Author Topic: Fire in Alberta threatens oil production, helps boost price  (Read 3521 times)

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Offline Smokin Joe

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Fire in Alberta threatens oil production, helps boost price
http://www.pennenergy.com/articles/pennenergy/2016/05/fire-in-alberta-threatens-oil-production-helps-boost-price.html?cmpid=EnlDailyPetroMay92016&eid=290980193&bid=1398232

AP

May 6, 2016

The massive wildfire in the heart of Canada's oil country is helping send crude prices higher.

Benchmark U.S. crude rose 34 cents to $44.66 a barrel Friday in New York after earlier dropping by nearly 2 percent. Oil prices often spike when there is concern that production could be curtailed.

Canada is the leading exporter of crude oil and natural gas to the United States, according to figures from the Energy Information Administration. Canada sends about 100 million barrels of crude and 240 billion cubic feet of natural gas per month to the U.S.

S&P Global Platts, which tracks the energy industry, estimated that up to 820,000 barrels a day of crude oil production were shut in by the fire, although the number could be lower if facilities were operating below peak capacity.

"It definitely is helping to boost the prices, although (the increase) is not that high considering the amount of crude that is being threatened," said Jeff Mower of Platts. He attributed the restrained market reaction to high inventories of crude in the U.S., especially in the Midwest, where much of the Canadian crude goes...

http://www.pennenergy.com/articles/pennenergy/2016/05/fire-in-alberta-threatens-oil-production-helps-boost-price.html?cmpid=EnlDailyPetroMay92016&eid=290980193&bid=1398232
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline IsailedawayfromFR

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #1 on: May 09, 2016, 06:38:54 pm »
Fire in Alberta threatens oil production, helps boost price
http://www.pennenergy.com/articles/pennenergy/2016/05/fire-in-alberta-threatens-oil-production-helps-boost-price.html?cmpid=EnlDailyPetroMay92016&eid=290980193&bid=1398232

AP

May 6, 2016

The massive wildfire in the heart of Canada's oil country is helping send crude prices higher.

Benchmark U.S. crude rose 34 cents to $44.66 a barrel Friday in New York after earlier dropping by nearly 2 percent. Oil prices often spike when there is concern that production could be curtailed.

Canada is the leading exporter of crude oil and natural gas to the United States, according to figures from the Energy Information Administration. Canada sends about 100 million barrels of crude and 240 billion cubic feet of natural gas per month to the U.S.

S&P Global Platts, which tracks the energy industry, estimated that up to 820,000 barrels a day of crude oil production were shut in by the fire, although the number could be lower if facilities were operating below peak capacity.

"It definitely is helping to boost the prices, although (the increase) is not that high considering the amount of crude that is being threatened," said Jeff Mower of Platts. He attributed the restrained market reaction to high inventories of crude in the U.S., especially in the Midwest, where much of the Canadian crude goes...

http://www.pennenergy.com/articles/pennenergy/2016/05/fire-in-alberta-threatens-oil-production-helps-boost-price.html?cmpid=EnlDailyPetroMay92016&eid=290980193&bid=1398232

I had a musing years ago that this could be the largest oil field in the world if some paradigms were removed from the equation.

Lots of unconventional gas exist in this part of Canada removed from a market, making it similar to Western Australia.  The Canadians are following the WA example of getting the gas to the coast, installed LNG and export.  Very expensive.

Instead, I had thought if they just sent it to Alberta to be burnt to generate steam at Athabasca, it would create much more value.

Particularly as Athabasca has an unlimited amount of heavy oil available.  It could rival SA's giant fields and conveniently sits nearby the largest oil market in the world, the USA.
No punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin~  George Washington

Offline Smokin Joe

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #2 on: May 10, 2016, 02:31:40 am »
Quote
The Canadians are following the WA example of getting the gas to the coast, installed LNG and export.

If they can keep the ecowhackos from blowing up pipelines... The Asian market for NGLs and LNG is unreal compared to the US, but you have to get it there...
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline thackney

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #3 on: May 10, 2016, 12:23:39 pm »
If they can keep the ecowhackos from blowing up pipelines... The Asian market for NGLs and LNG is unreal compared to the US, but you have to get it there...

While percentagewise is still a great improvement over local, it is not much in dollars compared to the price of transport and conversion.  Nat Gas prices fell with oil.

http://www.ferc.gov/market-oversight/mkt-gas/overview/ngas-ovr-lng-wld-pr-est.pdf
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Offline Smokin Joe

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #4 on: May 10, 2016, 12:26:46 pm »
While percentagewise is still a great improvement over local, it is not much in dollars compared to the price of transport and conversion.  Nat Gas prices fell with oil.

http://www.ferc.gov/market-oversight/mkt-gas/overview/ngas-ovr-lng-wld-pr-est.pdf
I knew they had dropped, but that is even more than I had last seen. Thanks!
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline IsailedawayfromFR

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #5 on: May 10, 2016, 01:38:17 pm »
If they can keep the ecowhackos from blowing up pipelines... The Asian market for NGLs and LNG is unreal compared to the US, but you have to get it there...

