Friday, 29 December 2017

Our review of energy cost inputs - Trudeau & Trump's diverging energy policies

By: Canadians for Affordable Energy

Canada-United States energy policies are rapidly diverging. Donald Trump was supposed to be a White House train wreck. But as 2017 ends, the U.S. president is scoring wins that will boost the U.S. economy, create good-paying jobs, and advance his administration’s ambition of American energy dominance.

Former presidents focused on “energy independence,” which was neither sensible nor necessary government policy when friendly neighbours – like Canada and Mexico – can help meet rising U.S. energy demand. In contrast, President Trump wants his country to export energy, use its natural resources to fuel domestic economic growth, and advance U.S. foreign policy by providing energy security to its allies, thereby weakening Russia and hostile countries in the Middle East.

To increase U.S. output of oil, natural gas and coal, Trump signed an executive order approving Alberta’s Keystone XL pipeline soon after entering the White House, lifted a moratorium on new coal leasing on federal land, abandoned the Paris climate agreement, promised to open Alaska’s Arctic National Wildlife Refuge to oil drilling (now done), and cut job-killing and investment-killing red tape. As the Weekly Standard reported, “The government has added an average of 13,000 new restrictions annually for the past 20 years. Under Trump, the number of new regulations is near zero.” Near Zero! That’s an impressive accomplishment by any measure.

And that was just the warm up act. This week, before leaving for its Christmas recess, Congress passed the biggest tax overhaul in 30 years. This sweeping tax bill will dramatically lower the U.S. business tax rate from 35% to 21%. Canada just lost its tax advantage – the average Canadian federal-provincial combined tax is now one point higher than the combined U.S. federal-state rate.

U.S. tax relief isn’t being slowly phased in over a decade, it will happen overnight – effective January 1, 2018. Tax expert Jack Mintz writes in the Financial Post, “Canada’s competitive position is about to get rocked, making it harder for Canadian governments to push costs onto businesses through higher levies and regulations. Federal and provincial authorities will need to change course. If politicians sit on their hands, the private sector won’t: Canadians will see investment, jobs and profits flowing to the States.”

There is more: U.S. energy companies, which traditionally have a higher marginal tax burden than other large companies, are the “tax overhaul’s biggest winner,” according to Forbes magazine. Energy is a capital-intensive business. “Under current tax law, [capital] expenditures can't be deducted in the year they are incurred. But the new law allows capital expenditures to be deducted in the year of their occurrence. This change will further lower the tax burden for the energy sector while encouraging more capital spending.”
And what’s happening in Canada?
Justin Trudeau is also motoring ahead on his own energy policy. Only our Prime Minister is less forthcoming than President Trump about the Liberal government’s objective, which is to shackle Canada’s hydrocarbon energy industry.

Like Trump, Prime Minister Trudeau wasted no time pursuing his agenda when he assumed office by cancelling the Northern Gateway pipeline project from Alberta to British Columbia. The Energy East pipeline to New Brunswick was killed this year after Ottawa signalled it wanted the National Energy Board to add layers of regulations on “upstream and downstream” CO2 emissions. It didn’t matter that the rules were being changed after Energy East had started the review process. Tellingly, the same “upstream and downstream” public review of Bombardier and Ford operations wasn’t done before these companies received massive government subsidies.

The effects of these deliberate policy changes combined with rising taxes on carbon dioxide emissions mean less investment in Canada’s oil sector, lost employment opportunity, and higher energy prices at home. The next hit on business and consumers will be the federal government’s soon-to-be unveiled Clean Fuels Standard regulations. It will add layers of red tape while steadily increasing the price of all forms of hydrocarbon fuels in Canada – including gasoline or diesel to fill your car, and natural gas, home heating oil or wood to heat your home.

In January 2017, the Prime Minister said at a town hall, “We can’t shut down the oilsands tomorrow. We need to phase them out. We need to manage the transition off of our dependence on fossil fuels but it’s going to take time and in the meantime we have to manage that transition.” Trudeau quickly backpedalled, said he “misspoke” and told Canadians, “I said something the way I shouldn’t have said it.” But it was a revealing political gaffe. As the political commentator, journalist and Vanity Fair columnist Michael Kinsley has said, a gaffe reveals some truth that a politician did not intend to admit.

Today, RBC Dominion Securities warns “Canadian oilsands producers face rising price discounts as growing production ‘materially exceeds’ export pipeline capacity to the United States in the first quarter of 2018.” Translation: Canada cannot get its oil to international sellers and is forced to sell its product at a lower price to the few buyers it can reach. Because our oil is unable to reach either the Pacific or Atlantic oceans, we are left with one foreign buyer – the United States – which sets the discount price.

Reuters warns: Canada oil producers exhaust options as pipelines, railroads fill. Oil companies have left Canada to invest instead in the U.S. – a more agreeable and profitable location – and in 2017 sold over US$23-billion in Canadian assets. Reuters also reports that output from Canada’s oilsands will grow, “but only as projects under construction are completed and smaller expansions come online.” Energy companies aren’t building new large projects. Why? Prices aren’t high enough and higher returns are realized elsewhere in North America.

Take a bow Mr. Kinsley: Prime Minister Trudeau's vow to “phase out” the oilsands was prophetic. Only it’s happening far faster than anyone expected.
When Canada and the U.S. has had broadly aligned energy policy, which is the historical norm, the outcome has led to aligned prices for consumers. Divergent policies will lead to dramatically different prices – at a cost to Canadians at home and at work.

Canadians for Affordable Energy
Canadians for Affordable Energy · Canada

Friday, 8 December 2017

First jobs tough to get in Alberta last year

Published: The Owl
By: ATB Financial's Economics & Research Team

It may have been selling corn dogs at the summer fair or clearing tables at a local restaurant--all of us will vividly remember our first real jobs. Entry-level employment is rarely glamorous or high paying, but those first jobs are critical for gaining valuable work experience.
Statistics Canada, in a report titled “Getting your foot in the door: A look at entry-level job vacancies in Canada” profiles the kinds of jobs offered to new workers. It explores topics such as: How many entry-level job vacancies are available? What are their characteristics? Which occupations offer entry-level positions?

It also profiles the unemployment rates among entry-level workers by province. The chart below shows the 2016 jobless rate for entry-level jobs compared to the overall job market. For most provinces, the unemployment rate for entry-level jobs (the blue bar) was lower than was the overall rate (the yellow bar), suggesting that it was easier for people just entering the job market to find work than those who were established in their careers.

However, in Alberta the unemployment rate for entry-level work was actually higher than the overall unemployment rate--it was nine per cent, almost 8/10th of a percentage point greater than the overall rate. (This was also the case in Manitoba and Ontario, although the differences here were smaller.)
So while 2016 was tough for established workers in Alberta, it was even more difficult for young workers or new Canadians looking for their first work experiences. Those corn dog sellers and table clearers may have been quite happy to find the jobs they did.

