Top 10
Top 10: Keystone clamour
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Pipes, pipes and more pipes—TransCanada's Keystone project may be attracting all the attention, but it's far from being the only pipeline on the horizon. Find out what about these stories and more in our roundup of the top 10 stories affecting Alberta's energy industry.
1. KEYSTONE CLAMOUR
Major pipeline project faces vocal opposition
Protestors have been grabbing headlines on both sides of the Canada-U.S. border lately as the Keystone XL pipeline awaits approval from the U.S. State Department. Over 1,200 pipeline opponents—among them celebrities like Margot Kidder and Daryl Hannah—were arrested at the White House in August and September, while 100 more were detained following protests at Parliament Hill in Ottawa in late September. TransCanada's $7-billion project would ship oilsands crude 2,700 kilometres from Hardisty, Alta., to Texas refineries along the U.S. Gulf Coast.
Why it matters: Federal Natural Resources Minister Joe Oliver expects the Keystone to create 60,000 jobs and add $600 billion to the Canadian economy over the next 25 years, while opponents argue it would increase greenhouse gas emission and endanger freshwater supplies like the Ogallala Aquifer in Nebraska. And while the Keystone may not be the only proposal on the table for transporting the Alberta oilsands, it's certainly one of the largest. The future development of the resource will be strongly influenced by access to much-needed refining capacity on the Gulf Coast.
2. LAND SALES LANDMARK
Strong interest in Duvernay formation drives land sales
For only the second time in history, Alberta land sales have surpassed the $3-billion mark—and there are still six more sales to go this year. The most recent land sale in late September added $298.27 million to government coffers, pushing the total for the year to $3.06 billion. The highest total on record remains 2006, when heavy oilsands spending helped the province hit a record $3.4 billion in sales.
Why it matters: The oilsands may have driven 2006 sales, but the Duvernay shale formation has been the key to much of this year's spending. It might sound strange that companies are spending big bucks on a gas play when prices remain so low, but the formation is considered to be rich with valuable natural gas liquids, making it an attractive prospect to natural gas producers.
3. MADE-IN-ALBERTA SOLUTION
Natural gas producers may have a new market close to home
Natural gas consumption in the oilsands is set to triple in the next decade, according to Ziff Energy Group forecasts. The analysis firm expects gas demand in the oilsands will rise to three billion cubic feet per day, up from the current levels of 1.1 billion cubic feet per day. The prediction rests on the expectation that oilsands production levels will rise to between 3.5 million and four million barrels per day by 2020. Current production is 1.4 million to 1.5 million barrels per day.
Why it matters: Natural gas markets in the United States remain saturated with shale gas, while pipeline tolls to Eastern Canada have been rising. But with local demand set to increase, long-suffering western gas producers may have found a "made-in-Alberta" solution to their market woes.
4. DOUBLE YOUR PLEASURE
Alberta pipeline twinning planned for increased oilsands production
Enbridge has plans to twin its Athabasca pipeline between the oilsands near Kirby Lake in northeastern Alberta and the Hardisty oil hub 345 kilometres south. The $1.2-billion project will add 450,000 barrels per day of capacity by 2016. The company also has the option of adding another 350,000 barrels per day of capacity if necessary.
Why it matters: Major oilsands growth is expected to be coming down the pipe in the next decade, and the Athabasca project is just one example of the industry preparing for an increase in production. Enbridge currently has $3.6 billion in pipeline expansions and additions to its oilsands system planned for completion by 2015.
5. WINDS OF GOOD FORTUNE
Canadian wind-power capacity on track for record year
Canadian wind energy is expected to hit new highs by the end of 2011, with 1,338 megawatts of capacity planned to begin operation this year—up significantly from 690 megawatts in 2010. If projections hold, Canada will have 5,300 megawatts of wind power capacity by the end of the year.
Why it matters: The Canadian Wind Energy Association says these new installations involve almost $3.5 billion in investment and 13,500 person years of employment. Much of that activity will reside in Ontario, which remains the national leader in wind power, but Alberta is still taking significant strides as well. Current capacity in the province sits at 800 megawatts, and is expected to increase by 300 megawatts this year.
6. COAL CLAMPDOWN
Environment minister warns companies hoping to skirt new coal regulations
Earlier in September, federal Environment Minister Peter Kent had strong words for coal power plants hoping to beat tighter rules for greenhouse gas emissions. The regulations are currently expected to cover any plant that begins operations after 2015. But Kent told the Canadian Press he may close the loophole if necessary, saying, "Until the final regs are written, they're not written."
Why it matters: Alberta's Maxim Power sparked controversy in late June when it received approval from the Alberta Utilities Commission to build a new coal plant near Grande Cache, Alta. The company is pushing to have the $1.7-billion, 500-megawatt facility in operation before the 2015 deadline. It would produce emissions well above the limit allowed in the proposed regulations.
7. RACE TO THE COAST
New pipeline proposal offers alternative route to Gulf Coast for Alberta oil
Enbridge is teaming up with Enterprise Products to build an 800,000-barrel-per-day pipeline from Cushing, Okla., to the Gulf Coast. The Wrangler project would span 800 kilometres and cost between $1.5 billion and $2 billion. If it receives regulatory approval, the pipeline could be up and running by mid-2013.
Why it matters: Alberta currently exports oil to the Cushing oil hub, where prices are at a $20 per barrel discount compared to the Gulf Coast. The problem is a supply glut, which has driven down prices in recent years. In addition to existing proposals like the Keystone XL pipeline between Alberta and the Gulf Coast, this new pipeline could offer another route to fresh markets and better prices for the province's oil industry.
8. TIE LINE TIE-UP
Delays in transmission project benefit proposed Alberta wind farms
The Alberta Utilities Commission has given the go-ahead to NaturEner Energy Canada to build a 162-megawatt wind farm in southern Alberta. The Wild Rose 2 project will be located in the southeastern corner of the province in Cypress County, adding to the 204 megawatts already planned for NaturEner's nearby Wild Rose 1 project.
Why it matters: The two wind-power projects are beneficiaries of the delays plaguing the Montana Alberta Tie Line, which is tangled up in legal challenges from local landowners. In a release, NaturEner says it is looking at speeding up work on both Wild Rose wind farms, while also noting that it will only build in Montana "when transmission becomes available."
9. ENERGY DOWN THE DRAIN
Pulp mill plans to produce power from wastewater
Millar Western Forest Products has plans to build a 5.2-megawatt biomass power plant at its pulp mill in Whitecourt, Alta. The $35.6-million plant would convert organic material in the mill wastewater into biogas, which could then be used to help power the facility.
Why it matters: In 2010 alone, Alberta's pulp and paper industry produced 1.5 million air-dried tonnes of pulp shipments worth $1.3 billion. Biomass projects like Millar Western's could serve as a model for the entire industry on reducing produced waste while driving down power costs.
10. OPEN AND SHUT-IN CASE
Alberta court rules on shut-in well regulations
The Alberta Court of Appeal has upheld the Energy Resource Conservation Board's decision to suspend Omer Energy's oil and gas licences on two shut-in wells in central Alberta. The company had fought the decision, but lost because neither well could produce enough natural gas to be considered a viable commercial property.
Why it matters: The decision could have lasting ramifications for the relationship between landowners and oil and gas companies. Companies sitting on shut-in wells waiting for the chance to develop the properties now run the risk of losing their licence unless they can prove the well is capable of production.
