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Western Canada facing gas shortages, oil supply cut from wildfires

Canadian motorists shouldn't expect increases at the pumps as summer gas prices are expected to remain stable.

Canadian motorists shouldn’t expect increases at the pumps as summer gas prices are expected to remain stable. (Canadian Press)

From gas shortages in Western Canada to a dramatic spike in costs of gasoline in Newfoundland and Labrador, Canadian motorists may be concerned that these are signs that price increases will surely hit the pumps this summer.

But some industry analysts are forecasting no major spikes for the balance of the summer driving season.

“My prognosis is we’ve probably seen as much of a price increase at this point that we will see in the summer,” said industry analyst Michael J. Ervin of Kent Group Ltd.

“There’s always those outlier things. If there was a substantial increase in crude prices, that could have an impact but we don’t think that we’re going to see any upward volatility of crude prices in the near future.”

Roger McKnight, a chief petroleum analyst with En-Pro International Inc., said that in 12 of the last 13 years, gas prices hit their peak around mid-April.

Petro-Canada kelowna

A sign at a Petro-Canada station on B.C.’s Highway 97 warns customers that they are out of fuel. (Brady Strachan/CBC)

In the run-up to the summer driving season, which starts with the Memorial Day weekend in the U.S., prices generally start to fall back because refineries are geared up and ready for the summer driving season.

And that pattern seems to be repeating itself this year as well, he said.

“Enjoy it while you can,” said McKnight. “The prices will remain stable if not fall noticeably between now and Labour Day.

…click on the above link to read the rest of the article…

Wildfire Nears Canada’s Major Oil Sands Plants

May 18, 2016

Wildfire Nears Canada’s Major Oil Sands Plants

A massive wildfire raging through the northern part of Alberta has swelled in size and surged north of Fort McMurray, destroying an evacuated oil sands camp on Tuesday and it is projected to encroach on major facilities shortly.

The flames consumed a 665-room oil-sands work camp north of the city, the Blacksands Executive Lodge, Alberta Premier Rachel Notley said Tuesday. The lodge is owned by Horizon North Logistics Inc. of Calgary.

Image courtesy of Nairaland.com

Officials said Wednesday they expected the fire to move east towards plants owned by Suncor Energy (TSX:SU) and its Syncrude subsidiary, CBC News reports. They added that the operations themselves are unlikely to be damaged by the flames as they are well isolated by wide barriers of cleared firebreak and gravel, and are employing their own firefighting crews.

Image courtesy of Nairaland.com

By 6:00 am local time Wednesday, the fire had grown to approximately 422,898 hectares in size.

“It’s pretty significant growth,” provincial wildfire official Travis Fairweather said in a televised interview with CBC. “We’ve just been seeing really extreme fire conditions over the last couple of days. It’s been really burning intensely and the winds have been carrying it.”

The wildfire, which destroyed whole sections of Fort McMurray earlier this month, is also expected to reach the neighbouring province of Saskatchewan.

Image © Cameron Strandberg | Flickr CC by 2.0

So far, it has forced more than 88,000 people to leave the area, with about 8,000 of them evacuating Monday night as the resurgent fire shifted directions, posing fresh threats to oil sands complexes and worker camps.

…click on the above link to read the rest of the article…

We are all Albertans now

May 16, 2016

We are all Albertans now

It would be easy–too easy–to point to the wildfires which have devastated huge areas of northern Alberta near Fort McMurray, the hub of tar sands mining in Canada, and say that Albertans are reaping what they have sown. Yes, it’s true that climate change is coming to one of the very areas which is contributing disproportionately to climate change and with catastrophic results.

The source of the current catastrophe is that the boreal forest which surrounds the tar sands has been turned into a tinderbox because of increasingly warm, dry weather that used to be uncharacteristic of this area of Alberta. But, what is happening in Alberta was predicted decades ago to be one of the consequences of unchecked global warming.

Having said all that, we should remember that the warming we are experiencing today is actually the result of greenhouse gases dumped into the atmosphere as of 40 years ago or so. (The analysis cited gives a range of 25 to 50 years, a lag related to what is called the thermal inertia of the oceans.) If this is the case, what Albertans are experiencing today has almost nothing to do with the climate effects of tar sands exploitation since there was very little production from Alberta’s tar sands that long ago.

