Canada, the world & the tar sands 2012
Crude oil extracted from tar sands one of the most controversial forms of fossil fuel
Tar sands, also known as oil sands, are a mixture of roughly 90 percent sand, clay and water and 10 percent bitumen, a thick hydrocarbon liquid. After extracting that 10 percent of bitumen from the tar-sand mixture, the bitumen can be purified and refined into synthetic crude oil.
In North America, tar sands are concentrated in the Athabasca Oil Sands in Alberta, Canada. Because of Canada’s vast oil deposits, it’s the top supplier of crude oil to the United States. Saudi Arabia is the second-largest supplier. Tar sands are also found in Venezuela and the Middle East.
Squeezing oil out of tar sand is an extremely wasteful process: it takes between 2 and 4 tons of tar sand and two to four barrels of water to produce a single barrel of oil. Rather than drilling for oil, enormous shovels carve out open pits in the tar sands, scooping out the greasy interior to be hauled to a processing facility.
There, the tar sand is combined with water to form a slurry, which forces the sand to sink to the bottom of the mixture while the bitumen floats to the top. Once the bitumen is extracted, the run-off is piped into large, stagnant tailing ponds of sand, water, and bitumen impurities.
To make it to the pump, refined bitumen heads to an oil refinery where it’s converted into gasoline. And since bitumen is a highly viscous “heavy” oil that doesn’t flow as easily as lighter crude, it requires more processing to facilitate its flow through the oil pipelines.
Overall, mining tar sands, extracting bitumen and converting it to gasoline releases three times more carbon dioxide than typical oil production. In addition to massive amounts of tar sand needed to extract oil and the carbon emissions generated, the tar sand mining operation takes places in Alberta’s boreal forest, a relatively untouched ecosystem prized for its biodiversity. But the habitat destruction has threatened the livelihood of various native species, and the Alberta Water Research Institute is currently spending $15 million to prevent runoff toxins collected in tailing pools from entering nearby water supplies. (September 2011)
Greg Weston: Harper draws a line in the oilsands, for now
Future foreign takeovers in oilsands will happen only under ‘exceptional circumstances’ The Harper government’s long hand-wringing over the proposed Chinese takeover of one of Canada’s top 10 energy corporations in the Alberta oilsands was never really about rejecting or approving the $15.4-billion deal. The main problem gripping the Harper government for months has been how to say yes without opening the door to a Chinese shopping spree in the Alberta oilsands. The government’s solution is now clear, announced Friday by the prime minister in a flourish of tough talk rarely aimed at Canada’s trading partners, least of all directly and bluntly at the Chinese. As expected, the government has approved the sale of Calgary-based Nexen to China’s state-owned energy giant CNOOC. The deal is China’s largest foreign takeover of any company in any country. But after Nexen, that’s it. No more. Other state-owned raiders of the oilsands will be stopped at the tailings pond. Well, maybe. The prime minister told reporters that future takeovers of Canadian oilsands companies would be allowed “only in an exceptional circumstance.” The government is deliberately not defining what an “exceptional circumstance” might be, reserving for itself full powers of political discretion.
In U.S. energy renaissance, flares of fear for Alberta’s oil patch
(Globe & Mail) … The International Energy Agency predicted this week that the U.S. is set to become the largest oil-producing nation on earth, more prolific even than Saudi Arabia. One day, the IEA said, the U.S. could drive away most foreign imports. … At stake is the growth of an industry that keeps Western Canada’s economy vibrant, producing boatloads of well-paying jobs, welcome spinoff effects and government revenue. Already, amid weaker oil prices, some oil companies have contemplated deferring or cancelling projects, and just this week the Alberta government backed away from a goal to balance its budget. … Enbridge believes it can be the solution by building new pipelines to bring Canadian oil to new markets, both abroad and in U.S. states not served by current pipelines. But it’s hard to find a new pipeline proposal – to the West Coast, to the Gulf Coast, to the East Coast – that is not wrangling with severe political and social skepticism. And if opponents succeed in stopping or slowing those projects, the outlook is grim: Prices for Canadian oil “will get pushed down to the point that production stops growing,” says Chris Micsak, an oil analyst with Bentek, an international energy forecasting and analysis firm.