Monday, 27 November 2017

The strange geopolitics of rising oil prices

By: H.T.
Published: The Economist

Why oil is at a two-year high

A STRANGE paradox underpins the recent rise in the price of oil to around $60 a barrel, its highest level in two years. On the one hand, it partly reflects optimism that when producers from the OPEC cartel meet in Vienna on November 30th they will extend an agreement with non-OPEC producers such as Russia to keep output under restraint until late next year. On the other hand, it partly reflects the fear that regional tensions between Saudi Arabia and fellow OPEC members Iran and Qatar could degenerate to such a degree that they disrupt supply from the world’s biggest oil-producing region. Such are the tensions within OPEC, according to Reuters, that Gulf oil officials have stopped using a WhatsApp chat group that used to be a useful co-ordination tool. So is it feasible to imagine that people who cannot bear talking to each other via social media can still agree to onerous production cuts that are vital to keeping prices high?

The short answer is yes. Throughout its history, OPEC has awkwardly held together despite intense internal squabbles and even conflicts, such as Iraq’s invasion of Kuwait (both OPEC countries) in 1990. Indeed, one reason for the growing confidence about an extension of the deal due to expire next March is that compliance levels were 96% last month. That is remarkable considering the rising tensions between Sunni Saudis and their Shia foes. Even at the best of times in the past, participants have usually started cheating when oil prices have risen.

Besides OPEC and geopolitics, there are other reasons oil prices are on a roll. A synchronous upswing in the global economy means that demand for oil is rising. The International Energy Agency, a global forecaster, recently spooked the market by saying that higher prices were likely to dent consumption of crude next year. That is possible, but with prices still at less than half their peak of 2008, consumers, such as drivers, show no sign yet of jamming on the brakes. Rising global demand and falling OPEC supply may yet flush out more American shale production, which is the main bugbear of oil bulls. Martijn Rats of Morgan Stanley says that to keep the market roughly in balance, shale-producers will have to raise output from 5.8m barrels a day (b/d) to 6.8m b/d over the next 12 months, a 17% increase. However, he notes that a bottom-up analysis of listed shale-producers suggests their production is only growing at about 5% a year, which is not enough to fill the gap. Rather than continuing to pump as fast as they can, they are now focusing on pumping more profitably.

With Brent crude above $60 a barrel, and America’s West Texas Intermediate drawing close, much of this may be baked into the price. Bullish hedge-fund investment in oil futures is close to record highs. If OPEC and the other petro-states disappoint in Vienna this week, there is the risk of a sharp sell-off. But for the first time in several years, the interests of the biggest producers in keeping output under control may be aligned. Saudi Arabia wants high prices to achieve a generous valuation when it part-privatises Aramco, the state oil company. Russia's president, Vladimir Putin, wants them to keep the economy—and hence his regime—stable. And shale producers want them because their investors are demanding higher returns, rather than higher volumes. No paradoxes there.

Friday, 17 November 2017

A Look Back to Looking Forward

By Rod Garland

100 years ago in October and November of 1917, four divisions of the Canadian Corps took turns assaulting Passchendaele ridge in Belgium during WW1. After separate attacks, they succeeded in capturing it and the ruins of Passchendaele village from exhausted German defenders.

The battle that had dragged on for months was one of the deadliest in terms of losses on both sides, but showed the rest of the world how Canadian resolve, spirit and resourcefulness could get the job done.

This week the World Energy Outlook 2017 (WEO-2017) was released by the International Energy Agency (IEA). It is the annual update of energy demand and supply projections to the year 2040, with reports under different scenarios, and their consequences for energy security, economic prosperity, efficiency, investment, air quality and climate change.

The highlights are that the global energy landscape is changing and the rate of change will likely vary over the coming decades.

On the World’s current path, by 2040, global energy demand is expected to grow by 30% with increasing electrification expected to meet this demand and as the cost of renewables decline, clean energy technologies are expected to meet 40% of the growth.

Solar power is expected to be the cheapest form of new electricity in many countries, with third world developing regions leading the growth. A third of energy demand growth is expected from India with China adopting a new economic strategy on a cleaner growth path to reduce pollution.

China is projected to become a world leader in wind, solar, nuclear and electric vehicles and the source of more than a quarter of projected growth in natural gas consumption.

The USA is expected to be the largest exporter of LNG by the mid 2020’s and a net oil exporter by 2030 and the shale oil and gas revolution in the United States continues thanks to the remarkable ability of producers to unlock new resources in cost-effective ways.

Globally, cars are expected to double to 2 billion, but oil for those cars is expected to peak as efficiencies are realized with fuels and with sales of more electric cars, especially in Asian markets.

Oil demand is expected to rise to 105million barrels per day due to commercial transportation, aviation, shipping and petrochemicals and global energy related CO2 emissions are expected to rise slightly.

Severe climate impacts are expected, and commitments to reach limits established by the Paris accord are encouraged.

Definitely not the end of the Oil era

With the United States accounting for 80% of the increase in global oil supply to 2025 and maintaining near-term downward pressure on prices, it is definitely not the end of the Oil era.

Change in global oil demand by sector in the NPS

Once US tight oil production flattens in the late 2020s and non-OPEC production as a whole falls back, the market becomes increasingly reliant on the Middle East to balance the market.

There is a continued large-scale need for investment to develop a total of 670 billion barrels of new resources to 2040, mostly to make up for declines in existing fields.

As the world’s fifth-largest oil producer and a significant gas producer, Canada is well positioned to meet the demand from other countries. Including from oil sands expansion, oil output is expected to grow from 4.5 million barrels per day to 6.2 million.

Will Canada miss the boat?

Canada’s competitiveness with the USA and other producing countries will be based on its ability to build new oil and gas infrastructure and construct pipelines in all directions. Recent failures in getting large projects beyond the planning stages is a disincentive to investors and producers alike, that has seen investment dollars go elsewhere and some producers scale down operations or leave.

Providing the certainty of a regulatory process that works for industry and that is acceptable to all stakeholders is desperately required. This will need strong, committed political leadership of the energy sector before investment will return.

The rest of the world is watching, we need to re-kindle the will and spirit of our brave men who played such a big part in Passchendaele and get the job done.

The IEA has released outlooks yearly and these projections and predictions are published and available on the IEA website for review. Many of the outlooks, in particular the longer term predictions have not always, if ever, met published expectations, mostly for geopolitical reasons, and more recently with rapid advances in new technologies such as deployed with the development of shale gas & oil.

Rod Garland

Rod has recently joined the CAGC in a member services role. He has been involved in the seismic industry since 1975, notably in the survey and line clearing sectors. He has served as a Board member for both Enform (now Energy Safety Canada) and the CAGC and has also represented industry on numerous environmental & safety committees for both the CAGC and the CSEG. He conceived the concept for Seismic-In-Motion which showcases seismic field technologies and is an editor and contributor of “the Source” magazine. He would be happy to meet with any companies or individuals who support the seismic industry and who would benefit from membership with the CAGC.

