Canadian oil

[Truenorth00]

Originally Posted by SignalHillHiker

BP is quitting the oil sands, opening an office in St. John's, and buying out Cenovus' share of Bay du Nord. Very minor blip for AP but potentially a good deal for us, given the outsized impact of such a move in our smaller market.

Way more than that. BP is doing this to reduce carbon exposure. This is a vote of confidence in BdN and a vote against the oil sands by a major international player.

[Hackslack]

Originally Posted by Truenorth00

Way more than that. BP is doing this to reduce carbon exposure. This is a vote of confidence in BdN and a vote against the oil sands by a major international player.

Plus the ease of access to Europe for the BdN project compared to oil sands, as Europe will be looking to source oil from elsewhere other than Russia.

[DoubleK]

BP selling it's stake in the Sunrise oilsands project to Cenovus in exchange for its stake in Bay du Nord.

[ericmacm]

News is a bit older, but in early April it was reported that CNOOC is likely preparing exit Canadian, British, and American operations over fear of western sanctions regarding its potential role in assisting Russia, and being "uncomfortable" with dealing with regulations and high operating costs in the developed world. They are also apparently having trouble trying to work with industry partners on more technologically challenging assets due to existing restrictions and sanctions, and ultimately want to turn their focus to new projects in Guyana, Uganda, and the Bohai Sea.

It won't be a return of Nexen, though, it'll likely end up as separate sales of each asset, as they are currently prepping the sale of their North Sea assets separate from the others.

[Truenorth00]

Originally Posted by DoubleK

BP selling it's stake in the Sunrise oilsands project to Cenovus in exchange for its stake in Bay du Nord.

BP is a global player. It's not just about supplying Europe. It's about developing a portfolio of energy projects that are viable in a transitioning world.

[LightingGuy]

A thought I had the other day but haven't done much research on admittedly...

If the whole world gradually switches over to electric cars, we would essentially be doubling the weight of every single vehicle. This would effectively double the wear on roads, requiring more road repair, and roads built to a higher standard.

Not only that, but a lot of Africa has yet to industrialize, which would cause further demand in road construction resources.

Road asphalt comes from Bitumen. Alberta's oil sands contain the highest bitumen deposits in the world.

Wouldn't this mean that even after we no longer need oil for cars that there would still be a massive market for Alberta's oil?

[Truenorth00]

Building roads consumes a very tiny fraction of global oil supply. Even if the demand was doubled (which it won't be), that will not be sufficient to offset any global decline in demand for automotive fuels.

[whatnext]

Originally Posted by ericmacm

News is a bit older, but in early April it was reported that CNOOC is likely preparing exit Canadian, British, and American operations over fear of western sanctions regarding its potential role in assisting Russia, and being "uncomfortable" with dealing with regulations and high operating costs in the developed world. They are also apparently having trouble trying to work with industry partners on more technologically challenging assets due to existing restrictions and sanctions, and ultimately want to turn their focus to new projects in Guyana, Uganda, and the Bohai Sea.

It won't be a return of Nexen, though, it'll likely end up as separate sales of each asset, as they are currently prepping the sale of their North Sea assets separate from the others.

Good riddance.

[WarrenC12]

Originally Posted by LightingGuy

A thought I had the other day but haven't done much research on admittedly...

If the whole world gradually switches over to electric cars, we would essentially be doubling the weight of every single vehicle.

Double? No. 25% more is realistic.

Originally Posted by LightingGuy

This would effectively double the wear on roads, requiring more road repair, and roads built to a higher standard.

This has been disproven numerous times. The heaviest vehicles (trucks, buses) do the lions share of road damage. That won't change.

To the rest of your point, roads can be made from other materials quite easily.

[LightingGuy]

Originally Posted by Truenorth00

Building roads consumes a very tiny fraction of global oil supply. Even if the demand was doubled (which it won't be), that will not be sufficient to offset any global decline in demand for automotive fuels.

I don't doubt that. Just wondering since Alberta oil in its existing form would need less production for asphalt use than say Saudi oil, so wouldn't it be more competitive for that purpose.

[LightingGuy]

Originally Posted by WarrenC12

Double? No. 25% more is realistic.



This has been disproven numerous times. The heaviest vehicles (trucks, buses) do the lions share of road damage. That won't change.

To the rest of your point, roads can be made from other materials quite easily.

Fair enough, appreciate the response.

[Truenorth00]

Even 25% is debatable. EVs are not double the weight to begin with. We're at the point where EVs are about on par with comparable vehicles or may be 100-200 kg heavier at the max. Double the weight is ridiculous nonsense. A quick Google shows this:

Tesla Model 3: 1,612 to 1,831 kg
BMW 3 Series: 1,665 to 1,896 kg

And batteries are getting lighter every year. I'd say the bigger issue for wear and tear on roads are the folks buying Chevy Tahoes and F150s for use on their weekly Costco run.

[swimmer_spe]

Originally Posted by LightingGuy

A thought I had the other day but haven't done much research on admittedly...

If the whole world gradually switches over to electric cars, we would essentially be doubling the weight of every single vehicle. This would effectively double the wear on roads, requiring more road repair, and roads built to a higher standard.

Not only that, but a lot of Africa has yet to industrialize, which would cause further demand in road construction resources.

Road asphalt comes from Bitumen. Alberta's oil sands contain the highest bitumen deposits in the world.

