it as "very preliminary," according to company spokesman Glenn Herchak.
"Because of the increasing growth of the oil sands, we've seen some market interest (from oil producers) in the potential for new pipeline capacity into the (eastern U.S.) region," Herchak said.
The company has also had initial discussions with refiners to handle the oil, but Herchak wouldn't identify them.
One potential customer would be Sunoco Inc., which owns the largest refinery in the region, a facility in Philadelphia that can process 330,000 barrels a day.
ConocoPhillips Co. has a 230,000-barrel-a-day refinery in New Jersey and a 185,000-barrel-a-day operation near Philadelphia.
The Philadelphia connection is one of two big new pipeline concepts Enbridge is pursuing. Last July, it said it was looking at a $3.6 billion, 400,000-barrel-a-day line to connect Alberta with Texas. The idea remains in the early stages, Herchak said.
The new ideas to move Canadian oil to different areas of the United States follow the stall that hit the proposed Gateway pipeline, which would move oil-sands crude from Edmonton, Alberta, to the west coast of British Columbia for export to Asia. After significant opposition from aboriginal groups along the route, as well as slow talks between refiners in China and Canadian producers, Enbridge was unable to get long-term shipping contracts signed.
Pipeline demands mount
Enbridge: Alberta needs at least three, utility says
Shaun Polczer
CanWest News Service
January 18, 2007
CALGARY - At least three new pipelines will be needed to move Alberta's growing oilsands production to new markets in the United States and abroad, a senior official with Enbridge Inc. said Wednesday. Those are on top of a 400,000-barrel per day (bpd) link to the U.S. Gulf Coast and a proposed 300,000 bpd hook-up to Kitimat, B.C., said Rick Sandahl, Enbridge's senior vice-president of market development.
``There's a need for significant infrastructure changes going forward,'' he told a Calgary oilsands conference.
``Getting to existing markets isn't adequate, you need to have pipelines to get to new markets.''
According to industry forecasts, oilsands production is expected to triple to about 3.5 million bpd by 2015, requiring at least two million bpd of incremental transportation capacity out of Western Canada.
Sandahl said Enbridge has received strong interest from American refiners interested in securing access to more Canadian oil.
In addition to the Gulf Coast, other potential new markets include California, which could be supplied from Kitimat, and the Eastern Seaboard, which would require a $1.4-billion line from Chicago to move Canadian oil into places like Philadelphia, Baltimore and New Jersey.
An Eastern pipeline could also access refineries on the Canadian side of the border, particularly in Montreal.
Companies like Shell Canada Ltd. and Petro-Canada have speculated on building or modifying facilities in Eastern Canada to process Alberta heavy crude.
However, Sandahl noted the East Coast line is the ``most speculative'' proposal in Enbridge's $15-billion project inventory. If it goes ahead, the pipeline could be built and in service by 2012.
But the Gulf Coast remains the big prize for Canadian shippers.
It has the largest concentration of heavy oil refineries in North America and is looking to diversify supply sources that come mainly from Venezuela and Mexico.
Venezuelan President Hugo Chavez has threatened to reduce exports to the U.S. while Mexico's oil production is in decline.
Other proposed export pipes from Canada include a 250,000-bpd bullet line to Texas currently being advanced by Altex Energy Ltd.
Altex is a private company headed by Jack Crawford and a management group responsible for building the Alliance natural gas pipeline to Chicago in 2000.
``The scope and scale of what we're proposing to do at Altex is very similar,'' he said.
Altex proposes to ship raw bitumen to U.S. refineries capable of upgrading and refining it into finished products.
Acknowledging the debate over value-added processing at home, Crawford said the pipeline would serve as a hedge against rising costs for labour and materials in Alberta.
``We believe exporting at least part of it is a way to mitigate some of the risk of cost overruns we're seeing here with upgrading,'' he said.
OPTIONALCUTENDS
Andrew Kuske, a pipeline analyst with UBS in Toronto, said Enbridge stands to gain from future expansion projects.
``Enbridge's asset position is likely to fuel a significant portion of highly visible corporate growth over the next five years,'' he said in a research note.
Enbridge shares fell 69 cents in Toronto, to close at $38.45.
spolczer@theherald.canwest.com
January 16, 2007
Ottawa set to unveil climate plans
Harper government lays groundwork by borrowing Liberal initiatives
BILL CURRY
Globe and Mail
16-Jan-2007
OTTAWA — The Conservative government is launching a series of new climate-change policies this week before MPs return for what is expected to be a heated parliamentary session dominated by divisions over the environment.
