Official (Alberta) Oil Discussion Thread

[Azure]

The cost is double right now because it hasn't been scaled. Imagine if we got China on board to adopt and develop our clean coal technology in their plants in exchange for some of the costly materials needed to build it here. We know they have an emissions problem, and we know they badly want to invest here.

Sounds like another idea that needs approval and go ahead right now.

[para transit fellow]

Wait... We actually have clean coal technology in use?

As I understand things. The Saskatchewan pilot plant sequester s carbon dioxide at a cost equal to the energy production.... So clean coal electricity is double the rate of older coal technology.

[accord1999]

Originally Posted by para transit fellow

It appears that in North America, coal is a losing proposition. If we keep coal in Alberta, are we going to have to subsidize it in 5years?

I don't think so; from what I can tell based on other markets, subsidies would only be necessary in a scenario where a lot of wind and solar generation get built (at least 5 or more GW) and they get priority on the grid so that coal can't sell electricity when wind is blowing and the sun is shining. But because they're not reliable, the coal has to be kept on standby to avoid a blackout when wind or solar suddenly drop out, such as what recently happened to South Australia. That standby part would have to be subsidized.

[IliketoPuck]

Here's an interesting read on the effectiveness of carbon taxes, and how Albertans (and Canadians) are bearing a disproportionate share of global costs.

http://energynow.ca/problem-carbon-t...er-management/

[Tinordi]

Follow up article on the statement from the CFO of Shell:

Oil demand in the developed OECD world has already peaked and is 9 per cent below the level reached in 2005. In Europe, oil demand is down 17 per cent over the same period.

After a surge in Chinese demand over the past decade – particularly during the years of rapid growth and industrialisation – it has become obvious that demand there has flattened off. Some of the oil imported over the last two years has been re-exported, and more has gone into strategic stock piles – a prudent measure when prices are low but not something that can continue. Demand is still growing in India and Turkey but the volumes involved are relatively small.

All the indications are that in the developed world demand has further to fall. Oil use is now heavily concentrated in the transport sector. Electric vehicles have only a fractional share of the market but the numbers are growing month by month. Technology is improving, reducing costs and expanding sales. Tesla gets most of the publicity but those wanting to understand the impact of EVs on the oil market should look at China where 188,000 new electric and hybrid vehicles were sold in 2015. This year that number is expected to more than double to around 450,000.

The technology improvements will continue but I believe the next big step will be a regulatory drive to make EVs the default choice for motorists in cities. Measures such as lower vehicle taxation, lower congestion charges and easier parking are being used as gentle incentives for behaviour change. But I can see cities in countries such as Germany or China going further and mandating their use – with the shift implemented over a relatively few years. In both countries local production will spur the adoption of new public policies. I will write more about what is happening in Germany in a future post.

Gradually, or perhaps more quickly, EVs will eat into the market currently reserved for petrol.

The conventional wisdom in some of the other oil majors is that this effect will be swamped by the growth in car use in the emerging market economies of Asia and Latin America. But that misses the phenomenon of leapfrogging. As EVs proliferate, their costs will fall until they are the natural purchase everywhere. Urban air quality is a big social issue in most developing countries, and once a viable alternative to petrol is available the shift could come quickly. Perhaps the internal combustion engine can match the falling costs and reduced pollution but it would be foolish to take that for granted. In addition, the new EV industry centred in places such as Germany and China will have every incentive to compete internationally.

https://www.ft.com/content/6c7d9e1f-...9-12dde9774140

[cam_wmh]

Originally Posted by Tinordi

Follow up article on the statement from the CFO of Shell:
https://www.ft.com/content/6c7d9e1f-...9-12dde9774140

Bollocks, I don't have a subscription & can't give this a read.

Is this posted anywhere else?

[polak]

So what impact is Trumps looming win going to have on OPEC talks and Oil Prices?

[Bunk]

Originally Posted by polak

So what impact is Trumps looming win going to have on OPEC talks and Oil Prices?

No one knows what happens now. I'm guessing extreme volatility, global instability.

[snootchiebootchies]

But it should help the price Alberta gets for its oil as Keystone XL is now back in play. Premier Notley wanted to get Alberta's oil to tidewater but not sure she wanted it done this way.

[puckedoff]

Yeah but have we earned enough Social License to deal with the Donald?

[Locke]

Originally Posted by puckedoff

Yeah but have we earned enough Social License to deal with the Donald?

The Donald doesnt care about Social Licenses!

The first time he meets Justin he'll probably just kick him, steal his lunch money and take off with his nannies.

