Stronger Canada-U.S. oil ties are a win-win

[FlamesAddiction]

There's probably an obvious reason but why wouldn't we build the refineries and then sell them the finished product? We should be trying to keep as many jobs here as possible.

[Slava]

^I don't think that anyone wants a refinery in their backyard.

[transplant99]

Originally Posted by Rutuu

Ok I'll make this too the point because I love ranting:

1. Fossil Fuels are a commodity...as long as the price it right it will be accessed. Funny thing is the people in the energy business understand this; even smart fellows on this board (Reggie/Transplant) don't seem too. Ex: I work in Australia after doing time in Canada, here the domestic market is $1/GJ for natural gas...what do we do? Book the reserves as fuel for a Natural Gas fired power plant, so now I get $15/kWatt...that's an extra 10%+ on my reserves and I look like a star. Moral is that we know lots about energy and how it works and how to make money off it.

2. This leads to my second point...Environmentalists seem to not know how economics work...some do...others that don't are just part of a bad debate. Energy companies hedge their bets, who do you think funds all of the quirky "new sources" and alternatives. Not all is lost, environmentalists have two huge tools at their disposal to stop Economics. A) Their wallets, quit buying it...Even at $100/bbl oil is cheap. B) Politicians...don't like the economics go to your local politician yourself or become one and lobby to make it more expensive...reason this doesn't happen...popular opinion doesn't sway that way. Also hidden third point C) Even if it is pricier we'll still make money either drilling for oil/natural gas still with new economics or we'll switch to producing alternatives.

3. People are lazy and good at simple math, so they buy whats available and easy...I mean transplant didn't even look up when the last refinery was built or grasp the concept that a pipeline goes under the ground where it can't be seen. A refinery is what makes Edmonton look like a sh*t hole when the lights come on, no one wants that in their back yard. Just to emphasize my above points politics blocks refineries AND economics do as well! Haha the profit on a refinery is like 2% on certain products.

4. That article is horrible...the only good thing it did was bring out a couple guys that know energy to laugh at some of the less informed posters on the issues. It's a pointless debate, I won't change your minds and you guys can't organize and change the world faster than I can switch teams if things are looking dire for Mr. Rutuu on this side of the fence.

Haha...oh one last twist of the knife; environmentalists your hate of CO2 and "carbon" just makes us more money. The government of Alberta paid for a CO2 pipeline for "reinjection", the company that was "environmentally friendly" now has an asset worth billions, not because of CO2 credits, but because they can sell the CO2 for a profit for anyone in Alberta that wants to perform a CO2 flood and increase their oil recovery factor to 50-60% from 20-30%.

I love money...it never lies...and is the fairest game out there...anyone of you could have looked up Denbury in the USA and seen it was a $2billion company and anyone of you could have organized and gotten your politicians to give you the money for the pipeline, but you didn't and you never will.

Now please quit complaining...we told you how to win, now do it if you really care.

No idea why this is directed at me...i was merely commenting on the "shot" that Nobles took at the sprawling of American cities and pointed out that Calgary is as guilty of it as anywhere else I have ever seen....and I am not even that much against sprawl either.

As for the refinery point...merely mentioning that the pipelines all seem to end up in the gulf coast (which I guess is where the only refineries are in the US, I had no idea) which is susceptible to hurricanes as we have seen in the last decade. When Ike (IIRC) hit in 08, this part of the USA had NO gas. None.

For over a week gas stations were out of product and it was all because the pipeline from the refinery into where ever the distribution point was, had been damaged by water/wind. It became perilously close to setting off another tragedy for the locals in the area when emergency vehicles were close to running out of fuel to put in their tanks. Nevermind that people actually had to stop going to work because there was no gas.

I have zero problem with the new pipeline or the use of fossil fuels until somethng viable can replace them.

[HOZ]

Originally Posted by transplant99

No idea why this is directed at me...

I felt he was on your side AND was just was adding. i.e. piling on....environmentalists suck.

[disco_inferno]

Canada should turn the tap off, build a bunch of refineries, and only sell the oil as a finished product.

