Bubbling leaks at CNRL's Primrose CSS project cast shadow over company and industry

Bitumen seep at Primrose. Picture stolen from the Edmonton Journal.

Since at least May, CNRL's Primrose Cyclic Steam Stimulation (CSS, or "Huff and Puff") project has been leaking bitumen to the surface near Cold Lake and Bonnyville. In total an estimated 6,600 barrels have leaked. The company has stopped steaming that part of the reservoir (under orders from the Alberta Energy Regulator, or AER) and the leak rate is now reportedly under 20 barrels per day and declining daily. It could continue leaking (at lower and lower rates) for months or even years. At the moment Primrose is CNRL's only producing in-situ oil sands project, although a number of others are in various stages of development.

The trouble with MEGALOADS

A megaload on its way to Kerl. Picture stolen from mymcmurray.com.

Athabasca says it will continue moving "megaloads" through Idaho to get the facilities at its Hangingstone SAGD project up and running. Specifically they're trying to move in big evaporators which opposition groups, including the Nez Perce tribe, say clog up roads and ruin scenery. Oil sands operators like using big modules because they mean less fabrication on site, which has helped make the oil sands notorious for cost overruns.

Could oilsands crude be shipped in the Atlantic sooner than the Pacific?

A map of the Portland-Montreal pipeline.
From the surprisingly detailed Wikipedia article.

So what will be the first port to put oilsands crude on the water (not to be confused with in the water, knock on wood)? Well according to this article, if the Portland-Montreal-Pipeline company has anything to say about it, it might be in Portland, Maine, that bitumen finally takes to the seas. It's a bit confusing, but it appears the company is owned by Suncor, Imperial and Shell.

CNRL's Horizon expansion under budget (so far)

The Horizon mine today, picture stolen from CNRL homepage.

Here's an article about the progress on CNRL's Horizon mine expansion. On the upgrade from 110,000 to 250,000 barrels per day, they say they're now 20% done and 10% under budget. Doesn't say if the expansion is on schedule (although CNRL's Kirby SAGD project is apparently ahead of schedule). Ultimately they say they're going to increase the mine size to 500,000 barrels per day, although don't provide a timeline or anything on how they intend to do so, as far as I can see.

Algae to reduce oilsands emissions?

Some bioreactors. Picture stolen from the Pond Biofuels
homepage.

Here's an interesting article about a pilot plant being made by CNRL and Pond Biofuels. Basically it appears they want to use CO2 produced in oilsands facilities to grow algae, which can then be used as animal feed, biofuel or fertilizer. The $19 million facility will be built at CNRL's Primrose South site near Bonnyville. 

Clearly early days on this, but might turn out to be something important.

Sinking bitumen to cause big trouble for Pacific exports?

A guy talking near some jars of bitumen.
Stolen from here.

Here's an article about how some scientists think that some diluted bitumen would sink in the event of an oil spill in the ocean. 

Merv Fingas says that Enbridge's expert, Alan Maki, is wrong when he says diluted bitumen is wrong. Fingas says the diluent separates from the bitumen in time, and then any bitumen that is denser than salt water will sink in the ocean, making cleanup more difficult. Quite a lot of bitumen is denser than salt water, although not all. He adds that bitumen is less damaging to sea life than conventional oil because it has "fewer soluble toxins". I suppose that squares with the observation that fish in the Athabasca river appear to be fine despite exposure to bitumen for thousands (millions?) of years.

Enbridge to transport crude from AOC's Hangingstone project

Hangingstone project map. Ruthlessly stolen from the
Athabasca homepage. Note the prosimity to Ft. Mac.

Enbridge, an Alberta pipeline company, has made an agreement with Athabasca Oil Corp (AOC) to transport crude from AOC's Hangingstone project. They say this will cost Enbridge $200 million, apparently for running a 50 kilometre line from Hangingstone to its Cheecham terminal and expanding the facility there as required. They say Enbridge already connects 8 oilsands projects to terminals.

Suncor likely to pull the plug on Voyageur

This is what $3.5 billion buys you these days.

After Suncor's CFO Bart Demosky spoke pretty critically of the project last week, the Voyageur upgrader is looking like it's going to be shelved. This is a big project - $11.6 billion according to the article, taking in 269,000 barrels of bitumen and outputting 218,000 barrels of synthetic crude each day. I'm not really sure how a project that big just gets "cancelled" like some TV show - the article says Suncor has already spent $3.5 billion on the site (it's not clear if that includes the money spent by their 50/50 JV partner, Total). I probably shouldn't use words like "cancelled", since the final decision on the project won't be made until later this month.

Cenovus expansion plans

Here's a table showing planned expansions and new developments by Cenovus. If they all come about (and no other companies grow by similar amounts) I think it would easily make Cenovus the biggest oilsands producer (mining or in-situ) at over 500,000 barrels per day.