[CorsiHockeyLeague]

Originally Posted by polak

So what impact is Trumps looming win going to have on OPEC talks and Oil Prices?

Depends if he actually follows through and turns the middle east into a glass parking lot.

People saying Keystone is back in play should probably read this.

http://www.politico.com/story/2016/0...-energy-224204

[burn_this_city]

The congressional republicans will probably talk him down from that position. Our industry is so intertwined with the US oil and gas industry that Exxon and others would be against his rent idea.

[belsarius]

Originally Posted by snootchiebootchies

But it should help the price Alberta gets for its oil as Keystone XL is now back in play. Premier Notley wanted to get Alberta's oil to tidewater but not sure she wanted it done this way.

This confuses me. All of the rhetoric I hear about Energy East or Trans-mountain is getting oil to tidewater to sell to overseas buyers, not the US, to get a better price. I get how the shorter route would save a little on transportation costs, but how does simply pushing more oil to US refineries get a better price? It will reduce the load from rail transport but I really don't see the better price..

[Regorium]

Originally Posted by CorsiHockeyLeague

Depends if he actually follows through and turns the middle east into a glass parking lot.

People saying Keystone is back in play should probably read this.

http://www.politico.com/story/2016/0...-energy-224204

At this point I can't separate bluster from reality.

I think it's back in play though, especially with the supermajority.

Not like this though...Not like this.

[accord1999]

Originally Posted by belsarius

This confuses me. All of the rhetoric I hear about Energy East or Trans-mountain is getting oil to tidewater to sell to overseas buyers, not the US, to get a better price. I get how the shorter route would save a little on transportation costs, but how does simply pushing more oil to US refineries get a better price? It will reduce the load from rail transport but I really don't see the better price..

It's really to get it to new buyers who could bid up prices, whether it be Asia with Trans-Mountain, east coast refineries with Energy East or gulf coast refineries with Keystone XL.

[Regorium]

Originally Posted by belsarius

This confuses me. All of the rhetoric I hear about Energy East or Trans-mountain is getting oil to tidewater to sell to overseas buyers, not the US, to get a better price. I get how the shorter route would save a little on transportation costs, but how does simply pushing more oil to US refineries get a better price? It will reduce the load from rail transport but I really don't see the better price..

You're correct. KXL is purely capacity.

The original Keystone has been running near capacity for half a decade. This includes obtaining a license to run higher than normal pressure (in exchange for more stringent inspections and regulator oversight).

However, running a pipeline so aggressively, in a way that it's not designed for (due to the original design including KXL) reduces the life of the pipeline. By adding KXL, it completes the original design, which takes a lot of stress off of the existing section, as well as improving capacity.

EE and TM and NG are the ones that are supposed to get us to tidewater and diversify our markets. The combination of both (KXL + these tidewater pipelines), will get us more capacity to sell to the states at higher prices.

[polak]

Whats with all the hype about the US being a net exporter of Oil then? If Trump is as protectionist as everyone is saying, shouldn't we expect tariffs on Oil so that the US uses its own product?

[belsarius]

Originally Posted by accord1999

It's really to get it to new buyers who could bid up prices, whether it be Asia with Trans-Mountain, east coast refineries with Energy East or gulf coast refineries with Keystone XL.

That doesn't make sense to me. First off there are no east cost refineries that could even process bitumen that I know of, the Irving refinery in St John needs upgrades in order to process it so really East is just about exporting, which makes sense to open to more bidding/buyers.

And how does increasing supply drive up bidding prices on the Gulf? I would assume that all of the buyers would already be bidding on it that wanted it and supplying more simply reduces the scarcity of the resource which normally would drive prices down. The only advantage I can see is increased volumes, with only marginally increased pricing from having a shorter, larger pipeline.

Trans mountain seems like a much better idea for open market pricing and reduced transportation costs.

[belsarius]

Originally Posted by Regorium

You're correct. KXL is purely capacity.

The original Keystone has been running near capacity for half a decade. This includes obtaining a license to run higher than normal pressure (in exchange for more stringent inspections and regulator oversight).

However, running a pipeline so aggressively, in a way that it's not designed for (due to the original design including KXL) reduces the life of the pipeline. By adding KXL, it completes the original design, which takes a lot of stress off of the existing section, as well as improving capacity.

EE and TM and NG are the ones that are supposed to get us to tidewater and diversify our markets. The combination of both (KXL + these tidewater pipelines), will get us more capacity to sell to the states at higher prices.

Yeah I can see how a combination would work that way. In isolation KXL wouldn't increase prices, but with the threat of other buyers in Asia with TM would pressure gulf refineries. Thanks!