Wednesday, 15 November 2017

Red tape chasing investors away from Alberta's energy industry

By Kenneth P. Green, Elmira Aliakbari and Ashley Stedman - The Fraser Institute
Published: Fort Nelson News

         TransCanada Corp. recently pulled the plug on Energy East, its proposed 1.1-million-barrel-per-day oil pipeline between Alberta and New Brunswick, a month after the company said it would conduct a "careful review" of the cost impacts of changes in National Energy Board regulations.
         It was the latest in a chain of bad news for Canada's energy industry, and further evidence that Canada's growing regulatory barriers may be damaging our investment climate.
         Plunging oil prices and the approval of competing pipelines such as Keystone XL certainly contributed to the cancellation of Energy East.
         But governments, by continuing to pile on new taxes and create unclear regulations, are killing existing projects and driving investment away from Canada.
         A 2016 Fraser Institute survey of energy executives and managers found that Alberta has become significantly less attractive to investment over the past few years. In 2014, Alberta ranked in the top 15 most attractive jurisdictions worldwide, but tumbled to 25th in  2015 and continued its downward slide to 43rd in 2016. This ranking is based on a policy perception index score, which measures the extent to which policy deters oil and gas investment.
         So what policies are driving capital and companies out of Alberta?
         Simply put, regulatory hurdles and poor policy decisions by the provincial and federal governments. Alberta's carbon tax, higher corporate and personal income taxes, a cap on greenhouse gas emissions from oilsands production all contribute to a poor investment climate.
         And while Alberta has become less attractive for investment, U.S. jurisdictions such as Texas, North Dakota and Oklahoma have remained amoung the most attractive in the world. The survey showed that in 2016, eight American states were in the top 10 most attractive jurisdictions in the world. Saskatchewan was Canada's only top-performing jurisdiction.
        And Alberta's investment attractiveness will likely continue to fall behind its American counterparts as a new U.S. policy changes, driven by President Donald Trump, favour the energy sector. Trump is simply making it easier to develop oil and gas resources, opening additional lands, suspending onerous regulations, dropping international greenhouse gas obligations, allowing oil exportation and, perhaps, cutting taxes on business.
        Yet in Canada, we have a difficult time getting shovels in the ground for major energy infrastructure projects - at a high cost for Canadians and the economy.
        Studies show that if Canada exported one million barrels of conventional heavy oil and oilsands bitumen a day to world markets at US$60 a barrel, additional industry revenues would reach $4.2 billion annually. And if access to international markets garnered Canadian producers a price boost, the Alberta and Saskatchewan governments could see oil royalties increase by more than C$1 billion annually, assuming oil reaches US$60/barrel.
        That would mean more Canadian (and Albertan) jobs and billions of dollars in revenue for governments, which could be used on vital services such as health care, education and infrastructure.
        But regulatory hurdles and poor policy decisions have crippled Canada's attempts to access new energy markets.
       TransCanada's abandonment of Energy Easts appears to be the latest example of investment walking out the door, leaving Canadian jobs and economic opportunities behind.
            Kenneth P. Green is a senior director, and Elmira Aliakbari and Ashley Stedman are analysts at the think-tank Fraser Institute. 

Thursday, 9 November 2017

The Future for Pipelines in Alberta

By: Rod Garland - CAGC Member Services

The Future for Pipelines in Alberta

The Alberta Enterprise Group recently held a panel discussion in Calgary to analyse the demise of the Energy East pipeline and discuss what it could mean for the future of energy infrastructure and investment in Canada.

Who are the Alberta Energy Group?

Formed in 2007, they are comprised of business leaders who advocate and lobby to improve the prosperity of Alberta as a place to live and conduct business.

Their role is to communicate the benefits of doing business in Alberta; to positively inform the public and policy makers on complex and challenging issues facing the province and the country; and create real change as the community requires. AEG member companies employ over 150,000 Albertans and generate billions in economic activity each year. The Chairman and founding member is Murray Edwards
also Chairman of CNRL.

The panel included Dennis McConaghy – Former Executive VP, Corporate Development – TransCanada Corporation, Dr. Andrew Leach – Associate Professor, Alberta School of Business – University of Alberta and Martha Hall Findlay – President + CEO, Canada West Foundation. The panel moderator was Claudia Cattaneo of the Financial Post

Andrew’s opening comments were that the reasons for the cancellation were about money, timing and regulations. His opinion was that $100 bbl oil is gone, the capacity requirement has diminished and that the length of the pipeline to the east coast through multiple regulatory regimes meant that cost effectiveness was unlikely. Opposition with the keystone pipeline, a long regulatory process and public interest acceptance were other reasons.

Dennis was convinced that TCP would not have successfully got all of the required permits. He mentioned that the changing of rules and regulations including requirements to assess upstream and downstream impacts of carbon emissions that were added late in the process were a key factor in the company’s decision and felt that the “Needs Assessment” should be the prerogative of TCP and shippers of product, not the regulators. He was skeptical that any other similar pipeline project would get built in the future.

Martha believes that the change in US Presidents that led to a quick approval of the Keystone project in the States, would likely lead to a successful outcome of that pipeline making the Energy East pipeline unnecessary. She also believes that the uncertainty with regulations detrimentally affects business decisions that CEO’s have to make and erodes investor confidence and delays for any reason cost money.

In the open free for all discussion the following points were made

Feds haven’t defined exactly what carbon taxes mean.

Carbon taxes shouldn’t have any relevance to whether or not a pipeline should be built that should be made as a needs assessment by industry shippers

The libs and NDP cheered when the company cancelled the project as it would have been a political nightmare for them in Ottawa.

Political sanction comes too late in any new pipeline process after companies have expended time, effort and money which ends up being wasted.

The example of Enbridge’s Northern Gateway pipeline was quoted whereby conditional approval from the Conservative government was granted, only to be cancelled by the subsequent Liberal government in 2016 citing concerns with the route through the Great Bear Rainforest. They also introduced a moratorium on oil tanker traffic on the BC Coast essentially killing the project as viable.

Investors are unwilling to risk capital without a degree of certainty that political decisions won’t stop projects at the last minute.

There is a lack of political leadership in defining a workable energy strategy. Several investors have turned away because of political delay (eg Petro-china, Petronas). Canada is perceived in the eyes of the world as not being able to get projects completed.

Going Forward

In the views of the panel, retaliation doesn’t work, all groups have to be on the same side.

Carbon taxes will have to be addressed to make projects acceptable.

There should be consideration for expanding railroad networks as an option to move product even though pipelines are a more economical transportation system.  New technologies such as converting fluids into pellets that could be safely transported over-land would eliminate the concerns over possible spills from pipelines and from tankers off the BC coast.

Projects shouldn’t require Cabinet approval late in the approval process.

Commitments from politicians that they truly support the hydro-carbon industry should be sought at every opportunity.

Canada needs a competent Energy Strategy

Inter-Provincial barriers should be removed, free trade options encouraged for market access and protectionism should be discouraged.

Follow the Alberta Energy Group at this link

Wednesday, 11 October 2017

'What Trudeau won't tax' hashtag pokes fun at PM

Published: IPOLITICS
By: Janice Dickson

As the Trudeau government continues to defend its controversial tax proposals in the face of fierce private sector criticism, a new hashtag has emerged on Twitter poking fun at the things Trudeau "won't tax."

Conservative MP Michelle Rempel appeared to help initiate the conversation.

"This is just begging for a hashtag. I'll go first. His cabinet Minister's taxpayer funded limo rides to hockey games. #whattrudeauwonttax," tweeted Rempel.