We loose so much opportunity by selling raw crude, between the jobs, the capital investment, the markup on the product, its so stupid. As someone in the mining industry, I hope the government declares oil a 'strategic national resource' like they did with potash, and starts to regulate how much gets shipped south a little bit closer.

[burn_this_city]

Originally Posted by disco_inferno

Canada should turn the tap off, build a bunch of refineries, and only sell the oil as a finished product.

We loose so much opportunity by selling raw crude, between the jobs, the capital investment, the markup on the product, its so stupid. As someone in the mining industry, I hope the government declares oil a 'strategic national resource' like they did with potash, and starts to regulate how much gets shipped south a little bit closer.

Mining isnt Oil, we have neither the investment capital, or the labour to build multiple upgraders and refineries.

[FlamesAddiction]

Originally Posted by disco_inferno

Canada should turn the tap off, build a bunch of refineries, and only sell the oil as a finished product.

We loose so much opportunity by selling raw crude, between the jobs, the capital investment, the markup on the product, its so stupid. As someone in the mining industry, I hope the government declares oil a 'strategic national resource' like they did with potash, and starts to regulate how much gets shipped south a little bit closer.

This is the thing that gets me. Canada is still stuck in the mentality of being a colony. We supply raw materials for just about every industry to other countries, then they make the products and sell them back to us.

I know a lot of it has to do with other countries being able to produce things more cheaply, but the difference between Canada and the U.S. labour should not be that significant.

[disco_inferno]

Originally Posted by burn_this_city

Mining isnt Oil, we have neither the investment capital, or the labour to build multiple upgraders and refineries.

I understand that mining isn't the only supply of oil, but to say that it doesn't have a huge play in the market is ignorant. The jobs in Ft. Mac for people with less than a Grade 12 making $100,000 driving trucks around is evidence enough.

Develop the skilled labour, something the mining industry is missing, increase demand by lowering supply, and the people (even the Americans) who actually invest the money will do it here, becasue they don't care where they make it.

From Syncrude Website:

The process of turning oil sand into Syncrude Sweet Blend crude oil begins with mining the resource. Because the oil sand in Syncrude’s leases is not deeply buried, surface mining is the most viable method of recovery.

Since Great Canadian Oil Sands (now Suncor) started operation of its mine in 1967, bitumen has been extracted on a commercial scale from the Athabasca Oil Sands by surface mining. In the Athabasca sands there are very large amounts of bitumen covered by little overburden, making surface mining the most efficient method of extracting it. The overburden consists of water-laden muskeg (peat bog) over top of clay and barren sand. The oil sands themselves are typically 40 to 60 metres deep, sitting on top of flat limestone rock. Originally, the sands were mined with draglines and bucket-wheel excavators and moved to the processing plants by conveyor belts. In recent years companies such as Syncrude and Suncor have switched to much cheaper shovel-and-truck operations using the biggest power shovels (100 or more tons)[36] and dump trucks (400 tons) in the world. This has held production costs to around $27 per barrel of synthetic crude oil despite rising energy and labour costs.[37]

-wikipedia

[mykalberta]

I think Canada should put no Political muscle towards this pipeline and instead invest all capital into the Gateway line.

The US is a struggling economy which will only get worse, the sooner we divest from the the greenback the better. If we only sell to one currency then we are handcuffed if currency markets change.

Also the increasing Eurofication of the US both politcally and economically with cripple Canada if they are our sole customer in the long run. The US track record vis a vi the oilsands isnt a hopeful one.

If they would rather fight wars in the Middle Easy and Africa for oil than buy oil from a neighbor and friend so be it.

[Pinner]

Pipelining heavy oil through the mountains and countless watersheds is not going to be an easy sell. Oil tankers in the coastal waters... good luck with that.

[Slava]

^ well there are already oil tankers on the east coast, and environmentalists can't be in favour of having tankers on the east/gulf coast and somehow think that the west coast is a different case?

[Tinordi]

Your argument is that because we're doing something destructive elsewhere we should do it here too?

[burn_this_city]

Originally Posted by disco_inferno

I understand that mining isn't the only supply of oil, but to say that it doesn't have a huge play in the market is ignorant. The jobs in Ft. Mac for people with less than a Grade 12 making $100,000 driving trucks around is evidence enough.

