Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Thursday, March 14, 2013

Defiant Canada is pumping out oil at record levels

Canada’s defiant oil industry shrugged off criticism as it cranked up production to four million barrels per day last December – its highest ever output, according to the International Energy Agency.

“Canadian oil production has increased rapidly over the last several months, reaching an all-time high of 4.1 mbpd in December on the back of a record one million bpd in synthetic crude output from surface mining operations,” the IEA said in a report published Wednesday.

Growth was not restricted to the oil sands. Alberta light and medium output also rose to 440,000 bpd, its highest level in a decade, on the back of new light tight oil developments in Cardium and Viking in Alberta, along with other plays in Saskatchewan and Manitoba, the IEA said.

Canada’s eastern offshore production stood at around 250,000 bpd in December.

The record ramp-up in production came as some of the oil sands’ biggest critics expressed hope that the U.S. rejection of the Keystone XL pipeline would slow down heavy crude production in Alberta.

“The markets are relentless and will continue to search for ways to move that product into the United States, whether Keystone XL is approved or not,” Jim Prentice, vice-chairman of the Canadian Imperial Bank of Commerce, told the Financial Post from New York where he gave a speech on the pipeline’s role in North America’s quest for continental energy security.

The U.S. State Department issued an environmental assessment on the Alberta-Gulf Coast project on March 4 and is in the midst of a 45-day public review. A decision on the project could come any time after that.

“The project is in the national interest of both Canada and the United States... I think it’s a mistake to exile the oil sands from the resource bounty that we have as North Americans, and attempting to extricate it from the North American marketplace... is impractical,” Mr. Prentice said.

With North American oil pipelines clogged and Northern Gateway project stuck in the review phase, railways have come to the rescue. More than 30,000 tank cars are being built across North America to ship rising production from Alberta, Bakken and other tight oil plays. Analysts estimate somewhere between 4% and 7% of North American oil production is being shipped by rail.

“One way or another, oil sands is going to grow and production needs to get out of there,” said Leo Mariani, analyst at RBC Capital Markets.

However, Keystone XL’s rejection could crimp production in the short run.

“At a minimum, it will stall some of the development plans for the oil sands,” Mr. Mariani said. “I would certainly expect to see Canadians find an alternative route but that is going to add substantially to the time on the project.”

There would certainly be consequences to a refusal, Mr. Prentice added.

“Personally, I hope and believe the president will see the wisdom in supporting the Keystone project... The pipeline grid from Canada into the United States is essentially full at this point and people are resorting to cumbersome alternatives to move Canadian products into the United States.”

For now, oil sands production in 2013 is more likely to fall due to planned maintenance work, which is expected to reduce mined synthetic crude output to around 810,000 bpd in the second quarter, compared to one million bpd in December.

The IEA says there are two downside risks to its outlook of four million bpd in 2013. “First, last year’s maintenance proved longer than initially announced, and this year could see a repeat. Second, with Western Canadian Select prices still experiencing a steep discount to WTI, operators may have an incentive to delay the restart of operations to a later time when the differential is more advantageous.”

The planned upgrade work is already strengthening Canadian synthetic crude prices. Light synthetic crude was trading at $102.07 per barrel, $7 premium over West Texas Intermediate, according to First Energy Capital data. Western Canada traded at a $18.93 discount to the WTI.

Original Article
Source: edmontonjournal.com
Author: Yadullah Hussain

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