November 29, 2009
Copenhagen: Seattle Grows Up
NAOMI KLEIN
The Nation
November 30, 2009
The other day I received a pre-publication copy of The Battle of the Story of the Battle of Seattle, by David Solnit and Rebecca Solnit. It's set to come out ten years after a historic coalition of activists shut down the World Trade Organization summit in Seattle, the spark that ignited a global anticorporate movement.
The book is a fascinating account of what really happened in Seattle, but when I spoke to David Solnit, the direct-action guru who helped engineer the shutdown, I found him less interested in reminiscing about 1999 than in talking about the upcoming United Nations climate change summit in Copenhagen and the "climate justice" actions he is helping to organize across the United States on November 30. "This is definitely a Seattle-type moment," Solnit told me. "People are ready to throw down."
There is certainly a Seattle quality to the Copenhagen mobilization: the huge range of groups that will be there; the diverse tactics that will be on display; and the developing-country governments ready to bring activist demands into the summit. But Copenhagen is not merely a Seattle do-over.
It feels, instead, as though the progressive tectonic plates are shifting, creating a movement that builds on the strengths of an earlier era but also learns from its mistakes.
The big criticism of the movement the media insisted on calling "antiglobalization" was always that it had a laundry list of grievances and few concrete alternatives. The movement converging on Copenhagen, in contrast, is about a single issue--climate change--but it weaves a coherent narrative about its cause, and its cures, that incorporates virtually every issue on the planet. In this narrative, our climate is changing not simply because of particular polluting practices but because of the underlying logic of capitalism, which values short-term profit and perpetual growth above all else. Our governments would have us believe that the same logic can now be harnessed to solve the climate crisis--by creating a tradable commodity called "carbon" and by transforming forests and farmland into "sinks" that will supposedly offset our runaway emissions.
Climate-justice activists in Copenhagen will argue that, far from solving the climate crisis, carbon-trading represents an unprecedented privatization of the atmosphere, and that offsets and sinks threaten to become a resource grab of colonial proportions. Not only will these "market-based solutions" fail to solve the climate crisis, but this failure will dramatically deepen poverty and inequality, because the poorest and most vulnerable people are the primary victims of climate change--as well as the primary guinea pigs for these emissions-trading schemes.
But activists in Copenhagen won't simply say no to all this. They will aggressively advance solutions that simultaneously reduce emissions and narrow inequality. Unlike at previous summits, where alternatives seemed like an afterthought, in Copenhagen the alternatives will take center stage. For instance, the direct-action coalition Climate Justice Action has called on activists to storm the conference center on December 16.
Many will do this as part of the "bike bloc," riding together on an as yet unrevealed "irresistible new machine of resistance" made up of hundreds of old bicycles. The goal of the action is not to shut down the summit, Seattle-style, but to open it up, transforming it into "a space to talk about our agenda, an agenda from below, an agenda of climate justice, of real solutions against their false ones.... This day will be ours."
Some of the solutions on offer from the activist camp are the same ones the global justice movement has been championing for years: local, sustainable agriculture; smaller, decentralized power projects; respect for indigenous land rights; leaving fossil fuels in the ground; loosening protections on green technology; and paying for these transformations by taxing financial transactions and canceling foreign debts. Some solutions are new, like the mounting demand that rich countries pay "climate debt" reparations to the poor. These are tall orders, but we have all just seen the kind of resources our governments can marshal when it comes to saving the elites. As one pre-Copenhagen slogan puts it: "If the climate were a bank, it would have been saved"--not abandoned to the brutality of the market.
In addition to the coherent narrative and the focus on alternatives, there are plenty of other changes too: a more thoughtful approach to direct action, one that recognizes the urgency to do more than just talk but is determined not to play into the tired scripts of cops-versus-protesters.
"Our action is one of civil disobedience," say the organizers of the December 16 action. "We will overcome any physical barriers that stand in our way--but we will not respond with violence if the police [try] to escalate the situation." (That said, there is no way the two-week summit will not include a few running battles between cops and kids in black; this is Europe, after all.)
A decade ago, in an op-ed in the New York Times published after Seattle was shut down, I wrote that a new movement advocating a radically different form of globalization "just had its coming-out party." What will be the significance of Copenhagen? I put that question to John Jordan, whose prediction of what eventually happened in Seattle I quoted in my book No Logo. He replied: "If Seattle was the movement of movements' coming-out party, then maybe Copenhagen will be a celebration of our coming of age."
He cautions, however, that growing up doesn't mean playing it safe, eschewing civil disobedience in favor of staid meetings. "I hope we have grown up to become much more disobedient," Jordan said, "because life on this world of ours may well be terminated because of too many acts of obedience."
EnCana grapples with gas glut
By Shaun Polczer
Calgary Herald
November 28, 2009
Company split takes effect Monday; Eric Marsh: Managing a natural gas 'renaissance'
 EnCana executive VP Eric Marsh is pressing government to develop policies that encourage consumption of natural gas, which is both clean and abundant. (Photograph by: Ted Rhodes, Calgary Herald) |
Starting Monday when the company's split into two comes into effect, he'll be charged with finding ways to use them up when he takes over the position of "Executive Vice-President Natural Gas Economy"--a fancy way of describing a natural gas evangelist whose job is to extol the virtues of North America's cleanest and possibly most abundant fossil fuel.