The hashtag emerged after it was reported that a document on the Canada Revenue Agency’s website indicates that employee discounts for merchandise should be treated as a taxable benefit. The document, known as a tax folio, states that when an employee receives a discount on merchandise because of their employment, the value of the discount is “generally included in the employees income.”
But while the Conservatives and lobby groups say the government is targeting retail workers, National Revenue Minister Diane Lebouthillier insisted that’s not the case.
“Our government recognizes the important role that the retail sector and those working in it play in our communities and in our economy,” Lebouthillier said in a statement Tuesday.
“There have been no changes to the laws governing taxable benefits to retail employees. We are not targeting individuals working in retail. The Agency issued a guidance document to mainly provide assistance for employers and is committed to further clarifying the wording of the guidance to reflect this.”

With files from Canadian Press.

Tuesday, 19 September 2017


By: Kevin Turko
Published: Oilfield Pulse

        If one takes the time to surf through all the news and the NEB website, I've got to tell you, it is tough not to get depressed with the state our country is in these days. Before I jump into the middle of this pool, a thought occurred to me the other day which made me wonder how all the politicians, eco-activists and concerned environmentalists would react to the following scenario. I know this is more than a little far fetched as it would cripple the Canadian economy for years to come, but work with me for a few more minutes.
       Let's say, just hypothetically or perhaps hysterically, that we gave in entirely to all the carbon-free warmongers and decided to kill the oil & gas industry in Canada. As they say, we capitulate totally and leave it in the ground. After all, that is what they are dreaming of, and that is what they are being funded for! Nothing less is acceptable in their minds. No amount of dialogue, monetary appeasement or technological innovations seems to matter. The 3rd largest proven oil reserves in the world, somewhere north of 170 billion barrels. Damn the torpedoes, let's just leave those n nasty and carbon infested fossil fuels in the ground. But the world keeps on spinning, and the demand for oil & gas doesn't diminish for decades to come.
         Fast forward to year 2100, and the rest of the world is running out of reserves and we're still sitting on over 100 billion barrels tucked away comfortably across Canada. OK, maybe Western Canada. The UN and other less fortunate countries, now starving for energy, plead with Canada to re-open the flood gates. People around the world will die if we say no! Would we stick to the moral high ground and say no, or would we live up to our renowned friendly reputation and compassionate ways and simply say yes. Of course, we would. But what if we say no? How long do you think it would take some other rogue or desperate state, or our might neighbors to the south, to forcefully and militarily come and get it?
       Perhaps for-fetched today, but in the year 2100, who knows!
        This leads me to the nonsense that we are experiencing with pipeline approval process here in Canada. The NEB is becoming a joke and now a political pawn for our oh so wonderful climate change gurus., and self-proclaimed planet protectors, federal Liberal government. So much for being an independent regulator! This is rapidly turning into a great way to defer the Energy East decision until after the next federal election, or better yet, to delay the Cabinet decision to say NO so long as these companies simply run out of money, give up on Canada and move on. Before you come over the top rope, and this is directed completely to those who disagree with my opinions, yes, I do firmly believe we must protect the environment and be utterly responsible in how we explore, extract, build pipelines, and ship this stuff. But the demand for oil & gas isn't going away anytime soon. Any decade soon! In fact, the entire crop of carbon naysayers and carbon tax supporters will be long gone, turned into ashes, and will be part of the world's eco-system before this ever happens.

  " In addition, the NEB will consider upstream and downstream greenhouse gas emissions (GHGs) in determining whether these projects are in the public interest. The NEB also wants to examine the potential market impacts of GHG reduction targets embedded in laws and policies on the economic viability of the projects."

    " Today's decision establishes the foundations for a thorough assessment based on science, traditional knowledge of Indigenous peoples, and other relevant evidence."
    Oh, for God's Sake! So now TransCanada is also responsible to defend debatable and unsettled climate change science around GHG emissions. Poor souls! I wonder how much more money and time this will cost them? Irving Oil, in a letter to the NEB said, its customers will use "relatively the same" amount of fuel,


and produce the same level of greenhouse gas emissions, whether the Irving-refined oil comes from Alberta through the Energy East Pipeline, or from other sources in the U.S. or overseas. "The scale of downstream GHG emissions will not be influenced by the Project". Bang on! And of course, any surplus oil shipped out of the Bay of Fundy, once refined, will eventually create GHGs. So now the new and improved NEB also needs to consider the downstream GHG emissions in far away countries around the world, to which we have no control nor influence. Whether it's our oil, or oil sourced from another country, the downstream emissions are the same.
    As for the upstream side of the NEB's thorough assessment based on science, let me do the quick math. We have about 170 billion barrels of proven reserves, whether it's shipped through Energy East or not, or whatever other pipeline or rail car or not, will create GHG emissions to get it out of the ground. Fact of life! This project is doomed if TransCanada needs to belly up to the bar and defend every producer in Canada and the GHG emissions they are creating. Again, Oh, for God's Sake!
    And don't shoot me for saying this, but what does the "traditional knowledge of Indigenous peoples" lend to "better understanding the risks associated with potential accidents and system malfunctions that may, for example., lead to an oil spill into the environment" or "upstream and downstream greenhouse gas emissions"? I suspect their traditional knowledge is about as valuable to the subject of pipeline approvals and climate change as is about 99.9% of all other Canadians.
     Rather than the NEB and Federal governments spending all this time and money on determining whether these pipelines are in the public's interest, perhaps they should devote all their time to determine how to get these pipelines built and flowing as safely, environmentally soundly, and expeditiously as possible. They're just not in Canadians public interest, they are in the world's public interest.
     The world needs our oil & gas, maybe not as much today, but that day is coming. When will we finally stop, and replace this constant industry vs. eco-activist infighting, and endless NEB navel gazing with Federal Cabinet leadership to simply get on with the show!
    Oh, For God's Sake!