Questions over oil sands tailings disposal
(RCI) Once a site has been mined, the industry is proposing to fill in pits with a thick layer of tailings, then “cap” it with a mixture of fresh water and dirty mine-processed water. They claim that the heavier material will settle to the bottom and eventually solidify, leaving clean water on top that could one day be used for recreational purposes. Critics say, the theory can only be proven by long term actual trials in a couple of test “end-pit lakes”. Testing which has not been done. [Emphasis added] RCI’s Marc Montgomery spoke with University of Alberta professor David Schindler about the proposal.. He is an ecology professor with an expertise in lake studies.
Alberta’s Redford pushing for tougher conditions in CNOOC-Nexen deal: source
Alberta Premier Alison Redford asked the federal government to impose tougher management and employment conditions on CNOOC Ltd.’s $15.1 billion takeover offer of Nexen Inc. before approving the transaction, according to a person familiar with the matter. Redford wants guarantees that at least 50% of Nexen’s board and management positions will be held by Canadians, the person said on condition they not be identified because the discussions are confidential. The request came in a recommendation provided to Industry Minister Christian Paradis and the government’s investment review division. Alberta’s conditions may impose additional costs and risks for CNOOC at a time when oil sands producers face a rising supply of North American crude and a lack of pipeline infrastructure threatens to stall sales. Prime Minister Stephen Harper’s government is reviewing the bid under the nation’s foreign takeover law, which specifies transactions need to have a “net benefit” to the country in order to win approval.
Andrew Coyne: Time for ‘net harm’ test in CNOOC-Nexen debate
(Financial Post) I doubt we’d be hearing so much about state ownership if it was Norway’s Statoil that was buying Nexen. Which is fair enough, up to a point: it’s legitimate, given China’s track record, to want to be sure that our laws would indeed be obeyed, notably with respect to environmental and labour standards, and to insist that our regulators have the access they need to enforce them. I see no reason to think that is impossible. Still, if that’s where we’re drawing the line now — no longer opposed to foreign takeovers as such, but only to those emanating from repressive regimes — that’s progress in itself. The prime minister has promised a broader redrafting of foreign investment rules in the wake of the Nexen decision. If rejecting or modifying CNOOC’s bid provided cover for a general opening of our borders, that would be a pretty good trade.
CNOOC-Nexen Deal: NDP Calls For Consultations, Says Opinion ‘Crystallizing’ Against Takeover
(Canadian Press) UPDATE: Clement: Public Consultations On Chinese Oil Sands Deal ‘Illegal’ Treasury Board President Tony Clement has rejected the NDP’s call for public consultations on the takeover of Alberta energy company Nexen by state-owned Chinese oil giant CNOOC. “Basically they’re calling on the government of Canada to break the law,” Clement said, as quoted at Bloomberg news. “The law is very clear. Under the Investment Canada Act, there is a legal process that if you diverge from that process in any way, you are going to be subject to legal consequences.” The NDP says public opinion is crystallizing against the Nexen Inc. deal and is asking the government to hold public consultations before it makes a decision. The Opposition has been conducting it own consultations with the public and interest groups and says it’s hearing many objections against the sale of the Calgary-based oil producer to a company owned by the Chinese government.
Opposition Day Watch: CNOOXen it is, then!
(CBC) … the NDP will devote tomorrow’s opposition day to the proposed CNOOC-Nexen takeover — specifically, the need for public consultations, as well as legislative clarification on what, exactly, “net benefit” actually means.