It's probably the first time a major energy producer has created a senior executive position focused solely on demand instead of supply.
"This industry has gone through a period of time over the last three to five years that we've
never known before," he says. "We would say it's a renaissance in natural gas development. The big change is that it's brought on by technology."
The new EnCana is coming to market at an odd and some say troubling time for natural gas producers, as one of the purest play natural gas producers in North America. Virtually all of its production is gas of the "unconventional" variety, an abundant but relatively difficult type of gas to produce from hard to reach rocks like shale and tight sandstone.
The original EnCana was a pioneer in this regard, practically inventing the concept of "resource plays." Today, every major multinational oil company from Exxon to Shell is scrambling to take up positions in every shale basin they can find.
Some estimates by the U.S. Geological Survey and others suggest North America has 100 years of gas in the ground, thanks to the discovery of big new shale plays in places like Horn River and Louisiana.
In fact, shale--which was once considered impossible to extract gas from--has proven to be so prolific that it currently accounts for 13 per cent of North America's total production and full-blown development has barely begun. Huge reserves lie untapped in places such as Quebec and Pennsylvania that could dramatically alter the production landscape for decades to come. Marsh says scarcity is no longer an issue in a market that has been characterized by volatile spikes in supply and demand.
That in turn has driven prices down to multi-year lows, as storage levels reach all-time highs. The more successful companies like EnCana are at finding and developing new reserves, the lower the price goes.
Speaking at the meeting to approve the split on Wednesday, EnCana CEO Randy Eresman warned of a looming shakedown among gas producers due to lower long-term prices. Conventional exploration and development that can only be profitable at $7 to $8 will probably fall by the wayside.
"We've got exposure to all of the plays that are actually causing the value of natural gas production we're seeing today," he said. "Over time we think that clear itself up and the best producers at the lowest cost will survive."
Finding the solution to the glut is Marsh's job. Already, he's pressing governments to develop policies that encourage consumption of natural gas as a substitute for coal and nuclear to generate power and as a transportation fuel in cars and heavy trucks.
Marsh estimates that a third of North America's greenhouse emissions could be eliminated by switching vehicles to burn natural gas. To set the example, EnCana is switching its 1,800-strong vehicle fleet to natural gas and configuring rigs to use it instead of diesel.
Marsh says many government leaders often aren't aware of the magnitude of the opportunity to reduce oil consumption and cut emissions. It's this "green" mantra the new EnCana will try to make as the cornerstone of its emerging corporate culture.
"We think you can make good inroads on commercial transport infrastructure in three years. We have this abundance of natural gas, it's affordable and we can count on the supply being there."
In a recent meeting with the Herald's editorial board, Texas oilman T. Boone Pickens complained that North Americans are unable to buy natural gas vehicles. Only one manufacturer actually produces a natural gas passenger car --the Honda Civic GX--and it's only available in limited quantities. About 150,000 cars are configured to run on natural gas out of a total North American fleet of 250 million automobiles. By contrast, natural gas-powered cars are common in places like Europe with almost 40 to 45 models to choose from. Europe currently imports most of its natural gas from Russia.
Pickens has described North America as the Saudi Arabia of natural gas. "We have more of it than anyone," he said.
Pickens is promoting his own plan to encourage natural gas in eighteen-wheelers and federal vehicles with a pair of bills working through the U.S. House of Representatives and Senate that he hopes will be passed by the end of the year. He said he has met personally with President Barack Obama to discuss the issue and described natural gas as "the only fuel we have in North America that can take out foreign oil."
But others have raised doubts about the extent of gas supplies in shale, questioning what they see as overly optimistic resource assessments.
Writing in World Oil magazine, consulting geologist Art Berman said that not enough is known about the long-term production characteristics of shale gas wells to accurately estimate reserves. In the August issue of the industry publication he suggested shale gas reserves could be less than a third of preliminary estimates.
Likewise, Allen Brooks, managing director of energy investment bank Parks Paton Hoepfl& Brown based in Houston, expressed his own doubts about how economic the shales will prove to be in self-proclaimed "musings," that have been widely circulated on the Internet. "The gas-shale play is beginning to smell like a bubble and as we have learned during the past few years, bubbles have a way of ending in a bad way."
But EnCana's Marsh is unfazed and envisions a day when gas producers vertically integrate, selling natural gas in filling stations and operating power generation facilities.
spolczer@theherald.canwest.com
© Copyright (c) The Calgary Herald
'Size of the prize' huge for shareholders:Cenovus CEO
By Shaun PolczerCalgary Herald
November 28, 2009
Ferguson has 25 years of oilpatch savvy
Brian Ferguson isn't your typical oilman. With his accounting background and a commerce degree from the University of Alberta, he often stood out from EnCana's other senior executives, as a bean counter among engineers and geologists. But his oilpatch credentials are impeccable.
