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Alberta Tar Sands Pt. 2

A forum for discussion of regional topics including oil depletion but also government, society, and the future.

Re: Alberta sinking billions into pipeline plan to send oil

Unread postby Midnight Oil » Tue 16 May 2017, 12:24:21

No doubt, true, already 6X the size of NYC and map shows that bioregions fragmented, living little wilderness. Actually, plans on the board project the landmass the size of the State of Florida be dug up!
All so we can drive on the Freeways a little bit longer...
Go figure.
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Re: Alberta sinking billions into pipeline plan to send oil

Unread postby rockdoc123 » Tue 16 May 2017, 16:27:05

No doubt, true, already 6X the size of NYC and map shows that bioregions fragmented, living little wilderness. Actually, plans on the board project the landmass the size of the State of Florida be dug up!


wrong

the oil sands area in total covers an area of 142,200 km 2 as compared to the boreal forest extent in Alberta of 381,000 km2. The total area of oil sands that can be possibly mined (shallow enough) is only 3% or 4260 km2. The rest must be accessed by in-situ methods (steam flood etc). The actual area which has been cleared or disturbed as a result of surface mining is around 900 km2 which is slightly larger than the total area of New York city (not 6 times it size) but is less than 1% of the total boreal forest extent in Alberta. Florida State is 170,000 km2 which is larger than the entire area of the oil sands including the 97% which does will not see disturbance from surface mining.
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Re: Alberta sinking billions into pipeline plan to send oil

Unread postby Midnight Oil » Tue 16 May 2017, 16:52:57

http://www.wri.org/sites/default/files/ ... _cover.jpg


If you look at the map and read the article you will see RIGHT!

http://www.wri.org/blog/2014/07/tar-san ... aten-world’s-largest-boreal-forest

According to Global Forest Watch data, from 2000-2013, Canada lost more than 26 million hectares of forest, mainly in its boreal region. More than 20 percent of the boreal forest region (more than 150 million hectares) is now covered by industrial concessions for timber operations, hydrocarbon development, hydroelectric power reservoirs, and mineral extraction

Forest loss is particularly high in the Alberta tar sands region, an area covering about 14 million hectares. Between 2000 and 2012, forest loss in the tar sands region—which is caused by bitumen (oil) extraction as well as logging and other industrial development—amounted to 5.5 percent of total land area, surpassing loss in Russia (2.2 percent), the United States (2.9 percent), Brazil (4.3 percent) and Canada as a whole (3.1 percent). And in the surface mineable area of the tar sands region – a 475,000 hectare area within the tar sands region where developers clear all vegetation from the land in order to extract bitumen— forest loss reached 20 percent
Canada’s tar sands development will continue to accelerate. Direct forest loss caused by surface and sub-surface tar sands development is projected to exceed 1,150,000 hectares over the next few decades. Studies show that disrupted habitat for endangered species will be at least 10 times that amount
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Re: Alberta sinking billions into pipeline plan to send oil

Unread postby rockdoc123 » Tue 16 May 2017, 17:44:22

if you look at the map and read the article you will see RIGHT!


my information is from the Alberta Government website that posts actual statistics

http://www.energy.alberta.ca/OilSands/791.asp

or you could go to the Energy Institute

http://resources.ceri.ca/PDF/Pubs/Studi ... Report.pdf

but you could also go to the wiki site that states

Although there is oil underlying 142,200 km2, which may be disturbed by drilling and in situ extraction, only 4,800 km2 may potentially be surface mined, and 904 km2 has to date been mined


https://en.wikipedia.org/wiki/Athabasca_oil_sands

The article you point to claims that 700,000 ha or 7000 km2 has been disturbed which is about 8 times the size of what actually has been mined to date and 1.6 times the size of what is actually mineable. Surface damage caused by in-situ methods is not extensive.

The Energy Institute report points out that in the oil sands areas as a whole oil and gas surface impact is ranks as third behind agriculture and forestry (in 2012 oil and gas surface impact in the oil sands area was a third of that created by agriculture and about half of that created by forestry).
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Re: Alberta sinking billions into pipeline plan to send oil

Unread postby Midnight Oil » Tue 16 May 2017, 18:26:32

Just as they "claim" that these will be "restored"

http://e360.yale.edu/features/on_ravage ... eclamation

When Alberta’s oil sands industry marked its 40th anniversary in 2007, one statistic stood out among the many that measure economic success and environmental impact: Not a single acre of mined land had been certified as being “reclaimed” to government standards.

Since then, major bitumen-mining companies such as Suncor and Syncrude have spent an enormous amount of time, money, and public relations effort to convince the public that theyhave returned disturbed lands to a state that is “equal or better than pre-disturbance conditions.