Wednesday, 2 August 2017

Wake up Canada! Get behind energy megaprojects or get ready for the consequences

By: Terry Etam
Published: Fort Nelson News // BOE Report

        Not many commodities are hot anymore; investors are quite comfortable shunning the segment. But perhaps you may want to know about a commodity that in contrast is particularly overheated these days.
        Natural gas firm service transportation out of Alberta, for the upcoming winter season.
        Firm service prices are being bid up to unusual levels, even in the face of a relatively low commodity price forecast. Producers appear somewhat panicked about their ability to access markets for their natural gas. This is understandable; current market conditions for AECO-priced gas are extremely shaky with some forecasts of sub $1 gas for the next few weeks due to capacity constraints. This happens not infrequently whenever there is a pipeline outage for western Canadian production, which has few markets that are in the shadow of potential US shale output, which could spring to life at the sign of any price increases. That's not normal behaviour, it's an indication of how few options gas producers have.
         This might seem an inconsequential irritant to the industry, the only by-product of which would be cheaper gas for consumers. But it's actually a big red flag warning of underlying problems. And then, right on top of this fiasco, lands the news that the $36 billion Pacific North West LNG export terminal will not proceed. Petronas, the major partner in the project, politely blamed market conditions, which might be believable were it not for the numberous US LNG export facilities marching towards completion.
         Canada is about to have two of its major economic engines strangled into near oblivion while we stand around and watch. First was the oil sands, and now natural gas development is being throttled. As a country, we are playing with fire. Or maybe more accurately, putting out a fire that we've been relying on.
        We all know that oil sands investment has pretty much stopped dead, knocking out one of the bigger lights in the Canadian economy. Natural gas might follow a similar path if it becomes a stranded commodity that can only be sold at ridiculous discounts. It is true that both the Alliance and TransCanada Pipe Line systems are working to handle substantially more gas in the next few years, but that gas will still be destined for highly competitive US markets that already are digesting growing shale production. The result will be reduced net backs all the way to Canada.
          Capital will not flow into Canadian natural gas developments indefinitely when the only markets are severely discounted ones; at some point investors will tire of pumping money into a sector whose product sells at 20 year lows (and they maybe already have). Lower corporate net backs and decreased investment levels may not make headlines immediately, but those factors surely will prick up ears when people hear about government deficits growing by tens of billions.
         The Canadian economy is under attack on multiple fronts. The softwood lumber industry is once again getting slapped around by the US. If one removes lumber, and oil and gas from Canada's economic equation, or large parts thereof, there will be a massive government revenue gap and the only way the economic equation can be balanced will be to slash the spending side, such as on our vaunted social safety nets.
        Oil, gas and lumber are tough shoes to fill for the nation. Manufacturing is big for southern Ontario, but not so much for the rest of the country. Hydroelectric energy is great, now that it's been built, but creating any new dams will (or should) trigger the same blizzard of outrage that any petroleum based mega project now does. Please don't point to other green energy sources for economic salvation; Ontario's fiasco of subsidizing renewable energy sources has created an unsustainable and bizarre power market where consumers can't afford the power bills and renewable energy sources reap huge benefits, all through the miracle of unsustainable mountains of government debt.
      Canada is a resource-based nation. We may want to get away from that, and at some point we will, but if we decide to make the big switch in the near future we'd better be ready for the pain that will be part of the ride. We can't continue in half hearted manner where we accept low returns by keeping our product from markets where it will be welcomed. That only serves to make our production schemes uncompetitive in a global marketplace, and we've seen recently how quickly capital can evaporate when better opportunities exist elsewhere.
       The environmental movement cheers these sorts of things, because any hindrance to petroleum development is a good thing in their eyes. If they get their wish, the world will go to witness firsthand the effects of strangling one of the world's strongest, safest, cleanest, and most progressive economies, because the debt fairies won't hand around forever to watch it all implode. And on the flip side, for those who think strangling Canada's energy sector will save the planet, remember that Canada in total is responsible for about 2 percent of global greenhouse gases. There is nothing Canada can do short of shutting itself down that will have a meaningful impact on global emissions.
        Wake up, Canada! We are presently a resource-based economy. Every resource based economy on earth tries to diversify, but it's not easy. It won't be for us either. No matter how green you see the future, the path to get there must be a gradual on to avoid economic chaos. For now, our social infrastructure and standard of living are financed by natural resources, and we are accepting a fraction of the value we could be getting by strangling ourselves in red tape and second guessing. To get to a green future, we must first not kill the golden goose.
       Either get behind energy megaprojects by demanding more of our politicians, or be prepared for a substantially reduced standard of living. The death of these developments, one by one, impacts us all.

Friday, 28 July 2017

A Few Questions for Canada's NIMBY Crowd

By: Mark Scholz - President of CAODC
Published: The Hitch - Summer 2017

President's Message

Locals and globally-funded environmental groups who oppose the Kinder Morgan Trans Mountain expansion project object to any infrastructure that might result in a proliferation of tankers that would disturb the beautiful Saelish Sea ecosystem. This position, while seemingly well-intentioned, is not rooted in fact; and it has presented one of the most compelling threats to Canadian federalism since the Quebec referendum of 1995.

Let’s look at a few facts. To date, there have been no major tanker incidents off of the coast of British Columbia, largely due to developments in double-hulled tanker technology and thoughtful marine planning and cooperation on the part of companies and municipal governments. About 250 large commercial vessels enter the Port of Vancouver every year, five of which are tankers destined for the Westridge Marine Terminal.1 The Trans Mountain expansion is projected to increase that tanker traffic to 34 tankers. That seems like a significant increase, except when you consider the fact that the increased total represents just 14 percent of all marine traffic in the Port of Vancouver.2

Canada is a world-class producer of oil and with new investments in energy infrastructure – namely pipelines – we can increase our potential to be a world-class supplier in a globally competitive market. Currently, less than one per cent of Canada’s oil is exported to markets outside North America, yet world demand for oil will continue to grow.3 Canadian oil production meets the highest standards among producing nations. We should aim to be the global choice in terms of oil and gas. Energy infrastructure is critical to reaching that goal.

So what about those who oppose pipelines in principle, on the grounds that their contents promote catastrophic climate change? Well, they should be encouraged by the fact that Canadian oil and gas are less GHG-intensive than ever.
When will enough be enough for you to divest yourselves of the notion that we need to “leave it in the ground”?
It’s commonly known (but no less remarkable) that the volume of GHGs released by every barrel of oilsands crude has been reduced by an average of 30 percent since 1990. But did you know that technologies such as molten carbonate fuel cells reduce the greenhouse gas intensity of in situ steam generation methods such as steam assisted gravity drainage? In the drilling industry, the time it takes to drill an extended-reach horizontal well has been reduced by up to 70 percent, resulting in significant GHG emissions cuts through dramatic reductions in the use of diesel fuel on site. In terms of the safety record of the existing Trans Mountain pipeline, it has transported oil products with a 99.9 percent spill safety rate since 1956.

Canadian industry will keep making impressive strides toward achieving perfect emissions, safety and conservation outcomes.

So here are a few questions for Canada’s NIMBY (Not In My Backyard) crowd:
  • When will enough be enough for you to divest yourselves of the notion that we need to “leave it in the ground”?
  • Are your objections to Canada’s regulatory processes rooted in conservation and consultation issues, or are they just a stall tactic to prevent investment in Canada’s oil and gas industries?
  • Do you believe that Canadians are really better-served by hobbling our opportunities to participate in the global energy transition by shutting down the production and transportation of our oil and gas resources?
These questions matter. They will determine our country’s energy future, our contribution as global thought leaders in innovation and excellence, and our ability to uphold a cohesive Canada. 
Mark Scholz is president of the Canadian Association of Oilwell Drilling Contractors. He can be reached at

1 Transport Canada

2 Kinder Morgan


Tuesday, 18 July 2017


Published: Oilfield Pulse
By: Kevin Turko - CEO - Oilfield Hub Inc

       It's almost impossible these days to watch an cable news network or national news broadcast without encountering some sort of story covering a protest rally or group shouting out or marching for their favorite or latest causes. Up until November of last year, there was a constant barrage of environmental groups and eco-activists out there at every opportunity chastising the oil and gas industry, chanting their vocal support to fix climate change and rid the planet of the new demon called 'carbon pollution'. Then, thank God, along came President Donald Trump who, right or wrong, has shifted both the medias and protestors' focus away from the energy sector. Here are just a few of my personal favorite chants:


      Whether you love the man and support his policies, or detest the man and despise his policies, President Trump has single handily polarized the political landscape well beyond the borders of the United States. By the way, it's a lot more fun when you read these chants out loud in a raised and rhythmic voice! Give them a try again; but to truly get into the agitated protesting spirit you should also read each of the chants 3 times in a row. Again, all thanks unwittingly or purposely to The Donald.
       In the last eight months or so, this has remarkably taken the pressure off the oil and gas industry. The boogeyman of climate change, Mr. Carbon Pollution, has taken a second seat to a whole host of other social justice causes on both sides of the border and opposite sides of the political landscape. Not to be out-done, I thought a little reminiscing was in order so we don't lose sight of the past and ongoing fine protesting efforts of our foreign funded environmental activist groups. Again, here goes with some of my personal global warming favorites.