After joining Alberta Energy Company in 1984, Ferguson has spent most of his career in Calgary's energy hub. In February 2006 he was appointed EnCana's chief financial officer, a position he has held through this week's breakup of the company into two parts. On Monday, he'll officially become the chief executive of Canada's newest heavy oil and oilsands player, Cenovus Energy, which begins operations Dec. 1.
Q: How would you describe Cenovus's corporate culture?
A: Cenovus is going to be a company that all our employees and stakeholders are going to be proud of. If I was to think of a couple or three words that I think would be important to describe the character of the culture, it would be words like rigorous, respectful, ready.
Q: Are you happy with the performance of the "when issued" Cenovus shares? I'm assuming the idea was to try to establish a value for the shares before the split took effect.
A: The when issued market, as we've discovered, is not something that is well known or often used. So as a result there seems to be a lot of learning on a variety of people's parts, whether that's investors or investment dealers. An anecdote: My own broker called me today and said, 'Brian, I've got an order for 50,000 CVE (Cenovus' ticker symbol) how do I do that?' I said, 'Don't ask me, call your trader.' It's something that's encouraged by the Toronto Stock Exchange, the idea is to provide a more orderly transition to the common shares in trading.
Q: How would you distinguish Cenovus from other heavy oil producers?
A: We have a 40-billion barrel opportunity. We have 40 billion barrels of natural bitumen in place, this massive opportunity that we have inherited under the EnCana umbrella. The size of the prize is huge for our shareholders. The other key way we distinguish ourselves is that I believe we can be self-funding.
There are two fundamental strategic questions I ask myself: How do I grow my business? And the other is how am I going to fund that growth? We've got a great balance sheet and a low cost structure that allows us to be self-funding at mid-cycle prices. That, I think, is definitely unique.
Q: Part of the rationale for the split was to increase each respective company's ability to grow--did I hear you correctly in saying you can grow 15 to 20 per cent per year?
A: That is specifically what we forecast for 2010 from Foster Creek and Christina Lake. I think we can sustain that 15 per cent range for the next decade just on our bitumen production just from Foster Creek and Christina Lake without looking at any of the other projects we have.
What we're going to do over the first two quarters of our life is to assess, evaluate and prioritize how we will place those other projects in the Cenovus portfolio and how we will move forward.
Q: EnCana's strategy to split seems the opposite of Suncor, which merged with Petro-Canada to avoid being purely an oilsands player. Is there any advantage to breaking into two pure plays as opposed to having one single diversified company?
A: What you always need to to do is establish the right strategy for your company based on the assets and opportunity in the portfolio that you have as a corporation.
Our strategy is one that has been in the making since 2003. After the merger of Pan-Canadian and AEC in 2002, we spent the first 18 months really trying to understand the assets. What we concluded is where we could really be industry leaders in unconventional gas and in situ oil right in our own backyard. We were active in 22 countries around the world at that point in time. Between 2003 and 2006 we sold $13 billion worth of assets--sold all our assets outside North America so we could focus on what we could do best and be very, very good at. That's evolved into the EnCana of tomorrow and Cenovus. I view the split here as the next natural step in EnCana's increasing focus.
spolczer@theherald.canwest.com
© Copyright (c) The Calgary Herald
November 20, 2009
Pipeline to West Coast gains backing
Nathan VanderKlippe
Globe and Mail
Thursday, Nov. 19, 2009
 Enbridge expects ‘solid shipping commitments' for Gateway |
For years, two major West Coast oil pipeline projects have languished without enough momentum to build the multibillion-dollar infrastructure required to take bitumen from the Fort McMurray, Alta., region to tidewater.
In 2005, when Enbridge Inc. (ENB-T44.220.180.41%) sought shippers for its Northern Gateway project, an 1,170-kilometre pipeline capable of carrying 525,000 barrels per day to the British Columbia coast, support was too low and the proposed project lost traction.
By early next year, however, Enbridge expects to announce for the first time that it has secured “solid” commercial backing for Gateway, marking a major step forward in the country's plans to diversify its oil exports.
That comes amid a shifting of the landscape, as industry executives, politicians and economists increasingly promote the idea that it is risky to rely solely on the United States to buy Canadian crude, especially as the oil sands grow in importance and demand for oil stagnates south of the border.
“We must export oil to China,” BMO chief economist Sherry Cooper said Thursday in a speech in Calgary. “It's very important. And the sooner the better.”
Such an outlet is both a useful exercise in market diversification, but also a necessary strategy in the face of looming U.S. climate policies, which may restrict oil sands imports, she said.
“For sure, the U.S. isn't going to like it,” Ms. Cooper said. “But that's good, because it gives us more leverage with the U.S. For example, it makes it more difficult for the U.S. to threaten us with comments about dirty oil.”
Kinder Morgan Canada (KMP-N56.00-0.22-0.40%) owns the only route currently connecting the oil sands to the Pacific, its 300,000-barrel-per-day Trans Mountain line to the Lower Mainland, largely used to fuel domestic consumption.
