Alberta alters rules on oil production limits to spur more conventional drilling
EDMONTON — Alberta's energy minister says the government is adjusting its rules on oil production limits to give producers incentive to drill more conventional wells. Sonya Savage says, starting immediately, any oil produced from a new well will not be subject to the rules. Savage says the government expects the change will spur producers to drill hundreds of new wells and that each well will create about 145 jobs. Due to pipeline bottlenecks, the former NDP government limited the amount companies could produce to prevent a surplus such as the one last year that sharply reduced prices for Alberta oil.
OTTAWA — Canada will move forward with a pipeline project that has set the country’s provinces against one another , opened rifts among its Indigenous communities and prompted major protests. The project — which will expand the Trans Mountain pipeline that links Alberta ’s oil sands to British
• The diluted bitumen Alberta wants to export has chemical and combustion properties that make it far Put another way, by 2030 Alberta ’s annual extra oilsands emissions will be equal to importing an Ontario’s Many bought into shale oil plays in the Dakotas and Texas. Then Washington repealed a
Export pipelines out of Western Canada are running at full capacity, but operators are now finding ways to squeeze even more oil through those pipes.
The additional pipeline space is desperately needed by oil companies as export constraints have contributed to lower prices and are the main reason the Alberta government continues to restrict how much oil can be produced in the province.
As new pipeline projects such TC Energy's Keystone XL, Enbridge's Line 3, and the federal government's Trans Mountain Expansion face delays, the expanded capacity could provide significant relief for the industry.
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How Do Pipelines Work? A simple pipeline is a long length of connected pipes with pumps, valves and Most pipelines are constructed of steel, although plastic and aluminum are occasionally used in the Alberta passed a bill that threatened to prevent its existing oil exports from reaching BC, to
Pipelines that move oil and natural gas are big business. They’re also a huge source of controversy What crude oil and natural gas pipeline proposals are there in Canada right now, and which are the most Enbridge’s Line 3 replacement would carry crude oil from Alberta to Wisconsin, but is facing
The incremental expansion of pipeline capacity is known in the industry as "debottlenecking."
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One way to debottleneck a pipeline is to add more pumping stations to add more force to the pipeline. Companies can also find certain areas of the pipeline where flow is constricted and add a segment of parallel pipe in those locations.
In addition, companies can explore ways to improve scheduling and operating of terminals, similar to running a railyard system more efficiently, said Dennis McConaghy, a former senior executive at TransCanada.
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Alberta aims to improve the volume of its heavier type of oil moving through a limited pipeline capacity. File photo by Heather Snow/Shutterstock. The provincial government of Alberta said it would back a process called partial upgrading with an eight-year, 0 million (USD) commitment starting in 2019.
"This is effectively adding another major pipeline," said Ian Gillies, the managing director of institutional research at GMP FirstEnergy, during a recent presentation.
In total, pipeline companies could add up to 575,000 barrels per day of capacity by the end of 2022, according to Gillies.
For comparison, the debottlenecking projects would represent more capacity than Enbridge's formerly proposed Northern Gateway project (525,000 barrels per day) and almost as large as the Trans Mountain expansion (590,000 barrels per day).
"Not all of that has been sanctioned yet and none of it is certain, but we certainly think it will be attractive to producers," said Gillies in an interview.
While some of the projects are a few years away, others are more immediate.
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The Alberta government said that the funding changes were part of "difficult decisions to balance the budget."The agency, which is funded by the Alberta government, said that its 2019-20 budget has been slated at $202 million, down from $278 million in 2018-19 and $298 million in 2016-17.
Alberta ’s premier made several visits to Washington. TransCanada and other energy companies, as well as some major trades unions, argued that America is in the midst of an oil and gas boom, and on track to becoming an energy superpower. Most of the tar sands oil would eventually be exported
The pipeline would be privately financed How was XL approved? The Canadian National Energy Board approved the pipeline in March It's argued by some that by developing the oil sands, fossil fuels will be readily available and the trend toward warming of the atmosphere won't be curbed. In the here and now, more energy is required to extract oil from the Alberta oil sands than in traditional
In the next two months, Calgary-based Enbridge said it will be able to ship an additional 100,000 barrels per day on its Mainline system out of Alberta. It's the first step in the company's plans to expand pipeline capacity and transport more oil.
"That extra 100,000 [barrels per day] comes from capacity recovery, and optimization of receipt and delivery windows, as well as the leveraging of Line 3 Canada," said CEO Al Monaco during a recent conference call with analysts.
Construction of the Line 3 replacement project is complete in Canada, although construction is delayed south of the border. When proper approvals are obtained in Minnesota, the American leg of the project is expected to take between six and nine months to build.
During the first three months of next year, Enbridge also said it plans to add 50,000 barrels per day of space to its Express pipeline out of Alberta to the U.S.
The expansions "require minimal capital, are highly executable, and they generate great return," said Monaco. "They are also good for customers as they provide much needed low-cost incremental capacity to the best markets."
Rail strike, pipeline spill lead Alberta to extend oil curtailment levels
CALGARY — The Alberta government says it will leave its oil production quotas unchanged in January to deal with the lingering consequences after oil shipping was delayed by the Canadian National Railway Co. strike and the temporary shutdown of the Keystone pipeline following a leak in North Dakota. A spokesman for Energy Minister Sonya Savage says producers were informed Tuesday that the production limit for January will remain at 3.81 million barrels per day, the same as December, after several consecutive months of easing quotas.
OTTAWA — In a decision that will almost surely prompt showdowns with environmentalists, indigenous groups and some political allies, Prime Minister Justin Trudeau of Canada approved on Tuesday the expansion of a pipeline linking the oil sands in Alberta to a tanker port in British Columbia.
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The additional space is welcome news for companies who have had to scale back production, transport more oil by rail and, in some cases, delay new projects.
"The pipeline companies have actually been doing a pretty good job of creating capacity in their pipelines," said Husky Energy CEO Rob Peabody, in a recent conference call with analysts.
Calgary-based Plains Midstream announced this summer it would expand its Rangeland system including its pipeline from Alberta to the U.S.
The current capacity of 20,000 barrels a day would be expanded to 100,000, subject to commitments from shippers and attaining permits and regulatory approvals.
"The expansions will be staged into service during the last half of 2019 with full capacity realized in 2021," the company said in a statement in July. A spokesperson would not provide an update.
The amount of extra pipeline volume proposed through debottlenecking shouldn't be dismissed, said McConaghy, the former TransCanada executive.
"That's a fairly impressive contribution if they can actually implement this and don't encounter any unexpected regulatory hurdles," he said.
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Construction advances on Canada's government-owned oil pipeline ahead of court hearing .
CANADA-PIPELINE/ (PIX):Construction advances on Canada's government-owned oil pipeline ahead of court hearingDec 3 (Reuters) - Expansion of Canada's Trans Mountain oil pipeline accelerated on Tuesday just two weeks before a court hearing in British Columbia that will decide whether Prime Minister Justin Trudeau's government can complete the project.