HicksBiz Blog

Category: Oil + Gas

Oil + Gas

Hicks on Biz: CRNL deal with Shell a good thing BY GRAHAM HICKS FIRST POSTED EDMONTON SUN: FRIDAY, MARCH 17, 2017

All eyes are focused on the Alberta 2017/18 provincial budget – the spending side of the equation. But good news is happening in the oil and gas sector – where most of the money comes from. This is a tad ironic. According to the headlines, the sky is falling on the oilsands. A few months ago, international energy giants ExxonMobil and ConocoPhillips announced a $4.4-billion write-down in the value of their oilsand reserves (the value of oil still in the ground). The sky is falling! Earlier this week, oil giant Royal Dutch Shell announced it was leaving the oilsands, selling its Athabasca Oilsands (Albian) mine, the Scotford upgrader and smaller oilsands holdings to Canadian Natural Resources Limited (CNRL) for $12.7 billion. Locally, Shell will continue to own Redwater’s Scotford refinery alongside the upgrader, and will continue to operate both plants. The sky is falling! All the world players who piled into the oilsands from 1990 to 2014 are getting out! Whoa! The write-d ... Read the rest of entry »

HICKS on BIZ: Alberta has to clean up its environmental act BY GRAHAM HICKS FIRST POSTED EDMONTON SUN: FRIDAY, MARCH 03, 2017

So here we go, folks. The Notley government’s Climate Leadership package has descended upon us. Your home heating bill has a new carbon levy charge. Your price per litre of gasoline now has a 5 cent a litre carbon levy built in. Environment Minister Shannon Phillips has announced the broad outlines of a $645-million program (over five years) to promote energy efficiency in Alberta homes and businesses. About $36 million is being made available this year to subsidize home solar panel installation, and $21.5 million for free home upgrades for energy-efficient products. At the mega-level, i.e. in the billions, this government has decided to eat all the costs of a long-term deal with utility companies to get rid of coal in the current 2016-17 budget. That decision adds another billion dollars to a provincial deficit now predicted to hit $10.8 billion by the end of March. There’s no middle ground. Either you are all for this kind of government spending for the greater good, or you are ag ... Read the rest of entry »

Hicks on Biz: We mustn’t count our chickens BY GRAHAM HICKS FIRST POSTED EDMONTON SUN: FRIDAY, DECEMBER 16, 2016

Never count your chickens until they hatch. But as the beaks of the baby chicks break through their shells, things look promising. Two new petro-chemical plants have been announced in Alberta’s Industrial Heartland – the enormous industrial park around Fort Saskatchewan. One will be in Sturgeon County, the other in Strathcona County. These are economic development monsters – a total of $5.6 to $6 billion spent over the next four years, 4,000 skilled-trade construction jobs through 2021. Dozens of local fabrication plant bosses aren’t sleeping these days, wondering where new business will come from as the Sturgeon Refinery and Suncor’s Fort Hills oilsands plant finish up construction. Two new petro-chemical plants will be a God-send. But we mustn’t count our chickens quite yet. The boards of the two energy companies involved – Pembina Pipelines (with Kuwaiti partner Petrochemical Industries) and Inter Pipelines – have not yet officially approved ... Read the rest of entry »

HICKS ON BIZ Some big ifs in pipeline expansion BY GRAHAM HICKS FIRST POSTED EDMONTON SUN: THURSDAY, DECEMBER 01, 2016

Congratulations to Premier Rachel Notley for her part – acknowledged by Prime Minister Justin Trudeau – in securing federal approval for doubling the oil-carrying capacity of both the Trans Mountain pipeline to the west coast, and Enbridge’s Line 3 to the American midwest. IF – and that’s a huge if – the pipelines actually get built, another million barrels of oil a day can be shipped from Alberta. IF – and that’s a minuscule if incoming American President Donald Trump approves the Keystone XL pipeline from Alberta to the Gulf Coast refineries, another 800,000 barrels a day can be exported. The ability to export another 1.8 million barrels a day means the oil industry and the province can continue a slow, measured, environmentally friendly expansion of oil and gas production for several decades. The big IF is getting Kinder Morgan’s Trans Mountain pipeline expansion built and operational, given the intense opposition on the B.C. Lower Mainland ... Read the rest of entry »

Hicks on Biz: How to save the world and still keep our coal industry BY GRAHAM HICKS FIRST POSTED EDMONTON SUN: THURSDAY, NOVEMBER 24, 2016

A few weeks ago, a simple question was posed in this column. What’s the most cost-effective way for Alberta to reduce its greenhouse gas (GHG) emissions (and other atmospheric pollutants) by 30% by 2030? Is it by ending all coal-generated electricity (currently producing 60% of Alberta’s power) by 2030 and replacing it with renewable power (wind and solar farms) and natural gas, as is planned by the New Democratic provincial government? Nobody is even pretending this is a least-cost model. To shut down six coal plants prematurely, the province has just  announced it will compensate three power companies to the tune of $1.36 billion ($97 million a year over 14 years). The money is to come from the impending provincial carbon tax.  Would it be cheaper to meet environmental targets by replacing all coal plants with natural gas? Would a “blend” of coal, natural gas and renewables make the most economic sense? I had never seen any cost comparisons – at leas ... Read the rest of entry »