One of the difficulties in the western Canadian unconventional gas like Horn Mountain, is the large % of inerts.  These must be removed prior to liquefaction. 

Reason why it seems to make sense to burn at boiler tip.

WA's only alternative to LNG is a tremendously huge pipeline across the continent to market users.
Canada's pipeline to Athabasca is only a stone's throw.
No punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin~  George Washington

Offline Smokin Joe

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #6 on: May 10, 2016, 11:13:36 pm »
One of the difficulties in the western Canadian unconventional gas like Horn Mountain, is the large % of inerts.  These must be removed prior to liquefaction. 

Reason why it seems to make sense to burn at boiler tip.

WA's only alternative to LNG is a tremendously huge pipeline across the continent to market users.
Canada's pipeline to Athabasca is only a stone's throw.
Running 10% or more CO2 is a problem. The worst I found was in the Deadwood Carbonate (Cambrian, ND) where there was so much CO2 more Methane would have to be added to get it to burn (the operator plugged back and produced the Sandstone which had significantly less CO2).

There can be a host of other problems with raw wellhead gas, but that looks pretty usable form a standpoint of just running boilers. The H2S would likely have to be processed out, too, (7000 PPM has potential to cause lots of problems)

If I have the right play, here: http://www.bcogc.ca/node/11238/download
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline IsailedawayfromFR

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #7 on: May 11, 2016, 12:05:37 am »
Running 10% or more CO2 is a problem. The worst I found was in the Deadwood Carbonate (Cambrian, ND) where there was so much CO2 more Methane would have to be added to get it to burn (the operator plugged back and produced the Sandstone which had significantly less CO2).

There can be a host of other problems with raw wellhead gas, but that looks pretty usable form a standpoint of just running boilers. The H2S would likely have to be processed out, too, (7000 PPM has potential to cause lots of problems)

If I have the right play, here: http://www.bcogc.ca/node/11238/download

Whoops it is in fact Horn River. my apologies for the confusion.  When I was commissioned to assist in North America searches for best unconventional gas prospects, Horn River climbed to near the top.  Great geological setting, great fraccability, resulting in fantastic producing rates.  Not so great location or inerts %.

The worst contaminants I have ever encountered is in the super-super giant East Natuna gas field in Indonesia.  See https://en.wikipedia.org/wiki/East_Natuna_gas_field

At 222 trillion cubic feet, that is a lot of gas.  Unfortunately, it is 71% CO2 and has never been developed.

I recall attending the Worldwide LNG conference (In Nice, France which is a pretty Nice place, pun deliberate) and sat next to several Exxon engineers who controlled East Natuna at the time and were analyzing alternative development scenarios.

They had hit on one development plan to separate the CO2 and reinject it along dozens of of miles of subsea pipelines as the study indicated that the ocean would absorb the CO2.  Unfortunately, the reinjection of 4 bcfpd of CO2 would have raised the ph value of the surrounding water by one and projected to killed off all ocean life in this area.  Needless to say, that scenario was dropped and the project has yet to have any viable development plans to date.
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Online Bigun

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #8 on: May 11, 2016, 12:06:22 am »
Running 10% or more CO2 is a problem. The worst I found was in the Deadwood Carbonate (Cambrian, ND) where there was so much CO2 more Methane would have to be added to get it to burn (the operator plugged back and produced the Sandstone which had significantly less CO2).

There can be a host of other problems with raw wellhead gas, but that looks pretty usable form a standpoint of just running boilers. The H2S would likely have to be processed out, too, (7000 PPM has potential to cause lots of problems)

If I have the right play, here: http://www.bcogc.ca/node/11238/download

Relatively easy to just remove the CO2 and be done with it.
"I wish it need not have happened in my time," said Frodo.

"So do I," said Gandalf, "and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us."
- J. R. R. Tolkien

Offline Smokin Joe

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #9 on: May 11, 2016, 12:32:26 am »
Relatively easy to just remove the CO2 and be done with it.
That's what they are doing. Then going the pipeline to export LNG route.  We were talking about using the raw wellhead gas to run boilers for the bitumen extraction operations. With 10% CO2 going to the boilers, just imagine the AGW/CC bunch having cartwheeling fits over emissions.

« Last Edit: May 11, 2016, 12:39:23 am by Smokin Joe »
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Online Bigun

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #10 on: May 11, 2016, 01:07:41 am »
That's what they are doing. Then going the pipeline to export LNG route.  We were talking about using the raw wellhead gas to run boilers for the bitumen extraction operations. With 10% CO2 going to the boilers, just imagine the AGW/CC bunch having cartwheeling fits over emissions.

Oh I can imagine but it seems to me that it would be just as easy to remove the CO2 for that purpose as well.
"I wish it need not have happened in my time," said Frodo.