Note that the biggest currently operating in-situ project is Foster Creek at about 120,000 barrels per day, closely followed by Imperial's Cold Lake project at about 110,000. These expansions, taking both Christina Lake and Foster Creek above 300,000, would be breaking new ground in terms of project scale.

My gut feeling is that the expansions are ambitious, but believable. Similarly, Narrows Lake sounds pretty promising. I'm not quite as sure they're ever going to be getting 180,000 barrels per day out of Grand Rapids/Pelican Lake though. I also can't really picture 90,000 out of Telephone Lake when as far as I know they're still struggling to find a partner for the project, and the if it was such a promising prospect someone would have jumped in by now. Hopefully time proves me wrong! I think it would be great to have an undisputed Canadian leader in the oil sands.

Chavez dead, bad news for the oilsands?

Well in case you missed it, Hugo Chavez died last week. A lot of people are happy to see him go, but maybe Canada's oil industry shouldn't be among them. Under his term as president (1999 - 2013) Venezuela's oil production fell from about 3.5 million barrels per day to about 2.5 million barrels per day. This neglect was one of the reasons Canada's oilsands industry grew so quickly over the same period: US imports from Venezuela fell from a height of 1.4 million bbl/d in 1997 to 868 thousand bbl/d in 2011. Canadian exports to the US grew from 1.2 million bbl/d to 2.2 million bbl/d over the same period. The Financial Post has an article on the possible consequences for Canada.

NDP about-face on oilsands?

Picture of Mulclair cowboying up.
From the article. No news yet  on
whether or not he's expecting.

Maclean's has an interesting story about an apparent reversal in the NDP on the oilsands. Thomas Mulclair, the party's leader, has recently been in Calgary making pretty positive noises at a bunch of oil people. They would now be "a partner for the development of Canada's energy resources", apparently.

This is of course a big change from the party's position in the past, where he blamed the oilsands for eastern Canada's economic woes as well as the standard environmental criticism.

Sunshine Oilsands - the next big thing or the next Oilsands Quest?

Bloomberg has a piece on Sunshine Oilsands. 

The money behind the company is largely Chinese, including Sinopec. They raised $580 million in an IPO in Hong Kong last March, and listed on the TSX in November. It listed at about HK$4.70 and is now trading at about HK$2.70, so things haven't exactly gone swimmingly on that front.

ConocoPhillips looking to divest some oilsands assets

The Wall Street Journal is reporting that ConocoPhillips is looking to sell some assets, including some oilsands ones. The story is behind a paywall but BOOM! You're welcome.


Reasoning is apparently that these assets (along with Australian LNG projects) are too expensive for what they're producing, particularly with the Canadian (and Australian) dollars so high. It's unclear which assets they had in mind, or if it's all of them. Conoco's main oilsands assets are Surmont (which it owns 100% of) and Christina Lake/Foster Creek (which it owns 50% of with Cenovus, who operates the properties). It was looking to sell some of Surmont and some other little (or early) projects last year, not sure what came of it in the end. Maybe this is the same process and they're just taking their time.

US State Department says Keystone won't increase oilsands production

Pipe for the original Keystone pipeline, 2008
Picture from Eric Hylden via CTV

A report released by the US State Department has opined that building the Keystone XL pipeline "won't have a major impact on Alberta's oilsands development". This is a tacit acknowledgement that the real reason for opposition to the pipeline isn't the risk that the pipeline itself poses (the report says it is no riskier than any other mode of transportation), but that it would encourage greater development of what is widely perceived as a dirty fuel. Saying that Keystone won't increase development is thus a strange way of hinting that they're getting ready to approve it, and indeed State Department approval was apparently a major hurdle the pipeline needed to get over.

Calgary company tests carbon capture tech

Alberta is often slammed for having the second highest CO2 emissions per capita in Canada (after Saskatchewan) in part because of oilsands emissions, although in greater part because of its reliance on coal for electricity generation. I think it's kind of neat, therefore, that a Calgary company called Carbon Engineering is making a pilot plant that could potentially economically remove CO2 from the atmosphere. That would be a lot more useful than existing scrubbing technology, which captures emissions from big industrial plants, like the clean coal powerplant that TransAlta cancelled last year, because it could be performed anywhere in the world, not just in a place that happens to be a large source of CO2 and have a suitable reservoir to sequester the CO2 in. It's also a lot harder, since CO2 is so much less concentrated in the air compared to a smokestack's emissions. If Carbon Engineering can do it, they could find themselves in a very profitable position.

It may be easier said than done of course. I think it all hinges on the price they can sequester the CO2 for. They're going for the angle that CO2 itself is a "valuable gas", although in practice it's not, since I doubt they'll ever be able to undercut the price of CO2 produced as a by-product in many oil and gas fields. Still pretty interesting, worth checking out!