Tag Archives: Canadian Association of Petroleum Producers

Canadian regulation, Crude By Rail, Derailment, DOT-111, Tank car retirement, TC-117

CANADA: DOT-111 tank cars can’t transport crude oil as of Nov. 1

Repost from Sudbury.com

Garneau confirms DOT-111 cars will not be able to transport crude oil as of November 1

By Canadian Press, Jul 26, 2016 8:26 AM
pmc101352009
Candian Transport Minister Marc Garneau

MONTREAL — Canada will put a stop to the transport of crude oil by older and less crash-resistant tanker rail cars earlier than scheduled, Transport Minister Marc Garneau announced Monday, however, the timeline for ending similar transportation of all other flammable liquids remains the same.

As of Nov. 1, crude oil in Canada will no longer be transported in DOT-111 tankers — the same kind of rail car that was involved in the Lac-Megantic tragedy in which 47 people died three years ago.

The DOT-111 cars without thermal layers of protection were scheduled to be phased out for the use of crude oil by the previous Conservative government by May 2017.

DOT-111s with thermal protection were to be taken off for oil transport by March 2018.

The new directives are for crude oil only, Garneau said, adding the phase-out deadline for DOT-111s carrying other flammable liquids is 2025.

Garneau said while he was able to accelerate the phase-out of DOT-111s for crude, the government needs to be “realistic” about other materials.

“The reality is that in this country we transport a huge amount by rail — hundreds of billions of dollars worth a year — and you can’t do everything in one shot,” he told a news conference.

“Here we have the opportunity to do something very concrete on the crude oil side — which is extremely important — and I am very proud of it.”

The Transportation Safety Board of Canada said in its report on the Lac-Megantic crash that until older and less crash-resistant tanker cars “are no longer used to transport flammable liquids and a more robust tank car standard with enhanced protection is set for North America, the risk will remain.”

Montreal Mayor Denis Coderre saluted Garneau’s announcement, saying “when we talk about (rail) safety we have to show it, we have to walk the talk.”

Vicki Balance with the Canadian Association of Petroleum Producers said the oil industry knew the Liberals were considering making changes but didn’t know what they were going to be.

“(The announcement) brings some certainty and predictability for us, which is positive,” she said.

On July 6, 2013, a runaway freight train pulling 72 crude-oil laden DOT-111s derailed and exploded, killing 47 people and destroying part of downtown Lac-Megantic.

In response, the U.S. and Canada created a series of new regulations to make rail transport of hazardous materials safer.

Former Transport Minister Lisa Raitt and her U.S. counterpart Anthony Foxx in May 2015 announced new regulations for tanker cars made after Oct. 1 of that year, for transporting liquid dangerous goods across the continent.

The new cars, known as TC-177s in Canada, are made of thicker steel than the DOT-111s and have other added safety measures.

Raitt and Fox also announced that all DOT-111s would have to retrofitted or phased out for the use of crude oil by 2018 and all other rail cars transporting any dangerous, flammable liquid would have to meet new safety requirements by 2025.

Garneau said Monday the new rules will only apply to Canada.

He said no DOT-111 train originating from the U.S. and carrying crude oil will be able to cross into Canada after Nov. 1, and violators will face financial penalties, but he didn’t say how much they would be.

Garneau said there are about 30,000 DOT-111s without a thermal layer transporting crude oil on railways in North America. He didn’t have a precise number for the cars with the protective layer.

Alberta Canada, Canadian regulation, Electoral politics, Natural gas, Oil Industry, Oil prices, Pipeline transport, Tar sands crude

Alberta’s possible pivot to the left alarms Canadian oil sector

Repost from Reuters

Alberta’s possible pivot to the left alarms Canadian oil sector

By Scott Haggett and Nia Williams, May 4, 2015 7:07am EDT
Alberta NDP Leader Rachel Notley meets with Mayor Naheed Nenshi in his office in Calgary, Alberta, April 30, 2015. REUTERS/Todd Korol

(Reuters: CALGARY, Alberta) – Canada’s oil-rich province of Alberta is on the cusp of electing a left-wing government that can make life harder for the energy industry with its plans to raise taxes, end support for key pipeline projects and seek a bigger cut of oil revenues.

Polls suggest Tuesday’s election is set to end the Conservative’s 44-year reign in the province that boasts the world’s third-largest proven oil reserves and now faces recession because of the slide in crude prices.

