Diana Daunheimer on March 27, 2017
There are so many misconceptions and lack of understanding presented here about our resource realities in Alberta, of which Mr. Panda is either wilfully or negligently ignorant, or simply a talking head for TransCanada and CAPP.
Many people argue we need refining and upgrading in the province, Alberta currently has 5 operating upgraders, processing about 1.33 million bbl/day into mostly synthetic crude, some diesel and petrochemical feedstock.
There are 4 operating refineries, but the refining feedstock is usually conventional oil. Only two plants have the capacity to take bitumen. Info can be found on the GoA website.
Thanks to a sweetheart deal with CNRL and the former PC government, under the Alberta Petroleum Marketing Commission, Alberta will soon be refining more bitumen in the Edmonton Heartland, but at $170,000 cost per flowing barrel, the operation has been continually referred to as an economic boondoggle.
If commodity prices do not drastically increase, the project will lose money. Well, the province and taxpayers will lose money, pretty certain CNRL and partners are contractually insulated from any downside. Current fees owed by the province on a per barrel basis are $63.23. The math here is rather obvious (and based on outdated metrics). This is only a 50,000bpd facility and within the recent AER ST-98 supply and demand report, the facility did not even cause a blip on the graph for any material impact to our export capacity or inter-provincial needs.
Alberta taxpayers are already on the hook for a minimum of a $34.5 billion dollar commitment to the project, which is not currently reflected in our budget deficit.
Good read on the topic at Alberta Oil Magazine, search NW Upgrader/Sturgeon refinery.
In the end, there is little, to no, fiscal benefit of refining super poor quality bitumen, and long term employment at these plants is nominal.
To add, you must consider the ownership and partnerships of our resources plays, the US owns a great deal of the land, licensing and pipeline systems in discussion regarding Keystone XL, and have ensured that profit margins are made and protected in their jurisdictions.
As per Energy East, not a single Albertan should endorse or support this project until they have read every letter of the take-or-pay contract the APMC signed with TransCanada, or seen an economic cost benefit analysis for the province…which to my knowledge and inquiries to the WR, AAMDC, AUMA and others, does not exist.
What did happen, is T/C met privately with certain members of AAMDC, which led to a resolution endorsing the project, even though, those members admitted, they did not read the contract details, were not aware of the costs to taxpayers and had not seen any form of economic benefit analysis for our province.
Was Mr. Panda lobbied, or wooed privately in the same manner by TransCanada?
Irving management has stated that Energy East will not reduce their import capacity from Saudi Arabia.
“We will add Western Canadian crude to our portfolio as the economics dictate, but probably not at the expense of our Saudi barrels,” he said.
To further, Energy East will cost Albertans, at minimum, $4.6 billion dollars in toll obligations, under the take-or-pay contract with TransCanada, even if no bitumen is shipped. Mr. Panda can not forecast that the project will be safe, especially if he takes even one moment to review the statistics on pipeline incidents. It can not go without mention this is a 50 year old gas line, that is being re-purposed for diluted bitumen, the engineering considerations and risks here are significant.
Energy East is a terrible contract for our province, unless you are a CEO of Irving or T/C.
As per Keystone XL, the profits for our province will be minimal, considering the NDP, implemented the lowest royalty rates in the history of the province, less than 4 cents on the dollar, along with two subsidy programs, at taxpayers expense, for unconventional resources. By the time all the carbon costs deductions and exemptions, tax and royalty credits, allowances and exemptions are calculated, imports of condensate are incurred, and I would imagine some creative accounting and tax evasion by KPMG are complete, our province may be at a net loss for this pipeline.
As per our “best-in-the-world” resource extraction program, that is false.
Albertans have no rights in the face of resource extraction. Right of Entry trumps all. The AER operates with total legal immunity, for any of their actions or inaction, and have no public interest or public health mandate, are not an agent of the Crown and are not beholden to the Public Service Act.
Alberta is just as much of an energy fascist than other oil producing nations or regions. Industry and the AER harm just as many people, as much land, water, air and livestock as other areas, it is just all concealed from the public through lease agreement waivers, AER ADR processes which are confidential and privileged, or through legally arranged gag orders or non-disclosure agreements.