Many experts doubt whether it’s technically or even economically possible to recreate on a large scale anything resembling the sensitive environments that existed there in the past. Even if were possible, others wonder whether climate change and rapidly expanding tar sands development in Canada — the volume of tar sands mining is expected to nearly double by 2021 — will sabotage efforts to accomplish this on a broad scale in the future.

“I call these reclamation claims by both government and industry a form of greenwashing,” says Suzanne Bayley, a wetlands ecologist at the University of Alberta who recently co-wrote a paper on massive peatland losses in the tar sands region. “What land the industry has reclaimed so far may look good in newspaper, magazine, and television ads, but it is not the wetland-rich landscape that was once dominated by forested and shrubby fens.”

University of Waterloo hydrologist Jonathan Price is one of a group of scientists from across Canada who recently received $6.7 million in government and industry funding to restore tar sands lands on Suncor property. The blueprint for reclamation includes trucking in stored peat, building an aquifer, diverting water, and physically separating oil tailings dumps from the fens so that the contaminants — more than 840 billion liters of toxic fluid byproducts are currently being held in open reservoirs — don’t leach into the groundwater.

Oh well, at least it not as bad as agriculture, mining, clear cutting ect (sarcasm)
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Re: Tar Sands are uneconomical for oil production

Unread postby onlooker » Thu 24 Aug 2017, 16:15:31

http://oilprice.com/Energy/Crude-Oil/Ca ... Lower.html

Canada’s Oil Industry Doomed If Prices Fall Lower
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Re: Alberta Tar Sands Pt. 2

Unread postby jawagord » Fri 27 Oct 2017, 09:30:02

For posterity, the next time the discussion on oil sands operating costs or new project break even costs comes up, Suncor is reporting highest profits since oil was selling at $100 per barrel by reducing cost of production to $22 per barrel and new projects could go forward if costs break even at $50 per barrel.

http://business.financialpost.com/commodities/energy/suncor-reports-best-results-since-days-of-100-oil

Cash costs for producing a barrel of oil from its oilsands operations were $21.60, down from $22.15 a year ago, which the company said are the lowest in a decade.

Suncor’s next growth will come from increased reliability at Syncrude and other debottlenecking opportunities, then smaller insitu oilsands projects, Williams said. They will move forward if they can break even with oil prices at $50 a barrel, he said.
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Re: Alberta Tar Sands Pt. 2

Unread postby ROCKMAN » Fri 27 Oct 2017, 15:11:58

jaw - As I've explained many times a company's profitability (especially on a per bbl basis) is not solely a function of the price of oil/NG. It's the difference between what it costs to produce and what it sells for. In general industry wide profits tend to be lower at higher oil/NG prices. But this can be difficult to deduce because of the lag times on both ends of the dynamics.

But one also has to be careful interpreting what the "high profits" of a public corporation implies. With assert write downs and other accounting adjustments a company can state high profits when in reality operations revenues are not nearly as impressive. Need someone who understands the SEC accounting regs to pull the numbers apart to get a true picture.
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Re: Alberta Tar Sands Pt. 2

Unread postby rockdoc123 » Fri 27 Oct 2017, 16:53:25

But one also has to be careful interpreting what the "high profits" of a public corporation implies. With assert write downs and other accounting adjustments a company can state high profits when in reality operations revenues are not nearly as impressive. Need someone who understands the SEC accounting regs to pull the numbers apart to get a true picture.


and of the course, the opposite can also be true where actual positive cash flow results are hidden behind one-off non-cash accounting adjustments making companies look worse than they are. BTW Suncor is a Canadian company so it is the Financial Instrument 51-101 along with IFRS accounting rules that apply. There are slight differences with that required in the US under SEC regs and considerations of successful efforts accounting (not everyone has switched over to IFRS). But it really doesn't take a lot of effort to understand what is happening at a company level by pulling out the year-end submissions.

interestingly enough Suncor announced yesterday they are applying to conduct a new SAGD project south of Fort Mac with the production of an additional 40,000 bopd to start in 2022. They seem to be willing to put their money where their mouth is.
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Re: Alberta Tar Sands Pt. 2

Unread postby Tanada » Wed 29 May 2019, 20:23:16

CBC wrote:Oilsands giant Canadian Natural inks $3.8B deal for Devon assets

One of Canada's largest oilsands producers is getting bigger in a $3.78-billion buyout that hastens the exit from the sector of yet another major foreign-owned rival.

One of Canada's largest oilsands producers is getting bigger in a $3.78-billion buyout that hastens the exit from the sector of yet another major foreign-owned rival.

Calgary-based Canadian Natural Resources Ltd. announced Wednesday it is buying the northern Alberta oilsands and heavy oil operations that Oklahoma City-based Devon Energy Corp. put on the block in February.