Surveys have proven wrong in Canadian provincial elections before and voters may end up merely downgrading the Conservatives’ grip on power to a minority government.

Yet the meteoric rise of the New Democratic Party and the way it already challenges the status-quo of close ties between the industry and the ruling establishment has alarmed oil executives. The proposed review of royalties oil and gas companies pay the government for using natural resources and which could lead to higher levies, is a matter of particular concern.

“Now is not the time for a review of oil and natural gas royalties,” Tim McMillan, president of the Canadian Association of Petroleum Producers, the country’s top oil lobby, said in a statement.

A 2007 increase in the levy was rolled back when the global financial crisis struck and oil executives say today the time is equally bad to try it again.

Yet the left’s leader Rachel Notley, a former union activist and law school graduate, has shot up in popularity ratings in the past months advocating policies that have been anathema for many conservative administrations.

She says she would not lobby on behalf of TransCanada Corp’s controversial Keystone XL pipeline or support building of Enbridge Inc’s Northern Gateway pipeline to link the province’s oil sands with a Pacific port in British Columbia. Citing heavy resistance from aboriginal groups to the Enbridge line, Notley says Alberta should back those that are more realistic such as TransCanada’s Energy East pipeline to the Atlantic ocean.

PACKING UP?

Notley also advocates a 2 percentage point rise in Alberta’s corporate tax rate to 12 percent to shore up its budget that is expected to swing from a surplus to a C$5 billion deficit in 2015/2016 as energy-related royalty payments and tax revenues shrink.

Even with the proposed corporate tax hike Alberta’s overall taxes would remain the lowest nationally. Oil executives warn, however, that any new burdens at a time when the industry is in a downturn, shedding jobs and cutting spending, could prompt firms to move corporate head offices out of the province.

“Business is mobile,” said Adam Legge, president of the Chamber of Commerce in Calgary where most of Canada’s oil industry is based. “Capital, people and companies move.”

Ironically, the challenge the oil industry and the Conservatives face is in part a by-product of Alberta’s rapid growth fueled by the oil-sands boom.

The influx of immigrants from other parts of Canada and overseas has changed the once overwhelmingly white and rural province. Today Alberta is one of the youngest provinces and polls show younger and more diverse population is more likely to support left-wing causes such as environment and education and more critical of big business. The New Democratic Party still only got 10 percent of the votes in the 2012 vote, but an election of a Muslim politician as a mayor of Calgary in 2010 served as an early sign of the changing political landscape.

The Conservatives themselves and their gaffe-prone leader Premier Jim Prentice also share the blame for the reversal of fortunes with one poll showing them trailing the left by 21 percent to 44 percent.

Prentice angered voters when he told Albertans to “look in the mirror” to find reasons for the province’s fiscal woes and then passed a budget in March that raised individual taxes and fees for government services but spared corporations.

Scandals – Prentice’ s predecessor left last year because of a controversy over lavish spending – and blunders added to the party’s woes.

The NDP vaulted to the top of the polls after Notley’s strong performance in an April 23 televised debate, when Prentice, former investment banker, drew fire for suggesting his rival struggled with math.

Then there is voter fatigue with a party seen as too comfortable and scandal-prone after decades in power.

“It’s still the same gang, the same policy, same procedures, the same concept of entitlement,” said one executive at a large oil and gas producer who declined to be named because he is not authorized to talk to the media. “I know some extremely neo-conservative guys who have said enough is enough.”

(Additional reporting by Julie Gordon in Vancouver and Mike De Souza in Ottawa; Editing by Amran Abocar and Tomasz Janowski)
Oil prices, Oil producers, Sensitive wildlife habitats, Tar sands crude

Wolves Shot From Choppers Shows Oil Harm Beyond Pollution

Repost from Bloomberg News

Wolves Shot From Choppers Shows Oil Harm Beyond Pollution

by Rebecca Penty, April 22, 2015 5:00 PM PDT
Wolves Shot From Choppers Shows Oil Sands Harm Beyond Pollution
British Columbia killed 84 wolves in the hunt that ended this month. Alberta eliminated 53 this year, bringing its total killed through the program since 2005 to 1,033. Source: Universal Education/Universal Images Group via Getty Images

Here’s one aspect of Canada’s energy boom that isn’t being thwarted by the oil market crash: the wolf cull.