The company is, however, drafting two expansion plans, one to expand Trans Mountain capacity by 80,000 barrels, and another to add a further 320,000, which it plans to detail in the next three to six months. Kinder Morgan is also working with Vancouver port authorities to sail huge, one-million barrel Suezmax tankers into harbour there, in hopes of boosting exports, which have already seen a dramatic rise this year.
In 2008, Kinder Morgan filled up 55 tankers with Canadian crude. By the end of this November, it will already have loaded 78. “We shattered last year's record,” said Kinder Morgan Canada president Ian Anderson, “which is really reinforcing the demand for West Coast access.”
But the idea of sending significant volumes of crude across the Pacific remains fraught with difficulty, both because of the volatility of ocean freight costs, and because it represents a radical change. In the second quarter of this year, Canada exported 1.76 million barrels a day to the U.S, but only 24,000 elsewhere. Several major pipelines to the U.S. will also provide ample capacity for years of oil sands growth.
However, new Asian oil sands entrants – including PetroChina and the Korea National Oil Corp. – have helped raise interest in shipping crude to Asia, and Enbridge plans to submit a full Gateway regulatory filing late this year or early in 2010. Tucked into that filing will be evidence that the project has solid support, beyond the $100-million that some shippers handed Enbridge last year to push Gateway forward.
“We expect we'll be able to demonstrate solid shipping commitments in our application,” said Gateway pipeline president John Carruthers.
But sending oil sands crude through B.C. may not be easy. Enbridge faces criticism of its Gateway plan among the 50 native communities Gateway will affect. They are concerned about the impact of potential spills on salmon and other marine life.
“Gateway faces growing and stiff and fairly unequivocal opposition,” said Eric Swanson, a corporate campaigner with environmental group Dogwood Initiative. “I think it is setting itself up to be one of the biggest fights in B.C.'s history.”
November 18, 2009
Climate Denial Industry Costs Us $500 Billion a Year
James Hoggan
desmogblog
16 November 2009
 |
The climate denial industry should foot the bill, since they are responsible for causing the delay.
In the run-up to the Copenhagen climate summit, a growing number of government leaders from around the world - and even high level United Nations representatives - have suggested that an ambitious, legally binding agreement is all but impossible to achieve in Denmark this December. Some have indicated that it may take six months to a year beyond Copenhagen to cement a global agreement. Nearly all point the finger at the United States for causing this delay.
But it is not President Obama’s fault, a fact that is difficult for many outside the U.S. to comprehend. Shouldn’t the U.S. president, often considered the “most powerful man in the world,” be able to commit the nation to specific emissions reduction targets and financial contributions to help developing countries deal with climate change?
It is not that simple, though.
The real blame lies at the feet of the climate denial industry, which has spent the past 20 years working to confuse the U.S. public and lawmakers about climate change. More than any other single factor, the climate denial industry can claim responsibility for the present stalemate in both domestic U.S. and international climate policy debates.
Groups like the Heartland Institute, U.S. Chamber of Commerce, National Association of Manufacturers, American Enterprise Institute and a host of oil and coal industry front groups, including the now-infamous American Coalition for Clean Coal Electricity (ACCCE), have collectively thrown a wrench in the cogs of U.S. climate policy, grinding the nation’s response to climate change to a halt.
Disinformation and denial campaigns waged by these fossil fuel defenders – several of which I profiled briefly in a recent post Who Is Killing Copenhagen – have also had an impact on efforts to forge a global action plan to address climate change. These front groups were actively involved in blocking U.S. participation in the Kyoto Protocol back in the mid-1990s, and now they are directly responsible, once again, for U.S. obstruction in the Copenhagen negotiations.
Now we know definitively that the climate denial industry – which spends hundreds of millions every year on disinformation and denial efforts – is costing the world an extra $500 billion for each year that we fail to implement a coordinated global response to climate change.
World leaders meeting in Copenhagen next month should consider adding to the agenda a plan to charge these oil and coal industry front groups for every penny of that $500 billion annual delay cost, including back payments for the past 20 years of delay created by the climate denial machine.
They owe at least that much to those facing climate change impacts already, let alone future generations who will suffer far more due to their efforts.
November 16, 2009
Vast majority of stimulus projects escape environmental-impact studies
MIKE DE SOUZA
Canwest News Service
Victoria Times Colonist
NOVEMBER 16, 2009
OTTAWA — More than 90 per cent of the thousands of new infrastructure projects across the country are slated to get funding from the Harper government without being required to undergo a federal assessment of their environmental impact, Canwest News Service has learned.
Although environmental assessments are generally required for projects that receive federal funding, exemptions were approved by Prime Minister Stephen Harper’s cabinet last spring to speed up the approval process on certain types of projects with small budgets.
The government said the small percentage of environmental assessments is the result of a program that was designed to kick-start projects and avoid extensive consultations that would “slow projects and threaten Canada’s economic recovery.”