Develop the skilled labour, something the mining industry is missing, increase demand by lowering supply, and the people (even the Americans) who actually invest the money will do it here, becasue they don't care where they make it.

From Syncrude Website:
Since Great Canadian Oil Sands (now Suncor) started operation of its mine in 1967, bitumen has been extracted on a commercial scale from the Athabasca Oil Sands by surface mining. In the Athabasca sands there are very large amounts of bitumen covered by little overburden, making surface mining the most efficient method of extracting it. The overburden consists of water-laden muskeg (peat bog) over top of clay and barren sand. The oil sands themselves are typically 40 to 60 metres deep, sitting on top of flat limestone rock. Originally, the sands were mined with draglines and bucket-wheel excavators and moved to the processing plants by conveyor belts. In recent years companies such as Syncrude and Suncor have switched to much cheaper shovel-and-truck operations using the biggest power shovels (100 or more tons)[36] and dump trucks (400 tons) in the world. This has held production costs to around $27 per barrel of synthetic crude oil despite rising energy and labour costs.[37]

-wikipedia

You're missing the point, you originally said we should be shipping refined products. My point is we don't have the dollars or man power to build the upgraders and refineries. Potash is simple, mine it and throw it in rail cars, I don't hear people saying we should be building fertilizer plants ect in Canada and shipping the finished products overseas.

[Slava]

Originally Posted by Tinordi

Your argument is that because we're doing something destructive elsewhere we should do it here too?

My argument is that you can't support it somewhere else and be against it here.

[Cowboy89]

Originally Posted by burn_this_city

You're missing the point, you originally said we should be shipping refined products. My point is we don't have the dollars or man power to build the upgraders and refineries. Potash is simple, mine it and throw it in rail cars, I don't hear people saying we should be building fertilizer plants ect in Canada and shipping the finished products overseas.

A defining point that gets glossed over by Albertans in the "Refine it Here" crowd is the lack of perspective on how out of whack Alberta incomes are compared to the rest of the world. Bottom line if you work in energy in Alberta you make double what you're worth in any other jurisdiction in North America for the work that you do, because our labor force is extremely small relative to the jobs we have.

Building a refinery in Edmonton is going to require a crapload of people making over $150,000 a year whereas the same refinery in Texas would cost half to build from a labor perspective. Our labor productivity is abismal here in Canada. Workers have been conditioned to constantly jump ship for more money due to the booms and busts of the past. In the patch we already have a bunch of skilled trades walking off the job because the guy across the street is willing to pay 20% more.

[burn_this_city]

Originally Posted by Cowboy89

A defining point that gets glossed over by Albertans in the "Refine it Here" crowd is the lack of perspective on how out of whack Alberta incomes are compared to the rest of the world. Bottom line if you work in energy in Alberta you make double what you're worth in any other jurisdiction in North America for the work that you do, because our labor force is extremely small relative to the jobs we have.

Building a refinery in Edmonton is going to require a crapload of people making over $150,000 a year whereas the same refinery in Texas would cost half to build from a labor perspective. Our labor productivity is abismal here in Canada. Workers have been conditioned to constantly jump ship for more money due to the booms and busts of the past. In the patch we already have a bunch of skilled trades walking off the job because the guy across the street is willing to pay 20% more.

To add to that, our construction productivity due to weather and other factors is extremely poor compared to texas (gulf coast). We literally add 40-80% more hours depending on the trade to account for the difference in productivity.

[mykalberta]

Originally Posted by Pinner

Pipelining heavy oil through the mountains and countless watersheds is not going to be an easy sell. Oil tankers in the coastal waters... good luck with that.

I am not saying its easy, have the terminal X KM off shore. It would be cheaper politically and economically in the long run. And all the economic benefit stays north of the 49th.

You can even play on Canadians ever popular anti-Americanism for the reason to build it.

[MelBridgeman]

The Americans can just use all that Oil they got from invading Iraq. They don't need ours

[Reaper]

Originally Posted by fotze

Don't forget the regulatory quagmire here.

I theorize that the ERCB created all hoops throughout history just so we could jump through them.