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Canada’s high-cost oil and gas needs a competitive game plan

Canadian oil and gas companies will be competing head to head with lower-cost energy producers in the near future, and the country needs a better strategy to remain competitive in a post peak-oil world. According to a PwC report released May 30, Canada has four options when it comes to the future of oil and gas: continue relying on exports to the United States ; focus on building pipelines to either the west or east coasts to get oil and gas to offshore markets; or look to develop “unconventional resources” in Canada’s north. “As Canada moves from a focus on the US market toward exporting our oil production to world markets, it will fight for market share with nations that have strategic interests and the regulatory will to capture demand, particularly in the high-growth Asian market,” says the report. While Canada still has some of the largest oil reserves […]

Posted On : Published By : ASPO-USA
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Total Joslyn Oil-Sands Project Delayed, Jobs Cut on Costs

Total SA (FP) will cut 150 jobs at its Joslyn oil-sands project in Canada and delay a final investment decision as costs escalate and the company and partner Suncor Energy Inc. (SU) look for ways to make the project more profitable. “We just need to find ways to go further in cost effectiveness,” Andre Goffart, the president of Total’s Canadian business, said on a conference call yesterday. Oil-sands mining projects including the C$11 billion ($10.1 billion) Joslyn venture are “very capital intensive projects.” Oil-sands miners have struggled with rising costs in northern Alberta because of labor shortages and distance from equipment suppliers. Imperial Oil Ltd. (IMO) , the Calgary-based producer majority owned by Exxon Mobil Corp., last year boosted the cost of its Kearl project by 18 percent. The decision on Joslyn will save Total, France ’s largest oil producer, $3.9 billion in the next four years, Oswald Clint […]

Posted On : Published By : Tom Whipple
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Ukraine to challenge Gazprom

| License Photo The drafting of a lawsuit against Russian energy company Gazprom is in the final stages, Ukrainian Justice Minister Pavlo Petronko said. Ukraine has a Friday deadline to settle a debt the Russian energy company says is for $2 billion. No payment means no gas deliveries to Ukraine starting in June, Gazprom officials said. The deadline coincides with a second round of trilateral energy talks between Ukrainian, Russian and European officials. Under a proposal , Ukraine would settle its debt and offer another $500 million by June 7. Ahead of the Friday talks in Berlin, Petronko said Ukrainian energy company Naftogaz sent a pre-arbitration statement to Gazprom in a challenge to its contractual relationship. "The drafting of the lawsuit is in the final stage," he said in an interview broadcast Thursday with RBC-Ukraine. Gazprom said Ukraine may have to pay in advance for natural gas if a […]

Posted On : Published By : Tom Whipple
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Fracking plans submitted for British shale

British shale explorer Cuadrilla Resources, the target of heated protests, said it submitted plans for new fracking operations to Lancashire County officials. "The proposal covers the works required to drill, hydraulically fracture and test the flow of gas from up to four exploration wells on the site," the company said in a statement Thursday. When the company announced its intent to submit plans to Lancashire officials in early May, Caudrilla CEO Francis Egan said the application would be an "important milestone" for British shale. In March, the company said it believes there are 200 trillion cubic feet of shale natural gas in the Bowland basin in Lancashire. The company was the target of major demonstrations last summer when exploratory operations in the southern village of Balcombe were viewed as a prelude to fracking, though the process wasn’t carried out at the site. Caudrilla said Thursday there […]

Posted On : Published By : Tom Whipple
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Three Necessary Strategies Mitigating Peak Oil

“First is conservation. That’s the missing piece in most proposals for dealing with peak oil. The chasm into which so many well-intentioned projects have tumbled over the last decade is that nothing available to us can support the raw extravagance of energy and resource consumption we’re used to, once cheap abundant fossil fuels aren’t there any more, so—ahem—we have to use less. Too much talk about using less in recent years, though, has been limited to urging energy and resource abstinence as a badge of moral purity, and—well, let’s just say that abstinence education did about as much good there as it does in any other context. The things that played the largest role in hammering down US energy consumption in the 1970s energy crisis were unromantic but effective techniques such as insulation, weatherstripping, and the like, all of which allow a smaller amount of energy to do the […]

Posted On : Published By : ASPO-USA
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Converging Energy Crises – And How our Current Situation Differs from the Past