“As such, large-scale projects that could potentially impact the environment were generally not eligible for the infrastructure stimulus fund,” said Chris Day, a spokesman for Transport, Infrastructure and Communities Minister John Baird. “They may be considered for funding under other envelopes with longer timelines.”
As a result, out of more than 3,000 projects that were approved for funding under the government’s multibillion-dollar infrastructure stimulus fund this year, only two per cent will go through a federal process to evaluate their environmental footprint, according to Day.
Meanwhile, only 15 per cent of more than 1,200 projects approved for funding as part of the government’s Building Canada fund for new infrastructure required the federal environmental assessment, he explained.
But some of the projects could still require a provincial assessment.
The exemptions for federal assessments were not introduced through legislation in Parliament and have been challenged in court by two environmental organizations, Ecojustice and the Sierra Club of Canada.
“It seems like they (members of the Harper government) are just making decisions arbitrarily,” said Justin Duncan, a staff lawyer at Ecojustice.
The new figures were released following a scathing report this month by the federal environment commissioner, Scott Vaughan, that questioned whether the government is doing enough to find out whether its assessments were preventing adverse environmental impacts from new projects.
Vaughan has recommended the government consider its findings as it does a scheduled review of the federal environmental-assessment legislation in the next year. Environment Minister Jim Prentice has said he accepts the commissioner’s recommendations.
November 13, 2009
Shale or sham?
COMMENT: Art Berman is not alone in suggesting that shale gas isn't the pot of gold at the end of the energy rainbow. His message is supported by Canadian energy analyst David Hughes. These two slides are from a recent presentation of his. (Check it out - note the well density around Dalla-Fort Worth, and the armada of fraccing trucks ready to go to work.)
This graph shows the approximate quantity of gas that can actually be produced from the stated "gas-in-place" in the major US plays. Irrespective of the resource - oil, conventional gas, coalbed methane, tar sands - the recoverable quantity is never even close to 100% of the stuff in the ground.
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This chart illustrates how rapidly most of the production from a shale gas well takes place - 65% of it is out in the first year.
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Combine much lower production than the headlines would indicate, with hugely accelerated up-front well depletion, with the fact that companies across North America (including northeast BC) are jumping on all the shale opportunities all at once, could mean that most of the continent's shale gas, which some headline writers claim could meet North America's gas demand for 100 years, will be played out in the next ten years.
In the context of climate change, is that all for the best (they won't be burning all the gas they claim is there) or is it worse (they'll be burning more sludge from the tar sands)?
By LOREN STEFFY
Houston Chronicle
Nov. 12, 2009
Art Berman didn't set out to become the Cassandra of shale gas.
That's simply been the result as the Sugar Land petroleum geologist and consultant has persisted in raising doubts about the hottest play in the domestic energy industry.
Natural gas extracted from shale formations has transformed the U.S. energy outlook, leading to predictions that it could produce as much as half of our natural gas by the end of the next decade. Shale gas, though, requires more expensive drilling techniques to produce than conventional gas. That made shale gas attractive last year, when natural gas was selling for $13.58 per million British thermal units, but it can be a money-loser at today's prices of less than $4.50.
In a boom-prone industry known for greeting new discoveries with wide-eyed hype, shale gas has unleashed a gusher of zeal, sparking a drilling craze and soaring lease rates across millions of acres from Texas to New York.
Berman isn't saying that the major shale players — companies such as Chesapeake Energy, Devon Energy and Houston-based Petrohawk Energy — are wrong, but he's skeptical that shale gas will be the domestic energy boon that the companies claim.
“I'm saying it's a bubble,” Berman said. “They're creating an illusion.”
Decline rates disputed
That view puts Berman at odds with a host of energy companies, consultants and investment bankers, who claim shale gas may more than double our domestic supply. They argue Berman's analysis is flawed.
The two sides disagree on how to calculate the decline rates for the wells. In simple terms, Berman believes that shale gas wells will play out much faster — producing much less gas — than his detractors do. He also believes that many of the wells being drilled in shale won't be commercially viable.
His conclusion is based on production rates from the Barnett Shale near Fort Worth, the country's oldest field, which he says show steep and persistent declines. Supporters say the initial declines ease over time and settle into a steady production stream.
In criticizing shale, though, Berman has become something of an Oil Patch pariah.
“I'm being creamed,” he said. “There's a brotherhood of defenders out there, and they're all lined up against me.”
A column he wrote for the trade publication World Oil got spiked, and Berman resigned in protest. He claims the shale companies put pressure on World Oil's publisher to silence him.
‘Time to move on'
John Royall, president and chief executive of Gulf Publishing, said he didn't receive any pressure from gas companies. World Oil serves a global audience, and gas shale is largely a domestic issue. Berman had written on the topic for a year, and Royall decided that was enough.
“Art had an interesting take on shale gas,” he said. “It was interesting, provocative stuff, but it was time to move on.”
Berman doesn't come off as obsessed or paranoid. He simply believes that the industry has abandoned caution when it comes to shale, wasting millions drilling wells with a lack of scientific analysis.
“All of my instincts say if you approach it this way, it's just insanity,” he said.