Some of the measures will have a familiar ring, as they include elements of Liberal climate-change programs scrapped or frozen last year by the Conservatives. One will include the revival and expansion of a Liberal incentive for companies to build more wind power. Another, dealing with energy efficiency for homes, is sure to be compared with the Liberals' Energuide program that had been scrapped.
The Conservatives froze or axed dozens of climate-change programs upon taking office, promising a review of whether they were cost-effective and achieving results.
The announcements begin tomorrow and will mark the government's first policy moves since Prime Minister Stephen Harper pledged to do "a lot more" on climate change as he shuffled his cabinet this month.
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They unfroze some initiatives that were frozen pending an assessment...
Borrow or steal ideas? Dion's entire "green" plan was "borrowed...
This is probably the biggest damage control plan in recent memory...
I think it is a good idea for the 'new' gov't to steal the plans...
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Natural Resources Minister Gary Lunn will kick off this week's media blitz by picking up reporters on Parliament Hill tomorrow morning in a low-emission bus. The plan is for the minister to tell his captive audience about the government's new and continuing support for clean-energy technology as they visit his department's suburban research centre.
That will be followed by an announcement Friday in Victoria, where new incentives for renewable power production will be rolled out. Then on Sunday in Toronto, the government will announce new energy-efficiency measures for vehicles and residential homes.
The announcements are likely aimed at building momentum for the Tories on the environment as they prepare to square off with the opposition over how to address the most challenging climate-change hurdles -- namely the emissions from Canada's big oil and power companies.
Advocates of wind power have been waiting for a signal from the Conservatives since a federal subsidy, introduced by the Liberals and called the Wind Power Production Initiative, was frozen early last year.
The program, launched in 2002, gave a federal subsidy of one cent for every kilowatt hour produced through wind power for the first 10 years of a new operation.
The 2005 Liberal budget promised to extend the program over 15 years for a total cost of $920-million, but the Conservatives said the incentive was on hold while all federal climate programs were reviewed.
The Liberals also promised a new program for all other renewable fuels -- such as solar and tidal power -- that would be worth $886-million over 15 years, but it was never implemented.
Mr. Lunn is expected to revive both programs this week and merge them under a new name and increased funding.
Bruce McCallum, president of the Canadian Bioenergy Association, said he would welcome a federal commitment to renewable power, but said industry is concerned about the lack of certainty.
Just as the previous Liberal commitments were derailed by a federal election, Mr. McCallum said, it is uncertain whether any announcements made this month would survive if the government is defeated this spring.
"Industry is getting very confusing signals," he said in an interview.
On energy efficiency, Mr. Lunn has previously promised a range of new regulations under the Energy Efficiency Act. The Conservatives gave notice last May that a range of air conditioners and other widely used appliances such as vending machines would be forced to use less power.
Air conditioners are a major drain on power supplies during hot summer days and ultimately produce more heat-trapping greenhouse gases. In Ontario, for instance, high power use in the summer forces Ontario Power Generation to fire up all of its coal-power plants, which are a leading source of greenhouse-gas emissions.
The David Suzuki Foundation issued a report yesterday calling for a 6-per-cent rebate on energy-efficient appliances that would be paid for by a 6-per-cent tax on non-efficient appliances.
Calling the proposal "Switch Green," Suzuki Foundation policy analyst Pierre Sadik said the idea has been well received by federal public servants.
"Everyone sees this as a win-win proposal and the way of the future," he said. "Now that the Harper government claims it's turned over a new leaf, the big question is, do they have the political will to make polluters pay?"
January 14, 2007
Do carbon offsets live up to their promise?
Moises Velasquez-Manoff
Christian Science Monitor
10 January 2007
In 2006, "carbon neutral" became the New Oxford American Dictionary's word of the year, evidence not only of the "greening" of our culture, but of our language as well. As scientists predict another bout of record-setting temperatures this year, climate concerns may soon "green" our wallets as well. By all accounts, 2007 is poised to see the industry of carbon neutrality - so-called carbon offsetting - grow dramatically.
