It takes energy to produce energy.
Environmentalists, in criticizing Alberta’s huge appetite for energy, are overlooking this crucial point.
A Statistics Canada study shows the province’s energy use rose like a Rocky Mountain peak between 1990 and 2002. Consumption climbed 30.7 per cent – the greatest increase in the country.
“Energy gluttons!” cried the Pembina Institute and the David Suzuki Foundation.
But the Stats Can study notes that energy-intensive oilsands projects were mainly responsible for Alberta’s energy consumption rising higher, proportionately, than the province’s 22-per-cent increase in population during the period.
The oilsands industry has actually become more energy efficient. It now uses about one-third less energy – mostly natural gas – to squeeze every barrel of oil out of the Athabasca oilsands than it did a couple of decades ago.
Moreover, Alberta’s energy is not just consumed at home.
Much of it is used as far away as Arnold’s California, to fuel the gas-guzzling Hummers owned by the Gubernator and the rest of Tinsel Town. Alberta’s natural gas is burned to keep Ontarians warm and America’s power plants generating electricity.
Environmentalists would do well to wag their finger not just at Alberta but at energy consumers in both Canada and the U.S. – from Arnold to this columnist to you, dear reader.
It is our collective desire for more energy that’s driving the ever-increasing use of energy to produce it.
PIPELINE DASH
Need more proof that it’s the global energy consumer who calls the shots in terms of demand and supply?
Look no further than Calgary-based Enbridge Inc. and Vancouver-based Terasen Inc. Both companies are racing to be first to build a new pipeline from Alberta’s oilsands to open new markets in the United States and Asia.
Enbridge’s proposed Southern Access Pipeline, which could be in service by 2007, would cost up to $871 million and initially transport 250,000 barrels a day.
The 1,000-kilometre line would link with the company’s terminal at Superior, Wisc., then head south to its Wood River oil hub in southern Illinois. The pipeline would also connect to Chicago and to the oil hub at Cushing, Okla., through the Spearhead Pipeline in which Enbridge bought a 90-per-cent interest last month from BP PLC.
Enbridge also hopes to make a decision by the end of next year on its separate $2.5-billion, 1,400-kilometre Gateway pipeline, which could be in operation by 2009. It would carry 400,000 barrels a day of oilsands crude to a port in B.C., for export to California and the Far East.
Terasen’s strategy is to twin its Trans Mountain system, which moves Alberta’s oil to the west coast of Canada and the U.S., in three stages at a total cost of $1.5 billion. Each stage would accommodate new oilsands production as it comes onstream.
No matter who wins the race, ever-increasing worldwide demand for Alberta’s crude makes all these projects inevitable.
PRODUCERS 2: EIB 0
Natural gas producers are ahead two-zip over the Alberta Energy and Utilities Board (EUB) in the battle for gas versus bitumen production.
The producers – Paramount Resources Ltd., Devon Canada Corp. and BP Canada Energy Co. – won approval last week from the Alberta Court of Appeal to challenge the EUB’s decision in March to permanently shut down 60 gas wells in the Chard-Leismer oilsands area, south of Fort McMurray.
The oilpatch considers the dispute to be a test case for the EUB’s subsequent order for producers to shut down 938 gas wells in the much larger Wabiskaw-McMurray oilsands area farther north in the Athabasca region.
The EUB argues that gas production will decrease reservoir pressure and hamper future bitumen extraction.
Another one got by the EUB last week, too. The regulator agreed to the producers’ request to extend a deadline, from November 1, 2003 to March 1, 2004, for completing pressure tests of more than 600 of the 938 gas wells still operating in the Wabiskaw-McMurray area.
This game is far from over. But already it looks like the big winners will be the lawyers.
SASKATCHEWAN HOT
Go east, young firm.
Alberta-based junior companies are helping to fuel oil and gas land revenue in Saskatchewan, where the October sale of Crown mineral rights generated $36.8 million for the province – the highest in nine years.
Cavell Energy Corporation of Calgary says its summer/fall drilling program has increased its natural gas production by another one million cubic feet a day at Shackleton. The company aims to boost total gas production in the southwest Saskatchewan area to six million cubic feet a day by year’s end.
Cavell also plans to start drilling next year in west central Saskatchewan, where it has added 122,000 undeveloped acres since the start of the year to bring its total undeveloped holdings in the region to more 220,000 acres (including farm-in lands).
Meanwhile, Calgary-based Hawk Energy Corp. announced an agreement to buy light oil reserves and production in southeast Saskatchewan – including 2,500 net acres of undeveloped land – for $6.7 million.
And two other Calgary firms – Uranium Power Corp. and Western Petrochemical Corp. – say they’ve reached an agreement on a $3.5-million joint venture to develop 700,000 acres of oil shale permits in the Pasquia Hills, about 340 kilometres northeast of Regina, over the next four years.
The big guys like the landscape in Saskatchewan, too. Burlington Resources Canada Ltd. paid $3.8 million in the October sale to acquire a special exploratory permit for nearly 20 townships west of Assiniboia.
MUNCHING MICROBES
Sulphur for lunch, anyone?
CCR Technologies Ltd. says its wholly owned subsidiary, New Paradigm Gas Processing Ltd., has a licencing agreement with Prime West Energy Inc. to use a new biological technology to treat natural gas.
The licence will allow Prime West, at its Valhalla gas-processing plant north of Grande Prairie, to use naturally occurring “sulphur eating” microbes to purify natural gas, while nearly eliminating the poisonous hydrogen sulphide in the gas stream by converting it into solid, fertilizer-grade sulphur.
New Paradigm (www.npgas.ca) is the authorized licensor of the Shell-Paques Biological Gas Desulphurization technology, which can treat both gas and liquid streams containing hydrogen sulphide.