If he's right, the insanity could affect us all. As Congress discusses carbon capture and environmentalists champion converting vehicles to run on natural gas, the prospect that gas supplies could be far less than we think could have a profound economic impact on the country.
“My message isn't ‘this is bad,' it's that we need to practice some caution here,” Berman said.
Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays. Contact him at loren.steffy@chron.com. His blog is at http://blogs.chron.com/lorensteffy/.
'Oil sands?' Bite your tongue
Carrie Tait
Financial Post
Friday, November 13, 2009
First they were tar sands. Then they were oil sands. Now? Enhanced oil projects. At least according to En-Cana Corp. and its oil-sands spinoff, Cenovus Energy Inc.
The pair want to distinguish their oil-sands operations, which employ the underground and more carbon-intensive steam-assisted gravity (SAGD) drainage method, from the more aesthetically offensive open-pit mining efforts that are accompanied by deadly tailings ponds. As a result, the two firms have ditched the term "oil sands" from their lexicon and replaced it with "enhanced oil projects" or just "oil projects."
"What we have done is had a look at the nature of the recovery techniques that we apply on EnCana's bitumen production, which is 100% [steam-assisted gravity drainage], and there are assets and properties that we drill and use drilling techniques to recover the oil, which is really a form of enhanced recovery," Brian Ferguson, EnCana CFO and future Cenovus CEO, said during EnCana's third-quarter conference call.
Cenovus will inherit En-Cana's SADG oil sands operations -- Foster Creek, Christina Lake and Borealis -- not to mention the environmentally unfriendly connotations, government red tape, and public relations headaches that come with doing business in northern Alberta when En-Cana splits in two at the end of the month. The oil sands are the world's second-largest known oil reserves behind Saudi Arabia.
"We just thought it was more representative of the nature of Cenovus' assets to describe them as such so that there wasn't any confusion [between SAGD and mining projects]," Mr. Ferguson said after EnCana and Cenovus unveiled their preliminary 2010 budgets.
Enhanced oil recovery traditionally means energy companies increase pressure in a reservoir by flooding it with water or injecting it with carbon dioxide in order to bring more crude to the surface. In oil sands SAGD or in-situ projects, two horizontal wells are drilled and steam is injected into the reservoir via the top well to melt the sticky, thick bitumen.
Kyle Murray, an associate professor of marketing at the University of Alberta School of Business, understands why EnCana and Cenovus want to distance themselves from the notorious images associated with the oil sands, but thinks they may fail.
"Rebranding works best when it comes with a lot of changes," he said. "Taking the exact same product and giving it a new name and without explaining what the value is or how it has changed isn't likely to be very effective."
Roughly 80% of the oil sands reserves will have to be extracted through SAGD methods because the bitumen is buried too far below the surface to mine.
Oil sands detractors, however, have made Fort McMurray's strip mines and tailing ponds the centrepiece of their intense dirty oil campaign. A cluster of SADG operators has formed the In Situ Oil Sands Alliance to further differentiate their operations from mining projects.
EnCana, which will focus on unconventional natural gas assets after it separates itself from Cenovus, plans to spend between US$3.6-billion and US$3.9-billion in 2010. Cenovus expects to spend between US$2-billion to US$2.3-billion, executives said.
EnCana as a whole earned US$25-million, or US3¢ per share in the quarter, compared with US$3.55-billion, or US$4.73 a share a year ago.
Wind energy delivers 53% of Spain's electricity demand
Asociación Empresarial Eólica
November 13, 2009
Wind Energy covered more than 50 percent of the electricity demand the whole of Sunday morning. It also achieved a record high of simultaneous generation with 11,546 megawatts.
Wind generation broke again a record, for several moments in the morning of Sunday 8th, with 53 percent coverage of the demand with a simultaneous production of around 10,170 MW, according to REE data (https://demanda.ree.es/eolica.html). The wind production covered from 03h00 till 08h30 over fifty per cent of the demand that in those hours ranged between 21,700 and 19,700 MW, being 19,000 MW the lowest time.
Wind energy generation had already covered last Wednesday and Thursday for more than five hours, both days, over 40 percent of the electricity demand.
Furthermore, in the first nine days of November, wind energy was the first technology of the Spanish electrical system regarding production, reaching 1,770,486 MWh, ahead of the combined cycle with 1,369,955 MWh and the nuclear power with 1,223,350 MWh, a leadership that is consolidated with this week´s production.
The figure of 53 percent far exceeds the record reached last Thursday with 45.1 percent of the demand, that at the same time slightly exceeded the previous record of 43 percent, achieved in the early hours of November 24th last year.
Furthermore, on Sunday at 14h30 the maximum of simultaneous production was also reached with 11,546 MW, 343 MW more than the 11,202 that were achieved on March 5th, which at that time accounted for 29 percent of the demand cover.
AEE wants to emphasize, once again, the regular functioning of the electrical system during these peaks and also remind that wind power has covered in 2008 11.5% of the electricity demand.
