Top 10
Top 10: Is Fort McMurray the new Pandora?
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1. IS FORT MCMURRAY THE NEW PANDORA?
Avatar director James Cameron pans oilsands development
Canadian-born Cameron made headlines in April when he said Alberta’s oilsands development is a “black-eye” on the country’s environmental record. He suggested more emphasis be placed on boosting renewable energy use. Premier Ed Stelmach proceeded to invite Cameron to Fort McMurray to witness efforts that are underway to develop the oilsands more responsibly.
Avatar takes place on Pandora, where the RDA Corporation is mining a valuable mineral called unobtainium. The planet is inhabited by the Na’vi, a 10-foot-tall blue-skinned species that lives in harmony with nature. The negative impact on Pandora’s indigenous people resonate with real First Nations people, says George Poitras, a former chief of the area’s Mikisew Cree. A month prior, environmental groups ran a full-page ad in a U.S. entertainment newspaper, under the headline “Canada’s Avatar Sands,” which also linked the movie’s plot to oilsands development. No word yet on when, or if, Cameron will visit.
WHY IT MATTERS: Being cast as an environmental bad boy doesn’t sit well with federal Environment Minister Jim Prentice, who prefers a storyline featuring Canada as a clean-energy superpower. The question is what Prentice (and Prime Minister Stephen Harper) will do about it.
2. “LAND” AHOY
Alberta land sales continue positive trend
Revenue from Alberta land sales continues to rise in 2010. By the end of April, those revenues had climbed to $622.16 million on the sale of 1.08 million hectares at average price of $574.11 per hectare. In the petroleum industry, “land” refers to the oil and gas rights beneath a particular section of land. To the same point last year, the province had attracted just $73.22 million in bids, when 585,353 hectares were sold at an average price of $125.10 per hectare, during a time that weaker oil and gas prices and the recession firmly gripped the province.
WHY IT MATTERS: An indication of oil and gas companies’ interest in exploring or drilling for hydrocarbons, land sales are a barometer of the industry’s health. Money received from land sales goes into public coffers.
3. INCENTIVE PLAN
Alberta extends bioenergy credit program
The province is expanding and extending an incentive program for producers of bioenergy products. Funding under the Bioenergy Producer Credit Program is extended for five years until 2016. The program provides incentives to develop a wide variety of bioenergy products including fuels, power, and heat.
WHY IT MATTERS: Alberta’s current bioenergy program treats all ethanol equally. The extended program focuses on the potential for second-generation ethanol, which uses feedstocks like forestry, agricultural, and municipal waste. Specifically, the program will encourage development of new technologies and facilities that use non-food crops, waste biomass, or wood.
4. END OF THE “BATTLE ROYALE?”
Government releases Competitiveness Review to generally positive feedback
The government released its long-awaited Competitiveness Review in early March, to generally positive reviews from the oil and gas sector. Effective January 2011, the province will reduce the maximum royalty rate for conventional oil to 40 per cent (from the current 50 per cent), and cut the top natural gas rate to 36 per cent (from the current 50 per cent). “Alberta’s royalty battles are hopefully behind us now,” says Roger Soucy, president of the Petroleum Service Association of Canada (PSAC). That said, he’s taking a bit of a wait-and-see approach as government continues to develop the final details of the plan. Next up? New royalty curves tied to the changes—affecting at what prices the rates will increase or decrease—will be finalized and announced by May 31.
WHY IT MATTERS: Royalties are an important part of the government’s revenue stream. They help fund programs like health, education, and infrastructure. A well-designed royalty system endeavours to strike the right balance between returning a share of the profits to the province as resource owner, while encouraging risk taking by the private sector to develop the resource, which creates jobs and economic growth.
5. MOVE ON UP
Drilling activity in Alberta projected to climb
PSAC has raised its forecast for drilling activity, saying that 7,590 wells will be drilled this year in Alberta, a 31 per cent increase over final 2009 drilling levels. The association attributed its more optimistic forecast to three main factors: the increase in the price of oil, the anticipated royalty changes in Alberta, and the general boost in economic activity as the economy emerges from the global recession. Not everyone is as bullish, though, with some believing the low price of natural gas will continue to suppress drilling activity.