What this means, of course, is that there will be much worse to come even if today we were to reduce to zero all greenhouse gas emissions and other factors which are raising worldwide temperature.

The problems we are already seeing such as increased flooding in some places; increased drought in others; sea-level rise that is already swallowing islands; the rapid change in climate zones (which affects what we can grow in those zones); and myriad effects on plants and animals around the globe as their habitat shifts or disappears–all of these are just the beginning.

…click on the above link to read the rest of the article…

Fort Mac Blaze: Brace for New Era of Infernos

May 8, 2016

Fort Mac Blaze: Brace for New Era of Infernos

What’s turning northern forests into tinder? Biggest reason is climate change, but that’s not all.

Fort-Mac-Fire

A police officer surveys smoldering devastation wrought by wildfire in Fort McMurray on May 5, 2016. Source: RCMP Alberta.

A sudden shift in the wind at a critical time of day was all it took to send a wildfire out of control through Fort McMurray, forcing more than 80,000 people out of their homes in what has become the biggest natural disaster in Canadian history.

Earlier this week, Darby Allen, the regional fire chief for the area, minced no words when he was asked what might happen now that more than 1,600 homes have been destroyed.

”This is a really dirty fire,” he said. ”There are certainly areas within the city which have not been burned, but this fire will look for them and it will take them.”

The media line now is that fire experts saw this coming five years ago when one of the Flattop Complex fires tore through the Alberta town of Slave Lake in 2011, forcing everyone to leave on a moment’s notice. A report released shortly after predicted that something similar could happen again, and its authors made 21 recommendations to prepare for the possibility.

But fire scientists and fire managers actually saw this coming back in 2009 when 70 of them gathered in Victoria to address the issue of climate change and what impact it was going to have on the forest fire situation in Canada. Each one of them was already well aware that fires were burning bigger, hotter, faster, and in more unpredictable ways than ever before.

”We’re exceeding thresholds all the time,” said Mike Flannigan, who was at the time a research scientist with the Canadian Forest Service. ”We’d better start acting soon.”

…click on the above link to read the rest of the article…

Welcome To Hell: The Giant Fort McMurray Fire Is The Worst Blaze In Canadian History

May 8, 2016

Welcome To Hell: The Giant Fort McMurray Fire Is The Worst Blaze In Canadian History

The gigantic wildfire that has forced the evacuation of the entire city of Fort McMurray in northern Alberta has been nicknamed “the Beast“, and mainstream news reports are telling us that it is now approximately 25 percent larger than New York City. 88,000 people have already been forced out of their homes, at least 1,600 buildings have been destroyed, and smoke from the fire has been spotted as far away as Iowa. To say that this is a “disaster” is a massive understatement. Northern Alberta is “tinder dry” right now, and authorities say that high winds could result in the size of the fire doubling by the end of the weekend. One-fourth of Canada’s oil output has already been shut down, and the edge of the fire is now getting very close to the neighboring province of Saskatchewan. This is already the most expensive natural disaster in the history of Canada, and officials fully expect to be fighting this blaze for months to come.

At this point, only rain is going to stop this fire. Canadian authorities insist that they are not going to be able to defeat this raging inferno no matter how many resources they throw at it. The best that they can hope for is to try to steer it away from heavily populated areas until the rain comes.

Nobody knows precisely how this tragedy is going to end, but everyone agrees that it is going to last for quite some time. According to the Washington Post, this fire has the potential to keep on burning “for months”…

The images are ones of devastation — scorched homes, virtually whole neighborhoods burned to the ground. And Canadian officials say they expect to fight the massive wildfire that has destroyed large parts of Alberta’s oil sands town for months.

…click on the above link to read the rest of the article…

“Out Of Control” Canada Wildfire Could Double In Size Today: Fort McKay Evacuated

May 7, 2016

“Out Of Control” Canada Wildfire Could Double In Size Today: Fort McKay Evacuated

Since we first reported on the massive fire (and the fallout) that was burning in Canada’s oil sands gateway, Fort McMurray, things have gone from bad to worse. Today we learn that the fire that has already devastated 600 square miles, growing an additional 50% in less than 24 hours, is out of control, and could double in size by the end of the day.