Hicks on Biz: Trump could be good for Alberta BY GRAHAM HICKS FIRST POSTED Edmonton Sun: THURSDAY, NOVEMBER 10, 2016

Please, no more hysterics. The sky is not falling. American President-elect Donald Trump could be very good for Alberta. Did we happen to mention the Keystone XL pipeline? Alberta’s biggest challenge is not climate change and greenhouse gas emissions, but the need for new pipelines to get our stranded oil and natural gas to market. Outgoing American President Barack Obama vetoed the Keystone XL pipeline – carrying up to 1 million barrels of dilbit (diluted bitumen) a day from the oilsands to under-utilized upgraders/heavy-oil refineries along the Gulf of Mexico. Trump has promised to reverse that decision as soon as possible. Trump believes fossil fuels will continue to play a major role in providing cheap energy to America and the world. Trump will take a very different environmental stance than Obama, with an underlying assumption that environmental concerns can be met without excessive government interference and subsidy. Trump will embrace the “greening” of ... Read the rest of entry »

Hicks on Biz: Lowering our green house gases will cost us how much? BY GRAHAM HICKS FIRST POSTED Edmonton Sun: FRIDAY, OCTOBER 21, 2016

* * * In the Alberta government’s climate change/carbon tax/phase out coal/renewable energy debate, I have never seen an objective analysis of how Alberta could meet its lower greenhouse gas (GHG) goals as cheaply as possible with the least possible damage to the province economy. We know the New Democrats’ end goal. Prime Minister Justin Trudeau has committed Canada to reducing greenhouse gas (GHG) emissions by one-third, from 2013’s 726 Mt (million tonnes) to 523 Mt by 2030. So must Premier Rachel Notley do the same, reducing Alberta’s GHG emissions by approximately a third from 2013’s 267 Mt to 193 Mt by 2030. We know however, that this New Democrat government is in love with renewables, regards coal as the face of evil, dislikes oil, and only grudgingly puts up with natural gas. But the question to be asked – the logical, rational question – is this: What combination of coal, natural gas, oil, renewables and conservation would reduce provincial GHG ... Read the rest of entry »

Hicks on Biz: Carbon tax a colossal waste of money BY GRAHAM HICKS FIRST POSTED Edmonton Sun: FRIDAY, OCTOBER 07, 2016

No matter that Canada’s contribution to global warming is negligible. No matter that China, India and the USA are the culprits, not Canada. No matter the consequences, the carbon tax is going to happen in Alberta. On January 1, the carbon tax will bump up the cost of gasoline by 4.5 cents a litre, diesel by 5.4 cents a litre, home heating costs by $1 a gigajoule. In winter, my 2,100 sq. ft. home burns eight to 10 gigajoules of natural gas per month. The carbon tax will add to most of your purchases. Municipalities will pass on carbon taxes in higher property taxes. Grocery stores will pass on the added cost of transporting food. Carbon taxes won’t go away. Those two great world saviors Rachel Notley and Justin Trudeau will keep raising the carbon tax every year for the next six years. By rough calculation, the carbon tax on gasoline will be around 17 cents a litre by 2022. This tax grab is the equivalent, respected Calgary economist Jack Mintz says, of a 3% provincial sales tax. ... Read the rest of entry »

Hicks on Biz: Predicting the best-and-worst-case scenarios of the Alberta NDP's energy policy BY GRAHAM HICKS FIRST POSTED Edmonton Sun, THURSDAY, SEPTEMBER 29, 2016

Too late to turn back.   The Alberta ND government has irrevocably committed the province to a profound change in electricity generation, from coal, natural gas and some wind to no coal, more natural gas, and massive new renewable energy projects – more wind farms, big solar farms, on-site solar and run-of-river hydro. The government’s self-declared goal is to have 30% of Alberta’s power generation coming from renewables by 2030. This fundamental shift is as expected from a government with a radically different mind-set than the old. The “Alberta Advantage” will no longer be measured in economic terms but in ecological ones. Under past Conservative governments, Alberta was the lowest-cost province in which to do business. The New Democrats want Alberta to be the cleanest province in which to do business. So let’s polish up the ol’ crystal ball, and predict best-and-worst-case scenarios of this determined effort that will hit home in January when th ... Read the rest of entry »

Hicks on Biz: A new kind of oil boom BY GRAHAM HICKS FIRST POSTED EDMONTON SUN: FRIDAY, SEPTEMBER 09, 2016

Ever since the world price of oil crashed and burned in July of 2014 and remains a smouldering wreck of over-supply, Alberta’s power brokers have talked about economic diversification, talked about weaning us off our love affair with oil + gas, talked about finding a new lover to shower us with the same kind of wealth.   The problem has been that nobody knew quite what to do. Even if a plan comes together, growing dynamic, profitable, job-creating companies and new industries is a long and arduous process, fraught with peril. . But now future industrial possibilities are emerging that actually sound like decent bets. It’s about a host of futuristic non-polluting products that can be made from oil; products that are fast becoming cheaper, lighter alternatives to metals used in manufacturing. In a talk to the University of Alberta Energy Club, Alberta economic thinker and industry strategist Dr. Richard Dixon made a gloomy but realistic case for an enduring global slowdown in dem ... Read the rest of entry »
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