Cenovus calls Trans Mountain’s desire for a blank cheque on cost overruns “commercially absurd” It turns out when you run a project something like 4 to 6 times the original budget (depending on what you consider the start and the original budget) the people expected to pay for it might balk a bit. In the letter quoted in the story, Cenovus basically tells Trans Mountain to, well, you figure it out.
Supper in Texas on Wednesday: for the 9th time in 3 weeks, the lights are in danger of going out due to high temperatures and low wind power generation.
Well, that’s what I initially wrote. Then the Texas grid literally went into “red alert,” as the frequency started to drop and reserves fell perilously low. If the frequency goes too low, generating plants would start to trip off in cascading failures, leading to massive blackouts. Thankfully, they got it under control.
Also: Pipeline Online editor Brian Zinchuk on John Gormley Live talking about oil prices, drilling activity, carbon capture, grid alerts, and dramatically more nuclear power generation possible in Saskatchewan.
And if you missed it, Enbridge snapped up three natural gas utilities in the US. Funny how they’re spending big money in the US, but not Canada…
Oil prices are up, but drilling activity in Saskatchewan is meh. Anyone care to guess why that might be?
Good news for Weyburn Unit, Whitecap, SaskPower, Weyburn and Estevan:
Whitecap Resources to buy CO2 from SaskPower until 2035, providing market for SaskPower’s BD3.
I did some in-depth analysis on the broader picture on all this, especially how carbon pricing in the US and Canada affect the economics.
Remember, the CO2 is used for enhanced oil recovery, dramatically extending the life of an oilfield that has now been producing over 65 years. And FYI, my kid found work with a oilfield company that’s worked in the Weyburn Unit for 62 years, give or take. I hope she can make a career there as a heavy duty mechanic.
A while ago I pointed out on Gormley that lower oil prices were definitely going to have an impact on Saskatchewan’s finances. I was right, as finances are down a half billion from budget.
Also, the feds just dished out $30 million for 1500 EV chargers in Quebec. Because of course they did.
So let’s see here, the federal government, with our tax dollars, have dished out money for EV manufacturers, battery plants, rebates on the EVs themselves, and now chargers. Is there anything they’ve missed? Maybe you get a car! And you get a car! Might have to do a column on this.
And, on the topic of the feds, after slow walking its construction for years, all of a sudden there’s a serious panic to get the Trans Mountain Pipeline complete and operating. Well, from what I understand, good luck with that.
First, Saskatchewan was considering four small modular reactors. Then the SaskPower minister said maybe as many as nine. Now Premier Scott Moe is floating the idea of large scale, 1000 megawatt reactors.
And the province just coughed up some money to help develop a domestic nuclear supply chain within Saskatchewan.
Also, Crescent Point Energy grew up in the Bakken, and at one point was briefly Saskatchewan’s largest oil producer. Well, they just sold all their North Dakota Bakken assets. Anyone want to start a pool as to when they will sell off remaining assets in Saskatchewan?
SaskPower hits record summer demand on Monday.
50 year anniversary for a stalwart of the Saskatchewan oil industry.
One of Saskatchewan’s largest oil producers makes a big deal in the Montney.
TC Energy, which I still think of as TranCanada, from back when I built pipelines for them, is spinning off its oil pipelines, which is principally the Keystone system.
I was searching for the best metaphor. “Like hot garbage,” kept coming to mind. I settled on dumping an ex-wife. My column on this: TC Energy dumping Keystone Pipeline like a despised, soon-to-be-ex-wife. The Keystone name is so verboten, it is barely mentioned in the press release or slide deck.
This is entirely because the anti-pipeline, anti-oil movement won on Keystone XL and Energy East. Can’tada and BANANAS USA won, and this is the result. (Build Absolutely Nothing Anywhere Near Anyone, Seriously, U Stup1d A@#$#@#)
Open letter: CCS is needed and ready to address climate change. This is from the Regina-based International CCS Knowledge Centre.
In response to some of the comments yesterday – carbon capture, as practiced in Saskatchewan, actually has a substantial benefit besides whatever climate issues one might be concerned about. The Weyburn Unit, one of the largest and most prolific oil plays in this country, has been in operation for 65 years. If it had no CO2 injection, it would probably be producing around 6,000 barrels per day. It’s currently doing around 24,000 as a direct result of CO2-enhanced oil recovery. That’s a gain of around 18,000 bpd. At $75/bbl., that’s about $1.3 million per day in gross revenue. It means hundreds of jobs in Weyburn, including my daughter, who started working as a heavy duty mechanic apprentice for an oilfield service company which has been working in the Unit for 62 years. If the CO2 continues to flow, that oilfield is expected to continue on likely for her entire career, if she stays there.
This can be applied on a much broader scale, dramatically extending the life of any oilfield it is applied to. CO2 increases recovery factors from around 20% to 40%+.
