Tag Archives: Oil prices

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.”

Alberta Canada, Economy, Electoral politics, Oil prices, Tar sands crude

Alberta, the Home of Tar Sands, has “Increasing Income Inequality”

Repost from Oil Change International

Alberta, the Home of the Tar Sands, Has “Increasing Income Inequality”

By Andy Rowell, April 21, 2015

As the Albertan election heats up, the worsening economy – in large part caused by the plunge in oil prices – is taking centre stage in the province’s election campaign which comes to a head in early May.

The early election comes as Alberta, the home of the tar sands, is feeling the full force of the declining oil price, with some 8,000 job losses expected in the energy sector.

The province’s government is grappling with a multi-billion deficit and is scrambling to reduce the reliance of the province on the tar sands industry.

“The premise for calling the election … was that we need a structural shift that is going to take the economy off of oil so that the proportion of the budget that’s accounted for by oil and gas resources goes down,” Bruce Cameron, a local pollster told the Globe and Mail.

Not only is the tar sands industry responsible for this boom and bust jobs cycle, it is also contributing to a widening gap between rich and poor.

A new analysis, published yesterday by the Parkland Institute, entitled From Gap to Chasm: Alberta’s Increasing Income Inequality, concluded that “the gap between the rich and the poor in Alberta is the widest in the country”.

The bottom line is that over the last couple of decades, as the tar sands industry has grown, so has the gap between those earning huge petro-inflated wages and those not.

The Institute, which is an Alberta research network situated within the Faculty of Arts at the University of Alberta, found that the disparity between those Albertans at the top of the income ladder and those at the bottom has been growing faster than in any other province in Canada.

Back in 1990, Alberta was roughly comparable to Canadian national averages of income inequality levels. However by 2011, the most recent year for which the data is available, it was the worst province.

The author of the new factsheet analysis, who is a public finance economist, Greg Flanagan said “The data show clearly that Alberta is now the most unequal province in Canada, and that the gap between those at the top and those at the bottom widened in Alberta over the past 20 years twice as much as the national average.”

Flanagan added that “Equally worrisome is the fact that because Alberta is the only province without a progressive taxation system, Alberta saw the least improvement in income equality after taxes.”

The rich have certainly got much richer, with the share of total income enjoyed by the top 10% of income earners in Alberta climbing by almost 30% between 1992 and 2007.

Meanwhile, the share of total income that went to the bottom half of earners in the province dropped over the same period, and has flatlined at or below 16% of total income since 2000.

“All the parties in this election should be presenting plans to address what is clearly a serious inequality problem in Alberta, and one that is getting worse, not better,” says Flanagan, who called on a significant shift to progressive taxation in Alberta to help reverse what he called “this troubling trend”.

Oil Industry, Oil prices, Oil producers

NY Times: Outlook for Oil Prices ‘Only Getting Murkier,’ Energy Agency Says

Repost from the The New York Times

Outlook for Oil Prices ‘Only Getting Murkier,’ Energy Agency Says

By Stanley Reed, April 15, 2015
Royal Dutch Shell is expecting prices to recover much of their recent drop over the next few years. It projects prices to hit $90 a barrel in 2018. Chris Ratcliffe / Bloomberg

LONDON — The outlook for oil prices is still uncertain after the sharp fall that began last summer, the International Energy Agency said on Wednesday.

Given the price collapse, “one might be hoping for more clarity on supply and demand,” the agency acknowledged in its monthly Oil Market Report, which was released on Wednesday. “Yet in some ways, the outlook is only getting murkier.”

Oil prices, which have fallen about 50 percent since June, rose after the report and a separate United States government report that said that American crude stockpiles had risen less than expected.

The international benchmark, Brent crude, was up about 3 percent on Wednesday, to $60.35, while its American counterpart jumped more than 5 percent to about $55.97.

The agency’s report reflects a broad debate inside and outside the oil industry about where prices might eventually settle.

Citigroup, for one, expects prices to continue falling in the coming months, as output remains high, supply is building up and investors who had helped prop up prices begin to sell.

“While prices have held relatively firm, there are significant signs of weakness ahead,” Citigroup said in a note to clients on Tuesday.

Royal Dutch Shell, the oil giant that announced an almost $70 billion takeover of the British oil and gas producer BG Group last week, is expecting prices to recover much of their recent drop over the next few years. It projects prices to hit $90 a barrel in 2018.

As the International Energy Agency noted, competing forces are still playing out in the market, making the direction difficult to discern. Low prices have stimulated higher-than-expected demand for oil products in China, India and even Europe, which has been plagued by lethargic economic growth, the agency said. But whether that increased consumption is a “temporary aberration” remains to be seen, it added.

There is much uncertainty, for instance, over future crude demand from China, which on Wednesday reported economic growth of 7 percent, the weakest rate since early 2009.

