Official (Alberta) Oil Discussion Thread

[burn_this_city]

Originally Posted by the_only_turek_fan

This decision has pretty much put me in a state of depression the last week.

It pretty much guarantees that major expansions at places like Christina Lake and Foster Creek are dead.

I am not going to make the case for Alberta oil here. There are hundreds if not thousands of posts on the form making the case.

It’s just a sad day. I just feel helpless and sad.

Are we talking about additional phases or a new CPF somewhere? I doubt this really changes the economics on the continuous phased expansion at CL and FC, CVE is making good netbacks right now at $50 WTI.

Do I think someone is going to build a new greenfield CPF, maybe, but with IOL cancelling Aspen despite being a counter cycle builder it might not make sense for anyone going forward.

[Red Slinger]

Originally Posted by burn_this_city

Are we talking about additional phases or a new CPF somewhere? I doubt this really changes the economics on the continuous phased expansion at CL and FC, CVE is making good netbacks right now at $50 WTI.

Do I think someone is going to build a new greenfield CPF, maybe, but with IOL cancelling Aspen despite being a counter cycle builder it might not make sense for anyone going forward.

Yeah, the economics for CL, in particular are quite strong.

[the_only_turek_fan]

Originally Posted by burn_this_city

Are we talking about additional phases or a new CPF somewhere? I doubt this really changes the economics on the continuous phased expansion at CL and FC, CVE is making good netbacks right now at $50 WTI.

Do I think someone is going to build a new greenfield CPF, maybe, but with IOL cancelling Aspen despite being a counter cycle builder it might not make sense for anyone going forward.

I am talking about new CPFs in the future.

I wonder if this kills Meadow Creek at Suncor?

[burn_this_city]

Originally Posted by the_only_turek_fan

I am talking about new CPFs in the future.

I wonder if this kills Meadow Creek at Suncor?

Last I heard from my SU pals, Meadow Creek was on the rocks. I'm curious how good the reservoir is there, considering its quite close to Long Lake which turned out to be a massive dud.

I think anything with an SOR above 3 is probably no bueno from economics and GHG intensity perspectives.

[FlameOn]

Well if it's any consolation for the Keystone pipeline cancellation, Biden's gonna be hitting the US oil industry much harder over his presidency. Equal measures for a green environmental policy.

https://www.reuters.com/article/us-u...KBN29P127?il=0

[Weitz]

Originally Posted by FlameOn

Well if it's any consolation for the Keystone pipeline cancellation, Biden's gonna be hitting the US oil industry much harder over his presidency. Equal measures for a green environmental policy.

https://www.reuters.com/article/us-u...KBN29P127?il=0

Democrats going to make it easy for the Republicans in 4 years I see.

While slightly in jest, I figured he would take the time to evaluate things prior to going full bore opposite Trump.

[RichieRich]

Originally Posted by burn_this_city

I'm not too broken up about KXL. Truth be told I've questioned it's necessity for the last couple of years. We have pipe going in the ground for both Line 3 and TMX, is there really a business case for another 800kbpd?

The age of major projects is probably behind us for good, I'm skeptical we're going to add more production where the additional takeaway is needed.

Industry is looking hard at reducing diluent requirements, that's where I see our incremental capacity increases happening going forward. We could add 1/3 more production if we eliminated diluent blending.

Diluent is used to make the heavy oil more mobile within the pipelines, so it flows easier and has lower pressure losses. Without it the stuff would either not flow or require ridiculous pumps and many of them. The diluent has an extremely high recovery rate too. Thus, without at-source processing, the diluent is required to enable the heavy oils to reach downstream processing.


Also the big heavy-oil-specific plants down stateside are designed specifically for heavy oil. Since much of the Mexican and Venezuelan production has dried up, they still want to run at or near capacity. Therefore there is increased demand for Canadian oils.