Spain reaches new wind record: 45.1% of Spain’s total electricity demand
Regulación Eólica con Vehiculos Electricós, November 8 2009Wind energy in Spain reached a new record last night, providing at its peak 45.1% of Spain’s total electricity demand – 2.1% greater than the previous record set in November last year.
Spanish electricity grid, Red Eléctrica, said that today’s record is a first since it was sustained over several hours during last night. Between 00.40 and 06.20 on 5 November wind met over 40% of electricity demand.
“There have been several peaks over 40% in Spain, but this new one – lasting nearly six hours compared to around one hour the previous time -- shows the huge part that wind can play in meeting Spain’s electricity demand,” Jacopo Moccia, regulatory affairs adviser for EWEA said.
The surge in wind power last night triggered water pumping stations which transport water into reservoirs. This store of water will then be released over the day generating electricity via water turbines at times of peak demand.
The Spanish Wind Energy Association said the sustained peak in wind powered electricity production proves that “wind energy is no longer marginal”. By 2020 Spain is expected to double its wind-power producing capacity from the current level of 16 gigawatts to 40 GW. “With this expected growth in capacity we could envisage wind meeting the vast majority of demand during times of peak supply by 2020,” Moccia said.
On average throughout the year, wind energy meets 12% of Spain’s electricity demand. The largest producer of wind power in Spain is Iberdrola, with 27 percent of capacity, followed by Acciona on 16 percent and Endesa with 10 percent. Spain's wind farms are on track to meet a government target of 20,000 MW in capacity by 2010.
Installed wind capacity in Spain reached 16,740 MW in 2008 with the addition of 1,609 MW. Expectations for the Spanish wind energy industry for 2009 are very high, with 18,500 MW of total capacity will be installed.
The wind sector expected this growth after the 3,500-MW increase in 2007, a special year in which companies made an effort to start up the greatest
number of wind farms so they could benefit from the previous support system. The total of 16,740 MW establishes Spain as the third country in the world in terms of installed capacity and will allow the 2010 objective (20,155 MW set by the Renewable Energies Plan 2005–2010) to be reached.
The addition of 1,609 MW in 2008 is an increase of 10.63%, the third highest increase in absolute terms in the short history of wind energy in Spain. The only higher annual increases were in 2007 (3,505 MW or 30%) and 2004 (2,297.51 MW or 37%).
Electrical energy demand in 2008 was 266,485 GWh, a growth of 1.21% over 2007. Wind energy met 11% of this demand and was the fourth largest contributing technology in the generation system, besting hydropower (7% of demand). The other contributors to the system were gas combined-cycle power plants (32% of total demand), nuclear power plants (20%), and coal power plants (16%).
On several occasions in 2008, wind energy covered more than 40% of hourly demand, and for several days it supplied more than 30% of daily electricity demand. For instance, on November 24, wind energy supplied more than 35% of the total electricity demand. And on several occasions, production of wind energy reached more than 40% of hourly demand.
Wind energy in Spain has also emerged as a driving force for industrial development. In 2008, investment was more than 2,250 million €, and about 50% of Spanish wind energy equipment production is dedicated to the export market. According to the “Macroeconomic Study on the Impact of the Wind Energy Sector in Spain,” the number of jobs related to wind power reached more than 40,000 in 2008. Of this total, the number of direct jobs in operation and maintenance of wind farms, manufacturing, assembly, research, and development is estimated at more than 21,800. The number of indirect jobs (linked mainly to components) is estimated to be more than 17,000.
The industrial sector participating in the Asociación Empresarial Eólica, or (Spanish Wind Energy Association) has established a new objective of 40,000 MW for 2020. Use of wind power has lowered CO2 emissions by about 18 million tons just during 2008. Furthermore, wind generation has saved up to 6 million tons of conventional fuels. Wind production has supplied the electrical consumption of more than 10 million households.
Gamesa installed more than 50% of new capacity, according to the Spanish Wind Energy Association’s Wind Observatory, with more than 9,480 MW (including the subsidiary company MADE) in Spain, which consolidates its leadership among manufacturers. VESTAS, the second largest manufacturer, installed more than 15% of new capacity in 2008, adding 242.2 MW.
November 07, 2009
Canada steps up oil sands push in United States
Jeffrey Jones
Reuters
National Post
Friday, November 06, 2009
 There are certain groups that just want to completely shut down the oil sands. That is completely unacceptable," said Canadian Natural Resources Minister Lisa Raitt (Reuters) |
CALGARY -- Canada has mounted its biggest campaign yet to sell the United States on the energy security benefits of the oil sands as Washington debates new environmental policy, the country's energy minister said on Friday.
Canadian Natural Resources Minister Lisa Raitt said she and her staff are lobbying interests in the United States at all levels, trying to send the message that the huge heavy-oil resource in Alberta is being developed responsibly and that U.S. input on environmental fixes is welcome.
The push comes as environmental groups have intensified their own campaigns warning of the impact of oil sands development on climate, water, land and local communities on both sides of the border.
"There are certain groups that just want to completely shut down the oil sands. That is completely unacceptable. That will not happen," Ms. Raitt said in an interview.
