Official (Alberta) Oil Discussion Thread

[cal_guy]

Originally Posted by Tron_fdc

Yikes, I just googled it and found this

https://financialpost.com/commoditie...lved-in-canada

Somewhere in the range of 50-80 million tonnes of LNG egress per year has been mothballed over the last decade. I'm sure there's a lot of overlap in capacities with the 3 or 4 different projects listed, but that's a LOT of money. Asian LNG is around 6.8 $/mmBTU (lhv) or 318 $/ton USD. US LNG is around 1/3 that price if I am reading things correctly.

That's an outrageous amount of revenue and missed royalties, even taken on the low end of the scale.

Analysis from the Canadian Association of Petroleum Producers put the combined costs of pipelining B.C. gas from the Montney and Horn River formations to the coast, liquefaction, and shipping to Asia at between $8 and $10 per GJ of gas shipped, and that’s before you’ve paid anything for the gas.

https://www.macleans.ca/economy/econ...n-b-c-s-coast/

The thing with LNG is that it really expensive. Obviously that's not an issue when gas prices are high like they are right now, but don't forget gas prices were a record low last year.

[Brewmaster]

At least the LNG Canada project is getting built which will provide a major outlet for Western Canadian gas. The first phase pulls about 2 bcf/d out of the Montney by 2025 and it's likely they will expand it to a second phase that will bring that up to about 5 bcf/d. For reference, production out of Western Canada is something like 15 bcf/d, so it's a big increase.
Unfortunately the pipeline that is being built for the project (Coastal GasLink) has had multiple issues with indigenous protests and construction costs. While it will certainly get finished, it sets a precedent that will likely scare away any future pipeline proposals across BC, so unlikely that we see other LNG projects getting positive FIDs.

[Red Slinger]

Originally Posted by Tron_fdc

Wasn't Petronas going to build some giant LNG terminal in Prince Rupert or something?

I don't recall exactly what happened, only that I knew someone that was offered a job on their legal team and they walked when the project was shelved. That was over 10 years ago so I might not be remembering correctly.

It was going to be a massive project. There were some legitimate environmental concerns regarding sea grass (which acts as a fish hatchery) and the impact of the tankers on the local marine wildlife. The other big factor was one indigenous family that was violently opposing the project, going so far as to put a temporary building on an inhabitable rock on the jobsite to claim as their ancestral home and occasionally attacking the marine geotech surveyors boats with grappling hooks. When the Canadian government continued to be wishy-washy about the project it seems like Petronas decided it wasn't worth the trouble.

[bizaro86]

Originally Posted by Red Slinger

When the Canadian government continued to be wishy-washy about the project it seems like Petronas decided it wasn't worth the trouble.

Hard to blame them for that. Their shareholders probably prefer they not dump billions into trying to get approval that never comes, which based in the recent history of energy projects in Canada....

[Fighting Banana Slug]

I note that Petronas joined the LNG Canada consortium after the failed Prince Rupert project. It was likely inevitable that some of the projects wouldn't achieve lift-off, but for all of them, other than LNG Canada, to grind to a halt is embarrassing.

[PostandIn]

Dow bullish on Alberta with a major new investment in a net-zero carbon emission ethylene complex. First complex of its kind in the world.



https://www.prnewswire.com/news-rele...301393405.html



https://www.cnbc.com/video/2021/10/0...term=dow%20ceo

[burn_this_city]

Originally Posted by PostandIn

Dow bullish on Alberta with a major new investment in a net-zero carbon emission ethylene complex. First complex of its kind in the world.



https://www.prnewswire.com/news-rele...301393405.html



https://www.cnbc.com/video/2021/10/0...term=dow%20ceo

This is where the next 30 years of work comes from. Having these early projects happening in Alberta is extremely bullish for our economy. If we can build out the CCS and Hydrogen expertise here there's no reason the downtown can't fill up again.

[SeeGeeWhy]

ATCO is planning on putting 20% hydrogen into their sales network short term and wants to get to 100% long term.

[the_only_turek_fan]

Originally Posted by burn_this_city

This is where the next 30 years of work comes from. Having these early projects happening in Alberta is extremely bullish for our economy. If we can build out the CCS and Hydrogen expertise here there's no reason the downtown can't fill up again.

My only concern is the world ditching blue hydrogen for green hydrogen.

https://www.google.ca/amp/s/www.cbc.ca/amp/1.5951584

[Brewmaster]

WTI above $80/bbl and rising. NYMEX natural gas at $5.50/MMBtu heading into winter. WCS differential hovering around $12/bbl with Line 3 just brought into service. Things haven't looked this good in years for the producers, and likely the best ever from a profitability standpoint.

The days of oil sands mega projects may be gone but the money rolling in is starting to feel like boom times again. When will we start to see this impact wages, real estate, and ancillary business in the city?

