View Full Version : Bitumen and GHG's

09-29-08, 10:48 PM
Canada's Harper pledges that he will ban Asian, maybe U.S. oil sands exports

Canada may ban exports of raw bitumen to countries which do not meet Canada's processing emission standards if the country's Conservative Government is re-elected in the country's forthcoming poll.
Author: Dorothy Kosich
Posted: Monday , 29 Sep 2008

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Canadian Prime Minister Stephen Harper has put the pressure on Canadian oil sands producers with a warning that, if re-elected, the Conservative Government will prohibit the exportation of raw bitumen to countries outside of Canada that do not have equivalent emission targets.
Experts warn that the move would exclude most oil sands markets except for the U.S., which is struggling with its law prohibiting federal agencies from entering into any contract to procure alternative or synthetic fuels with higher lifecycle greenhouse gas emissions than conventional petroleum.
This past week the U.S. Congress upheld provisions in the national energy act that prohibits federal agencies from using fuels derived from carbon-intensive fuel sources, which could include oil sands. If bitumen exports to the United States were to be banned, Canadian oil sands projects may be in jeopardy.
Alberta produces 1.3 billion barrels of bitumen daily with about 62% remaining in Alberta, and 500,000 barrels being exported and upgraded outside of Canada. About 30% of that is exported to the United States to be upgraded and refined. That figure is expected to triple over the next decade.
Bitumen is heavy, black viscous oil that must be treated to turn it into an upgraded crude oil, which can subsequently be refined to produce gasoline and diesel fuels. Harper says bitumen is found beneath 140,200 square kilometers of north-eastern Alberta.
In a statement, Harper said, "While Canada encourages the export of our energy resources, we cannot allow companies to increase exports of raw bitumen simply in order to avoid Canadian emissions standards as they are strengthened over the next few years. Nor can we afford to export the jobs and spin-off industrial opportunities created by the upgrading of bitumen."
"A re-elected Harper Government will prohibit the exportation of bitumen outside of Canada for upgrading in order to take advantage of lower pollution or greenhouse gas emissions standards elsewhere," he added.
Harper said the new rules could mean that his government would prohibit the export of raw bitumen to future Asian markets, including China. The policy would take effect in January 2010, but would only apply to new exports deals and not impact existing contracts.
Alberta Deputy Premier and Minister of International and Intergovernmental Relations, Ron Stevens, told the news media the province was given no warning of Harper's intentions. Stevens also claimed that no one from the Conservatives have offered to answer any of the Alberta Government's question or asked for any input.
He insisted the "oil sands are the property of Alberta. We'll be keen to ensure that Alberta's interests are protected." However, Premier Ed Stelmach said he would curb the shipment of Alberta's bitumen and jobs down the pipeline to Texas and Illinois.
Adam Sparkes, the Canadian Association of Petroleum Producers' manager of intergovernmental affairs, said his group will work with whichever national government is elected on October 14. A number of oil sands projects are planned or under construction, but some companies are delaying upgrades, citing soaring cost increases.
Liberal leader Stephen Dion said the plan could expose Canada to trade retaliation. "It's because I care about Alberta that I want carbon pricing, a price on greenhouse gas emissions that would be credible, to protect us again a situation where the exportation from Alberta around the world will be stopped by tariffs," he told reporters.

Isn't this very good news for the integrated oil sand co's and the refiners with cokers?


09-30-08, 11:39 AM
Isn't this very good news for the integrated oil sand co's and the refiners with cokers?


The purely politically motivated "pile-on" against the oil sands continues...

You can be sure of a few things however:
The export of oil sands bitumen and synthetic oil to the USA will "never" be banned. I put "never" in quotes because I am well aware that the US Congress, Senate and Adminstration(s) are perfectly capable of utter incompetence, and therefore "anything" can happen. For a time. But there won't be any sustainable banning of the export of so-called "dirty oil" from Canada to the Lower 48. Downsizing from an Escalade to DeVille just won't do it, ;) and the US is refusing to recognize that the number of politically reliable sources of crude is shrinking. Its other continental supplier, Mexico, will not long have the net surplus crude to export to the US.
Harper's in the middle of a re-election campaign that could still go either way, and the opposition Liberals have a carbon-tax policy as the main plank in their election platform. That isn't going over very well with most voters according to the polls, but there still remains a fairly significant consituency of Canadians that think climate change and saving the planet is the most important issue; like any politician Harper is cravenly trying to cater to that cohort.
Stephan Dion couldn't give a damn about Alberta, beyond the ability of the province to fund transfer payments to Central Canada. Frankly neither does Harper, even though he's from that province.
Similar to the North American natural gas E&P activity, the "pile-on" in the oil sands combined with the credit contraction and the province's higher royalty tax is shutting down new investment. Completely out of control costs for new construction (no deflation there...at least not yet) combined with a vocal "anti-everything" attitude from the politicians, public and press shows no signs of abating, so I would judge the existing integrated producers will ultimately have a considerable competitive advantage. Most of the new money going into oil sands leases has been foreign (France's Total, Norway's Statoil, Sinopec, etc). I am sure many are now concerned about the investment uncertainty being created by the behaviour of both the Provincial and Federal Governments.
I am sure that the ownership changes in 4 have not escaped the notice of the US authorities. Not ever wanting to pay for what it needs (even in depreciating bonars), maybe the current effort is to severely devalue oil sands assets so that US interests can scoop them up very cheaply? Now there's a thought worthy of $#*...