A reality check for the promise of the oil sands
(Globe & Mail) … Suncor Energy Inc. … has abandoned lofty growth targets in favour of a rigid focus on costs, and has even said it could abandon some projects. That scrutiny comes amid a broad moment of reckoning for an industry that has spent most of a decade in frenzied construction. Now, amid sagging share prices and profits held back by price shocks, the oil sands industry is being forced to contemplate how profitably it can build new projects. No one expects growth to stop. It may, however, slow as question marks rise over a sweep of spending plans formulated by companies now concerned that weaker global demand and surging U.S. production will soften future oil prices. Threats to Canada, spy report Canada’s spy agency warns that some foreign takeovers may threaten national security. The Canadian Security Intelligence Service says that foreign state-owned firms might make illegal transfers of technology or engage in other espionage. The warnings come in the agency’s annual report and at the same time as shareholders approved the 15-billion dollar of oil company Nexen by the China National Offshore Oil Company.
(CBC) Power and Politics examines the pros and cons of China National Offshore Oil Company’s proposed $15.1B takeover of Canadian energy producer Nexen 4 questions about China’s Nexen bid With final approval for the transaction now resting with Ottawa, critics across party lines have questioned whether Canada stands to gain a “net benefit” from the deal, pointing out some potential hidden costs.
1. Does China have ulterior motives?
2. Does it jeopardize Canadian control of the resource sector?
3. Will it affect Nexen’s existing investments in the community?
4. Should China’s human-rights record be a concern?
China trade minister to visit Canada, could mention CNOOC bid for Nexen
Chinese Commerce Minister Chen Deming will visit Canada next week as Ottawa deliberates whether to approve a landmark $15.1-billion takeover of oil producer Nexen Inc by state-owned Chinese oil company CNOOC Ltd. CNOOC said it did not expect Chen to raise the sensitive takeover bid during talks with the Canadian government. Canada China Business Council president Peter Harder, however, said he would not be surprised if Chen mentioned it in a speech to his group next Tuesday.
Nexen shareholders approve CNOOC takeover
Stephen Harper is now the only remaining hurdle standing between China and the Communist country’s largest ever foreign acquisition. Nexen Inc. shareholders voted to approve the $15.1-billion takeover bid from Chinese state-controlled CNOOC Ltd. during a special meeting here early Thursday morning. Final approval is still required from Canada’s federal government and the Prime Minister and his cabinet have been directly involved in applying Ottawa’s ambiguous “net benefit” test, which the deal must pass before it can move ahead. “Today’s shareholder vote is just one step in the transaction approval process,” Kevin Reinhart, who has been serving as Nexen’s interim chief executive since January, told those assembled at a downtown Calgary conference centre. “Regulatory applications have now been filed with the applicable agencies in Canada, the U.S. and the U.K., and it is now in their hands to assess the transaction against their criteria.”
Battle over CNOOC’s proposed Nexen takeover heats up in Ottawa
Keystone By John H. Richardson
(Esquire) Whether to build the international pipeline, designed to convey the Tar-sands oil from the massive deposits in Western Canada to the Texas Gulf Coast for refining, has not only become an explosive issue in this year’s presidential election, it has become central to the debate over the future habitability of planet earth. A special report.
CSIS said to be probing financial links between First Nations, China
(National Post) Canadian intelligence services appear to have probed financial links between First Nations groups and Chinese companies as scrutiny continues to mount on China’s interest in this country’s natural resources sector. This week, Chinese oil company CNOOC Ltd. announced a $15-billion takeover bid for Calgary-based Nexen, a proposal that will have to pass scrutiny under the Canada Investment Act. The deal seems to be raising warning flags among politicians who fear the energy-hungry superpower’s influence in Canada’s oil patch. But scrutiny of China’s investment reach appears to stretch back several years.
Handle Chinese investment with care Canada should consider how much it really wants to depend on continued runaway economic growth and political stability in China, writes J. Michael Cole, former analyst at the Canadian Security Intelligence Service, and currently a correspondent on China for Jane’s Defence Weekly.
(Ottawa Citizen) the idiosyncrasies in China’s economy and political system make it essential that we fully assess the potential implications of allowing China to gradually take over a major segment of our resources.
John Ibbitson: Ottawa will approve Nexen deal because it can’t afford not to
If Ottawa were to reject this takeover, it would be signalling to the Chinese government, which owns CNOOC, that no investment in Canada from their state-controlled companies will be tolerated. And that’s a message that this country simply can’t afford to send. Canada is a small country that exports natural resources, which means it has always depended on foreign capital to develop those resources. … The alternative is to leave the stuff in the ground, until someone nicer comes along. That could be a long wait.