"So do I," said Gandalf, "and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us."
- J. R. R. Tolkien

Offline IsailedawayfromFR

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #11 on: May 11, 2016, 01:25:17 am »
Relatively easy to just remove the CO2 and be done with it.

May be easy in this case, but East Natuna it would not be.

The newly-commissioned Gorgon LNG project has been developed and an estimated 20% of the capital costs is to strip out inerts and return via reinjection.

It is a $54 billion dollar project, so put a pencil on how 'Relatively easy' that one would be.
No punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin~  George Washington

Online Bigun

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #12 on: May 11, 2016, 01:28:32 am »
May be easy in this case, but East Natuna it would not be.

The newly-commissioned Gorgon LNG project has been developed and an estimated 20% of the capital costs is to strip out inerts and return via reinjection.

It is a $54 billion dollar project, so put a pencil on how 'Relatively easy' that one would be.

Point taken.

Wonder why it's so expensive to do that up there?
« Last Edit: May 11, 2016, 01:31:42 am by Bigun »
"I wish it need not have happened in my time," said Frodo.

"So do I," said Gandalf, "and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us."
- J. R. R. Tolkien

Online Free Vulcan

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #13 on: May 11, 2016, 06:27:57 am »
We got quite a bit of smoke from those fires down here in SE Iowa this weekend via a north wind.
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Offline Smokin Joe

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #14 on: May 11, 2016, 06:34:53 am »
We got quite a bit of smoke from those fires down here in SE Iowa this weekend via a north wind.
We had it thick in NW ND, too. Red sun at midday. We did get a thunderstorm, which was particularly welcome considering I had just put the garden in, but also because it scrubbed the air.  We get the smoke plume from fires in western Canada, Montana and Idaho, and the Pacific Northwest.
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline IsailedawayfromFR

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #15 on: May 11, 2016, 01:36:58 pm »
Point taken.

Wonder why it's so expensive to do that up there?

Australia is an environmental wacko's paradise.  Nothing is done without extremely strict environmental protections.  Case in point: when I used to work Australia, I visited Barrow Island, a beautiful place off the Northwest Shelf that was un-inhabited save the oil-field workers there who operated the largest onshore oilfield in the country.  Just no fresh water for anything to survive but indigenous life which flourished there that was used to it.

EVERY piece of equipment that was shipped to island, including logging and cementing trucks, had to undergo a cleaning process to ensure no plants were transported there, as well as a three day wait to check for any rodents presence, prior to being transported to the island.

Guess where the Gorgon LNG plant is located?  Barrow Island. 

I worked back in the late 80's to try to get a development going for Gorgon and it took almost another 30 years to make it happen.  Our estimated capital costs back then were $4bn and they ballooned to present $54 bn.

It did not help that Shell was part of the consortium, as that company is almost a enviro-wacko itself with its nonsensical zero-CO2 emissions commitment as a company it made.  For years Shell has tried to get the Australian govt to force that same standard onto all companies so Shell could remain competitive.  Competitive by make everybody share the misery of hi costs like it chose to do.
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Offline thackney

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #16 on: May 11, 2016, 02:34:52 pm »
Oil Sands Operations To Restart In The Next Few Days After Wildfires Shut-In 1 M/bpd
http://oilpro.com/post/24393/oil-sands-operations-to-restart-next-few-days-after-wildfires-shu?utm_source=DailyNewsletter&utm_medium=email&utm_campaign=newsletter&utm_term=2016-05-11&utm_content=Article_5_txt
5/11/2016

Quote
Alberta Premier Rachel Notley met with oil company executives on Tuesday to discuss plans to restart operations after massive wildfires over the past week have shut down a little over 1 M/bpd of production from the oil sands region.

The fires have moved away from the projects situated north of Fort McMurray. Winds are currently directing it east towards Saskatchewan. No significant damage to pipeline and power infrastructure has been reported.

Facilities located north of Fort McMurray could resume operations in the next few days, Notley said at a Tuesday news conference. More facilities will resume production over the next few weeks, she added.

Morgan Stanley said in a Wednesday note that projects that comprise ~0.9 M/bpd of the 1.0 M/bpd impacted production could restart production in the next few days.

The Restart Timetable
On Monday, Shell said its Albian Sands mining operations had resumed production at a reduced rate. As noted above, more projects are expected to come back online in coming days and weeks. But the pace of these restarts depends on a series of factors.

Here is what Morgan Stanley said in its Wednesday note:

[W]e believe mining projects can ramp up relatively quickly with the upgraders being the main bottleneck (~3-4 days to a week to be fully up). In situ projects could take longer given the need to restart steaming and potentially having to repressurize....
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Offline IsailedawayfromFR

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Re: Fire in Alberta threatens oil production, helps boost price
« Reply #17 on: May 12, 2016, 12:00:02 am »
Point taken.

Wonder why it's so expensive to do that up there?

I forgot to mention it is down there, not up there too.

Have a brother who has lived there now 35 years, and used to visit him.  Now few and far between.
No punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin~  George Washington