As of late Saturday night, the fire had grown to 156,000 hectares and was heading toward the Saskatchewan border. Officials said winds up to 40 kilometres an hour will blow Saturday and warm temperatures mean it could add another 100,000 hectares to the fire by the end of the day. “We need heavy rain,” said Chad Morrison, senior wildfire manager, giving an update with Notley at noon Saturday according to the EdJournal.

“This remains a big, out of control, dangerous fire” Public Safety Minister Ralph Goodale said. “There is one prediction, that if it continues to grow a the present pace, it could double today” Goodale added.

The map above shows the fire as of 11 a.m. Saturday. The smaller fire in the northeast corner of the map is expected to join the major fire today and continue growing. There are serious concerns it will reach the Saskatchewan border

Alberta’s government crisis cell warned that the fire conditions remained extreme in the province due to low humidity, high temperatures, and gusty winds.

“It looks like the weather in and around Fort McMurray will still be, sadly, very conducive to serious burning conditions. The situation remains unpredictable and dangerous.” Goodale continued.

People that fled to the north of the city are now being evacuated again due to changing wind conditions. The plan now is to move people south to other evacuee staging grounds, and eventually to Edmonton, 250 miles to the south.

…click on the above link to read the rest of the article…

More evacuation orders issued for Fort McMurray area

May 5, 2016

More evacuation orders issued for Fort McMurray area

Anzac, Gregoire Lake Estates and Fort McMurray First Nation forced to evacuate late Wednesday

Many evacuees forced from their Fort McMurray homes by wildfire Tuesday are on the move once again.

Three communities south of Fort McMurray, one including an evacuation centre, were ordered to leave as changing weather patterns turned the wildfire their way late Wednesday evening.

A red glow from the encroaching fire can be seen ominously framing the Anzac evacuation centre as people board buses. For Donna Guillamot, evacuated yesterday from Fort McMurray, the feeling is all too familiar.

“I thought it was safe here, so I guess we’ll go to Edmonton,” said Guillamot. “It’s very stressful, you don’t know what’s burned, what’s not burned, when you can go back.”

“Now you’re sitting here and all you see is red flames. It’s pretty scary.”

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Cameron MacIntosh ✔‎@CamMacIntoshCBC

VIDEO: more on #Anzacevacuation #YMMFire #ABFire #cbcedm @cbcnews

1:42 AM – 5 May 2016

RCMP went door to door in Anzac, Gregoire Lake Estates and Fort McMurray First Nation after a mandatory evacuation order was issued.

Buses took people to Edmonton and officials hope to have everyone out by midnight. Dale Bendfeld, the acting director of community services and policing for Wood Buffalo, says safety, as always, is paramount.

“As you can see looking up there this is a very large and very serious fire we’re working with,” said Benfeld.

“It’s already taken on a city, we’re going to ensure that people of Anzac and Gregoire are safe and get them down to Edmonton and out of here.”

Evac bus

Evacuees board a bus preparing to leave Anzac. (Cameron MacIntosh)

The regional emergency operations centre (REOC) which had just relocated to Anzac from the Fort McMurray airport will be moving south to Lac La Biche.

…click on the above link to read the rest of the article…

Exclusive: Release of Inspection Reports From TransCanada’s Keystone Pipeline Expose Risk of Future Spills

May 5, 2016

Exclusive: Release of Inspection Reports From TransCanada’s Keystone Pipeline Expose Risk of Future Spills

Inspectors at the US Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) observed TransCanada’s contractors violating construction design codes established to ensure a pipeline’s safety, according to inspection reports released to DeSmog under the Freedom of Information Act (FOIA).

Evan Vokes, former TransCanada materials engineer-turned-whistleblower, told DeSmog the problems uncovered in the reports show issues that could lead to future pipeline failures and might also explain some of the failures the pipeline had already suffered.

Vokes claimed PHMSA was negligent in failing to use its powers to shut down construction of the pipeline when inspectors found contractors doing work incorrectly. “You cannot have a safe pipeline without code compliance,” Vokes said.

The Keystone and the Cushing Extension are part of TransCanada’s Keystone Pipeline network, giving the company a path to move diluted Canadian tar sands, also known as dilbit, to the U.S. Gulf Coast.