China’s CNOOC offers $15B for Calgary oil firm Nexen
Nexen has faced numerous challenges over the past few years, most recently the troubled launch of its Long Lake oilsands project in northern Alberta. The project has yet to come close to its design capacity of 72,000 barrels of bitumen per day due to a number of operational glitches. As it stands, Nexen is a sizable international conventional oil company. Only 28 per cent of Nexen’s output — and just 11 per cent of its revenue— comes from its Canadian operations. Indeed, Nexen’s non-Canadian assets shouldn’t be dismissed, Bob Shultz of the Haskayne School of Business at the University of Calgary said Monday. “The whole idea is to get assets from offshore to provide the oil that China needs to grow,” he said in an interview with CBC News. Nexen currently produces 207,000 barrels of oil equivalent per day. But the company has about 5.6 billion barrels of oil equivalent when its oilsands holdings are considered.
Bob Rae seeks middle ground on oilsands development
Interim Liberal leader Bob Rae waded into the oilsands debate Saturday suggesting that, while Alberta’s booming development is an important part of Canada’s economy, the discussion about how best to use it has been polarizing and unproductive. Attempting to strike a middle ground between Opposition NDP Leader Thomas Mulcair’s strong stance against development and Prime Minister Stephen Harper’s position that the oilsands are crucial to creating “jobs and growth” for Canadians, Rae told CBC Radio’s The House that “the key word in all this is balance.” … He challenged the federal government to set clearer standards for development and to ensure that all stakeholders — including First Nations communities, which live around the oilsands — are on board.
Environmental Coalition Wants Alberta To Show Oilsands Recommendations Were Followed
(Canadian Press via HuffPost) Environmentalists are trying to force the Alberta government to show it’s followed through on previous recommendations to reduce the impact of oilsands mines before any more projects are approved. The Oilsands Environmental Coalition has asked the regulatory panel examining Shell’s proposed Jackpine expansion to check into the status of dozens of recommendations by previous panels. Those recommendations were conditions under which previous oilsands projects were given the OK, but there’s no information on whether they’ve been lived up to, said Simon Dyer of the Pembina Institute.
Maxime Bernier: Let entrepreneurs tackle tailings ponds
(Financial Post) I recently visited the newly built pilot plant of Gradek Energy in Montreal, a small business founded by Quebec entrepreneur Thomas Gradek. He is one of many entrepreneurs and researchers across the country who are working on innovative solutions to deal with the environmental consequences of exploiting the oil sands. Mr. Gradek has invented a reusable bi-polymer bead that removes bitumen from the tailings ponds — the pools of waste created by the extraction process — leaving inoffensive organic matter and water as a byproduct. The recovered bitumen can be refined while the leftover organic matter can be reintroduced into the environment, free from contaminants. Valuable minerals found within the tailings ponds are also recovered. Water, which accounts for 85% of tailings ponds, can be reused in the oil extraction process. Since this water is already warm, this also brings energy savings.
The age of extreme oil: ‘This used to be a forest?’
One grey Thursday at the end of April, a plane touched down in Fort McMurray, Alta., carrying four Achuar Indians from the Peruvian Amazon. They had flown 8,000 kilometres from the rain forest to beseech Talisman Energy Inc., the Calgary-based oil and gas conglomerate, to stop drilling in their territory. Talisman’s annual general meeting was coming up, and the Achuar were invited to state their case to chief executive officer John Manzoni in front of the company’s shareholders. But first, they wanted to see a Canadian oil patch for themselves, and meet the aboriginal people who lived there.
Ethical Oil challenges Harper, Mulcair to back reversal of Ontario pipeline
A pro-oil-sands lobby group is calling on politicians to support a proposal that would see an existing Southwestern Ontario pipeline reversed to send oil from west to east.