The expansion of oil-sands mines and drilling pads has brought the caribou pictured on Canada’s 25-cent coin to the brink of extinction in Alberta and British Columbia. To arrest the population decline, the two provinces are intensifying a hunt of the caribou’s main predator, the gray wolf. Conservation groups accuse the provinces of making wolves into scapegoats for man-made damage to caribou habitats.

The cull carried out in winter when the dark fur of the wolves is easier to spot against the snow has claimed more than 1,000 animals since 2005. Hunters shoot them with high-powered rifles from nimble two-seat helicopters that can hover close to a pack or lone wolf. In Alberta, some are poisoned with big chunks of bait laced with strychnine, leading to slow and painful deaths that may be preceded by seizures and hypothermia.

“It’s an unhappy necessity,” Stan Boutin, a University of Alberta biologist, said of the government-sponsored hunt. “We’ve let the development proceed so far already that now, trying to get industry out of an area, is just not going to happen.”

The energy industry has delivered a death blow to caribou by turning prime habitat into production sites and by introducing linear features on the landscape that give wolves easy paths to hunt caribou, such as roads, pipelines and lines of downed trees created by oil and gas exploration.

A drop in drilling after oil prices plunged can’t reverse the damage. More than C$350 billion ($285 billion) spent by Alberta’s oil-sands producers to build an industrial complex that’s visible from space have made the province’s boreal herds of woodland caribou the most endangered in the country. Their population is falling by about half every eight years, according to a 2013 study in the Canadian Journal of Zoology.

Caribou Ranges

Since 2005, Alberta has auctioned the rights to develop more than 25,000 square kilometers (9,652 square miles) of land in caribou ranges to energy companies, according to the Canadian Parks and Wilderness Society, an Ottawa-based charity. That’s equivalent to about three times New York’s metropolitan area.

“When the oil industry goes in there and cuts those lines and drills and puts in pipelines, it helps the wolves,” said Chad Lenz, a hunting guide with two decades of experience based in Red Deer, Alberta. Lenz has watched caribou herds shrink as the number of wolves soar. “There’s not a place in Alberta that hasn’t been affected by industry, especially the oil industry.”

Home to the world’s third-largest proven crude reserves, Alberta depends on levies from the energy industry to build new roads, schools and hospitals.

British Columbia

British Columbia joined Alberta in sponsoring a wolf hunt this year as its logging and energy industries too are putting populations of woodland caribou at risk. Canada’s westernmost province is trying to erase its debt with revenues from the energy industry, as companies including Royal Dutch Shell Plc consider multibillion-dollar gas export projects along the Pacific Coast.

The provinces are widening their wolf cull — a stop gap poised to extend for years — as companies such as Devon Energy Corp. join in testing other radical measures to revive the herds.

British Columbia killed 84 wolves in the hunt that ended this month. Alberta eliminated 53 this year, bringing its total killed through the program since 2005 to 1,033.

Conservation groups have petitioned for the end of a program they deem unethical without aggressive habitat recovery, while the provinces keep selling drilling rights on caribou ranges.

‘Scapegoating Wolves’

“We do not support the current wolf kill,” said Carolyn Campbell, a conservation specialist at the Alberta Wilderness Association, a Calgary-based advocacy group. “It’s an unethical way to scapegoat wolves.”

The provinces are only poised to kill more wolves, though, as they prepare plans to reverse the population decline for each caribou range ahead of a 2017 Canadian government deadline.

Alberta is expected to continue the cull in the first of its range plans to be released this year, which will serve as a model for handling of the other herds, said Duncan MacDonnell, a spokesman for Alberta’s Environment and Sustainable Resource Development department. British Columbia’s 2015 cull was just the first of a five-year program.

Killing wolves is saving caribou from extinction while governments and energy companies consider new approaches, said the University of Alberta’s Boutin.

Industry Efforts

The energy industry has worked to reduce its impact on caribou by adding gates on roads to block access and by returning disturbed land to a more natural state, said Chelsie Klassen, a spokeswoman for the Canadian Association of Petroleum Producers.

After spending about C$200 million annually for 12 years to help revive the caribou and watching populations continue to fall, companies are finally seeing small successes, said Amit Saxena, senior biodiversity and land specialist at Devon.

Wolves tracked with collars are being deterred from areas where companies have replanted trees, Saxena said. At its Jackfish oil-sands project, Devon is monitoring a fenced patch of land to see if it can keep out wolves and bears attracted by bait. Until the lessons can be successfully applied to wider swaths of land, the wolf cull will have to continue, he said.

