Free Republic

That low oil prices are squeezing out oil sands producers is not breaking news. But in spite of a grim oil price outlook, production out of Calgary has continued to grow, defying both expectations and logic. The implications are serious, not just for the future of Canada’s energy industry and economy, but also North American energy relations. In June 2015, the Canadian Association of Petroleum Producers (CAPP) revised down its 2030 production forecast to 5.3 million barrels per day (mbd). A year earlier the group predicted Canada would be able to produce 6.4 mbd by 2030. This is compared to...

“There’s just no cash.” That’s the Coles Notes from a senior banker describing the book of oil service loans he manages for one of Alberta’s leading lenders. There’s simply not enough cash flow to support current levels of debt. Bankers and borrowers have kicked the can down the road about as far as they can as more oilfield service (OFS) and exploration and production (E&P) companies default on their loans and seek more relief on lending covenants. While a significant oil price increase to lift all the sinking boats will surely come, it won’t happen soon enough. More of the...

Canadian Oil Sands Ltd., one of Canada’s largest producers of crude, is looking into selling some of its future production amid low crude oil prices and a growing debt load. Canadian Oil Sands owns 37% of the Syncrude oil-sands mining consortium, one of the country’s largest producers of crude from the Alberta oil sands. Production snags at Syncrude’s operations and oil prices that recently fell to six-year lows have hit Canadian Oil Sands particularly hard because the Syncrude project is its only producing asset. In July, Canadian Oil Sands said it swung to a second-quarter loss, and last month Moody’s...

Big oil is taking no chances with the outcome of Alberta’s royalty review currently underway. In 2007, the industry was surprised when royalties were jacked up despite dozens of corporate presentations to the royalty review panel warning of the fragility of investment economics and the damage increased royalties would cause. Therefore producers and others with significant vested interest have already started the lobbying process. Such is the case with Canadian Natural Resources Limited (CNRL) which made a slide presentation to the new NDP Alberta government on August 20. The industry has obviously learned never to assume politicians actually understand what...

fter decades of exhaustive attempts to overcome the dirty reputation of oil sands, we finally have an environmentally-friendly and low cost method to tap into these vast resources in the state of Utah—good news both for Mother Nature and all oil and gas investors. MCW Energy Group’s CEO, former Exxon President of the Arabian Gulf region, Dr. R. Gerald Bailey, tells Oilprice.com in an exclusive interview that his hunt for an innovative technology that simultaneously makes money and cleans up the environment is over. The race to capitalize on Utah’s vast oil sands resources is on, and only the ‘clean’—both...

Canadian Oil Sands Ltd., the largest owner of the giant Syncrude oil-sands project, said on Sunday that it has halted production after a fire damaged equipment at its synthetic crude oil processing facility in northern Alberta. The company said the fire, which occurred early Saturday and was extinguished without any injuries, affected pipes connected to a water treatment unit at Syncrude’s heavy oil upgrader on the site of its Mildred Lake oil-sands surface mine. The cause of the blaze is under investigation, it said. While the upgrader’s core machinery wasn’t damaged and the strip mine continues to operate, Canadian Oil...

BOOK CLIFFS, Utah (AP) — On a remote Utah ridge covered in sagebrush, pines and wild grasses, a Canadian company is about to embark on something never before done commercially in the United States: digging sticky, black, tar-soaked sand from the ground and extracting the petroleum. The impending opening of the nation’s first tar sands mine has become another front in the battle across the West between preservationists and the energy industry. U.S. Oil Sands has invested nearly $100 million over the last decade to acquire rights to about 50 square miles, obtain permits and develop what it says is...

More than three-quarters of Canada's daily output of 2.2 million barrels of crude from oil sands is being produced at a loss at current prices, research from analysts at TD Securities shows, although producers are unlikely to halt operations. Only two mining and upgrading projects - Canadian Natural Resources Ltd's Horizon project and Suncor Energy's Millennium mine - are producing synthetic crude for less than its current outright price around $36 a barrel, analyst Menno Hulshof said on Thursday. Every thermal oil sands player is bleeding cash on every barrel produced with U.S. crude around $41 and the Canadian heavy...

Canada has given oil sands a dirty reputation, but a breakthrough, commercially viable technology has caught the eye of a former Exxon Mobil president who is putting it to use to clean up Utah’s billions of barrels of oil sands. Imagine extracting high-quality oil out of the estimated 32 billion barrels buried in Utah’s oil sands, without creating the toxic wastelands that have resulted from oil sands projects in Western Canada. And imagine doing it at a cost that can still turn a profit in today’s oil price slump. That would be highly enticing to some of the large operators...

TransCanada on Thursday announced a two-year delay to its plans to move the Canadian tar sands. The company is cancelling its plans to build a controversial export terminal in Quebec, citing environmental concern over the endangered beluga whale. This means a delay to plans for finishing the Energy East pipeline, now set for 2020. In the meantime, TransCanada will search for a new location for its port. For once, then, Canadian oil news isn't about the TransCanada-owned Keystone XL, which has faced a six-year delay as the Obama administration sits on a decision to issue a permit. At least not...