Just pumping CO2 into the ground – that’s another story.
Here are the big pieces on Jonathan Wilkinson’s time in Saskatchewan last week. The Minister of Natural Resources came to Regina to speak about “just transition.” There’s still a few more to come from it for the rest of this week, including his faith that there will soon be electric tractors for our farmers (where will you charge them???)
Shorter version (if you can call it that)
Long version:
Wilkinson’s full speech on “just transition,” verbatim.
Video of whole speech included with both.
Lloydminster is building a new arena, and Cenovus, Saskatchewan’s largest oil producer, just ponied up big dollars for naming rights. Still waiting to hear of a wind power generator donating millions to a local community.
The climate, or perhaps weather, struck back at oil and gas on Monday, with lightning striking an oil battery northeast of Stoughton, Saskatchewan on Monday. Mother Earth gets her revenge about once or twice a summer.
Entitled “Creating a Fair and Equitable Energy Transformation,” The 56 page report outlines nothing short of the utter transformation of Canada, its economy and workforce, by way of transitioning away from fossil fuels to a largely electric economy, with the possibility of hydrogen usage as well. In doing so it means to largely do away with the fossil fuel industry which is one of Canada’s largest industries and contributors to GDP, exports and wealth. The report provides recommendations as to what to do with the people involved in that industry, but not so much the companies who employ them, create those jobs or that wealth.
On Thursday, I’ll have the detailed Conservative response from MP Shannon Stubbs.
Believe it or not, there are successful oil companies growing substantially in Saskatchewan.
Also, Quick Dick McDick goes branding. This video has way too much about prairie oysters. Way too much.
A few years ago the Weyburn Oil Show Board created a new honour called Southeast Saskatchewan Legends. There are a number of people who, over several decades, were key players in building the Saskatchewan oil industry. Many of them started and operated not one, but several oilfield service companies, and coincidentally, almost every single one of them farmed on the side. You could call them “serial entrepreneurs.”
Ron Wanner of Estevan was one of the first to be honored as a “Legend,” back in 2017. He started wheeling and dealing surplus oilfield equipment, and ended up having a trucking company, an oil company, a drilling rig and a service rig company. He passed away a few days ago. He also had a policy of buying long-term employees their own vehicle after a certain number of years. I remember around 2010 he bought a Hemi Challenger SRT/8 for the engineer who successfully built his oil company from nothing. This is his obituary, as published in Pipeline Online. They don’t make many like Ron Wanner anymore.
The new CEO of Cenovus, Canada’s second largest oil producer and Saskatchewan’s largest (after they bought Husky during the COVID pandemic), tells it like it is. There’s a healthy dose of reality in his comments, but Cenovus is also leading the charge for carbon capture in the oilsands. He also likes the idea of nuclear reactors usage in the oilsands.
Didn’t Biden say, “We’re not going to turn the faucet off and say we’re not drilling anymore?”
Well, on April 21, his Interior Secretary was singing from a different choirbook. But “We’re in a climate crisis, everyone,” she noted.
The Nemeth Report Podcast: Energy transition crisis, with Irina Slav, has some real straight-forward talk about the realities of the energy industry, and keeping people scared about climate change. Expect to see more on Pipeline Online from T Nemeth, who is originally from Saskatchewan.
One of the key leading indicators of oil and gas development is Crown land sales. And the Saskatchewan April sale saw increased interest in all four oil production areas of the province.
On the opposite end of the timeline is well abandonment and cleanups. When the crap hit the fan for the industry when COVID-19 hit, there was a cry for some sort of relief program. That ended up being the Accelerated Site Closure Program, which properly abandoned inactive wells and facilities. That program just recently concluded, having been fully subscribed.
And on the other side of the country, Newfoundland’s Muskrat Falls hydro project is finally online. This project almost bankrupted Newfoundland, but the feds quietly bailed them out during COVID. That kinda got swept under the rug. Muskrat Falls was Newfoundland’s attempt at squeezing additional power out of the same river system as the massive Churchill Falls project, which produces about 50 per cent more power than the entire province of Saskatchewan on any given day. Quebec pays Newfoundland next to nothing for that power, and uses it domestically and sells it to the US and enormous margins. Muskrat Falls, at a much lower output, was basically Newfoundland’s F You to Quebec.
This stirs up serious memories for me, as I was the Canadian reporter in 2016 who asked presidential candidate Donald Trump if he would approve the Keystone XL Pipeline. He said he would, but “he wanted a piece.”
Here we are in 2023, and a Canadian Press reporter challenged President Joe Biden on cancelling the Keystone XL and delaying the Line 5 project, but approving a new oil project in Alaska. And it turns out, math is hard.
I don’t know who that reporter was, but I’d buy him a bottle of 18-year old Scotch.
Also, there’s a hell of a lot said about energy in the joint statement released by Trudeau and Biden. And some in his speech to Parliament, too.