B.C. premier floats oil sands royalty sharing Christy Clark targets risk-benefit ratio of proposed Northern Gateway pipeline British Columbia Premier Christy Clark is becoming a particularly uncomfortable thorn in Alberta’s side. In a wide-ranging interview with Brian Hutchinson at the National Post, the B.C. Liberal Party leader suggests – without explicitly saying so – that her government will not lend its support to Enbridge Inc.’s $5.5-billion Northern Gateway pipeline without first seeing a commitment to oil sands royalty sharing.
Who’s afraid of China? Industry mum as citizens worry about giant’s rising influence in oil sands China’s growing influence in oil sands development might be the most important issue facing Canada’s energy sector that nobody is talking about. Canadian companies have happily accepted billions of dollars in investments from Chinese state-owned enterprises in recent years on the basis that the energy-hungry emerging Asian superpower will soon be their best customer. Meanwhile, as the public grows increasingly concerned about the potential importation into Canada of questionable Chinese corporate practices and opposition politicians raise questions of possible interference with Canada’s national interests, industry associations, environmental groups and the government of Canada itself have stayed mute.
Oilsands critics put spotlight on foreign ownership
Anti-oilsands activists hit back at recent criticism of foreign funding of environmental charities Thursday by releasing a report showing oilsands companies are overwhelmingly foreign-owned. ForestEthics Advocacy — a spin-off of ForestEthics, which is a registered charity — released a shareholder analysis conducted using Bloomberg statistics that found 71 per cent of all companies operating in the Fort McMurray, Alta., area are not Canadian.
Don’t call them ‘tar sands’
(Maclean’s)The industry-approved lingo for Alberta’s hydrocarbon gunk is ‘oil sands’
Critic’s Journal: Oil Sands Net Benefits will be Maximized if Scientists Monitoring the Environmental Impacts can Speak Freely about their Research By Ted Hsu, Liberal Science & Technology Critic
Alberta, Ottawa, oil lobby formed secret committee
(Toronto Star) The federal and Alberta governments struck up a secret, high-level committee in early 2010 to coordinate the promotion of the oilsands with Canada’s most powerful industry lobby group, a document obtained through an access to information request reveals. The committee brought together the president of the Canadian Association of Petroleum Producers (CAPP) with deputy ministers from Natural Resources, Environment Canada, Alberta Energy and Alberta Environment to synchronize their lobbying offensive in the face of mounting protest and looming international regulations targeting the Alberta crude.
EU delays decision on whether oil sands crude more harmful to environment
(Toronto Star) Environmentalists and oil producers are vowing to keep up the fight after a European Union vote Thursday delayed a decision on whether to declare oil sands output more harmful to the environment than conventional crude.
Impact of burning oilsands tiny: study
(Vancouver Sun) … This past Sunday, [Andrew] Weaver and his doctoral student, Neil Swart, published an analysis in the scientific journal Nature Climate Change, an offshoot of Nature, the world’s most prestigious science journal. In their paper, Swart and Weaver conclude the impact of burning all the economically viable proven reserve of Alberta’s oilsands – all 170 billion barrels – would be negligible. Burning all the proven reserve between 2012 and 2062, they say, would raise global temperatures by just 0.02 C to 0.05 C.
Nobel Winners Urge EU Leaders To Back Tar Sands Law (Planet Ark) A group of Nobel peace prize winners urged European leaders in a letter on Thursday to support an EU Commission proposal to class fuel from oil sands as highly polluting. “Tar sand development is the fastest growing source of greenhouse gas emissions in Canada, and threatens the health of the planet,” eight Nobel Peace Prize laureates, including Archbishop Desmond Tutu of South Africa and Iranian human rights activist Shirin Ebadi, said in the letter.
Federal documents spark outcry by oil sands critics
The documents, obtained through an access to information request and released by Greenpeace Canada, are a draft diplomatic strategy outlining ways to shape European perceptions of Canada’s oil sands. They show that the government’s messages are intended to shift attitudes in media and among top decision makers regarding the oil sands industry, which faces a possible effective import ban in Europe as the continent pursues a low-carbon fuel strategy.
