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Page added on February 25, 2020
‘Nail in the Coffin’: Era of Big Oil Sands Mines May Be Over
Canada’s oilsands industry may have already built its last big mine.
The cancellation of Teck Resources Ltd.’s Frontier project in northern Alberta —which envisaged producing more crude than OPEC member Gabon — epitomizes the struggles of an industry that has already seen most foreign investors flee. It’s not clear that any other proposed mine would be able to clear the hurdles that felled Frontier in the years to come, possibly spelling the end of an era of megaprojects that transformed North America’s energy landscape by turning Canada into the top foreign crude supplier to the U.S.
“This may be the nail in the coffin,” said Laura Lau, who helps manage $2 billion (US$1.5 billion) in assets at Brompton Corp. in Toronto. “I would expect some smaller projects would have a better chance going through.”
On top of middling oil prices, a pipeline capacity shortage in Canada and heightened competition from U.S. shale, the oilsands have become a particularly shunned industry in a world of rising concerns about climate change, leading some major funds to divest their holdings. And with speculation oil demand could peak in 10 years or so, companies are growing increasingly wary of committing to multibillion-dollar projects that require decades of operation to pay out.
The oilsands of Alberta have drawn the ire of environmental activists because of the region’s vast open-pit mines that require the clearance of forest, produce massive lakes of wastewater and consume more energy than other ways of extracting oil. Refining the sticky, black bitumen scooped from some mines in so-called upgraders is also very carbon-intensive. Newer, smaller projects, while more efficient, still use a lot of energy to extract the oil with the help of steam.
While attempts to make Canada’s oilsands into an economically viable source of crude have been ongoing for about a century, the industry experienced its heyday in the 2000s and 2010s, when fears abounded that the world may be running out of crude.
Those fears prompted a flood of global investment as nations and international producers rushed to secure supplies. From 2004 to 2014, about $210.1 billion was invested in the oilsands, according to data from the Canadian Association of Petroleum Producers. Over those 10 years, oilsands output more than doubled, to 2.2 million barrels a day, and Canada shot up from the world’s eighth-largest oil-producing nation to the fifth-largest.
The industry has struggled since global oil prices crashed from more than US$100 a barrel in mid-2014. New pipeline projects were stalled by environmentalist opposition and legal challenges, weighing on Canadian heavy crude prices. International giants including Royal Dutch Shell Plc and ConocoPhillips sold off oilsands assets. And capital spending in the oil sands fell for five straight years.
The situation came to a head in late 2018, when a wave of new production, the shortage of pipeline space and a heavier-than-normal refinery maintenance season in the U.S. combined to cause a crash in Canadian heavy crude prices. That prompted Alberta’s government to implement mandatory production limits that started in 2019 and may remain in effect for the rest of this year.
Teck Chief Executive Officer Don Lindsay, in a letter explaining the company’s decision on Frontier, acknowledged the project raised broader questions over climate change and how countries’ regulatory regimes should balance resource development and emissions reductions.
“The growing debate around this issue has placed Frontier and our company squarely at the nexus of much broader issues that need to be resolved,” Lindsay said. “In that context, it is now evident that there is no constructive path forward for the project.”
But the hard economic reality remains the potentially biggest hurdle. Frontier’s 2011 application relied on long-term oil prices over its four-decade life of about US$95 a barrel, a level global benchmarks haven’t seen since 2014. With both West Texas Intermediate and Brent crude prices in the US$50-a-barrel range and the U.S.’s Permian Basin continuing to pump more oil, those prices may not return anytime soon.
The growing debate around this issue has placed Frontier and our company squarely at the nexus of much broader issues that need to be resolved
Don Lindsay, Teck Resources CEO
“This was the last big oilsands mining project advancing in the oilsands,” said Kevin Birn, IHS Markit’s director of North American crude oil markets. “Fully new greenfield ones outside this one, I don’t think there is any.”
Analysts had generally positive reactions to Teck cancelling Frontier. Morgan Stanley analyst Carlos De Alba said that despite the $1.13-billion writedown Teck would take on the project, “it removes overhanging concerns about the company potentially making a significant investment in fossil fuel amid raising ESG focus.”
