Alberta Makes Tap-Turning Bill into Law

22 hours ago, Marina Schwarz said:

When you read the comments posted at that article, you begin to realize just how much animosity now exists between the peoples of Alberta and BC.  With that attitude, the producers in Alberta might as well just write off that market.  Personally, I don't think that the govt of Alberta has the legal ability to stop a private producer from shipping their product out of Province; it is private oil, and no Province in the Canadian Confederation scheme can interfere with inter-provincial commerce.  Or, maybe the oil companies will say nothing, knowing that busting the NDP govt in BC is in their best interests, so "make it happen."  It looks like predictions are that BC gasoline will hit $12/gallon which is seriously steep for North America, that would be at least triple and likely 4x the price anywhere else. Now, that should seriously roast the socks of the voters!

On the other hand, I can see a nice new market for electric bicycles developing out there....

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Quote: "If Alberta wants to squeeze BC it can shut down the pipe. But if it did the courts would deal with that in hours/days. But the truth of the matter is that Alberta is full of smart people and they know that the Trans Mountain can be gamed to reduce the amount of refined gasoline coming down the pipe. This will have price consequences."

https://achemistinlangley.net/2019/04/14/a-primer-on-the-bc-refined-fuel-market-lower-mainland-gasoline-prices-and-how-they-can-be-affected-by-a-change-in-mix-in-the-trans-mountain-pipeline/

So in France on the highways we pay Euro 1.71 (~CAD 2.56) / litre of gazoline, what does BC know yet about high rates for gazoline?

Let's see if Alberta can jack it up to $4.-/L and see some "yellow vests" rise in BC as well.

It's all fun and games, but my investment in Alberta says that Alberta must win and rather sooner then later.

Have fun.

 

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(edited)

It's a empty threat that will never happen.  Yeah "we have too little pipeline capacity so lets shut down one we have and waste huge amounts in legal fees in a fight we could never win."  .

Edited by Enthalpic

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On 5/11/2019 at 3:38 AM, Enthalpic said:

It's a empty threat that will never happen.  Yeah "we too little pipeline capacity so lets shut down one we have and waste huge amounts in legal fees in a fight we could never win."  .

Pray, pay attention: " But the truth of the matter is that Alberta is full of smart people and they know that the Trans Mountain can be gamed to reduce the amount of refined gasoline coming down the pipe."

Please read Blair's explanation.

 

 

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16 minutes ago, RuudinFrance said:

Pray, pay attention: " But the truth of the matter is that Alberta is full of smart people and they know that the Trans Mountain can be gamed to reduce the amount of refined gasoline coming down the pipe."

Please read Blair's explanation.

 

 

Link of what you want me to read?

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Yet the more promising approach to shipping bitumen is to solidify the material and ship it as so-called "hockey pucks" in open-top gondola cars, using the same materials-handling machinery as for coal.  The oil is mixed with plastic pellets, creating a sticky mass. That in turn is placed into thin-wall plastic cups, then a top lid sealed on, and you end up with a puck about two inches cubed.  Now you can load the pucks, either into gondola cars or into shipping containers, whatever railcar is handy, and haul it over those mountains.  All that rail infrastructure is already in place so this goes very fast.  At the other end the polymer material is extracted, the oil can go into the refinery and the polymer returned to the starting point. Or you can use the plastic pellets locally, if there is a customer for the stuff. 

What this saves is the vast expense of actually building the new pipeline.  You want to be careful not to get wedded to old ideas, as technology has this way of making reliance on old ideas foolish.  Do you want to get that bitumen to market fast and safe?  Try the hockey puck idea.  What makes it so appealing is that is is spill-damage proof.  The pucks float, so if there is a train derail and the freightcar tips over, all you need to do is have the workmen scoop those pucks up.  That is quite appealing as if the spill is in Winter, you can quietly wait until conditions are better to get out there and deal with it.  The bitumen encased in polymer is inert; you can go scoop up a year later and the effects on the environment are zero. Cannot say the same for a pipeline break. 

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This is anecdotal but there are a lot of people angry in BC not only at Horgan and Trudeau but at Suzuki and the "environmental movement" in general.

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13 minutes ago, catalyst said:

This is anecdotal but there are a lot of people angry in BC not only at Horgan and Trudeau but at Suzuki and the "environmental movement" in general.

Sure there are.  You can place the now-unemployed forest-product workers, the woodsmen, loggers, and truckers in the interior, in that camp, as they have watched their livelihoods evaporate and their towns wither away.  

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6 hours ago, Jan van Eck said:

Yet the more promising approach to shipping bitumen is to solidify the material and ship it as so-called "hockey pucks" in open-top gondola cars, using the same materials-handling machinery as for coal.  The oil is mixed with plastic pellets, creating a sticky mass. That in turn is placed into thin-wall plastic cups, then a top lid sealed on, and you end up with a puck about two inches cubed.  Now you can load the pucks, either into gondola cars or into shipping containers, whatever railcar is handy, and haul it over those mountains.  All that rail infrastructure is already in place so this goes very fast.  At the other end the polymer material is extracted, the oil can go into the refinery and the polymer returned to the starting point. Or you can use the plastic pellets locally, if there is a customer for the stuff. 

