The federal Conservatives see offshore oil and gas as giving them the energy edge in this election campaign – at least in Atlantic Canada.
But for the Liberals and the NDP, the answer to the country’s energy demands is blowin’ in the wind.
Paul Martin’s Liberals would quadruple funding for wind-energy development, as part of a $27-billion election platform unveiled last week.
That will be welcome news to Canada’s wind- energy industry and environmental groups, which have been lobbying Ottawa to boost the existing federal wind-power production incentive.
Wind-energy developers now receive one cent per kilowatt-hour for the first 10 years of their wind-power facilities.
But critics say that Canada’s measure is worth about one-third of a wind-power incentive offered in the U.S. by the Bush administration – making the American industry more competitive.
Adding another three cents per kilowatt-hour for Canadian wind- power developers certainly wouldn’t strain the federal treasury, and it might even kickstart a homegrown wind-turbine manufacturing industry.
NDP Leader Jack Layton has pledged to build 10,000 wind turbines across Canada by 2010 to produce 10,000 megawatts of new green energy.
Layton made his windy pitch in the heart of Calgary’s oilpatch, which likely didn’t win him any votes at the Petroleum Club.
The NDP’s wind-power plan could cost as much as $10 billion if the turbines aren’t made in Canada and need to be bought elsewhere.
The party says it would pay for the clean machines by collecting $4.5 billion a year from Canadian energy companies, as part of a new emissions-trading system under the Kyoto Accord to cut greenhouse gas emissions.
Stephen Harper says a Conservative government would let Nova Scotia, Newfoundland and Labrador keep millions of dollars in higher shares from offshore oil and gas royalties.
Newfoundland Premier Danny Williams says he has a signed agreement from Harper to back up that election promise.
Now there’s an idea worth pursuing.
All the premiers should get the Liberals and NDP to sign on the dotted line about their wind-energy pledges. Maybe then, one or more of the provinces would finally step up to match the federal wind energy incentive.
Energy Efficiency There’s still a treasure chest of oil and gas beneath Alberta – and a new $200-million, five-year provincial program hopes to find the key.
Energy Minister Murray Smith says the government will pay up to 30 per cent of the cost of pilot projects (up to a maximum of $10 million per project) aimed at improving the output of existing oilfields, by reducing royalties for companies that qualify for the program. The companies will pay the remaining 70 per cent of the costs for the pilot enhanced-recovery projects.
Boosting the amount of hydrocarbons recovered by just one per cent would add 600 million barrels of conventional oil, 17 billion cubic feet of bitumen and two trillion cubic feet of natural gas to Alberta’s reserves, the Energy Department estimates.
If industry takes full advantage of the program, the incentive could unleash up to $667 million to develop new technologies, including the use of carbon dioxide to recover more oil while permanently storing the greenhouse gas underground and helping reduce Alberta’s emissions.
The program also should spur new collaborations between industry and researchers at the University of Calgary’s new Institute for Sustainable Energy, Environment and Economy (ISEEE). One of ISEEE’s four key R&D areas is advanced hydrocarbon recovery.
Kudos to Smith and his department for taking a step that will make the most of Alberta’s oil and gas wealth.
Bear Warning The B.C. government is opening up a potential $16 billion worth of oil and gas development in one of the province’s most spectacular wildlife regions.
The Liberals have released new “pre-tenure” development plans that detail environmental requirements for companies that want to explore for oil and gas in the 64,000-square-kilometre Muskwa-Kechika region in north-central B.C.
Wisely, the government developed the plans in consultation with local environmental groups, area residents, municipal governments, aboriginal communities, and tourism interests.
The Muskwa-Kechika, an area larger than the province of Nova Scotia, contains unique wildlife and wilderness values.
The pre-tenure plans give bidders for exploration rights the certainty that they will be able to access the area. At the same time, the plans establish guidelines for conservation of biological diversity and soil and water resources, targets for minimizing disturbance in the area, and remediation requirements once exploration and development are completed.
Of course, any plan is only as good as the company that honours it on the ground.
The Muskwa-Kechika will retain its majestic wilderness only if the industry and provincial regulators ensure that the rules are followed.
Gas Reliance Grows The stormy price of natural gas is darkening Alberta’s oilsands horizon.
Oilsands production could easily reach 2.2 million barrels of oil a day by 2015 from the one million b/d this year, the National Energy Board (NEB) says in a new report.
But that also means the industry’s reliance on natural gas to fuel that expansion is expected to more than double, the NEB says. The oilsands currently use 600 million cubic feet of gas per day, or four per cent of conventional production from Western Canada.
By 2015, gas consumption will increase to upwards of 1.6 billion cubic feet per day, or 10 per cent of gas production.
This means not all of the $60 billion worth of oilsands projects and related infrastructure now on the drawing board will go ahead, certainly not if gas prices remain at $6.70 US per thousand cubic feet or so.
The industry is counting on the arrival of Arctic gas via the planned Mackenzie Valley pipeline to help fuel its growth.
But environmental groups are already raising red flags about the oilsands gobbling up all this irreplaceable northern gas, while at the same time greatly increasing Alberta’s greenhouse gas emissions.
If the industry has foresight, it will invest now in developing new technologies that use fuel sources other than natural gas.
Nexen Inc. and Opti Canada are pioneering the area with their $3.4-billion Long Lake oilsands plant, which is designed to create its own synthetic gas from the bitumen it produces. It’s an example other oilsands operators should follow.