Supply is also hard to gauge. While there are signs that low prices are beginning to have an impact on the production of oil from shale rock, overall oil output in the United States is expected to grow this year, the agency said.

 

In addition, the Organization of the Petroleum Exporting Countries is showing no signs of backing away from the policy, backed by Saudi Arabia, of holding onto market share regardless of falling prices. OPEC production rose almost 900,000 barrels a day in March from a month earlier, the agency said, as Saudi Arabia increased production to more than 10 million barrels per day.

Among the uncertainties in the market is the potential effect on oil supplies of a proposed nuclear accord with Iran, a major producer, the agency said. International sanctions have sharply reduced the country’s sales of oil, and an accord is expected to ease, or lift, those sanctions.

While it would take time for Iran to organize the enormous investment that would be required to sustainably bolster its production capacity, the agency said that the country might be able to make short-term changes to increase output and exports relatively quickly.

For instance, the agency said, Iran has 30 million barrels of oil stored on tankers, which could quickly feed an increase in exports. The agency also estimated that Iranian oil fields could ramp up production to as much as 3.6 million barrels a day, a 29 percent increase, within months of sanctions being lifted.

Specialists have been working at some of those sites, and “some of Iran’s core fields,” which were run down, may already have been revived, the agency said.

Under the pressure of sanctions, both Iranian production and exports have been curbed. Exports are down about 50 percent since 2012, to an average of around 1.1. million barrels a day, though they rose to 1.3 million barrels a day in March on high demand from China.

 

Bakken Crude, CPC-1232, DOT-111, Oil Industry, Oil prices, Oil producers, Rail traffic, Refinery safety, Tank car retirement, Tank car retrofit

Wall Street Journal: Fewer Oil Trains Ply America’s Rails

Repost from The Wall Street Journal

Fewer Oil Trains Ply America’s Rails

Safety concerns, low crude prices depress train traffic

By Alison Sider, April 6, 2015 3:30 p.m. ET
In March, oil-train traffic was down 7% from a year earlier. The slowdown comes amid safety concerns. Photo: David Paul Morris/Bloomberg News

The growth in oil-train shipments fueled by the U.S. energy boom has stalled in recent months, dampened by safety problems and low crude prices.

The number of train cars carrying crude and other petroleum products peaked last fall, according to data from the Association of American Railroads, and began edging down. In March, oil-train traffic was down 7% on a year-over-year basis.

Railroads have been a major beneficiary of the U.S. energy boom, as oil companies turned to trains to move crude to refineries from remote oil fields in North Dakota and other areas not served by pipelines. Rail shipments of oil have expanded from 20 million barrels in 2010 to just under 374 million barrels last year, according to the U.S. Energy Information Administration.

About 1.38 million barrels a day of oil and fuels like gasoline rode the rails in March, versus an average of 1.5 million barrels a day in the same period a year ago, according to a Wall Street Journal analysis of the railroad association’s data.

Oil-train traffic declined 1% in the fourth quarter of 2014 as crude-oil prices started to tumble toward $50 a barrel. More recently, data from the U.S. Energy Department show oil-train movements out of the prolific Bakken Shale in North Dakota have leveled off as drillers there have begun to pump less, though oil-train shipments from the Rocky Mountain region have risen.

WSJ_Shipped-By-US_Rail_2014-15The slowdown comes as federal safety experts call for stronger tank cars. On Monday the National Transportation Safety Board recommended an aggressive five-year schedule for phasing out or upgrading older railcars used to haul crude-oil. A string of oil train accidents in recent months have resulted in spills, intense fires and community evacuations. The NTSB said railcars in use today rupture too quickly and aren’t fire-resistant enough.

A few incidents have involved more modern tank cars—the CPC-1232 model. The NTSB also said the new railcar’s design isn’t sturdy enough. “We can’t wait a decade for safer rail cars,” said NTSB Chairman Christopher A. Hart Monday in a letter to federal transportation regulators.

Opponents of a fast phaseout have said that if tougher standards are introduced too quickly it will create a railcar shortage and make some oil train operations unprofitable.

Many refiners, including Philadelphia Energy Solutions, say they are still committed to shipping oil on trains. Chief Executive Phil Rinaldi in December said he likes that railroads don’t require long-term contractual agreements the way pipelines do. That allows his plant managers to buy crude only when it’s needed.

With pipelines, “you have to pay for that transit whether it makes sense or not,” Mr. Rinaldi said. “With rail, that’s not the case.”

Railroad operators have warned investors that their outlook for transporting crude is slightly weaker than it was last year, said David Vernon, a rail analyst at Sanford C. Bernstein & Co.

BNSF Railway Co., which is responsible for about 70% of U.S. oil-train traffic, operated as many as 10 trains a day last year, but is averaging nine a day now, a spokesman said.