      Ok, ok , ok, if you are paying attention I made the last one up! From where I am leaning, all these folks just don't have to be so damn negative. Why can't we start some cool chants of our own to help modify, in a much more positive manner, the climate change and carbon pollution narrative! Give it a try! I rather like the HEY HEY! HO HO! chants. Snappy little jungles and pretty easy to make up by yours truly and by the countless number of seemingly paid and well funded eco-activists. Several of which are thinly veiled or cloaked as so called charitable organizations, at least for the time being in Canada as long the Trudeau Liberals are in power. But hey hey, ho ho, that's a whole other article! Sorry, couldn't resist.
    These climate change and carbon pricing debates are such divisive issues right now, but what I find fascinating are the unfortunate parallels to the political climate we are being subjected to. If you watch channels like the CBC or CNN you get bombarded with countless hours of 'the world is ending' reporting, and if you watch Fox News you're being swayed for an equal number of hours that its all 'fake news' and that nothing wrong is happening. All in search of higher ratings and increased revenues. Most people just don't have time nor inclination in their daily lives to search out the truth which undoubtedly lies somewhere closer to the middle of our daily news spectrum.
     There's so much time, effort and dollars being spent on indoctrinating everyone on what's wrong and precious little time, effort, and dollars are being devoted to educating the public on what we, our business leaders and politicians, can do to make it right. Let's use pipelines as an example. If we are all so concerned about carbon pollution on a global scale, why no get these pipelines built now! As a first step, doesn't it make more sense to get countries like China, India and other high emitting countries off their dependence on coal and onto clean burning natural gas. Wouldn't this be a massive positive step toward lowering GHG emissions now, versus by 2030?
      The life blood of the oil and gas industry in Canada is access to foreign investors. These investment dollars won't return to Canada until significant and meaningful progress is made on getting our oil and gas to tidewater. On the home front, we seem to care little about making Canada truly energy independent with our own natural resources. Instead we are blocking pipeline construction with petty local and domestic issues. I say petty, because our industry detractors have lost sight of the greater good. Let's get our clean burning natural gas to China, and many other countries, so we no longer have to watch news reports of Chinese people with face masks walking thought their cities under a smoggy and hazy skyline.
      Instead we slap our citizens and businesses with meaningless carbon taxes which don't in any way change consumer behaviours. We distract our people into thinking this is the answer to tackle climate change. We allow civic politicians in cities like Vancouver to ban clean burning natural gas furnaces. These same politicians and local protestors are hurting our Canadian economy, and unwittingly, or stupidly, denying access to LNG to the worst polluting countries of the world. This is small-ball crap and just plainly hypocritical!
    So the next time you see a protestor in your neck of the woods, think of our less fortunate global neighbors and throw back a chant of your own. You're always welcome to use mine as well.



Monday, 17 July 2017

Pipelines for Peace

By: C. Kenneth Reeder
Published: Pipeline Observer - CAEPLA

Why supporting Canadian energy transport projects can mean fewer wars and refugees

We generally think of the pipeline debate in terms of economy and environment, but pipelines can be a war and peace issue as well. 
     An American diplomat once said, "If goods cannot cross borders, armies will." If people can't get what they need through cooperation and trade, then they must resort to violence and plunder. 
     That is why most of history's wars have been fought over land and resources. In the modern era we basically accept that oil and gas have something to do with many conflicts. We know why so many "strategic interests" include the Middle East and not the Congo. 
      We can see this in Syria. The war-torn country is ground zero for clashing foreign interests. There are many layers to the conflict but one of these is competing gas pipelines. 
       It's nearly impossible to understand the irrationality of Middle Eastern politics, and Syria's civil war is no different. We have a nasty secular dictator fighting a hodgepodge of terrorist-rebel factions (including ISIS, Al-Qaeda, and others). Whatever they're fighting over, it's a brutal struggle with no good guys to cheer for. 
       How do pipelines fit in? The Syrian Civil War started in 2011. In 2009,. Syria's leader Assad rejected a pipeline project with Qatar and Turkey, while supporting an Iranian pipeline project through Syria. 
      The Qatar-Turkey pipeline would have gone from Qatar's North gas field through Saudi Arabia, Syria, and on to Turkey with future access to Europe. Qatar is a major gas producer and its rulers want to be main providers of gas for Turkey, which otherwise depends on Russia and Iran for energy. They also have their eyes on Europe, which will be thirstier than ever for natural gas imports as its own production wanes. 
      Now here's a question: who are the main backers of fundamentalist Sunni rebels forces in Syria? Interestingly, it is the fundamentalist Sunnis in Saudi Arabia and Qatar, with help from Turkey. 
      Now on the flip side of this, who is supporting Syria's regime against the terrorist-rebels? Russia and Iran. 
      Both are key Syrian allies. The rejected project would have been a problem for Russia and Iran's own pipeline related goals through Syria and Turkey because they need to preserve market share and economic power. Assad reportedly said he would not sign off on the Qatar-Turkey pipeline to protect Russia's economic interests. 
     All this foreign interference has greatly aggravated the Syrian conflict, leading to hundreds of thousands dead leading to hundreds of thousands dead and a refugee crisis that has spilled into Europe and elsewhere. 
     When politicians point to the tragedies of Syria and tell us to open our arms and wallets for refugees, we should reflect a bit on how we can alleviate conflicts over petroleum resources.  
      Building more energy infrastructure and exporting more oil and gas is a huge part of this.
      Peace isn't created by vapid, sloganeering politicians, nor by pompous bureaucrats making sleazy deals in the halls of the UN. 
      Peace comes through trade. Civilized people know it's better in the long run to have economic relationships, not violent ones. People don't even have to like each other to do business together and make deals. That is the beauty of commerce. 
     Oil and gas are the lifeblood of modern civilization and thankfully there is no problem of running out anytime soon. The challenge instead is actually making our abundant supplies available to those who want to buy the stuff. 
     When Canada's major pipeline projects get stonewalled by political interference, it's bad for the world. It creates smaller global supply for purely political reasons. Having fewer sources of stable supply empowers the world's bullies to leverage their economic power where supplies are constrained. This is especially true with natural gas, which was mostly stuck in its local market before the advent of LNG transportation. 
     And so Canada's restrictive pipeline policies will stimulate more conflict than otherwise. Some of these conflicts will be bloody and make people flee their homelands. 
    Let's be clear about what we're saying here. Ottawa can't end the Syrian civil war and solve the refugee problem just by approving pipeline projects in Canada. 
   But increasing Canadian supply could help reduce demand for product from those who resort to instigating war to promote their exports. 
    So, Canada can do its part for peace and win small victories by selling more oil and gas to the rest of the world. By doing so can we help ease a major conflict on earth. 
    A pretty good reason to end the political paralysis of pipelines in Canada. 

