Thursday, August 04, 2016

The Train Is Leaving The Station

Change is coming to Alberta's oilsands. Carol Linnit reports that:

Suncor Energy CEO Steve Williams rocked the oil industry boat last week when he announced a plan to leave some of the company’s oilsands reserves unrecovered during a conference call with investors.

Williams said the company is working to develop a plan with Alberta to “strand” its least economical reserves, a proposal that appears to align with the call of environmentalists to leave the high-cost and high-carbon fossil fuels in the ground to prevent catastrophic global warming.
“We are advocating in a modest way to work with government so that we can strand some of the oil in the oilsands,” Williams said.

It remains to be seen whether the Alberta government will buy into Williams plan:

Keith Stewart, head of Greenpeace Canada’s climate and energy campaign, said Williams surprised many people with his call for a new approach to the oilsands, but it’s unclear how Alberta will manage Suncor’s request.

“It’s important to recognize that what [Williams] really wants to do is ‘high-grade’ his existing reserves, exploit only the cheapest and most profitable parts,” Stewart said.

The Alberta government, which relies on oil royalties, may be reluctant to allow companies to back out of oil extraction agreements, Stewart added.

Extraction agreements are managed under Directive 82, a regulation Alberta might have to alter to accommodate Suncor’s proposal.

“Lease agreements often establish rules that limit ‘high-grading’ and Suncor is clearly trying to get those rules changed,” Stewart said, adding this would likely help companies shut-in low-performance in situ operations.

It's only a small change. But it's the first time in a long time that someone from the oil industry has talked about leaving bitumen in the ground. The train is leaving the station.



Steve said...

Hillary's new best friends are the diabolical Kock brothers. They happen to own the oil sands. I bet President Hillary would not agree to stranding.

Owen Gray said...

It's true that The Kochs have abandoned Trump, Steve. But they haven't embraced Clinton, either. Instead they've decided to focus on keeping the Senate in Republican hands to block whatever legislation she has planned.

"At this point I can't support either candidate, but I'm certainly not going to support Hillary," Koch told hundreds of donors gathered for a weekend retreat in a luxury hotel at the foot of the Rocky Mountains.

Steve said...

Hi Owen, unlike you and the Mound I am 58 with no pension and working at a call center to pay the bills. I say blow it up real good, because this system is not working for me. I expect most American would agree, cause they were denied the choice of a JT.

Toby said...

The whole point of "Peak Oil" is that extracting oil becomes increasingly expensive after the peak. The world will never run out of oil; it just becomes too expensive to extract. Suncor Energy CEO Steve Williams didn't rock the oil industry; he stated the obvious. Carol Linnitt is sort of exaggerating.

Owen Gray said...

You're right, Toby. It's simply getting harder to make an economic case for tar sands oil. Nonetheless, if that goo stays in the ground, the planet might have a chance.

Owen Gray said...

You have every right to be as mad as hell, Steve. And you have every right to expect something better. Sometimes your options are few. Such is the case this year south of the border.

Anonymous said...

Pure money play from Williams.

The price of oil is going to make it uneconomical to extract oil from the tar sands for years to come, so why not gain a MASSIVE tax advantage by 'stranding' the stuff.

Nicely played Steve.

Owen Gray said...

He's not doing this out of the goodness of his heart, Anon. But, if the stuff stays in the ground, the planet may survive.