Canadian Natural shares fell in early trading in Toronto, but rebounded as analysts rated the price of about $29,400 per flowing barrel of daily production attractive for the buyer in comparison with other recent deals.

"The transaction ... is a win-win deal for both Devon and Canadian Natural," said Steve Laut, CNRL's executive vice-chairman, on a conference call with analysts.

"(It gives) Devon the ability to achieve its objective of exiting Canada and Canadian Natural the opportunity to leverage our economies of scale, our technical and operating expertise and capture significant synergies to add incremental value from these very high-quality assets."

The Devon assets represent the "textbook definition of excellent fit," Laut said, adding his company has already identified $135 million in synergistic annual cost savings it aims to achieve by the end of the year.
What was a little surprising is the purchase price.- Jennifer Rowland, analyst with Edward Jones

On a map in a website presentation, Devon's 108,200-barrel-per-day Jackfish oilsands project south of Fort McMurray is shown adjacent to Canadian Natural's Kirby North and Kirby South projects.

All produce raw bitumen crude using steam-assisted gravity drainage technology, where steam is injected into a horizontal well to melt the heavy sticky oil and allow it to drip into a parallel well to be pumped to surface.

Another map shows Devon's conventional heavy oil properties, which produce about 20,100 bpd, farther to the south and surrounded by Canadian Natural lands.

Devon's production is currently restricted to about 122,800 bpd because of Alberta government production curtailments.
'Clean and timely exit from Canada'

"This transaction creates value for our shareholders by achieving a clean and timely exit from Canada, while accelerating efforts to focus exclusively on our high-return U.S. oil portfolio," Devon chief executive Dave Hager said in a statement on Wednesday.

Jennifer Rowland, an analyst with Edward Jones in St. Louis, said Canadian Natural struck a "good deal" in acquiring the assets, adding she thought they'd have fetched 20 to 25 per cent more.

"What was a little bit surprising is the purchase price," she said. "Not having ... a big pool of buyers helped as far as [Canadian Natural's] ability to negotiate the transaction."

Wednesday's deal is Canadian Natural's seventh major acquisition since 2014, when it struck a $3.12-billion agreement to buy most of Devon's non-heavy oil Canadian assets, according to a report from Wood Mackenzie.

"This continues the trend of Canadian-domiciled consolidation that we've seen since 2016," said analyst Stephen Kallir.

"In 2020, the oilsands will produce 3.3 million bpd and just four companies now account for 85 per cent of that volume."
Largest producer in Canada

Wood Mackenzie points out Canadian Natural stands to be the largest producer in Canada with 1.2 million barrels of oil equivalent per day when the latest Devon deal closes.

That would make it the 25th largest producer in the world and eighth largest if you don't include companies owned by government.

The exit of Devon from the oilsands follows recent Canadian oilsands asset sales by foreign companies including Norway's Statoil, France's Total SA, Arkansas-based Murphy Oil and Houston-based ConocoPhillips.

Kallir said Wednesday's announcement follows a long-running trend of consolidation in Alberta's oilsands, describing it as a natural progression of the business cycle.

"While there is certainly negative investor sentiment around the oilsands right now, I think specifically looking at this from the perspective of CNRL, we are coming into a time that, hopefully, we're going to see quite a few positive catalysts," he said.

For instance, he said, there's hope the federal government will give the go-ahead to the Trans Mountain pipeline expansion next month and that Enbridge's Line 3 pipeline project will be completed in 2020.
Deal to close next month

The deal between Canadian Natural and Devon is expected to close by June 27, but its effective date is Jan. 1, 2019. The accumulated cash flow from the first half of the year means Canadian Natural will have to borrow only $3.25 billion in a three-year term loan to finance the deal, said chief financial officer Mark Stainthorpe.

The company expects to be able to continue to maintain its dividend and share buyback programs and its balance sheet will continue to strengthen despite the new debt, he added.

Canadian Natural is moving about 14,000 bpd of oil on railcars and is looking at adding more, but the Devon production comes with sufficient market access, said president Tim McKay.

Canadian Natural says it will add about 735 new employees from Devon, including both field and head office personnel.

The company said the deal includes 607,000 hectares of land, of which 405,000 hectares are undeveloped. The lands contain proved reserves of about 730 million barrels of oil.

By year-end, Canadian Natural's production mix is expected to be 250,000 bpd of thermal oil, 450,000 bpd of oilsands mining and upgrading, 150,000 bpd of conventional light crude oil and natural gas liquids, 120,000 bpd of heavy crude oil and 220,000 barrels of oil equivalent per day of natural gas.

The transaction, which is subject to normal closing conditions and regulatory approvals, is expected to close June 27.


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