Tuesday, 11 July 2017

We can wage our own battle (against the naysayers)

By: Scott Jeffrey
Published:  Roughneck Magazine

The Global Petroleum Show wrapped up on June 15, and we need no further evidence that the industry is not back from its glory days. Less than 600 exhibitors were signed up for the three day event, about 1/3 of record numbers when the show was held every two years. As an exhibitor, we also noticed the number of attendees was down, and a view of cards gathered indicated that many producers didn’t take the time to attend the show.

It’s still a great event, and the exhibitors were enthusiastic, selling oil and gas equipment and services with their usual aplomb. Activity is up, oil prices are stable(ish), and demand for product is strong and rising throughout the globe. We are sitting on reserves that put us in the top five in the world, and we may actually see increased pipeline deliverability in the next five years.

However, it is now time for every individual who makes a living from the industry, or who is a proponent of the industry, to wage their own information campaign with the naysayers who enjoy the benefits provided by the sale and use of oil and gas.

How many times have you sat around a dinner table, listening in outraged silence while some white wine socialist holds forth on the evils wrought by the industry that is the foundation for our modern society? Or, how many times have you been able to take no more, exploding in outrage against falsehoods or half-truths spun by men or women who came to dinner in their gas guzzler, enjoyed the comfort of a heated or air conditioned home, and chowed down on a delicious steak prepared on a natural gas or propane barbecue? If you finally do speak up in such a fashion, you’re seen as a hothead, in no way objective, a destroyer of the planet.

And so, in the certain knowledge that revenge is a dish best eaten cold, you can again invite those individuals to dinner, either singly or as a group, and destroy them with five, and only five, unassailable facts. You won’t need any more than that to have THEM sputtering in outrage, while you remain calm and stick to your guns.

Fact #1- Almost 500,000 people in Canada are employed by the oil and gas sector.
Just using an average salary per individual of $75,000/year, wages paid out to the industry amount to $37.5 billion, at least 35% of that taxable. You then factor in royalties on the sale of oil and gas. The economic benefits to Canada, and to government coffers, are enormous. Whether the money is misspent or not, our current standard of living comes in large part from the oil and gas industry.

Fact #2- Pipelines are by far the most efficient and safe way to transport petroleum products.
In Canada we have over 800,000 km of pipelines, transporting about three million barrels of crude per day. In the last 15 years, pipelines have delivered 99.9995 per cent of product safely. Canadians spill more on the ground when they fill up. In B.C., where new pipelines are debated and often vilified, 43,000 km of existing pipeline could be displaced by using about 4,200 railcars. Who wants that amount of rolling stock passing through their community?

Fact #3- Canada’s oilsands produce 0.13% of global greenhouse gases (GHGs).
Environmentalists all over the world rail against our “tarsands,” which by the way is an absolute misnomer. Tar is produced by the distillation of coal, not to be confused with the oil that is entrapped in sand up in northern Alberta. If you want a real fight on your hands, take on King Coal, which is responsible for 44% of global GHGs.

Fact #4- Over 6,000 household items are produced from petroleum based products.
There is no need to mention the obvious uses for our petroleum products, but when you realize that cleaning products, medicines, cosmetics, synthetic rubber, plastic, fabrics, and foodstuffs are made from petroleum, people tend to get very quiet. If you find a product not made from a petroleum base, you probably chopped it down and carved it yourself.

Fact #5- Canada can supply all its oil and gas needs, but imports over 600,000 bbl/day.
This is ridiculous. We spend about $25 billion a year importing Saudi and other crude, and we are held up by about 1,000 km of new pipeline construction. To the detriment of the rest of Canada, a few Quebec mayors will try to halt Energy East until they get paid. The benefits of using our own natural resources are so obvious that only the most obtuse would object.

So there you have it. In my simplistic way, I’ve presented five facts that are not subject to interpretation. If your dinner guests still dispute the need for oil and gas, ask them to put their money where their mouth is. Ask them to think globally, as they no doubt believe they are doing, but act locally. They can walk to your house, ask you to turn off the furnace or the air conditioner, wear less mascara, and otherwise reduce their consumption of products produced from the oil and gas molecule.

And most important of all, remain calm, and let them do the sputtering for a change.
#Canada #oil #OilandGas #TheRoughneck #Roughneck #Canada150 #import #Export #industry #oilsands #pipelines #environment

Thursday, 29 June 2017

Energy For Tomorrow

By: David Coglon
Published: Context Magazine

Five reasons why Canada's oil and natural gas resources are an essential part of the future energy mix for our nation and the world.

Energy runs the world. It meets our most basic needs, such as having a warm place to live, lights to read by, and a means of cooking food. It also underlies our ability to travel great distances, transport goods for trade, and build amazing products from smart phones to artificial hearts.

Oil and natural gas have formed the backbone of an energy revolution that has transformed the lives of billions for the better. Oil and natural gas have the promise and opportunity to transform the lives of billions more, with Canada at the lead as a sustainable, responsible and innovative energy producer.

As the world moves to a lower-carbon future, some have pronounced the doom of the hydrocarbon industry. This does not stand up to scrutiny. Oil and natural gas have a critical role to play in meeting the world’s energy needs for the foreseeable future. We examine five reasons why.

Reason 1: We need more energy

“If you look at any forecast, we’re going to see growing energy demand,” says Jackie Forrest, director of research at the Calgary-based ARC Energy Research Institute.

Forrest’s comment is backed by the latest energy outlook from the International Energy Agency (IEA). The IEA’s World Energy Outlook 2016 projects that by 2040 the world will need 31 per cent more energy than we use today. Others draw similar conclusions. BP in its latest report estimates global energy demand to grow around 30 per cent by 2035, while the U.S. Energy Information Administration says this could even reach 48 per cent by 2040.

“We’re going to see a huge increase in the energy system because we’re seeing a growth in population, more countries increasing their wealth and many people demanding mobility,” Forrest says.

The IEA numbers make for serious reading. According to the agency, 1.2 billion people still lack access to electricity. And 2.7 billion are without clean cooking fuels, instead depending on wood, charcoal or animal dung for fuel. It’s clear many people around the world are looking to low-cost, efficient energy sources simply to boost their quality of life to standards we in the West have long taken for granted.
So if more energy is required, what’s it going to take to get us there? In practical terms, it’s going to take all forms of energy—and that includes oil and natural gas.
“People often hear about the rapid growth rate of renewable energy. But even if this happens, at the end of 2040, renewables will still make up only seven per cent of the world’s entire energy mix,” says Terry Abel, CAPP’s executive vice-president. “Most people would be surprised to learn that hydrocarbons—oil, natural gas, coal—together will still make up more than three-quarters of the future energy mix in 2040.”
This forecast is part of the IEA’s central or “New Policies” scenario, which incorporates countries getting serious about meeting climate pledges made in Paris in December 2015.
“If government leaders stick on the path today, even including the agreements signed in Paris, this future still implies growth in oil and gas,” Forrest says.