The Keystone pipeline network is made up of the Keystone Pipeline (Phase I), that runs from Hardistry, Alberta, to Steele City, Nebraska, and the Keystone-Cushing extension (Phase ll), from Steele City to Cushing, Oklahoma. There, it connects to the southern route of the Keystone XL, renamed the Gulf Coast Extension (Phase III), that runs from Cushing, Oklahoma to the Gulf Coast in Texas.

The final phase of TransCanada’s network, the Keystone XL, (Phase lV), originating in Alberta, is meant to connect to the Gulf Coast pipeline. But KXL is blocked for now since President Obama rejected a permit TransCanada needs to finish its network.

…click on the above link to read the rest of the article…

Why Canada’s Oil Industry May Never Be the Same

April 28, 2016

Why Canada’s Oil Industry May Never Be the Same

Never is a long time. The dictionary definition is, “at no time in the past or future; on no occasion; not ever.” In the volatile oil and gas industry, those who try to look that far into the future and predict anything with certainty are invariably wrong. Here’s hoping.

But it’s not all bad, oil prices are gradually rising because of market physics and investor sentiment. Federal and provincial politicians are softening their opposition to, and have even publicly declared support for, pipelines to tidewater. The worst is over.

However, it is increasingly certain that the future will not be like the past. Previous downturns have been equally devastating but the primary causes eventually reversed themselves; low commodity prices recovered and damaging government policies were rescinded.

This recovery will be different for a variety of reasons which will combine to cap growth, opportunity and profits, even if oil and gas prices spike. The following major changes appear permanent.

Oil Is Destroying the World

“New research shows that the fossil-fuel era could be over in as little as 10 years, if governments commit to the right policy measures… If you think workers are suffering in Alberta now, wait until you see what Canada’s economy looks like if we miss the huge opportunities for jobs and prosperity offered in renewable energy and a truly climate-friendly economy.”

Written by a climate and energy campaigner for the Sierra Club, this appeared on top of page 13 in the April 23 edition of Victoria’s Times Columnist, under the headline, “Pipelines not the pathway to Paris solutions.” B.C.’s views on pipelines are well known.

Whether you or the tens of thousands of laid-off oil workers believe the first paragraph or not, on April 22 at the United Nations in New York, 171 countries signed the Paris climate change agreement negotiated last year.

…click on the above link to read the rest of the article…

A carbon tax is bad for Alberta

April 27, 2016

A carbon tax is bad for Alberta

Yesterday, Alberta Premier Rachel Notley asserted that Canada was “absolutely” closer to a new pipeline due to her province’s new carbon tax. According to the premier, “Alberta is not the Alberta that they thought of a year ago, or two years ago, or three years ago. After years of inaction from the previous government, Alberta is now at the forefront in the fight against climate change.”

How does a carbon tax moderate climate change andlead to the construction of one or more proposed pipelines linking oil extraction activities in Fort McMurray to the Atlantic Ocean, the northern coast of British Columbia and an export terminal near Vancouver? An understanding of economics helps to answer that question.

The new carbon tax takes effect on January 1, 2017. The initial tax will be $20 per tonne, rising to $30 in 2018. According to the provincial government, the carbon tax is the key tool to help pay for a more diversified economy. Conspicuous by its absence is an explanation of how planned wealth redistribution improves the delivery of energy, the consumption of which the government is actively trying to discourage in view of mitigating global temperature changes.

Carbon is a chemical element common to all known life on our plant. It is non-sentient and does not experience gain or loss. Carbon does not and cannot pay taxes. Only individuals can be compelled to do so. The individuals to be dispossessed of their earnings with government’s new policy, and at what rate, can be clearly identified. With few exceptions, they include consumers in Alberta of diesel (5.35¢/litre), gasoline (4.49¢/litre), natural gas ($1.011/GJ) and propane (3.08¢/litre). Cutting through politician-speak: Taxing carbon means taxing people.