What this saves is the vast expense of actually building the new pipeline.  You want to be careful not to get wedded to old ideas, as technology has this way of making reliance on old ideas foolish.  Do you want to get that bitumen to market fast and safe?  Try the hockey puck idea.  What makes it so appealing is that is is spill-damage proof.  The pucks float, so if there is a train derail and the freightcar tips over, all you need to do is have the workmen scoop those pucks up.  That is quite appealing as if the spill is in Winter, you can quietly wait until conditions are better to get out there and deal with it.  The bitumen encased in polymer is inert; you can go scoop up a year later and the effects on the environment are zero. Cannot say the same for a pipeline break. 

This is quite an interesting solution, but it won't entirely solve Canada's problem due the economics of it. They estimate it will cost $50 million to create a facility that could produce 10,000 boe/d. In addition, if I remember correctly, the cost to producers would be around $5-8 per boe. You stack that cost onto shipping via rail at roughly $16-20, you'd have to have a significantly wide differential to support both costs.

At the current moment, since curtailments in Alberta we're introduced, they began depleting the amount of oil in storage, as of last month data is showing that it's growing again due to the drop off in oil being shipped by rail. This is due to the compression of the differential making oil by rail no longer economically viable.

Anyways, to cap it off, the whole point of TMX is to try and get a premium on heavy oil as many other oil producers do. Without new pipeline capacity and the diversification of our market, Alberta and the rest of Canada's economy will continue to suffer.

P.S: I'm Canadian, and was hopeful these pucks and or other technological improvements would get us out of this mess. Hopefully I'm wrong.

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2 hours ago, Matthew w said:

P.S: I'm Canadian, and was hopeful these pucks and or other technological improvements would get us out of this mess. Hopefully I'm wrong.

Rest assured, they will, and here's why: 

First,  the relative costs.  How much do you expect it would cost to build a new Energy East pipeline running entirely through Canada - which means across Northern Ontario?  You cannot assume that the individual States of Minnesota and Wisconsin and Michigan (and, assuming the route is underneath Lake Huron into Sarnia, whatever bodies control that water) are simply going to go hand out Permits.  In the current climate, that is unlikely.  That pipe has to be both extra strong to withstand the pressures needed to move bitumen, and insulated to boot so that it would actually flow at all.  So, the alternative to rail is a very expensive pipe, way into the billions.

Second, you have the time problem. It will take years to build a new pipeline.  OK, it can go fast across the prairies, where you have soft soil.  Across pre-Cambrian rock, not so much.  Across the treacherous terrain of the Rockies, not so much.  

Third, to ship oil by rail in tank cars you have to go build the tank cars - no easy task.  Fine, the Govt of Alberta goes and orders up 4,500 tank cars.  That is big bucks, and will not be enough.  Plus, you need lots of diluent to move oil by tank-car, just as you do by pipe.  That also costs money.  You don't have these problems when you use the existing fleet of gondola cars.  Gondola cars are easy and cheap to build, it is a box with the top missing, dropped onto two standard trucks.  It does not get simpler.  

Fourth, the cost numbers to pelletize will continue to drop, probably dramatically, as experience with the technique is developed. 

Fifth, I predict that some new technique will evolve, where the oil is packed into a (larger) puck mold, seared by heat or laser, and a solid mass is ejected, thus eliminating the need for the plastic pellets as the binder.  Once you get to that stage, the costs go way, way down. 

You cost profile then drops down to what it is for coal.  Coal is an ultra-cheap commodity, yet it is hauled by rail from Wyoming  (Powder River basin) all the way to Norfolk, Virginia, for loading into bulk ships for export.  Coal cars are cheap to build, and there are lots of them.  Unit coal trains are common.  Substituting blocks of bitumen for the coal uses easily transferable skills and machinery. 

Remember that the CN itself is the driver behind this development for oil shipping. They like it because it dramatically lowers their exposure to costs of a derail and oil spill. When was the last time you saw people freaking out over some coal train derail?

Now, if you incorporate pucks or chunks into a National Energy Plan wherein the Canadian market is closed to imports without special license, and oblige the Eastern Provinces to use oilsands oil as feedstock  (excepting Newfoundland and their offshore oils), then you have the foundation for developing the oilsands in a rational way.  And it gets a lot better once extraction technology via solvents comes into its own - which I predict it will. Happy days will be here again, as Canada finally gets it right and comes into its own.  That assumes, of course, that the political factions don't screw it up, which historically they have displayed a special elegance in doing.  Being rational is not a Canadian strong suit. 

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