In theory, the idea is simple. The consumer pays a third party to remove a quantity of carbon (in the form of a greenhouse gas) equal to what he or she emits. But how voluntary carbon offsets actually work is unclear at best, and potentially fraudulent at worst, say experts.
The problem: No current certification or monitoring system has any teeth, and there is no easy way to confirm that offsetting companies are doing what they promise. Now, various organizations are scrambling to provide standards for what experts call a fragmented market with a product of drastically varying quality.
The first-ever ranking of carbon offsetters recently released by Clean Air-Cool Planet, a nonprofit in Portsmouth, N.H., graded 30 companies on a scale of 1 to 10; tellingly, three-quarters scored below 5. Critics, meanwhile, question whether the carbon market might be a dangerous distraction at a time when decisive action is needed to avert climate catastrophe.
"On the one hand, there is the potential benefit of educating people through offsets," says Dan Becker, director of Sierra Club's global warming program. "On the other hand, if people view offsets like papal indulgences that allow you to continue to pollute, then it's probably not a good idea."
Many companies have nonetheless moved to make carbon neutrality part of their 21st-century brand identity. Travelocity and Expedia now offer customers the option of offsetting carbon emissions associated with their trips for a few extra dollars. In 2005, "Syriana" became the first carbon-neutral movie. In 2006, "An Inconvenient Truth" followed suit to become the first such documentary. With the purchase of 170,000 tons of carbon offsets, HSBC declared itself the first-ever carbon-neutral bank. Other companies, including Google and Ben & Jerry's - not to mention musical groups such as the Dave Matthews Band - are moving toward, or have arrived at, various levels of carbon neutrality.
And that's just the beginning, say analysts.The volume of metric tons of carbon traded on the voluntary market doubled last year over 2005. It's widely expected to double again in 2007. Of 92 companies polled by The Conference Board, a nonprofit business research organization, three-quarters were actively computing their carbon footprint. While only 15 percent were currently trading on the voluntary carbon market, 40 percent were considering it. Carbon was the topic du jour in more than two-thirds of the corporate boardrooms polled.
Carbon markets fall into two broad categories:
1. The cap-and-trade system. Countries that have ratified the Kyoto Protocol, an amendment to the global treaty on climate change, participate in this system by setting a limit, or cap, on greenhouse-gas emissions. Those companies that emit less than their allotment receive credits that they can sell on carbon exchanges. Those that emit more must purchase credits in order to avoid financial penalties. (The voluntary Chicago Climate Exchange also operates this way.) Proponents of this system trust the innovative power of the free market to promote energy efficiency.
2. The voluntary carbon market. In the United States, the market for carbon offsets is voluntary, driven primarily by corporations seeking to enhance their brand identity or to familiarize themselves with what they consider to be an inevitability.
Many offsets sold on this market are what Ricardo Bayon, director of Ecosystem Marketplace, a San Francisco-based information provider on ecosystems services, calls "gourmet." Their value lies not in the compliance, but in the prestige of achieving carbon neutrality. At first glance, this type of offset appears more straightforward: A consumer pays for a carbon-removal service.
Dig a little deeper, however, and it gets more complicated. There are many ways to remove carbon from the air, each operating on a different time scale and all of them of different "quality." You can capture greenhouse gases by planting trees. You can also prevent greenhouse gas from entering the atmosphere by burning methane released from animal manure and landfills. (As a greenhouse gas, methane is 23 times more potent than CO2.) Or you can preempt its release by building alternative-energy sources such as wind- and solar-power devices.
Compounding an offset's inscrutability is its intangibility. Unless you're willing to visit Uganda in 20 years to verify the existence of a new tree, a carbon offset is arguably invisible. "The carbon market is particularly difficult because of that issue," says Mark Trexler, president of Trexler Climate + Energy Services in Portland, Ore., the firm commissioned to author Clean Air-Cool Planet's (CA-CP) guide to carbon offsets. "You're dealing with stuff in the future in many cases that hasn't happened yet."
CA-CP's "A Consumer's Guide to Retail Carbon Offset Providers" attempts to wrangle a semblance of order from what one industry insider calls the "Wild West." It ranks offsetting companies on factors like transparency, third-party certification, their efforts to educate consumers, and how well they prove they're not selling the same carbon offset more than once.