Reason 2: Oil and natural gas: plentiful, powerful, transportable

We don’t have to go far to realize what’s behind continued demand for oil and gas: They pack a lot of energy punch within their molecules.

“Nothing can compete with oil and natural gas in terms of economics or their utility. At $50 a barrel, it’s fairly cheap to use oil versus other alternatives,” says Forrest. “Liquids fuels have a lot of energy density. When you get a tank of gas, you can travel really long distances—and that’s a big advantage,” Forrest says.

There’s also their abundance. It used to be that society worried about peak oil. But through innovation, we’ve found plenty more. That’s true especially today, as unconventional technologies have unlocked new shale gas and tight oil reserves, vastly growing the world’s hydrocarbon reserves. In fact, according to BP’s latest energy outlook, there’s enough technically recoverable oil in the ground to meet double the world’s needs by 2050.

Alternatives to oil and gas are becoming more viable. Improvements to solar technology are allowing this energy source to take on a larger role, specifically in electricity production. As well, more electric cars are entering the market. Even so, they do not spell an end to hydrocarbon-driven energy.

“There are still a lot of cars that run on gas and diesel in the world,” says Forrest, who estimates there are more than a billion light duty vehicles (LDVs) on the road currently. As well, while more cars may be electric, hydrocarbons are often used to generate the electricity needed to charge up these vehicles. For example, both the U.S. and China currently depend on hydrocarbons for at least two-thirds of their electricity production.

Another important advantage for hydrocarbon energy sources—particular in supplying developing and emerging economies—is they can be efficiently transported over large distances via tankers and pipelines. Places like Canada with plentiful energy resources and modern energy infrastructure can export these resources to places elsewhere where energy is in short supply and high demand. This option isn’t possible for most alternative energy sources where you need to be relatively close to the source (as is required for hydro) or build significant infrastructure to access or create the energy supply (think nuclear, solar and wind).

As well, energy sources such as natural gas can be counted on to fuel electricity generation backstopping more wind and solar.

“When the wind isn’t blowing or the sun isn’t shining, we will still need a backup. That can come from natural gas, which is always available when you need it and is economic,” Forrest says.

Reason 3: Innovation can solve the carbon dilemma

To meet the world’s growing energy demands while shifting towards a lower-carbon future requires innovation. This applies to renewable energy sources which today cannot meet the burden of providing energy security to large populations without improvements that deal with the high cost, large land footprints and intermittency of these sources.

By the same token, innovation will enable oil and natural gas to continue as an important part of a growing energy mix within a lower-carbon future. Canadian producers are already working hard to find ways to significantly reduce carbon emissions associated with the production of oil and natural gas.

Groundbreaking research, for example, is taking place through Canada’s Oil Sands Innovation Alliance (or COSIA). Five years ago, 13 oil sands companies formed COSIA—a unique partnership that’s committed to better environmental performance in key areas, including greenhouse gases. To do that, they’ve set aggressive targets. They’re pooling their resources and sharing knowledge, best practices and even intellectual property. Already they’ve shared more than $1.3 billion of intellectual property representing more than 900 technologies and innovations. This is a magnitude of intellectual property sharing unique in the world.

“Through literally hundreds of projects, the companies are achieving environmental performance goals they’ve set for themselves. And the improvements through innovation are translating into new value for the companies involved and the industry,” says Gordon Lambert, a former vice-president of sustainability at Suncor Energy and one of the founders of COSIA.
“To be positioned for success in the 21st century, our industry has to be resilient in a carbon-restrained future."
Gordon Lambert
Elsewhere, industry is partnering with research institutions, like the University of Calgary, to create environmentally effective technologies. Armed with a $75-million grant from the Canada First Research Excellence Fund, a team of 270 researchers at the university is working with producers to find lower impact ways to extract energy from unconventional oil resources with less energy and less water.

Lambert, who’s also a former member of the Alberta government’s climate change leadership panel, calls these and similar efforts “mission critical” to the industry’s future.

“To be positioned for success in the 21st century, our industry has to be resilient in a carbon-restrained future. And the way in which we can do that is through innovation. Innovating to produce hydrocarbons with less energy inputs, which in turns translates into less GHG outputs and lower costs, will be the essence of our industry’s future carbon competitiveness,” he says.

Reason 4: Canadian energy: abundant, reliable, sustainable

While we’re still very much a continental oil and gas player supplying mostly our neighbor to the south, new pipelines and export facilities could change all that, putting us on the world stage. When that happens, the “made in Canada” sticker on oil and gas products could carry a lot of weight with foreign customers.

“I think we’ll find that the world will welcome Canadian oil and gas production. Our resources come from a stable political regime. The sources are consistent and constant, and we have long, steady-producing entities,” Abel says.

Add to that, Canada's oil and natural gas is produced under a world-class regulatory system. A 2014 study by Worley Parsons comparing Alberta’s environmental policies, laws and regulatory systems with other oil-producing regions, ranked Canada near the top.

“Canada undergoes quite a bit of scrutiny in the development of its resources. We have some of the most stringent environmental regulations, and the transparency to go with it,” says Abel, who previously worked as a senior executive at the Alberta Energy Regulator.

Abel says Canada, with its responsibly produced oil and gas, has the opportunity to make a difference on the world stage. Alberta has introduced a carbon leadership plan with a hard cap on oil sands GHG emissions. And the industry already invests heavily in technology and innovation.

“If the world wants to see cleaner, more responsible oil and gas, then they will want Canada to be in the mix of suppliers,” he says.

Reason 5: Petrochemicals and almost everything you own

We shouldn’t forget that oil and natural gas are needed to create petrochemicals, the building blocks used to manufacture many of the products we count on every day.

Walk into any home, and there’s something made using petrochemicals: the paint on the walls, the lightweight winter jacket, the smartphone in our pockets. Petrochemicals are also behind carbon fibre and other advanced materials that make airplanes lighter (and more fuel efficient) and wind turbine blades stronger, while allowing for breakthroughs like lightweight and flexible artificial limbs.

“Our chemistry industry touches many aspects of our society, and petrochemicals are a big part of that,” says David Podruzny, vice-president of business and economics for the Chemistry Industry Association of Canada (CIAC). CIAC represents Canada’s $53-billion chemistry sector, which relies on natural gas liquids and oil for high-value feed stocks.

According to Podruzny, just under five per cent of oil and about 20 per cent of Canada's natural gas consumption gets converted to petrochemicals. And that’s an application he doesn’t see disappearing soon.

“Nor should it disappear,” he adds, noting there are close to $12-billion in investment decisions under consideration for Canada that would use natural gas or biomass as raw material to make petrochemicals. “We make petrochemicals with the lowest carbon footprint on the planet,” says Podruzny, “Who will benefit if these investments move elsewhere?”

“Even as society talks about decarbonizing our economy and some talk about even eliminating the use of oil and natural gas, I challenge that. I see new value from hydrocarbons 50 years from now where they are used to make new materials that add to our quality of life,” Podruzny says.

It’s a broader outlook for oil and natural gas that ultimately challenges industry to capture even more value from the resource, yielding new products and applications for now, and well into the future.