Category: Oil + Gas
Oil + Gas
“Edmonton – Where’s the Boom?”
By Graham Hicks
January 17, 2023
We live in strange times here in Edmonton.
Every other time we went through high energy price cycles – when oil was running between $100 Cdn to $130 Cdn - Edmonton boomed.
Restaurants and clubs were opening every week, packed from the moment they opened their doors. The fun zones of the city – Old Strathcona, the west end of downtown – pulsed with energy. Money gushed through town. If you wanted a job, you got a job. Well-paying too.
At times Edmonton and Calgary led the country in rising real estate prices, low vacancy rates and expensive rents.
It’s been a year now – since the start of 2022 - that oil and gas prices had the big rebound.
But the city still seems to be in a post-pandemic lethargy. Pedestrians in the party zones are few and far between. A depressing number of quality restaurants have gone out of business. The “for lease” ...
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TC Energy's Keystone pipeline facility in Hardisty, Alberta.Jeff McIntosh / The Associated Press
Let us lay ourselves down a while and rest from this ceaseless doom ‘n’ gloom.
Let’s have a chat with Ian MacGregor — the most creative and visionary mind in Alberta’s oilpatch, who not only talks the talk, but walks the walk.
MacGregor, through his company North West Refining, is a 50 per cent partner in the $10-billion Sturgeon Refinery located between Redwater and Fort Saskatchewan.
He has so much skin in the game, it is amazing he has any hide left.
And he’s been beat up real good.
The refinery is brilliant, the first to convert Alberta bitumen (currently worth $30 a barrel) directly to diesel fuel (worth around $80 a barrel) to the tune of 40,000 barrels a day.
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More important, the refinery has enabled the building of the Alberta Carbon Trunk Line. All its CO2 emissions are liquified under pressure, carried ...
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The virus may dominate the headlines, but Alberta’s biggest battle still looms.
If we do not gain the “social licence” to produce environmentally acceptable oil and gas, we might as well pack up and leave Alberta now rather than later.
We face a staggering enemy, outnumbered even within Canada by those in provinces like Quebec, Ontario, B.C. Those who believe fossil fuels must be phased out and replaced by renewable energy if the Earth is not to turn into one giant, overheated Sahara Desert.
It is hugely frustrating, because Alberta is a world leader in “de-carbonizing” our oil and gas production, in creating products from fossil fuels WITHOUT releasing CO2 into the air.
There is a little snowball happening, about 45 kilometres northeast of Edmonton.
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A little snowball that must grow into an avalanche of positive proof: That the processing of oil and gas can be as pure and clean as driven snow.
Coming up shortly are anno ...
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The near empty parking lot at the Premium Outlet Centre shopping mall near the International Airport in Edmonton, April 17, 2020, is an indication of the economic impact of COVID-19 restrictions.Ed Kaiser / Postmedia
What’s going to happen?
After the pandemic, will recent graduates find decent jobs?
Will you have enough money to cover the mortgage and utilities? If not, will the banks/government cut you some slack?
Will seniors receive the same government pensions as in the past? Could private pension payments be slashed?
If I’m a businessperson, can I ride out the storm … or does all the blood, sweat and tears I’ve put into this enterprise end in bankruptcy … unless the government somehow bails me out?
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Let’s not kid ourselves. The economy — thanks to COVID-19, rock-bottom oil prices and wanton over-spending by Ottawa and Alberta in the recent past — is in horrible shape.
It’s worse than ...
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Downtown Edmonton is seen from Ada Boulevard near Rundle Park in Edmonton on Friday, Jan. 3, 2020.Ian Kucerak / Postmedia, file
The glass is half-full, not half-empty.
Never waste a good crisis.
From the ashes, the phoenix is reborn.
Positives can arise from this unprecedented economic emergency caused by the COVID-19 pandemic, impossibly low oil prices and forever-delayed resource development.
The biggest positive? A shattering of conventionality.
For decades, Alberta made half-hearted efforts to innovate and diversify beyond oil and gas. It never really happened. It was too easy to make a ton of money from oil and gas.
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Today, these last few weeks, it has hit home. Either we drastically change, or we die.
Every other jurisdiction in Canada, and around the world, faces a similar challenge. If we are all rebuilding from ground zero, Alberta looks really good.
Our population is young, strong and talented, supported by excellent educatio ...
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The Aspen Oil Sands Project, Imperial Oil’s $2.6 billion, new in-situ oilsands project will eventually produce 150,000 barrels of oil per day (bpd). It is under construction.
