Facility will turn natural gas to diesel fuel

By Toban Dyck - Tuesday, January 8, 2013 at 12:48 PM - 0 Comments

Sasol, a fuel company based in South Africa, recently announced plans to invest up to $14 billion in a facility in Louisiana that will turn natural gas to diesel fuel, a bold—not to mention incredibly costly—project that represents one of the biggest foreign investments ever in the U.S. It’s not the only company eyeing the growing North American gas market. Shell is working with partner companies to develop bigger engines able to run on liquefied natural gas. In Canada, Calgary-based Encana Corp. recently closed a $2.2-billion deal with PetroChina to develop natural gas projects.

Increasingly, energy companies are betting natural gas will be North America’s future fuel as plentiful shale gas reserves are uncovered. Canada’s natural gas sector is on course to rival the oil sands, attracting up to $386 billion in investment, adding nearly $1 trillion to the economy and supporting about 131,000 jobs annually over the next 24 years, according to a Conference Board of Canada report. (The oil patch is expected to generate $364 billion in investments.) One U.S. estimate said shale gas development in the U.S. would create 870,000 jobs by 2015. Analysts say the one big threat to the industry now is too much of a good thing: a glut of gas pushing down prices.

Resource curses, West and East

By Colby Cosh - Thursday, March 15, 2012 at 6:29 AM - 0 Comments

Ex-Colleague Coyne has an excellent column on the emerging political split between the resource-extracting parts of the country and the sentimental nationalists who think every drop of bitumen and chip of timber sent abroad makes baby Jesus cry. I noticed one snippet, though, which goes to show how even the most trend-aware and detail-oriented columnist (that’s what he is!) can be held prisoner by persistent images of the past: Continue…

Korean company interested in buying Shell’s natural gas shares

By macleans.ca - Tuesday, July 19, 2011 at 12:42 PM - 0 Comments

Korea’s government-owned natural gas company—Korea Gas Corp.—may buy out Royal Dutch Shell PLC’s stake in the Mackenzie Valley pipeline, the CBC reports. A spokesperson for Shell’s Canadian division told press the company is selling its interest in the Mackenzie pipeline, which transports gas from the Northwest Territories into Alberta. Korea Gas Corp. has shown great interest in the gas possibilities on Canada’s West Coast recently, hoping to liquefy and export its shares by tanker. Korea Gas Corp. is the largest importer of liquefied natural gas (LNG) worldwide.

CBC News

Where did all the oil go?

By Josh Dehaas - Thursday, December 16, 2010 at 8:20 AM - 1 Comment

Getty Images

The National Petroleum Reserve in Alaska, a chunk of the state about twice the size of Nova Scotia, has less than one-tenth of the oil than it was previously thought to have. The NPRA, created by president Warren Harding in 1923, was thought to contain 10.6 billion barrels of liquid gold when it was last studied in 2002. However, recent surveys with new 3-D technology revealed that the deposit is more like 896 million barrels, says the U.S. Geological Survey (USGS). (Estimates of natural gas deposits in the NPRA are also down 13 per cent.) The much lower figure was a surprise for Philip Weiss, a senior energy analyst with Argus Research in New York. “Estimates change from time to time,” he says. “That one seemed a little extreme.”

It isn’t the first time 3-D seismology has caused such a surprise. In 2008, the USGS announced that the Bakken shale formation (which runs through North Dakota, Montana and Saskatchewan) may contain 25 times more than was estimated in 1995. In Alaska’s case, though, less is bad news for almost all of the state’s 700,000 residents. Each Alaskan receives an annual “dividend” payout funded by royalties charged on oil, gas and minerals (it’s been as much as $3,000; in 2010, it’s $1,281 each). Now that the NPRA is smaller, future cheques could shrink, too.

Not wanted in Quebec

By Tom Henheffer - Wednesday, October 27, 2010 at 9:20 AM - 0 Comments

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Shale gas is fuelling a political firestorm in Quebec, where a recent Léger Marketing poll found that three-quarters of residents want a moratorium on drilling. But neither Ottawa nor the province have any plans to curtail the industry. “Minister [Pierre] Arcand and Premier [Jean] Charest have taken the necessary steps to commence a process of exploration in shale gas. We support that process,” said federal Environment Minister Jim Prentice.