Finally, there is the very simple and elementary aspect of profit margins and cost structure of our resources compared to foreign oil. Saudi gets high quality crude oil out of the ground for about $10/barrel. Nothing in Canada compares, either in cost, quality or production.
In reality, if our plays were to support all our refined hydrocarbon products, Canadians would be obligated to 5 to 20 times the costs of what we currently pay for fuels and heating. Is there any one of Mr. Panda’s constituents that are willing or able to do that? Also, super majors would never be on board, that would eliminate their profiteering, and unless Alberta provided trillions more in subsidies to allow the industry to continue to profit, this plan is fiscally absurd and unworkable.
This is a ridiculous motion, that would be best served, by not being served at all.
Diana Daunheimer The Alberta PCs, after Peter Lougheed left office, were the ones who set in the very poor oil royalty rates.
Like · Reply · 27 March 2017 13:38
I credit this to Darren Keith (thanks Darren!):
“27.8 % – Lougheed gov’s average percentage share of profit from Alberta’s oil and gas
14.9 % – Getty government’s average percentage share of profit from Alberta’s oil and gas
15.5 % – Klein government’s average percentage share of profit from Alberta’s oil and gas
12.9 % – Stelmach government’s average percentage share of profit from Alberta’s oil and gas
9.6% – Redford and Prentice government’s average percentage share of profit from Alberta’s oil and gas
3.6% – Forecasted 2015/2016 average percentage share of profit from Alberta’s oil and gas”
You can also review this from Regan Boychuk:
Or read the NDP Modernized Royalty Review. The NDP have implemented the lowest royalty returns in the history of our province, far worse than even the PC’s. Hard to even imagine, but true. [Emphasis added]
Geoffrey A Pounder on March 26 & 27, 2017
“Alberta’s oil is the best in the world”
Actually, AB’s oilsands product is low quality crude, with high nitrogen, sulphur and heavy metals; and full of contaminants, plus water and solids. Hence the need for upgrading (for mined bitumen) to remove heavy hydrocarbon fractions. It’s an energy-intensive, hugely polluting process, with an outsize carbon footprint.
Not to mention leaky, ever-expanding toxic tailings lakes — a death trap for birds.
Prasad Panda’s hyperbole undercuts what is otherwise a sound argument for replacing foreign oil with domestic supplies in the East.
A six-hundred-word oilsands advertisement recycled from the Ethical Oil zealots – and not one word about the issue of our time: global warming and climate change. Which is why the Wildrose dooms itself to irrelevancy.
“Our oilsands are a clean, reliable and ethical source of oil.”
Canada has ethical asbestos too. Try some. You’ll like it.
In what sense are oilsands clean? Dismissing oilsands pollution destroys Wildrose’s credibility.
“Oil sands toxins growing rapidly”
w w w [dot] theglobeandmail [dot] com/report-on-business/industry-news/energy-and-resources/oil-sands-toxins-growing-rapidly/article1667306/
Pollution from Baytex’s Cold heavy oil production with sand (CHOPS) facilities forced Peace River farm families to abandon their homes and farms.
Why doesn’t Panda call up those families and tell them it’s their imagination?
God only knows about the impacts of oilsands pollution on natives downwind and downstream of the oilsands. The AB Govt still refuses to conduct a comprehensive, independent health study.
a death trap for birds? 1500 birds die once in a tailings pond and its an epic disaster. That many, or more die everyday from wind turbines and solar panels, but not a peep from you. Are you on the Greenpeace payroll? They admit they lie in their propaganda.
27 March 2017 10:08
Geoffrey A Pounder
Glenn Jones: The number of incidents and the death toll is far higher than that one incident.
Do you really believe that’s the first or last time that birds have landed in the toxic goo?
Most bird landings go unobserved, unreported, and uninvestigated. Especially at night.
“Oilsands companies need better techniques to keep birds off tailings ponds, according to a report that shows ducks and other water birds are landing by the tens of thousands on ponds containing waste from open-pit mines.”