At the Age of Limits Conference , I gave a talk called Converging Crises  (PDF), talking about the crises facing us as we reach energy limits. In this post, I discuss some highlights from a fairly long talk. A related topic is how our current situation is different from past collapses. John Michael Greer talked about prior collapses, but because both of our talks were late in the conference and because I was leaving to catch a plane, we never had a chance to discuss how “this time is different.” To fill this gap, I have included some comments on this subject at the end of this post. The Nature of our Current Crisis The first three crises are the basic ones: population growth, resource depletion, and environmental degradation. The other crises are not as basic, but still may act to bring the system down. Humans have found a series […]

Posted On : Published By : Tom Whipple
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Oil Mixed Following U.S. Inventory Data

Oil futures were mixed in Asian trade, with some profit-taking in U.S. crude after overnight gains thanks to a drawdown in stockpiles at Cushing, a major onshore storage hub and the physical delivery point for New York Mercantile Exchange futures. Light, sweet crude futures for delivery in July traded at $103.42 a barrel at 0534 GMT on the Nymex, down $0.16 in the Globex electronic session. They settled up 86 cents, or 0.8%, at $103.58 a barrel overnight. U.S. crude futures are likely to see little downside risk, with prices staying well above $100/bbl in the near-term due to the low stocks at Cushing, which fell 1.5 million barrels from a week ago, said Okato Shoji Co. ‘s deputy manager of research, Kaname Gokon, in Tokyo. Supplies in Cushing have fallen 16 out of the last 17 weeks and are down more than 20 million barrels since late January, […]

Posted On : Published By : Tom Whipple
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WTI Set for Monthly Gain as Cushing Supplies Decline

West Texas Intermediate headed for its first monthly advance since February as crude inventories shrank at the delivery point for New York contracts. Brent was steady in London, poised for a second monthly gain amid separatist violence in Ukraine. Futures were little changed after rising 0.8 percent yesterday. Stockpiles at Cushing, Oklahoma , the biggest U.S. oil-storage hub, dropped by 1.53 million barrels last week to the lowest level since November 2008, according to the Energy Information Administration. Supplies nationwide expanded by 1.66 million, compared with a 500,000 barrel gain estimated in a Bloomberg News survey . “Cushing is certainly a factor” supporting front-month WTI prices, Tony Machacek, a broker at Jefferies Bache Ltd. in London, said by e-mail. “Total stocks are high, so there shouldn’t be any strong fundamental reason for prices to move too much higher.” WTI for July delivery was at $103.20 a barrel in electronic […]

Posted On : Published By : Tom Whipple
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Natural Gas Slips as Supplies Grow More Than Expected

Natural gas slipped Thursday as a larger-than-expected supply increase put inventories on track to replenish by next winter. Natural gas for July delivery settled down 5.6 cents, or 1.2%, at $4.559 a million British thermal units on the New York Mercantile Exchange. Producers added 114 billion cubic feet of gas to storage in the week ended May 23, according to the U.S. Energy Information Administration. The average forecast was for an addition of 110 bcf in a Wall Street Journal survey. Natural-gas inventories shrank significantly this past winter, as frigid weather across much of the country led to record demand for gas-fueled indoor heating. This week’s injection, the largest one-week gain since June 2009, puts stocks on pace to close the deficit by the coming winter. The number "caught everybody off guard a little bit," said Frank Clements, co-owner of Meridian Energy Brokers Inc. Last […]

Posted On : Published By : Tom Whipple
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OPEC May Crude Output Advances From Three-Year Low in Survey

OPEC crude production climbed in May for the first time in three months, led by gains in Angola and Saudi Arabia, a Bloomberg survey showed. Output from the 12-member Organization of Petroleum Exporting Countries rose by 75,000 barrels a day to an average 29.988 million, according to the survey of oil companies , producers and analysts. Last month’s total was revised 50,000 barrels a day higher to 29.913 million because of changes to the Saudi Arabian and United Arab Emirates estimates. Members increased production as the International Energy Agency projected further increases will be needed to meet demand during the second half of the year. The IEA said in a May 15 report that OPEC will need to provide an average of 30.7 million barrels a day in the last six months of 2014. “There’s still room for OPEC production to increase further,” said Sarah Emerson , managing principal […]

Posted On : Published By : Tom Whipple