To be sure, the oilsands industry is far from shutting down. Major producers are generally profitable and producing free cash flow. Capital spending is even projected to tick up this year. Producers are continually developing new technologies and finding ways to cut costs.
They can still expand existing mines and are able to add output from what are known as in situ projects, which resemble more familiar methods of oil extraction by tapping underground resources through the use of wells. Those tend to be smaller, cheaper and faster to build.
But even those projects are having trouble in the current environment. Imperial Oil Ltd. last year delayed its $2.6 billion Aspen oilsands project, which had been approved and was scheduled to start production in 2022, because of Alberta’s production limits.
And with the cancellation of Frontier, there are no major mine projects of the kind that formed the industry’s bedrock. The last big mine to come online was Suncor Energy Inc.’s $17-billion Fort Hills mine, which started producing in 2018.
Teck is a partner at Fort Hills and is considering getting out of that investment, too.
62 Comments on "‘Nail in the Coffin’: Era of Big Oil Sands Mines May Be Over"
REAL Green on Tue, 3rd Mar 2020 5:58 am
“Why I’m Not Preparing for Covid-19”
https://tinyurl.com/qkzx2za low carbon life
“We’re not preparing only because we’re already prepared, at least on the most basic and most useful level. I can’t think of much I could add today that would significantly increase our safety. Slightly, maybe, but not significantly. The great news is that getting ready for one bad surprise gets you at least half way ready for all the others. Ice storm closed all the roads? Better make sure you don’t have to run to the store for food or bleach, and you have some other way to cook, heat and poo in case the power and water stop. Community-level health problem? You’re safer not leaving home, and you should probably assume that power and water employees may not be able to get to work. Lost your job? Better not go to the store, and maybe do without power and water in favor of paying the rent or mortgage. Are you seeing a pattern here? I certainly do.”
REAL Green on Tue, 3rd Mar 2020 5:58 am
I am in a similar situation being already prepped and more important mentally prepared. I am a green prepper so all the things in this article I have already worked on. Our situation is slightly different but the motivation is much the same. The important point for me to express to other readers here is green prepping is not about creating this unsinkable ship that will save you. It is about lifeboats of strategies of things and lifestyle that assist the process of mitigating and adapting to decline. These things and attitudes become part of a life style that naturally seeks wise simplicity and this then obviously centers around localism. Scaling with balance results. What this means is a proper human scale is not the modern one but balance means we are trapped in a scale that is modern but not proper. Most all of us must live and work in a scale that is not proper for sustainability and resilience. You can adapt this dysfunctional arrangement
I will make the point that survival has never has been assured even when humans were scaled better. This is the nature of planetary acquiescence. What green prepping is then is more of a dealing with the false attitudes the current social narrative habituates us too. In a way we are more vulnerable than the older times because we have been deceived into believing there is this magic safety net from the techno modern. What green prepping is about is acceptance of the wisdom of insecurity and the going forth in this truth to make ones local more resilient and sustainable.
There is then the hospice part of this activity which seeks honesty in the face of decline and death. This view of death is not necessarily the mortal end of our lives but the death of a way of life so many of us have been born into. Globalism has been all any of us have really known. Now we are faced with the end of this powerful system both systematically but also planetary. This means that all those delocalization strategies that have been embraced by individuals and communities will have to be critically examined. The only obvious response is simplicity and localism.
There is only so much that can be done but doing something should be obvious. Paralysis is understandable but only in the beginning of this realization. Simple things like growing food should be a natural response. Simpler yet is learning to grow food. Home economic skills are another area. Crafts and professional expertise that are applicable to this new way of living should be honed. If somebody is good with animal husbandry or carpentry these should be applied to decline. A community is made up of multiple skill. Individuals should become a jack of all trades in general and specialize with your individual talents. Most people are good at something.
None of this is assured because the damage from delocalization and the destruction of local community has gone so far. Yet, these powerful human links of community will return from necessity as the absurd world of depending on survival from value chains that stretch the earth are exposed. Not everyone can do advanced green prepping. BTW the green part of this prepping means fortifying the planet and the people in the local. So, many are already green oriented it is just these attitudes have not gone through the metamorphosis that a crisis like this virus is presenting.