…click on the above link to read the rest of the article…

“We Haven’t Seen This Is In Our Lifetimes” – CEO Says “Alberta Is In A Depression”

April 25, 2016

“We Haven’t Seen This Is In Our Lifetimes” – CEO Says “Alberta Is In A Depression”

Regular readers know that we’ve covered Alberta’s decline at length (refresher here), so there is no need to give much of a backstory other than to say that the situation seems to get worse for the Canadian province as each day passes even as oil has rebounded in the past two months.

Toronto’s “Condo King” Brad Lamb tried to put things into context when he said the situation is “worse than 2008.” However, on Friday we received an even more gloomy (albeit realistic) description of the economic situation in Canada’s energy hub, Alberta. In a very blunt interview with BNN, Murray Mullen the CEO of trucking company Mullen Group, said that the situation has moved well past recession, and should be described as a depression.

“Well, if you’re involved in the oil patch directly, drilling activity or anything like that I think we’ve gone beyond recession and it’s more a depression. The facts are that this latest round of commodity price collapse that happened the first part of this year I think really put the nail in the coffin for the industry.”

“The damage has already been done basically for this year. Even though it seems like the oil price and even natural gas is starting to recover, there was no room for error because commodity prices had fallen so low in 2015, and then when it happened in 2016, and it’s not just crude oil, it’s natural gas also. We’re just kind of trapped in a difficult market dynamic that we haven’t seen in probably most of our lifetimes.”

“There’s no investment activity going on below $40, it just goes to zero.”

…click on the above link to read the rest of the article…

Canadian Oil Industry No Longer Sees Alberta Advantage

April 8, 2016

Canadian Oil Industry No Longer Sees Alberta Advantage

“Who will stand up for Alberta’s persecuted billionaire community?” the headline of a popular political blog site sarcastically blared after the story broke last month about how wealthy and successful Calgary entrepreneur N. Murray Edwards had apparently relocated his residence to London for tax reasons. The article opened with the sentence, “A billionaire is moving from Calgary and we should all be worried, the newspapers tell us.” Obviously, some don’t think this is a problem.

The story broke in the Calgary Herald on March 24 after publicly traded Magellan Aerospace Corp., a company controlled by Edwards, disclosed in its annual year-end filings its chairman resided in London, United Kingdom, not Calgary / Banff as had previously been the case. A few days later in its Annual Information Form, oil and gas producing giant Canadian Natural Resources Limited (CNRL) released the same information about its executive chairman. The Herald wrote, “Two sources familiar with the situation who asked not be identified said Edwards is switching his residency to the U.K. For tax reasons.”

The increasingly reclusive Edwards has yet to publicly confirm or deny his departure from Calgary. But it is illegal for listed companies like Magellan and CNRL to knowingly publish false information in their regulatory filings. Therefore, it is safe to assume Mr. Edwards has indeed physically left Calgary. Whether rising corporate and personal income taxes are the reason is only speculation. However, it is not speculation to observe wealthy and successful entrepreneurs like Murray Edwards pay very close attention to tax rates. That’s why they are wealthy and successful.

Canada’s battered oilfield services (OFS) sector should certainly be worried when a serial entrepreneur and wealth creator of Murray Edwards’ reputation concludes for whatever reason Calgary is no longer his preferred place of residence.

…click on the above link to read the rest of the article…

Alberta and oil prices: How Middle East geopolitics and religion affect our future

March 28, 2016

Alberta and oil prices: How Middle East geopolitics and religion affect our future

Calgary’s economic fortunes enmeshed in decisions made on the other side of the globe

Saudi Arabia's Oil Minister Ali al-Naimi at a news conference following a meeting in Doha, Qatar February 16, 2016.

Saudi Arabia’s Oil Minister Ali al-Naimi at a news conference following a meeting in Doha, Qatar February 16, 2016. (Naseem Zeitoon/Reuters)

Calgary is unlike most other cities.

It is a city of 1.2 million people separated from its two nearest urban neighbours by 300 kilometres of prairie and 1,000 kilometres of mountains.

Yet as a city Calgary’s economic fortunes are affected less by the surrounding landscapes and neighbouring cities, and more by difficult-to-comprehend and impossible-to-influence decisions made on the other side of the planet.

For better or for worse Calgary’s well-being and prospects hinge on the world price of oil.

Here is a look at the escalating rivalry between Iran and Saudi Arabia and what its impact might be on Calgary.