CA-CP's ranking effort is the first in what's likely to be a burgeoning industry effort at standardization. Two San Francisco organizations, Business for Social Responsibility and Ecosystem Marketplace, recently joined forces to write guides on the voluntary carbon market, and Ecosystem Marketplace is about to release a book on the topic. This spring, the Center for Resource Solutions in San Francisco plans to release a certification standard it hopes will be universally adopted.
Central to the CA-CP report - and to the debate on how to gauge an offset's quality - is the topic of "additionality." Additionality is determined by answering a deceptively simple question: Would a project have happened anyway? If yes, the offset cannot be said to have additionality. If no, then it qualifies as a true offset. Simple - except that no one agrees on what could have happened.
"You put a bunch of climate wonks in a room, it's the one [topic] they're going to talk about most," says Mr. Bayon. "And it's the one that has bedeviled every single climate discussion I've ever seen."
But while experts disagree on the effectiveness of the carbon market at averting global warming, nearly everyone agrees on two points. First, the fact that people are beginning to factor in the cost of their carbon footprint when doing business is good. "You're starting to put a price on the emissions of carbon," says Bayon. "That cost begins to filter into your operations. And you start saying to yourself, 'Should I throw that 10 or 20 bucks out of the window?' "
Second, the more money invested in renewable energy, the better. "That has an important effect in the aggregate," says Bogdan Vasi, assistant professor at Columbia's School of International and Public Affairs in New York City. "As more and more people make these choices, they are creating a market, and slowly it's shifting the proportion of renewable energy to fossil-fuel energy."
But ultimately the carbon-offset market is more a phase than a destination, says Jonathan Isham, professor of international environmental economics at Middlebury College in Vermont. "We really want a world where, in a generation, we don't need offsets anymore," he says. "Once we get the legislation we need, prices will reflect the social costs of carbon." More trees not necessarily the way to a cooler earth
Everybody loves trees. They're beautiful, big, and green. Unfortunately, planting them may not be the best approach to reduce global warming, say scientists. While a tree does suck up carbon, its net cooling effect depends on latitude, according to a collaborative study from Lawrence Livermore National Laboratory in Livermore, Calif. Only trees planted at tropical latitudes have a net cooling effect. Those at temperate latitudes actually warm the planet.
And unless a forest is permanent (and who can guarantee that?), trees only temporarily sequester atmospheric carbon. When they burn or decompose, the carbon they contain is released back into the atmosphere. In tropical countries, where trees are most effective as a cooling agent, they're often up against poverty and political instability. "Does some guy wake up and say, 'Now I'm the dictator of the country. I want a golf course?' " says Michael Dorsey, a professor of environmental studies at Dartmouth College in Hanover, N.H. "There's the big issue."
Still, a tree's value shouldn't be discounted. While not the ideal carbon solution, they do increase biodiversity and decrease soil erosion. Most important, their natural appeal makes them ready-made symbols. "We do support tree-planting projects to get our employees engaged," says Erin Meezan, director of environmental affairs at Interface Inc., a textile company with an environmental bent. "It's one of the easiest things for people to understand. If you start getting into anaerobic digesters and underground injection, we lose them."
January 11, 2007
The Polar Dash for Oil
The Polar Dash for Oil
Luke Burgess, Pure Energy Report, 11-Jan-2007
COMMENT: The polar areas are special places on this earth. Both are largely untrammelled by the direct impacts of man, both awesomely rich laboratories for study of nature and the indirect impacts of man - the best places on earth for all nations to agree to suspend territorial claims, military presence, and exploitation.
This has been done in Antarctica with the 1959 Antarctic Treaty System. I'm sure it's not perfect, but it's a lot better than the "It's mine" hissyfit that is happening around the Arctic now that global warming and oil depletion are ganging up on the last places on earth we haven't dominated.
http://en.wikipedia.org/wiki/Antarctic_Treaty_System
We argued last year that expending energy to establish an international protection zone is preferable to gunboats and drillrigs. The subject then was increasing pressure, especially from the US, to open up the Northwest Passage to commercial shipping.
The Arctic: to defend or protect
http://www.sqwalk.com/blog2006/000935.html
Not all industry analysts think the Arctic will be the global oil honeypot that this writer seems to believe.
Arctic has less oil than earlier estimated
http://www.sqwalk.com/blog2006/000892.html
See also:
Melting Antarctic Ice Causing Sea Levels to Rise
http://www.sqwalk.com/blog2006/000701.html
Ticking Time Bomb
http://www.sqwalk.com/NewsItems2005.shtml
Arctic ice cap 1979 vs 2003
http://www.sqwalk.com/blog/000267.html
The Polar Dash for Oil
There's oil under the polar ice caps, but is it economic, and whose oil is it, anyway?
