Top 10
Top 10: Getting busy
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There are sunny days ahead — and not just for the solar industry. Conventional oil drilling in Alberta is starting to heat up again, with increased land sales and forecasts for higher drilling rates next year. But a dark cloud still hangs over the oilsands industry, and it brings with it a storm of international attention. Learn all about it in our list of the top 10 recent news stories shaping the future of energy in Alberta.
1. GETTING BUSY
PSAC forecasts 12,250 wells for 2011
The Petroleum Services Association of Canada predicts 12,250 wells will be drilled across Canada next year, which is higher than the expected final tally of 11,350 for 2010. PSAC estimates 7,915 wells will be drilled in Alberta in 2011, a five per cent increase from this year’s expected count.
WHY IT MATTERS: The overall health of the oil and gas sector can be measured by the level of drilling activity. Last year’s downturn in drilling activity due to the poor economy had a direct impact on employment and capital flowing into local economies.
2. WIND POWERHOUSE
TransAlta adds to its renewable power portfolio
By the end of 2010, Calgary-based power generator TransAlta will become the first company in Canada to own and operate more than 1,000 megawatts of installed wind capacity — 30 per cent of the country’s total. The company has 18 commercial wind facilities across the country in Alberta, Ontario, Quebec and New Brunswick. TransAlta’s future wind development plans include new facilities in New Brunswick, Quebec and Saskatchewan.
WHY IT MATTERS: TransAlta has 12 wind facilities in southern Alberta. Along with providing renewable energy, the projects help rural municipalities through job creation, contributions to the tax base and providing monetary benefits to landowners.
3. COMEBACK STORY
Oil-directed drilling continues to be story for 2010
Oil drilling’s big comeback amid strong crude prices and the collapse of natural gas prices continues to be one of 2010’s dominant storylines in the oilpatch. To the end of September, about 58 per cent of wells with a reported status are listed as oil wells, which would make 2010 the oiliest year for Canadian drilling over the past decade.
WHY IT MATTERS: While producers who can target oil plays on their lands are doing well financially, those companies that have traditionally focused on gas plays are suffering due to low gas prices. Many companies that once had more of a gas focus are now trying to turn to more oil drilling.
4. HERE OR THERE?
Alberta Tories push for more Alberta-based bitumen upgrading
The Alberta government is being urged by its supporters to take a more active role in ensuring bitumen upgrading and refining in the province keeps pace with the growth in oilsands development. Delegates to the provincial Conservative party convention in late October approved a motion asking the government to proceed on an “urgent basis” to put policies, programs, incentives and, if necessary, legislation in place to ensure that 65 per cent of bitumen produced in Alberta is upgraded in the province. Many oilsands producers ship their raw bitumen to the United States for processing and more plan to do the same.
WHY IT MATTERS: Some provincial Tories believe various levels of government (federal, provincial and municipal) could lose hundreds of billions of dollars of revenue over the next decade if raw bitumen is shipped to the United States instead of being upgraded locally.
5. PASSING A LAND-MARK
Alberta vaults over $2-billion mark in 2010 land-sale revenue
Alberta has passed the $2-billion mark in land-sale revenue as the 2010 rebound continues, bolstered by late October’s auction that produced $151.6 million in sales.
WHY IT MATTERS: Year-to-date, $2.07 billion has rolled into provincial coffers through the sale of petroleum and natural gas rights. To the same point last year, Alberta had attracted $279.93 million. The higher level of spending signifies that oil and gas producers are encouraged by opportunities in the province, as well as the high price of crude oil, which has remained buoyant all year.
6. GAS FIRED-UP
Enmax gets conditional approval for Calgary-area natural gas plant
The Alberta Utilities Commission approved in late October Enmax’s Shepard Energy Centre, an 800-megawatt natural gas–fired power generation facility. The $1-billon project still needs approval from Alberta Environment on water use and Enmax must submit a final risk assessment.
WHY IT MATTERS: Proponents of the increased use of natural gas say using the cleaner burning fuel will reduce greenhouse gas emissions. Enmax says the facility will use advanced combustion technology that will produce half the carbon dioxide per megawatt than a conventional coal-fired power plant.
7. FINE TIME
Syncrude fined $3 million for the deaths of 1,600 ducks
Syncrude will pay a $3-million penalty for negligence in the deaths of 1,600 ducks in April 2008. A judge had earlier found the company guilty in the deaths, ruling that Syncrude failed to take the necessary steps to keep waterfowl away from one of its tailings ponds. Most of the money will be contributed to wildlife and habitat conservation programs in northern Alberta. A few days after the sentencing proposal, more birds landed at tailing ponds operated by Syncrude, Suncor and Shell. In this case, the waterfowl may have landed due to fatigue after facing freezing rain in the area, despite deterrents being in place.
WHY IT MATTERS: The Syncrude case fuelled international concern about the environmental impact of developing Alberta’s oilsands.
8. SUNNY DAYS AHEAD
Calgary-based Enbridge starts huge solar-powered PV plant
Pipeline giant Enbridge and its partner First Solar have started operations at an 80-megawatt photovoltaic plant in Sarnia, Ont. It’s the largest such solar facility in the world. Solar panels are spread across almost 400 hectares and power is sold to the Ontario Power Authority. Enbridge expects the facility to generate enough power to meet the needs of about 12,800 homes.
WHY IT MATTERS: Some larger oil and gas companies continue to diversify their production mix, adding renewable energy assets to their portfolios.
9. IN THE SPOTLIGHT
Director James Cameron visits the oilsands
In early October, Hollywood director James Cameron came to Alberta for a tour of an oilsands mine as well as meetings with Premier Ed Stelmach and aboriginal leaders in Fort Chipewyan, who have raised concerns about toxins flowing downstream into their community. Since the success of the movie Avatar, Cameron has spoken out about how resource development can affect local communities.
WHY IT MATTERS: Cameron is perhaps the most famous of a long list of people visiting the oilsands to see how development affects the environment. From members of the U.S. congress to members of the European Union, the oilsands are in the spotlight. The province and industry hope the tours and face-to-face meetings will allow them to impart factual information about oilsands development.
10. BILL ME
Bill 24 to make Alberta liable for long-term CO2 storage
Nearly two years after pledging $2 billion of public funds to carbon capture and storage (CCS), the Alberta government has tabled a law to regulate large-scale CCS projects in the province. When it passes, Bill 24 will make Alberta the first jurisdiction in Canada to enact what provincial bureaucrats are calling “comprehensive” legislation to regulate CCS. Although not yet law and still subject to change, the bill would make the Alberta government liable for the long-term storage of carbon dioxide injected into underground reservoirs, subject to rules requiring that the project operator establish that the gas is “contained.”
WHY IT MATTERS: The draft law would put ownership of the subsurface pore-spaces where CCS proponents plan to store carbon dioxide in the hands of the Alberta government. In the past, critics of CCS theory have questioned who should accept responsibility for long-term CO2 storage, especially if the gas escapes its intended storage zones. Also under Bill 24, the province would create a special fund financed by CCS operators that would pay for future monitoring of underground CO2 storage sites and any necessary remediation.