WHY IT MATTERS: A sustained rise in drilling activity boosts employment for rig workers. And, if a producer’s new well strikes oil or gas, it leads to more expenditures for companies that provide services to those wells, which results in even more employment for Albertans.
6. ATTENTION, WALMART SHOPPERS
Department store tries out solar, wind systems
Walmart Canada is using renewable energy to make its stores and distribution centres more energy-efficient. The retail giant’s new $115-million distribution centre just north of Calgary will include 16 solar panels and a 225-kilowatt wind turbine. The goal: to make it 60 per cent more efficient than a typical distribution centre. The 40,000 square foot building near Balzac is scheduled to open later this year. Each solar-panel system will generate enough power for 39 households a year. The wind turbine should generate enough power for four households.
WHY IT MATTERS: If the world’s largest retailer can save money using renewable energy, expect to see the technology at other locations. Using Walmart’s own formula, if each of its approximately 300 stores in Canada installs a solar-panel system it would be equivalent to saving enough power for 11,700 households a year.
7. COAL SHOULDER
Ottawa tells power companies to start powering down coal-fired plants
Environment Minister Jim Prentice has told the country’s major electricity providers that they’ll have to gradually retire their coal-fired plants and replace them with cleaner sources of power. Under Ottawa’s proposal, power companies would have to close their coal-fired plants as they reach the end of their commercial life, largely over the next 10 to 15 years. The companies would not be allowed to refurbish the plants or replace them with new coal units unless they include technology to capture CO2 emissions and store it underground.
WHY IT MATTERS: Alberta relies on coal for about two-thirds of its electricity generation. Billions of dollars will be required to outfit plants with carbon capture and storage technology. Cleaner-burning natural gas may the beneficiary of Ottawa’s moves cut CO2 emissions.
8. CLEAN SLATE
Encana pitches natural gas for power generation, transportation
Encana is leading a charge to help increase markets for natural gas across North America, especially for power generation and transportation. “We have a long-term reliable supply of natural gas in North America and the end use of this fuel makes the most economic and environmental and sense in any efficient production mode,” says Encana’s top executive, Randy Eresman. But the gas industry also faces a significant lobbying effort from coal-fired utilities and the railways that transport coal. That lobbying is likely more aggressive in the U.S. than in Canada, Eresman suggested.
WHY IT MATTERS: Natural gas production is expected to rise when growing volumes of shale gas come on stream. It offers a cleaner energy solution—i.e. fewer greenhouse gas emissions—for the industrial, commercial, residential, generation, and transportation sectors.
9. FAST FOOD DRIVE-THRU
Duo sets world record using waste oil from french fries
A native of Edmonton, Cloe Whittaker, has officially broken the Guinness World Record for the longest journey by car using alternative fuel. Whittaker, along with Tyson Jerry, set the new mark in their “Veggie-Mobile,” a van converted to run on the waste oil from french fries and other restaurant foods. The previous record was 38,137 kilometres. The duo plans to continue their “Driven to Sustain” campaign until they hit 45,000 kilometres.
WHY IT MATTERS: Biofuels are produced by converting organic matter into fuel. They are an alternative source to fossil fuels and proponents hope their increased use will reduce transportation-related greenhouse gas emissions.
10. GIVE PEACE A CHANCE
Alberta oilsands could aid world peace, says researcher
A Canadian researcher says the province’s oilsands could become a key ingredient for world peace. In his recently published book Canada’s Oil Sands and the Black Bonanza, The Race to Secure North America’s Energy Future, Alastair Sweeney predicts that oilsands development will be a stabilizing force in the world, offering energy security, and that North American could reduce its reliance on importing oil from political hot spots.
WHY IT MATTERS: Despite gains made by renewable-power generation, we still live in a petroleum economy, Sweeny says. The oilsands will allow the world enough time to make a smooth sea change to sustainable solutions, he adds, while avoiding the risks of dealing with undemocratic and unstable petro-states such as Iran and Venezuela.