Building these big pipelines is rarely a case of "build and they will come". The big economic analysis are very extensive, however they require a minimum commitment level prior to it even being feasible to start. So they get their contracts aligned a few years ahead based on this, and then look to incrementally fill the remainder of the pipeline with higher netback production. You can look online yourself for statements to this effect for KXL, TMX, and KAPS.

[CaptainCrunch]

Originally Posted by FlameOn

Well if it's any consolation for the Keystone pipeline cancellation, Biden's gonna be hitting the US oil industry much harder over his presidency. Equal measures for a green environmental policy.

https://www.reuters.com/article/us-u...KBN29P127?il=0

Betting that this goes by the way side, there's too much money in American Oil and they're going to fight it. And just because you're signed to the Paris accords doesn't mean that you have to live up to it. Look at Canada. Its the equivalent to saying, hey I went to Paris and got this Paris Accords T-Shirt, that makes me environmentally sensitive.


If Biden is anything like his former boss, he'll mouth some platitudes, make some policies that don't effect American industry and keep pumping.

[burn_this_city]

Originally Posted by RichieRich

Diluent is used to make the heavy oil more mobile within the pipelines, so it flows easier and has lower pressure losses. Without it the stuff would either not flow or require ridiculous pumps and many of them. The diluent has an extremely high recovery rate too. Thus, without at-source processing, the diluent is required to enable the heavy oils to reach downstream processing.


Also the big heavy-oil-specific plants down stateside are designed specifically for heavy oil. Since much of the Mexican and Venezuelan production has dried up, they still want to run at or near capacity. Therefore there is increased demand for Canadian oils.


Building these big pipelines is rarely a case of "build and they will come". The big economic analysis are very extensive, however they require a minimum commitment level prior to it even being feasible to start. So they get their contracts aligned a few years ahead based on this, and then look to incrementally fill the remainder of the pipeline with higher netback production. You can look online yourself for statements to this effect for KXL, TMX, and KAPS.

No one wants to handle the condensate, it's a necessary evil but neither the producers nor the refiners want it. There's a ton to gain by reducing the requirements both economically and environmentally. We push a 1mbdp+ of condensate around across North America simply to move our barrels. There is a massive incentive to remove as much of it as possible.

[RichieRich]

Originally Posted by burn_this_city

No one wants to handle the condensate, it's a necessary evil but neither the producers nor the refiners want it. There's a ton to gain by reducing the requirements both economically and environmentally. We push a 1mbdp+ of condensate around across North America simply to move our barrels. There is a massive incentive to remove as much of it as possible.

I agree that if it were reasonably possible to reduce the carrier fluid and thereby increase revenue-generating production then for sure. I'm quite certain many folks are working on this already.
That said, there are some midstream companies who also generate substantial revenue from the sale of, and management of, this diluent.

[the_only_turek_fan]

Originally Posted by CaptainCrunch

Betting that this goes by the way side, there's too much money in American Oil and they're going to fight it. And just because you're signed to the Paris accords doesn't mean that you have to live up to it. Look at Canada. Its the equivalent to saying, hey I went to Paris and got this Paris Accords T-Shirt, that makes me environmentally sensitive.


If Biden is anything like his former boss, he'll mouth some platitudes, make some policies that don't effect American industry and keep pumping.

This.

And while he does that our PM is going to shut things down here.

[InglewoodFan]

Originally Posted by RichieRich

I agree that if it were reasonably possible to reduce the carrier fluid and thereby increase revenue-generating production then for sure. I'm quite certain many folks are working on this already.
That said, there are some midstream companies who also generate substantial revenue from the sale of, and management of, this diluent.

I don't know for sure, but my understanding is Fractal is still going ahead with their JetShear commercial plant. They have a patented mechanical shear viscosity reduction process that will reduce diluent barrels. And I know of one or two other technologies that are moving from pilot to demonstration stage that will do the same. To me these are kind of a middle ground between dilbit and upgrade it all into synthetic crude.