While Congress and the White House continue to wrangle over the Keystone XL pipeline extension, the oil industry is taking matters into its own hands. Markets are primed for an influx of Canadian crude oil, but with pipeline transport off the table for the foreseeable future, producers have built alternative modes to meet the demand. The problem is, recent disasters have soured legislators and environmentalists on road and rail for moving oil. Alongside political uncertainties are other wild cards like extreme weather and the unknowns that arise from an emerging logistics infrastructure, which can all impact the flow of goods....

Prentice suggests Albertans must accept some responsibility for financial plight Alberta Premier Jim Prentice has found indirect support at the highest level from ExxonMobil Chief Executive Officer Rex Tillerson for his doom-and-gloom message that those who rely on oil prices for a living are in for a rough ride. Tillerson spent, for him, an unusual amount of time in the first week of March behind microphones, on the airwaves and in front of TV cameras spreading the word that the world and investors should “settle in” for a long period of relatively weak and volatile crude prices. He said there...

Alberta wages almost 25% higher than Canadian average Economists, politicians and business leaders seek ways to bring wages down Springtime is typically oilpatch bonus season. As the grass turns green, car dealerships and upscale stores tend to get busier. This year is different. Bonuses — if they exist at all — are expected to be small. Wages have been frozen. Oilpatch workers are happy to have a job at all. And that's the private sector. Public sector workers, like teachers and nurses, are on high alert as the provincial government makes increasingly loud noises about reopening their contracts to cut...

WASHINGTON — Unexpected visitors have been dropping in on anti-oil activists in the United States — knocking on doors, calling, texting, contacting family members. The visitors are federal agents. Opponents of Canadian oil say they’ve been contacted by FBI investigators in several states following their involvement in protests that delayed northbound shipments of equipment to Canada’s oilsands. A lawyer working with the protesters says he’s personally aware of a dozen people having been contacted in the northwestern U.S. and says the actual number is probably higher. Larry Hildes says it’s been happening the last few months in Washington State, Oregon...

Stimulus: Obama says jobs from the Keystone project aren't permanent and it's just one pipeline that will move foreign oil to foreign markets. But fixing the bridge he once used as a prop didn't create permanent jobs either. 'Let's set our sights above a single pipeline," the leader of the party of infrastructure told Congress in the State of the Union. But this Congress has 80 more Republicans than when he took office, and on Thursday the Senate rejected his admonition by a 62-36 vote. Eight Democrats crossed the aisle after a series of amendment votes, a process that had...

For all those who have forgotten that the I in the GDP equation stands for Investment, here is a reminder courtesy of the latest crude collapse victim, Suncor, which moments ago announced it is not only cutting its 2015 CapEx by $1 billion (as in I, directly and adversely impacting US GDP by the same amount) but that it would also cut "operating expenses" by up to $800 million, and, drumroll, implementing "a series of workforce initiatives that will reduce total workforce numbers in 2015 by approximately 1000 people, primarily through its contract workforce, in addition to reducing employee positions....

With oil prices sliding downward, Jim Gray — a veteran of Alberta’s energy business — provides perspective. 1. There has been a lot of gloom and doom over the oil price slide. What do you make of the 50 per cent drop in the price of oil since June? There are many precedents for a 50 per cent slide in oil prices. Just since 1983, there have been four principal slides. When you look at the history of oil prices since 1983, you’ll see the rate of recovery is tied to how quickly prices fell. In 1986, prices dropped between...

Seems Canada is tired of waiting – and waiting – for a decision on the Keystone pipeline and has come up with an alternate plan for moving the oil to market. As Bloomberg reports: It would be Keystone on steroids, more than twice as long and carrying a third more crude. Its end point, a refinery in the blue-collar city of Saint John, New Brunswick, operated by a reclusive Canadian billionaire family, would give Canada’s oil-sands crude supertanker access to the same Louisiana and Texas refineries Keystone was meant to supply. And: … if you’re a fed-up Canadian, like Prime...

So you’re the Canadian oil industry and you do what you think is a great thing by developing a mother lode of heavy crude beneath the forests and muskeg of northern Alberta. The plan is to send it clear to refineries on the U.S. Gulf Coast via a pipeline called Keystone XL. Just a few years back, America desperately wanted that oil. Then one day the politics get sticky. In Nebraska, farmers don’t want the pipeline running through their fields or over their water source. U.S. environmentalists invoke global warming in protesting the project. President Barack Obama keeps siding with...

The European Commission on Tuesday proposed scrapping a mandatory requirement to label tar sands oil as highly polluting after years of industry opposition. The new proposal abandons one obstacle to Canada shipping crude from tar sands to Europe and is likely to draw strong criticism from environmental campaigners and Green politicians. It is suggested in a revised draft law on how refiners report the carbon intensity of the fuel they supply. The debate about labelling tar sands, also known as oil sands, dates back to 2009 when EU member states approved legislation with the aim of cutting greenhouse gases from...