Ottawa sees itself as protector of oil sands benefits
(Reuters) – Canada’s government has a responsibility to make sure people can take advantage of the economic benefits Alberta’s massive oil deposits can generate, the country’s energy minister said on Monday as he once again decried “radicals” bent on stopping Enbridge Inc’s Northern Gateway oil pipeline.
Boehner: ‘We May’ Try To Attach Keystone Pipeline Plan To Payroll Tax Cut, Again
(HuffPost) One week after the president — citing State Department concerns — put the kibosh on plans to build a pipeline through the United States for the purposes of carrying crude oil, Boehner told “Fox News Sunday” he would attempt to resuscitate the proposal.
XL Pipeline Opposition Funding: U.S. Groups That Funded Environmentalists Also Gave To Canadian Government
(Canadian Press) Rich American foundations are not only footing the bill for opposition to Canada’s oilsands. Tax returns show the Canadian government has also been the beneficiary of millions of dollars in largesse from some of the wealthiest private organizations in the United States. And some of that money came from the same U.S. groups that helped fund Canadian environmentalists.
Obama administration to reject Keystone pipeline
(WaPost) The Obama administration will announce this afternoon it is rejecting a Canadian firm’s application for a permit to build and operate a massive oil pipeline across the U.S.-Canada border, according to sources who have been briefed on the matter. However the administration will allow TransCanada to reapply after it develops an alternate route through the sensitive habitat of Nebraska’s Sandhills. Deputy Secretary of State William J. Burns will make the announcement, which comes in response to a congressionally-mandated deadline of Feb. 21 for action on the proposed Keystone pipeline.
Harper says pipeline debate should be left to Canadians
Canada not ‘giant national park’ for U.S., prime minister says
In Canada’s energy sector, foreign influence cuts both ways
(Globe & Mail) It isn’t wrong for foreign oil companies to discuss projects with Canadian officials, or for foreign backers of Northern Gateway, like France’s Total and China’s Sinopec, to support it at hearings. Or for environmental groups to take American sums to oppose it. The panel’s reviewing evidence, not taking a poll. CBC Showdown: Sierra Club vs “Ethical Oil” – One of them is a Ridiculous Radical
Terry Glavin: The real foreign interests in the oilsands
(Ottawa Citizen) If there were a global competition for the most brazen and preposterously transparent attempt by a ruling political party to change a necessary subject of national debate with alarmist distractions and hubbub, the Conservative escapade engineered in Ottawa these past few days really deserves some kind of grand prize. The $5.5-billion Enbridge pipeline project is all about sending Alberta bitumen in huge oil tankers to China. Beijing’s own state enterprises are among the project’s major backers, and Beijing has been buying up Alberta’s oilpatch at such a dizzying pace lately it’s hard to keep up.
Oliver’s comments roil Northern Gateway environmental hearings
(Globe & Mail) Mr. Oliver issued an open letter Monday, saying that there are “environmental and other radical groups” that are trying to block the pipeline and squelch Canadian resource prosperity and job growth. “They use funding from foreign special interest groups to undermine Canada’s national economic interest,” he said.
‘Foreign money’ could gum up pipeline approval, Harper warns
(Globe & Mail) The Prime Minister is threatening to prevent foreign environmental interests from delaying the approval of a pipeline that would take bitumen from the Alberta oil sands to the West Coast for shipment to Asian markets.
China’s oil-sands deal will have lasting impact
(Globe & Mail) Chinese firms aren’t just buying stakes, they’re buying whole operations. It’s a new phase of China’s step-by-step Canada strategy. It will change not just the oil patch but Canada’s foreign policy. And a game of international energy politics is afoot in Canada’s West. … resource investments around the world indicate China doesn’t want to rely on buying products on the markets. It wants to own. The Chinese companies expect there will eventually be pipelines to the West Coast that will allow shipments across the Pacific.
Of Beijing and bitumen
(Globe & Mail) The acquisition by the state-controlled PetroChina Co. Ltd.’s of 100 per cent of the MacKay River oil-sands project is a vivid reminder that the federal government’s review of Investment Canada’s foreign-takeover criteria has not yet been issued