[Flamenspiel]

Generally speaking Canada has to become more self sufficient, we rely too much on the goodwill of our neighbours. Unfortunately it’s not really there anymore and I don’t see “America First” going away soon, they will just be more quiet about it.

The interprovincial hostility and the passive attitude is hurting us on the Covid-19 virus issue as well, the prime minister and his minions refuse to take responsibility.

[CaptainCrunch]

TC has halted construction, I would expect some massive layoffs in Alberta over the next few weeks.

[Ozy_Flame]

Originally Posted by CaptainCrunch

TC has halted construction, I would expect some massive layoffs in Alberta over the next few weeks.

Already started to some extent this week, although may not be directly related to the cancellation of KXL.

[Locke]

Originally Posted by the_only_turek_fan

This decision has pretty much put me in a state of depression the last week.

It pretty much guarantees that major expansions at places like Christina Lake and Foster Creek are dead.

I am not going to make the case for Alberta oil here. There are hundreds if not thousands of posts on the form making the case.

It’s just a sad day. I just feel helpless and sad.

You know. I've been thinking about this a lot lately because I echo your sentiments.

We as a society...maybe collectively we're just too stupid?

It seems like the rest of Canada has this penchant for wanting to pat Alberta on the head as though "There, there now Alberta, the Grown-Ups are here now...."

WTF? We have one of the youngest, yet highly educated and experienced populations around. We've operated our Province with everyone trying to shut us down and we're still one of this Country's Economic Drivers and even despite our low population we're punching way above our weight class.

I'm getting sick of this ####.

[Bunk]

I have such complicated feelings about all this.

On one hand, while the world requires Oil, having market access for our oil is important. And I am disappointed that it will have some negative economic impact on our region.

On the other hand, the world is going to transition more away from fossil fuels, whether we like it or not, because of climate impacts and other emerging energy sources that are becoming more economic. The world is always going to need more and more energy, and nothing makes me more anxious than our companies seemingly unwilling or unable to participate and lead in business and opportunity related to energy sources other than oil and gas.

[undercoverbrother]

Originally Posted by Locke

You know. I've been thinking about this a lot lately because I echo your sentiments.

We as a society...maybe collectively we're just too stupid?

It seems like the rest of Canada has this penchant for wanting to pat Alberta on the head as though "There, there now Alberta, the Grown-Ups are here now...."

WTF? We have one of the youngest, yet highly educated and experienced populations around. We've operated our Province with everyone trying to shut us down and we're still one of this Country's Economic Drivers and even despite our low population we're punching way above our weight class.

I'm getting sick of this ####.

There there big fella

[ah123]

Originally Posted by Bunk

I have such complicated feelings about all this.



On one hand, while the world requires Oil, having market access for our oil is important. And I am disappointed that it will have some negative economic impact on our region.



On the other hand, the world is going to transition more away from fossil fuels, whether we like it or not, because of climate impacts and other emerging energy sources that are becoming more economic. The world is always going to need more and more energy, and nothing makes me more anxious than our companies seemingly unwilling or unable to participate and lead in business and opportunity related to energy sources other than oil and gas.

Completely agree with your statement. What I am even more disappointed with, is that we don’t have any visionaries at the provincial government level who can put policies/ideas in place to take Alberta ahead of the pack.

[Manhattanboy]

Originally Posted by Locke

You know. I've been thinking about this a lot lately because I echo your sentiments.

We as a society...maybe collectively we're just too stupid?

It seems like the rest of Canada has this penchant for wanting to pat Alberta on the head as though "There, there now Alberta, the Grown-Ups are here now...."

WTF? We have one of the youngest, yet highly educated and experienced populations around. We've operated our Province with everyone trying to shut us down and we're still one of this Country's Economic Drivers and even despite our low population we're punching way above our weight class.

I'm getting sick of this ####.

And don't forget innovation.

The Alberta oil and gas industry's implementation of new technologies to reduce emissions and otherwise promote responsible resource development is world class.