“Sustainability of caribou herds and oil and gas activity can go hand in hand on the landscape,” Saxena said. “If we can manage that predation level that is too excessive in some areas, then caribou can recover on an industrial, active working landscape.”

Habitat Recovery

The human impact can’t all be reversed for herds that each require about 30,000 square kilometers of mostly undisturbed land to thrive, Boutin said. The biologist advocates building pens for pregnant and newborn caribou and larger fenced-off areas for certain entire herds.

“Habitat recovery will be part of the toolbox but it will never be useful on its own,” Boutin said. If provincial governments don’t pursue radical ideas such as maternity pens, fences and predator control, “then they’re going to be wasting everybody’s time.”

Oil Industry, Oil prices, Oil producers, Tar sands crude

Tar Sands Going the Way of the Dodo? – Energy companies canceling tar sands projects

Repost from OneEarth.org

Are Tar Sands Going the Way of the Dodo?

Energy companies are canceling their tar sands projects.

By Brian Palmer | March 6, 2015
Photo: O.F.E.

Shell withdrew its application to extract tar sands from Canada’s Pierre River mine last week. The cancellation is news in itself, but the oil company’s decision to walk away from a massive seven-year project says a great deal about the viability of tar sands generally. Last year, the Canadian Association of Petroleum Producers cut its 2030 tar sands production forecast by 400,000 barrels per day. Last week, the energy consultancy Wood Mackenzie predicted that cash flows from tar sands would drop $21 billion in the next two years. The industry is undeniably shrinking.

Tar sands won’t disappear tomorrow, of course—most of the expense comes in opening the mine, so producers will keep operating their existing mines for several decades. New mines, however, are economically unfeasible. It’s difficult to break even in the tar sands business at current low oil prices. Over the medium term, the lack of pipeline access challenges any prospects for profitability. (That’s why the industry is so desperate for the Keystone XL and Energy East pipelines.) Looking deeper into the future, the specter of carbon taxation is enough to scare energy executives away.

All this is good news for the climate. Tar sands are the most carbon-intensive form of energy on the planet, emitting three or four times more greenhouse gas than conventional crude oil (which isn’t exactly good for the environment either). Here’s a brief rundown of all the canceled or deferred Canadian tar sands projects in recent months, and how much carbon they could have pumped into the atmosphere.

Pierre River Mine
Company: Shell
Stated reason for withdrawal: “Our current focus is on making our heavy oil business as economically and environmentally competitive as possible.”
Projected barrels per day: 225,000
Carbon saved from the atmosphere each day, in tons: 21,000

Corner Oil Sands Project
Company: Statoil
Stated reason for withdrawal: “Costs for labor and materials have continued to rise in recent years…Market access issues also play a role, including limited pipeline access.”
Projected barrels per day: 40,000
Carbon saved from the atmosphere each day, in tons: 3,700

Christina Lake Expansion
Company: MEG Energy
Stated reason for withdrawal: None given
Projected barrels per day: 150,000
Carbon saved from the atmosphere each day, in tons: 14,000

Narrows Lake
Company: Cenovus
Stated reason for withdrawal: None given
Projected barrels per day: 130,000
Carbon saved from the atmosphere each day, in tons: 12,200

Grand Rapids
Company: Cenovus
Stated reason for withdrawal: None given
Projected barrels per day: 180,000
Carbon saved from the atmosphere each day, in tons: 16,800

Telephone Lake
Company: Cenovus
Stated reason for withdrawal: None given
Projected barrels per day: 90,000
Carbon saved from the atmosphere each day, in tons: 8,400

MacKay River Expansion
Company: Suncor
Stated reason for withdrawal: “Cost management has been an ongoing focus…In today’s low crude price environment, it’s essential we accelerate this work.”
Projected barrels per day: 40,000
Carbon saved from the atmosphere each day, in tons: 3,700

Joslyn Mine
Company: Total
Stated reason for withdrawal: “Costs are continuing to inflate when the oil price and, specifically, the [net profit] for the oil sands are remaining stable at best—squeezing the margins.”
Projected barrels per day: 160,000
Carbon saved from the atmosphere each day, in tons: 15,000

* * *

Tally that up and these canceled or postponed projects represent nearly 95,000 tons of carbon dioxide staying in the ground rather than floating into the atmosphere. That’s the equivalent of taking 6.6 million cars off the road. Murmurs in the energy industry suggest that several other projects will soon be deferred or canceled, as oil prices show few signs of recovering. Stay tuned.