[OldDutch]

Originally Posted by the_only_turek_fan

My only concern is the world ditching blue hydrogen for green hydrogen.

https://www.google.ca/amp/s/www.cbc.ca/amp/1.5951584

Our current energy crisis is a warning to listening to zealots like David Suzuki over pragmatism.

Green Hydrogen is great but impractical. How does a company make money when their inputs rely on the wind blowing and sun shining all the time?

I see Blue as a viable way forward to address climate and maintain the economy.

Not saying I don’t share your worry when the Trudeau’s of the world are maintaining power. CERB for everyone!

[the_only_turek_fan]

Originally Posted by OldDutch

Our current energy crisis is a warning to listening to zealots like David Suzuki over pragmatism.

Green Hydrogen is great but impractical. How does a company make money when their inputs rely on the wind blowing and sun shining all the time?

I see Blue as a viable way forward to address climate and maintain the economy.

Not saying I don’t share your worry when the Trudeau’s of the world are maintaining power. CERB for everyone!

Dude, I totally agree with you.

The world has gone crazy though.

[Bunk]

Originally Posted by Brewmaster

WTI above $80/bbl and rising. NYMEX natural gas at $5.50/MMBtu heading into winter. WCS differential hovering around $12/bbl with Line 3 just brought into service. Things haven't looked this good in years for the producers, and likely the best ever from a profitability standpoint.

The days of oil sands mega projects may be gone but the money rolling in is starting to feel like boom times again. When will we start to see this impact wages, real estate, and ancillary business in the city?

I know the boom times don't mean necessarily all the jobs coming back anymore. But are companies hiring some people? That's when you'll see the spin off effects locally, not just windfall profits.

[Lubicon]

Originally Posted by Bunk

I know the boom times don't mean necessarily all the jobs coming back anymore. But are companies hiring some people? That's when you'll see the spin off effects locally, not just windfall profits.

We’re hiring more field staff to take on the increased volume of work but our company is holding the line on office hiring as much as possible. Which sucks because our workload is out of control now. Big issue from our end is it’s a struggle to raise prices. More work doesn’t equate to higher profit, therefore a reluctance to hire.

[edslunch]

Originally Posted by Brewmaster

WTI above $80/bbl and rising. NYMEX natural gas at $5.50/MMBtu heading into winter. WCS differential hovering around $12/bbl with Line 3 just brought into service. Things haven't looked this good in years for the producers, and likely the best ever from a profitability standpoint.

The days of oil sands mega projects may be gone but the money rolling in is starting to feel like boom times again. When will we start to see this impact wages, real estate, and ancillary business in the city?

As companies open the purse strings for maintenance and replacement projects I expect we will see a good recovery in overall employment but until/unless there is competition for workers I wouldn't expect higher wages. Without the mega-projects will we see that?

On the plus side this looks like a healthy, mature, and profitable industry for the next while.

[Weitz]

Originally Posted by Bunk

I know the boom times don't mean necessarily all the jobs coming back anymore. But are companies hiring some people? That's when you'll see the spin off effects locally, not just windfall profits.

There won’t be a large rehire in Calgary when it comes to O&G. Companies have realized they were overstaffed (some hilariously so) and will continue to operate at a lower head count. You will mostly see postings to fill jobs where someone has left to another company. Or performance layoff. Or retirement. Etc.

[indes]

I'm just assuming that most of the profits will lead to expansion in more energy friendly parts of the world.

There will be an uptick in maintenance and small projects but any real money will continue to be invested outside of Canada for the most part.

On top of that the company I'm working for is trying to outsource as much work as possible, from planning to inspection. The pandemic definitely sped things up in that regard, if you can WFH, it means someone else can do it from India.

[chedder]

Yup. Have a friend that owns a company on the service side and he said Texas is going bonkers. He's seriously contemplating moving down for a few years.

[Brewmaster]

Originally Posted by indes

I'm just assuming that most of the profits will lead to expansion in more energy friendly parts of the world.

There will be an uptick in maintenance and small projects but any real money will continue to be invested outside of Canada for the most part.

On top of that the company I'm working for is trying to outsource as much work as possible, from planning to inspection. The pandemic definitely sped things up in that regard, if you can WFH, it means someone else can do it from India.

I'm not so sure this will be the case. Almost all of the major producers here are Canadian companies with little or no global operations outside of the country. Their strategies seem to be to modestly grow production on existing projects while increasing shareholder returns and reducing emissions. The opportunities to do that are in Canada with the TMX pipeline expected to come on in the next couple years and carbon capture and storage projects gaining support.

[SeeGeeWhy]

More projects will be tipped into post payout, that’ll be good to fund up next years More bestest summer ever!