“Birds continue to land on tailings ponds, report says”, Edmonton Journal, May 10, 2014
“Both the federal and provincial environment departments are reviewing the groundbreaking study by University of AB biologist Colleen Cassady St. Clair whose research revealed an estimated 200,000 bird landings annually which would result in more than 1,000 fatalities.”
“Federal and Alberta governments study better ways to keep birds off toxic tailings ponds”, Edmonton Journal, May 30, 2014
Glenn Jones: “230 birds euthanized after landing on tailings pond”, Calgary Herald, Oct 26, 2010
“Oil industry lowballs bird deaths: study”, CBC News, Sept 7, 2010
“Annual death rate related to tailings ponds at least 30 times higher, ecologist says”
“Oilsands may threaten whooping cranes’ survival”, CBC News, Jul 15, 2011
“Nearly 100 birds land in three oilsands tailings ponds”, Edmonton Journal, Nov 5, 2014
“30 blue herons found dead at Syncrude Mildred Lake site”, CBC News, Aug 08, 2015
“Millions of birds could die from oilsands development: report”, CBC News, Dec 2, 2008
Panda: Canada should put a stop to importing oil by Wildrose MLA Prasad Panda, March 25, 2017, Edmonton Journal
Alberta’s oil is the best in the world, but Canada continues to import more than 245,000 barrels of oil per day from countries with brutal human rights and environmental records.
This needs to change. It’s why I’m putting forward a motion in the legislature that calls on the federal government to place Alberta oil, Canadian oil, ahead of foreign dictator oil.
This valuable initiative will urge the federal government to introduce legislation to phase out the import of what is essentially dictator oil.
Our governments ought to promote legislation to support Canadian oil over foreign oil and to facilitate the building of pipelines within Canada to ensure better prices for Alberta oil and the security of supply to Canadian markets.
The resource importance of Western Canada is unparalleled, and should be celebrated.
I’ve worked internationally as an engineer in the petroleum sector for 28 years. India, with a population of 1.3 billion, is energy poor, while Canada is energy rich, yet it has not established energy independence from countries that limit basic personal freedoms and have no credible regulations or measures to protect the environment.
There is something fundamentally broken about our country if we can’t get this fixed.
The oilsands are the world’s third largest energy resource and one of Canada’s most successful job creators. Our oilsands lifted Canada out of the recession in 2008, have provided hope and opportunity for tens of thousands of Canadians, and will play a central role in growing Alberta’s economy for decades to come.
They are a clean, reliable and ethical source of oil. Canada has 10 per cent of the world’s forests and more lake area than any other country in the world. The men and women who work in our industry care deeply about safety and protecting the land they work on and in.
Today in the oilsands, there are bison roaming on reclaimed mines. Suncor has reclaimed a former tailings pond into new wetland space. Our water safety is strictly monitored and publicly reported.
Our oilsands should not only help supply the world’s energy needs, but help put Canada further down the path toward energy independence.
TransCanada’s Energy East project is a 4,500-kilometre pipeline that will transport, safely, about 1.1 million barrels of oil per day from Alberta and Saskatchewan to the refineries of Eastern Canada and a marine terminal in New Brunswick.
Energy East is expected to create over 14,000 direct and indirect full-time jobs across Canada during development and construction alone.
With 100,000 Albertans currently out of work, Energy East needs to be approved. Sadly, it continues to face roadblocks from the federal government with more burdensome red tape through the National Energy Board review process.
We’ve heard a lot from politicians lately about the need to phase out our oilsands. Not only would that be devastating, but it ignores the reality that fossil fuels will provide the majority of the world’s energy needs over the next century.
We need to build our energy sector, not harm it.
When Liberal and NDP governments introduce carbon taxes, while our largest customer and competitor will not, Canada is put at a competitive disadvantage.
At a time when Albertans are hurting, we need to rally around our oilsands and support development, not curtail Alberta’s economic future with policies that will put a cap on growth. Further regulation from overreaching governments will not equal energy prosperity.
Albertans are proud of our oil and all that we have accomplished as a province.
With support of the motion I’m putting forward in the legislature, together we can ethically ensure Canada and Alberta’s future economic prosperity.
Prasad Panda is the Wildrose MLA for Calgary-Foothills and his party’s economic development and trade critic.