The history of the rivalry

We have visited and worked in both countries.

To Alberta eyes there are many similarities between the two Middle Eastern countries ruled by adherents of Islam.

But that only makes the rivalry more difficult to understand.

So, what are the differences between the two countries? What is the historical basis of this national rivalry?

Why is it heightened today?

And does all this have any implications for Calgary’s economic fortunes as a city tied in to the global oil market?

The Kingdom of Saudi Arabia and the Islamic Republic of Iran are the largest and most powerful countries in the Middle East.

Ethnically Saudi Arabia is Arab while Iran is predominantly Persian.

Saudis speak Arabic, while Iranians speak Farsi.

Shi’ite Muslims try to cross a barricade during a protest against the execution of cleric Nimr al-Nimr, who was executed along with others in Saudi Arabia, in front of Saudi Arabia embassy in New Delhi, India, January 4, 2016. (Adnan Abidi/Reuters)

…click on the above link to read the rest of the article…

Steam Injection Fractures Caprock in Big Alberta Spill, Regulator Confirms

March 23, 2016

Steam Injection Fractures Caprock in Big Alberta Spill, Regulator Confirms

Incident highlights fragility of high-cost energy extraction.

Large fractures in earth seeped bitumen at one of four well sites operated by CNRL near Cold Lake, Alberta. Photo: CNRL, September 2013.

Three years after an eruption of 10,000 barrels of melted bitumen contaminated the boreal forest and groundwater near Cold Lake, Alberta, the provincial energy regulator has now officially blamed hydraulic fracturing, or the pressurized injection of steam into the ground for fracturing nearby rock.

The bitumen blowout occurred sometime between May and June 2013 at Canadian Natural Resources Ltd.’s Cold Lake project, an operation that uses steam injection to melt bitumen and bring it to the surface.

In this case, the pressure from the steam cracked rock between different formations, allowing melted bitumen to find natural fractures and flow to the surface at five different locations, including under a lake.

In some places, the bitumen erupted through fissures in the ground as long as 159 metres deep.

The event, not the first of its kind as an earlier Tyee investigation revealed, killed wildlife and seeped nearly 20 barrels of bitumen a day into muskeg over a five-month period.

In a lengthy report, the Alberta Energy Regulator concluded what experts had suggested all along — that all five bitumen seeping events “were caused by excessive steam volumes, along with an open conduit (wellbore or natural fracture or fault) or hydraulically induced vertical fractures.”

According to the regulator, an independent third party expert panelthat also reviewed the bitumen disaster found that the company, a major bitumen producer, had failed to properly account for geological faults and fractures in the region it was steaming.

That panel submitted “that CNRL’s approach had insufficiently addressed the impact of geological variability” and how natural fractures would respond to increases in steam pressures.

…click on the above link to read the rest of the article…

Fallout in Alberta: The oil crash isn’t just about lost jobs

March 15, 2016

Fallout in Alberta: The oil crash isn’t just about lost jobs

Disillusionment has a way of setting all sorts of bad thoughts in motion

The story assignment from The National was simple. Go to Alberta and talk to regular people about the crash in the price of oil. Humanize the downturn.

Harsh economic numbers coming out of Alberta aren’t hard to find. A projected deficit of $10.4 billion. An unemployment rate of 7.4 per cent, the highest mark since 1996.

Then there was the startling projection from the Conference Board of Canada last week that Alberta will be the only province to see its economy shrink in 2016.

But what do these figures mean for people? How the downturn affects individual lives is much harder to figure out.

It is not always easy to get people to talk about these kinds of things. People who’ve just lost their jobs are busy trying to find another one, or they’re embarrassed by their situations.

But here are three people who agreed to speak to us and share some of their personal experiences during Alberta’s current downturn.

Warren Sonnenberg, Camrose

Warren Sonnenberg

Warren Sonnenberg, in Camrose, says one of the harder things is having friends and neighbours who are too upset to talk about their own situations. (CBC)

Sonnenberg, 35, worked for five years on a drilling rig in the oil patch. He started at the bottom as a leasehand and worked his way up to derrickhand. Before he was laid off in January he was making $40 an hour. He never thought the good times would end.

…click on the above link to read the rest of the article…

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