Foster Creek Oil Sands Expansion Project — Cenovus — $2 billion, adding 40,000 bpd — under construction.
Lewis/Meadow Creek East/Meadow Creek West SAGD Oil Sands Projects — Suncor — $2 billion, around 200,000 bpd from different projects — proposed.
Narrows Lake In Situ Oil Sands Project — Cenovus — $1.6 billion — 130,000 bpd — proposed, currently deferred.
What is our problem here?
Why the tears and teeth-gnashing over the indefinite postponement of the TECK Frontier open-pit bitumen mining proposal in the oilsands, when environmentally acceptable in-situ oilsands projects are lined up around the block?
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A quick oilsands refresher: There are two ways of extracting heavy oil (bitumen) from the oilsands, open-pit mining a ...
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From left, Kyran Auger, of Keepers of the Water, Bonwen Tucker, Oil Change International, Batul Gulamhusein of Climate Justice Alberta and Nigel Henri Robinson with Beaverhillls Warriors held a press event to call on the Federal Environment Minister Jonathan Wilkinson to reject the proposal and recommended approval of the Teck Frontier Mine in Northern Alberta on November 22, 2019. Photo by Shaughn Butts / PostmediaShaughn Butts / Postmedia
By GRAHAM HICKS
Why would the Alberta government be so damned stupid as to propose another surface mine in the oilsands?
No matter the science, the optics stink.
Yet another vast, oily, tailings pond, huge intrusions into Mother Earth, vast disruptions of the beaver, the fox, the bear and the caribou. All the oilsands stuff that the Rest of Canada hates … and many Albertans are equally uneasy about.
The federal Liberal government is committed to net-zero carbon emissions by 2050. To that end, its core political support is near 100 per cent in ...
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(This is the last of a Hicks on Biz series on Alberta’s economic future if new pipelines are not built.)
For decades, Alberta’s wealth was criticized for being harvested, 100%, from the low-hanging fruit of oil and gas extraction and processing.
It was just too easy to make money from oil and gas. The sector scooped up every new engineer and scientist graduating from our universities, every skilled tradesperson coming out of our colleges. Eighteen-year-old dropouts were paid $1,500 a week to drive truck.
The bloom is off that rose. Alberta’s future growth will be the result of technology-savvy entrepreneurs reaching for that higher-hanging fruit.
But not entirely. As mentioned at the start of this series, oil isn’t going away.
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Even without new pipelines, and with more oil-by-rail, oil production at a minimum will grow from 3.5 million barrels a day today to 4 million.
Meanwhile, despite the persistent denial of climate-change extre ...
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Rail cars wait for pickup in Winnipeg. (File photo)
By GRAHAM HICKS
Today I am going to figure out, with the help of energy analyst Tim Pickering of Calgary-based Auspice Capital, one of the weirdest aspects of Alberta’s oil business.
Despite good prices for our heavy oil, why has shipping oil-by-rail fallen off the map?
Alberta oil producers are currently sitting pretty.
Our Western Canadian Select (WCS) heavy oil – basically the oil from the oil sands — has moved from a rock-bottom $12 US a barrel last fall to around $40 today. (All prices are in American dollars. P.S. this column is not about the dreaded “differential” – it is concerned only with the actual price of heavy oil.)
We all know the pipelines carrying our oil are full. Our oil storage capacity – those great big tank farms we see around the Strathcona County refineries and elsewhere along our oil pipelines – is once again filling up.
If the pipelines are full, the storage tanks ...
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North American Construction's President and COO Joe Lambert is dwarfed by one of the company's 300 monster haul-trucks.GRAHAM HICKS/EDMONTON SUNEdmonton
North American Construction’s president and COO (chief operations officer) Joe Lambert sheds his corporate identity when he walks into the storied Spruce Grove company’s enormous, new, state-of-the-art repair/re-build facility in the Acheson Industrial Park.
Lambert’s like a kid in a sandbox, showing off several of North American’s 240-ton to 400-ton earth-moving trucks in the shop for refurbishment and rebuilding.
These are not just trucks, they are TRUCKS — some of the biggest in the world.
With its most significant expansion since 2012, the publicly-traded company purchased all of former competitor Aecon’s contract-mining division, including its entire dirt-moving fleet, in November.
The 26 240-tonners added from Aecon has bumped North American’s dirt-hauling fleet to 300 trucks, from 100-ton car ...
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