It is likely this virus will only hurt globalism with maybe no more death than the flu. Yet, humans really don’t have any alternative to globalism so this is serious nonetheless. The basics of survival are centered around globalism so it is not going to magically disappear and a wonderful localism sprout. This bifurcating process will have consequences that will require pain and suffering and for some death. That is ultimately the hospice part. Now is the time to at least evaluate your life in regards to an existential insecurity everyone is faced with. Even the elite and the privileged have nowhere to hide. This economic pandemic will touch everyone. Is it a pathogen pandemic yet? Does it matter really because it has shaken the economy into a new level which is a lower level of affluence. These things are related so don’t be fooled when people say the virus is no worse than the flu because on the economic level it is and our economics are global and the global is survival. Adapt this while you can.
realgreenadaptation.blog
REAL Green on Tue, 3rd Mar 2020 6:18 am
“How ‘smart integrated renewable energy systems’ can drive sustainable economic development in remote communities”
https://tinyurl.com/w939lvl renewable energy world
Demand-side flexibility programs Through the deployment of “demand response,” financial viability can also be improved. This process refers to the schemes developed by utilities to balance out peaks and troughs of the electricity demand. Different levels of service reliability can ultimately be tolerated by different strata of society. In addition, the incorporation of demand-side flexibility resources in long-term planning decisions lays groundwork to establish new design standards for off-grid renewable energy systems. The new design standards entail varied reliability margins to varying populations and can serve as a buffer against uncertain investments in specific economic conditions of communities. The above process of habitual electricity consumption patterns can be transformed into 100%-renewable energy systems. This could pave the way to reap interactions between different energy carriers. Accordingly, prioritization weights can be personalized by end-user of different energy services subscribed to an integrated energy system.”
Anonymouse on Tue, 3rd Mar 2020 6:21 am
The only thing you should be preparing for, is a trip the mental institution. Have to wonder how you ever find to the time for your magical ‘prepping’, when all you do, is hang out here harassing the intelligent posters, stalking and ID thieving 20 hours a day.
PS: No one reads your bloviating turd salads.
REAL Green on Tue, 3rd Mar 2020 6:31 am
“How Do You Know If You Have Coronavirus AKA COVID-19? 5 Answers to Common Questions”
https://tinyurl.com/udzsl2e realfarmacy
“The new coronavirus COVID-19 (2019 n-CoV) continues to spread and cases are being diagnosed in many countries, including the United States. With initial symptoms that resemble other diseases, many people are wondering how to know whether to seek medical help. With the new coronavirus now in the US, am I at risk? The biggest risk factors for being infected with the new coronavirus are travel to China, particularly Wuhan and other areas of Hubei Province, and close contact with a person who has a suspected or confirmed n-CoV case. Without those risk factors, the chance for the general American public of catching this virus is low. However, the outbreak is rapidly changing, and it is unclear how the situation in the U.S. will evolve in upcoming weeks. What are the symptoms of 2019 n-CoV? Most cases of 2019 n-CoV have had fever and signs of pneumonia, like cough or shortness of breath. In some cases people are not able to breathe on their own and require the use of a ventilator. A small percentage of people die. What should I do if I have any of these symptoms? If you experience any of these symptoms within 14 days of travel to China, or within 14 days of coming in close contact with an individual infected with the coronavirus, you should immediately call your health care provider. It is best to call ahead before going to a clinic or emergency room. Your health care provider will evaluate you with the help of your state’s public health department and the federal Centers for Disease Control and Prevention. If your travel history and reported symptoms fit with n-CoV infection, you may be tested for the virus. Right now that test can be performed only at the CDC, so your health care provider would send samples to the CDC for testing. What else could it be? At this time of year many respiratory viruses are circulating in the community, including influenza, RSV, rhinovirus and human coronaviruses, which are different from the 2019 n-CoV virus. It is much more likely that you have one of these viruses than the 2019 n-CoV virus, even if you have traveled to China. So there are other coronaviruses? Yes. There are four human coronaviruses that circulate each year in the U.S. They cause 10% to 30% of upper respiratory tract illnesses in the U.S., with mild symptoms akin to the common cold. Health care labs can test for these coronaviruses – but not for 2019 n-CoV.”