"This is too strategic a resource for the country, and that's the other part of the message: we will develop it, we will use technology, we are going to work with the United States on it."
Canada is already the largest foreign supplier of oil to the United States, topping such OPEC suppliers as Saudi Arabia and Venezuela. Much of that crude is derived from oil sands developments in northern Alberta.
TransCanada Corp. is preparing to start its 435,000-barrel-a-day Keystone Pipeline to the the U.S. Midwest, pushing even more oil to the country's biggest trading partner.
Ms. Raitt travels to New York next week as part of the effort to promote the oil sands. That trip follows a series of meetings with the new U.S. ambassador to Canada, David Jacobson, and Prime Minister Stephen Harper's new top diplomat in Washington, Gary Doer.
"We're deploying people on the ground in the United States as well. It has to happen at all levels, you have to engage at 'officials' levels, you have to engage at ministerial levels, you have to engage at business levels," she said.
U.S. Energy Secretary Steven Chu has said he is aware of the impact of oil sands development, but has expressed optimism over the industry's ability to develop technology to limit the ecological damage.
California, often seen as a bellwether of U.S. environmental policy, established its own low-carbon fuel regulations this year that the Canadian energy industry has warned could eventually hurt exports.
"I absolutely recognize the fact that in some cases, individual states are implementing energy policy that would seem to be detrimental to Canadian positions," Ms. Raitt said. "But as well, even with all that, we exported more oil this summer than we ever have."
Ms. Raitt was in Calgary to talk to industry R&D people about ways to cut emissions, such as carbon capture and storage, as well as how to make energy production more efficient to offset some of the costs of CCS.
Despite the short record carbon capture technology, Canada and the province of Alberta have pledged hundreds of millions of dollars to private-sector projects they hope will help the country meet emission-reduction targets.
Canada can cooperate with the United States on some aspects of energy and environmental policy, Ms. Raitt said. But she said a full-blown continental energy plan is not possible.
© Thomson Reuters 2009
November 01, 2009
Spill in Australia
Editorial
Anchorage Daily News
October 31st, 2009
Alaskans haven't heard much about oil drilling disaster
On Aug. 21 this year, a blowout ripped through an oil drilling rig operating in Australian water, more than 100 miles offshore. The rig had to be evacuated as the blowout sent crude oil spewing into the ocean. Two months later, the blowout was still raging, pumping 300 to 400 barrels of oil a day into the water. Three attempts to drill a relief well had failed and a fourth is still in progress.
It took three weeks just to get a specialized rig to the site and begin drilling the first relief well, according to The New York Times. The new well has to intercept the well that's leaking -- an effort Australian observers have said is like trying to find a needle in a haystack while blindfolded.
A month after the blowout, the Times reported that the resulting oil slick was 25 miles wide and 85 miles long. Since then the spilled oil has reached Indonesian water, according to the Jakarta Post.
Early on authorities used airplanes to hit the spill with chemical dispersants.
That has helped keep oil from reaching Australia's shores, but it is still a toxic hazard to marine life on the open sea. At least two well-known reefs may be hit.
The Australian spill hasn't gotten a lot of attention in the U.S. media [ed note: it has received considerable attention on www.sqwalk.com]; it's literally half a world away. But the incident has been noticed in Florida, where offshore drilling proposals have provoked a vigorous debate.
According to coverage by the Tampa Tribune, offshore drilling proponents say Australia allowed a drilling technique that carries a higher risk of spills and is not permissible in U.S. federal water. Opponents counter that the cause of the blowout is not yet known and dispute the inference by drilling supporters that "It can't happen here."
In Alaska the federal government is working to issue oil and gas leases in Arctic water. The environmental impact statement for the Chukchi Sea leasing says the odds of a large oil spill during development could be as high as 50-50.
Can a spill in that hostile Arctic environment, with jumbled, flowing ice, high winds, strong tides, and long winter darkness, be cleaned up?
Shell Alaska executive Pete Slaiby says yes. In a newspaper commentary earlier this year, he said tests showed that using a combination of mechanical collection, chemical dispersants and burning the oil in place will work.
Environmentalists dispute the claim.
Any spill in Alaska's Arctic will be far more challenging to handle than the Australian spill or the Exxon Valdez spill, which occurred in calm conditions in ice-free water, before fouling 1,200 miles of Alaska coastline.
Shell's Slaiby says the industry has a good record in the North American Arctic. "There has never been an oil spill caused by a blowout from offshore exploration and production in Alaska or Canada," he wrote.
The blowout was Australia's first offshore spill since 1984, according to an Australian industry spokesman cited in the New York Times article. Still it is troubling.
Australia is not a Third World nation, so desperate for money that it skimps on environmental standards. The rig involved is only a few years old, not some creaky wreck that belongs on the scrap heap. The blowout and spill occurred in warm, semi-tropical water, not an area choked with ice for most of the year.
The New York Times article about the blowout was entitled "As Oil Enriches Australia, Spill Is Seen as a Warning."
BOTTOM LINE: Australia's experience is a cautionary tale for Alaska.