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The kinder, gentler energy superpower
David Ebner and Barrie McKenna, Globe & Mail
Canada is the kind of oil supplier the U.S. can rely on, and no one knows it better than the Texans
—
n Texas City, a small port town south of Houston near the Gulf of Mexico, a hub of refineries rises through the misty January air, billowing steam from scrubber towers.
These refineries make up part of a sprawling industrial cluster in the Gulf Coast region that is better equipped than anywhere on earth to handle the gooey crude coming out of Alberta’s oil sands.
In a twisting turn of geography, geology and history, Texans are hungry for Alberta oil.
As the U.S. seeks to decrease its dependence on crude from unstable regions and OPEC countries, and with the oil sands booming, Canada has supplanted Saudi Arabia as the leading supplier of crude to the U.S., claiming the No. 1 spot in 2004.
Now, three major pipelines that would move Alberta oil all the way to Texas are under consideration, with a final decision on at least one likely within two months. A fourth pipeline is nearly approved to send almost half a million barrels a day to Illinois, Oklahoma and northern Texas – the first major extension of Canadian oil beyond the Chicago region.
The push to develop major oil pipelines over thousands of kilometres from Alberta to Texas represents a major shift in the movement of Canadian oil.
(29 January 2008)
Contributor CP writes:
This is Part 2 of 8 part series. Part 1 prompted heated on-line discussion on the Globe and Mail web site.
The oil majors: Trickier times ahead for big fish
Dino Mahtani, Financial Times
Over the past 15 years, Africa has featured prominently on the global exploration map of international oil majors looking to open up new frontiers and book new reserves. Soft fiscal terms in oil rich countries and high oil prices more recently have driven exploration programmes of some of the bigger companies into the deepwater areas of the Gulf of Guinea, which has a prolific oil bearing geology.
With many of the international oil companies locked out of the most productive basins in the Middle East, or up against hostile government policies in producers such as Russia and Venezuela, Africa has come as something of a reprieve.
…But despite the relative exuberance of the last few years, there are increasing signs that the big companies could be in for a much trickier time in the years ahead. Some companies, such as Devon, Occidental and Woodside, have recently drawn down their African portfolios, sensing that margins in Africa could be topping out. Even Shell has begun a restructuring plan in Nigeria, in response to some of its woes there.
(28 January 2008)
Supergrid could provide 30% of Europe’s electricity (Audio)
David Strahan, Global Public Media
A high voltage electricity grid connecting countries from the North Sea to the Bay of Biscay could provide almost a third of Europe’s power by 2030, according to the company behind the idea. The system would improve energy security, cut emissions, and even reduce the price of power at times of peak demand.
The supergrid is the brainchild of Irish wind generator Airtricity – recently acquired by Scottish and Southern Energy for €1.1 billion – and would connect countries as far apart as Norway and Spain to each other’s offshore wind farms. When the wind blows in one country but not in others, power would be directed through the high voltage direct current (HVDC) network to wherever it is needed most.
According to Mark Ennis, Airtricity’s Executive Director for Strategy and Public Policy, the system will solve the Achilles heel of wind generation. In an interview with lastoilshock.comand Global Public Media, Ennis said “By having a very large grid over several thousand kilometers you take the variability out, you almost come out with base load energy”
Speaking on the sidelines of the World Future Energy Summit in Abu Dhabi last week, Ennis went on to say that the HVDC technology is proven, that existing financial incentives are already sufficient to make the idea viable, and that a regulatory agreement between countries is close: “I think we are nearly there”. If work starts soon, Ennis claimed, the supergrid could supply 30% of Europe’s power by 2030.
The initial investment would be huge, but would be spread between grid operators, such as the National Grid in Britain, and Eon Netzt in Germany, and wind farm operators. However, by directing electricity to where demand – and prices – are highest, according to Ennis the system should reduce peak demand for fossil fuels and therefore bring costs down.
(28 January 2008)
Norwegian gas will go to highest bidder
David Strahan, Global Public Media
s the European gas market tightens over the next decade, Norwegian supplies will be allocated on a strictly commercial basis, according to Deputy Minister of Petroleum and Energy Liv Monica Stubholt.
In an interview with lastoilshock.comand Global Public Media, Ms Stubholt stressed that Norway was raising its gas production and would be a “reliable and predictable supplier”.
Several studies suggest European gas market will be tight or under-supplied by the middle of the next decade. One forecast from E.ON, cited in a recent presentation by industry trade body Euro Gas, suggests supply could fall 10% short of predicted demand by 2015, with the deficit widening to 23% by 2020. Ms Stubholt said, “We are aware of an increase in demand and we will do our best to meet this”
Speaking on the sidelines of the World Future Energy Summit in Abu Dhabi last week, the Minister would not say when she expected Norwegian gas production to peak, merely noting that production would rise from about 88bcm/year today to about 120bcm “in a few years”.
One independent forecaster, Dr Michael Smith of Energyfiles, predicts Norway’s gas production will peak in 2020 at 162bcm, falling sharply to 111bcm by 2030. Norway’s oil production peaked in 2001.
With UK gas output in terminal decline, Norway is Western Europe’s only remaining gas exporter of any significance, leaving the continent’s future supply critically dependent on Russia and on LNG imports from North Africa and the Middle East. Plans to create a new “gas OPEC” are due to be discussed at a meeting of the Gas Exporting Countries Forum in Moscow in June.
Ms Stubholt stressed that “Norway does not run its gas supply based on foreign policy concerns or on favourites, but on commercial market conditions”. When asked if that meant Norwegian gas would go to the highest bidder, Ms Stubholt replied “That sounds about right”.
(28 January 2008)