REAL Green on Tue, 3rd Mar 2020 6:39 am
“There are no limits to growth”
https://tinyurl.com/u59fllp energy shifts
Davy on Tue, 3rd Mar 2020 7:10 am
“The Threat Of Nuclear War Between US & Russia Is Now At Its Greatest Since 1983”
https://tinyurl.com/yx4utrt6 zero hedge
“US Air Force Gen. Tod D Wolters told the Senate this week he “is a fan of flexible first strike” regarding NATO’s nuclear weapons, thereby exposing the fatal fallacy of the alliance’s embrace of American nuclear deterrence policy.Under any circumstance, the public embrace of a “flexible first strike” policy regarding nuclear weapons employment by the Supreme Allied Commander in Europe should generate widespread attention. When seen in the context of the recent deployment by the US of a low-yield nuclear warhead on submarine-launched ballistic missiles carried onboard a Trident submarine, however, Wolters’ statement is downright explosive. Add to the mix the fact the US recently carried out a wargame where the US Secretary of Defense practiced the procedures for launching this very same “low yield” weapon against a Russian target during simulated combat between Russia and NATO in Europe, and the reaction should be off the charts. And yet there has been deafening silence from both the European and US press on this topic. There is, however, one party that paid attention to what General Wolters had to say–Russia. In a statement to the press on February 25–the same date as General Wolters’ testimony, Sergey Lavrov, the Russian Foreign Minister stated that “We note with concern that Washington’s new doctrinal guidelines considerably lower the threshold of nuclear weapons use.” Lavrov added that this doctrine had to be viewed in the light “of the persistent deployment of US nuclear weapons on the territory of some NATO allies and the continued practice of the so-called joint nuclear missions.” Rather than embracing a policy of “flexible first strike”, Lavrov suggested that the US work with Russia to re-confirm “the Gorbachev-Reagan formula, which says that there can be no winners in a nuclear war and it should never be unleashed.” This proposal was made 18 months ago, Lavrov noted, and yet the US has failed to respond.”
I AM THE MOB on Tue, 3rd Mar 2020 1:19 pm
It’s official: The American Left is back!
https://www.alternet.org/2020/03/its-official-the-american-left-is-back/?utm_source=&utm_medium=email&utm_campaign=3854&recip_id=2946&list_id=2
Abraham van Helsing on Tue, 3rd Mar 2020 2:35 pm
Can somebody explain to the mobster the difference between a primary and presidential election, as he won’t take it from me.
As a rule mobster, a leftist candidate always wins the primary of a leftist party.
Hope this helps.
Abraham van Helsing on Tue, 3rd Mar 2020 2:57 pm
Empire shit hole press admits defeat:
https://www.spiegel.de/politik/ausland/triumph-der-fluechtlingsgegner-a-575d7b35-01e5-4d98-a1d7-53bc9cc16a3c
“Hate has won”
LOL
Greece going in total lockdown vis-a-vis invaders. No more scruples. These invaders are cancer and you don’t negotiate with cancer, you cut it out.
America and Britain may become the next USSR, we are going to become a hard-right super-power with 640 million citizens.
Won’t be long until der Spiegel journalists will be in Santiago de Chile or in a camp, just in case they don’t get the message.
Telltale signs that Europe will be liberated from the globalist Anglos is if Europe organizes the largest military parade in history and will start a giant armament program.
Abraham van Helsing on Tue, 3rd Mar 2020 3:07 pm
Biden gets endorsements. Mini-mike will withdraw. Biden + Hillster veep against Sanders. The entire Dims establishment backs Biden.
6 month in the presidency Biden declares himself senile or the hildebeest pulls a LBJ and adds the sniffer to the clinton body count.
President after all.
Abraham van Helsing on Tue, 3rd Mar 2020 3:11 pm
Airline relative winners: those who ordered the B737 Mad Max:
https://www.infowars.com/coronavirus-dealing-heavy-blow-to-airlines/
“CORONAVIRUS DEALING HEAVY BLOW TO AIRLINES”
No plane, no pain.