Still, the vocal majority, who’ve been vehemently protesting—and once forced an energy executive to flee a town hall meeting out of fear for his own safety—have earned a few small victories. The government is starting public hearings into the environmental impact of shale gas, and is scrambling to write industry regulations. Meanwhile, two of the biggest energy players in the province, Questerre Energy Corp. and Talisman Energy Inc., are pushing back a major exploration project by six months. They blame the public backlash, low natural gas prices and the high costs of importing workers and infrastructure.

But with some of Canada’s richest reserves and an industry expected to generate up to 19,000 jobs and $1 billion annually in tax revenue for Quebec, drilling is all but an inevitability, regardless of how many executives are sent running.

A cure for the energy crisis

By Tom Henheffer - Monday, July 26, 2010 at 3:21 PM - 0 Comments

Getty Images/ MetroWest Newspapers

Mike Markham used to hold a match under his faucet and light the tap water on fire. He’d get a small blue flame or an explosive orange fireball, depending on the day. “I had to check to see if I still had a moustache,” he says. Markham lives on an 80-acre farm in Fort Lupton, Colo. There are about eight natural gas wells within a few miles of his property, which he says are causing methane gas to migrate into his water.

The problem, which also affected about 100 of Markham’s neighbours who get water from the same aquifer, ended this year when the drilling companies changed pipe infrastructure and introduced filters and holding tanks to remove the gas before it entered household sinks. The aquifer is still contaminated, but local concerns about water quality aren’t going to stop the nearby drilling. That’s life on the front lines of what might be the biggest energy revolution in generations.

Continue…

Strange bedfellows indeed

By Colby Cosh - Wednesday, February 10, 2010 at 12:12 AM - 16 Comments

The theory that new Alberta finance minister Ted Morton was put in place to placate the fiscal hawks and play the cold-eyed budget-slasher—a zombie Steve West—was always dubious. I’m not saying Morton wouldn’t suit the role, and he may still be called upon to wield the scalpel. But the Stelmach government has one obsessive, overriding imperative: to announce a budgetary surplus for the fiscal year 2012-13, immediately before calling an election. And Alberta’s revenues depend to a fantastical degree on world prices for commodities, chiefly natural gas (though the end-products of the tarsands are catching up fast).

So either the Tories will pull it off or they won’t. Morton’s job is to keep the fiscal plan on track for the 2012 “Mission Accomplished” announcement and pacify various interest groups in the meantime—if possible, without exhausting the rainy-day Sustainability Fund established in 2003 to address temporary revenue downturns resulting from the volatility of Alberta’s petro revenues.

As of today, the master plan is still pretty much on target. Revenues were slightly stronger than expected for 2009-10, limiting the deficit to $3.6 billion. Today’s 2010-11 budget allows for another deficit of $4.7 billion with a 4% overall increase in spending. After that, the government expects gas prices to rise slowly from the present trough and pull Alberta out of the red. The futures markets expect pretty much the same thing. (Alberta finance ministers could conceivably play dirty with oil-and-gas pricing projections, since they ultimately get to pick which forecasters they listen to; but while the temptation must be strong, as a rule they refrain. International lenders and rating agencies are watching, and they expect stern realism. From governments, anyway.)

That’s not to say that Morton and his predecessors haven’t cut things close. The projected 2012-13 surplus is tiny and the amount expected to be left in the Sustainability Fund account is less than $3 billion. One unexpectedly warm global winter or other economic shock could eat into both quantities fast, as could a simple continuation of the methane glut. And that would mean scalpel time. The Finance Minister is already screwing a tight lid on spending in some areas that are, considered from a non-Machiavellian moral standpoint, particularly recession-sensitive: child-welfare interventions, employment retraining for adults, anti-homelessness measures and social housing (whose relevant ministry’s 2010-11 budget takes a 19% boot in the shorts).

But, like the political scientist he is, he’s taking care of the electorally armed-and-dangerous departments: seniors, health, and education—the S.H.E. Who Must Be Obeyed when governing a province. Anybody who still thinks of Morton as a whip-cracking Wyoming cowboy bent on Goldwaterizing Alberta should contemplate the astonishing reactions to this budget. The president of the Alberta Federation of Labour called it “clearly a victory” for public services (by which they mean, “for the union”). The Friends of Medicare (i.e., the Most Holy Order of Nurses Militant) agreed. The President of the Alberta Teachers’ Association, still amicably disposed after its pension bailout, declared with satisfaction that “The government listened to Albertans.” These are the dogs who have barked loudest and most persistently during the past 17 years of Conservative government. Ted Morton sure makes for a funny-looking pack leader.