By Luke Burgess
Pure Energy Report
January 11, 2007
BALTIMORE, MD - As companies rush to find the new fields that will satiate our world's increasing demand for oil, their mad dash has pushed them to the ends of the earth, literally.
History Redux
In 1848, when Thomas Roys sailed the Superior through the Bering Strait, effectively becoming the first ship to pass through the narrow water gap between North America and Asia, he wasn't in search of new land, scientific discovery, or even fame.
He was after oil.
The truth is that whale oil prices escalated dramatically during that time period, mostly because whales were becoming scarce. As their numbers decreased rapidly, whalers like Roys were forced to move further into uncharted territory.
This scenario is being replayed again on the world stage. And while the characters are different today, the problem is the same.
Let's face it . . . global demand for oil isn't going away. Soaring demand and depleting reserves are just plain facts we face amidst our ever-growing dependence for oil.
The world currently produces nearly 85 million barrels of oil per day (MMbbls/d), and according to the Energy Information Administration, we will need an additional 13 MMbbls/d just to keep pace with our burgeoning economy over the next eight years.
And since no other energy source is ready to take over the reins, oil companies are literally going to the ends of the earth to alleviate this impending crisis.
The Great Untapped Polar Hope . . . or Hype?
Nestled to the north - maybe under Santa's workshop - could be the solution that the oil industry has been looking for.
The U.S. Geological Survey suggests that the Arctic Circle may hold more that 25% of the world's untapped reserves. And this number doesn't reflect the vast unknown potential the area contains. Fact is, the Artic Circle is one of the most unexplored areas left on earth, and could very well include oil fields that would rival those drilled in the Middle East.
This hope, however, is surrounded by much controversy, not to mention the present difficulties faced in producing the oil from such harsh terrain.
Amid possible record oil reserves, certain people are worried that the Arctic's fragile ecosystem would crumble under the rigs and drills of oil exploration.
Environmentalists leading the charge against drilling bring several points forward. One of their contentions is that the Arctic wildlife would suffer dramatically from oil exploration, including such risks as oil spills.
Among their other concerns is global warming. In recent decades, the Arctic has seen the largest increases in average temperatures throughout the world.
Also, the amount of oil that is estimated to be in the Arctic has been challenged lately, with advocates severely lowering the number of reserves calculated by the USGS.
But protesters aren't the largest obstacle for oil companies.
The biggest problem lies in the technology.
Drilling in extreme temperatures like the Arctic is a grueling, laborious task.
In order for the Arctic Circle to become an economic source for oil, new technology will be needed to lower the cost of drilling, or else the protesters may not even need to bring out their markers and placards.
The Geopolitical Arctic Scramble
The Arctic region is about to become the center of attention for exploration and production, and the major oil companies are looking to play.
At the moment, there is a veritable scramble to lay claim on potentially rich property. The problem here, however, are the raging disputes set to ignite from the main countries involved-the U.S., Canada, Russia, Norway, and Denmark.
Conflicts have already surfaced.
The U.S. and Canada quarrel over land in the North West Passage, while Norway and Russia have a similar conflict in the area of the Barents Sea, and whichever way a person looks, disagreements arise. Not to be outdone, Denmark has laid claim over the entire Arctic Circle!
Each country is attempting to carve out its own pieces to exploit the profit that is sure to be generated from oil companies' exploration and future production on the land. The geopolitical Arctic war has already begun, and these countries have all come out swinging.
Time is of the Essence
There is no denying the dire need to find new sources of oil will be upon us in the near future.
And if no clear successor to oil emerges in the next few years with no significant discoveries being made, two factors will remain consistent-demand will increase, and production will decrease.
This will drive oil prices skyward, and when our escalating energy dependence consumes us, it will make $100 oil look like the deal of a lifetime.
Even though we haven't come to that crossroad yet, the question is: will we be prepared to handle it?
Luke Burgess is the managing editor and publisher of GoldWorld.Com. He also writes a weekly column for EnergyAndCapital.Com, and WealthDaily.Net. Furthermore, Luke co-edits The Pure Energy Report and Secret Stock Files with Michael Schaefer.