Wouldn't this mean that even after we no longer need oil for cars that there would still be a massive market for Alberta's oil?

Let's say that due to materials technology, those cars were half the weight. Think of carbon fibre vs aluminum
"Carbon fiber composites have a density of 1.55 g/cm3 (epoxy resin 30%, carbon fiber 70%), that in the case of aluminum is 2.7g/cm3 and 4.5 g/cm3 for titanium or 7.9 g/cm3 for steel."
http://www.dexcraft.com/articles/car...-of-materials/

You could then say that we would need even less oil. The goal of most people when it comes to the end of oil, is not stopping using it, but stopping using it as a fuel for energy. Plastics are made of oil. I'd guess plastics will still be around for decades for use in everyday stuff. However this does bring up a different issue - cost of oil. This could see places like Alberta oil sands shut down till it gets back over a certain price. The thing is, we won't feel it as the cost is in the cost of manufacturing a product, not in energy consumption.

[LightingGuy]

Originally Posted by Mister F

The world is already on a path away from oil, with massive investments into EVs, green energy, and battery manufacturing. Oil may now be in its last boom period. Declining oil demand over the next decade is going to hit high cost producers like Alberta hardest. And the transition is only going to accelerate now with Putin's foolhardy invasion of Ukraine. There are going to be a lot of stranded assets in the fossil fuel industry in the not too distant future. Building more pipelines doesn't seem like the best idea with these trends happening. We need to be moving away from oil, not doubling down on it.

I don't think that's a decision for the government to make though. It's private money being invested into these projects - if they lose it, tough. All the government needs to focus on is regulating it from environmental standpoints.

[Al Ski]

Originally Posted by swimmer_spe

Let's say that due to materials technology, those cars were half the weight. Think of carbon fibre vs aluminum
"Carbon fiber composites have a density of 1.55 g/cm3 (epoxy resin 30%, carbon fiber 70%), that in the case of aluminum is 2.7g/cm3 and 4.5 g/cm3 for titanium or 7.9 g/cm3 for steel."
http://www.dexcraft.com/articles/car...-of-materials/

You could then say that we would need even less oil. The goal of most people when it comes to the end of oil, is not stopping using it, but stopping using it as a fuel for energy. Plastics are made of oil. I'd guess plastics will still be around for decades for use in everyday stuff. However this does bring up a different issue - cost of oil. This could see places like Alberta oil sands shut down till it gets back over a certain price. The thing is, we won't feel it as the cost is in the cost of manufacturing a product, not in energy consumption.

The problem is: as much as we'd like to think that we're 'Green', our economy is still fully dependent upon fossil fuels.

And you can't expect the oil industry to simply switch the supply on now that we need it - after we've been telling them for years to gear down.

These investments, disinvestments and policy changes take years (decades) to play out.

And commodities, like the rest of the stock market, are so highly manipulated that there is no simple solution - it doesn't really matter what we do.

[swimmer_spe]

Originally Posted by Al Ski

The problem is: as much as we'd like to think that we're 'Green', our economy is still fully dependent upon fossil fuels.

And you can't expect the oil industry to simply switch the supply on now that we need it - after we've been telling them for years to gear down.

These investments, disinvestments and policy changes take years (decades) to play out.

And commodities, like the rest of the stock market, are so highly manipulated that there is no simple solution - it doesn't really matter what we do.

Yes, we are addicted to oil. Two movies to watch Who Framed Roger Rabbit? And Who Killed the Electric Car? This shows how we got hooked on oil. Tesla is proving that the electric cars are the future and the average person can own one. That shift will move us off oil.

[Truenorth00]

Originally Posted by LightingGuy

I don't think that's a decision for the government to make though. It's private money being invested into these projects - if they lose it, tough. All the government needs to focus on is regulating it from environmental standpoints.

It's not government deciding. It's the capital markets deciding. There's a lot of folks who just don't like that the capital markets aren't deciding in their favour.

Most people cannot imagine a world where oil demand is actually declining. But technology is now creating cheaper alternatives. And as that happens, investors are going to look for oil assets that are higher quality and lower emitting. A lot of Canadian oil is heavy and sour. And a lot of Canadian oil producers spent the last decade trying to argue against cutting emissions instead of getting on with the job. Now they are finding out that traders in New York and London don't give a shit about your politics, they are just looking at your waning long term prospects and passing on your project.

[ericmacm]

The Trans-Mountain Pipeline Expansion has been deemed unprofitable by the PBO after construction costs soar to an estimated $21.4B. The pipeline is estimated to be worth a net -$600M over a 40-year lifespan. What’s interesting about this is that the federal government maintains the claim that the pipeline will have a 100-year lifespan, which conflicts with the lifespan claimed by the PBO.

I get that the PBO is supposed to be more conservative on these kinds of estimates, but considering the fact that the existing Trans-Mountain Pipeline has been functioning since 1953 (70 years by the time TMX is supposed to be complete next year), the federal government claim on lifespan is likely more accurate due to modern materials and construction methods. Either way, I think the big lesson being learned here is that pipelines through the mountains are no easy feat, especially within the modern Canadian political and environmental context. Any future pipelines we see in the country will probably go east instead of west.

[WarrenC12]

Originally Posted by ericmacm

The Trans-Mountain Pipeline Expansion has been deemed unprofitable by the PBO after construction costs soar to an estimated $21.4B. The pipeline is estimated to be worth a net -$600M over a 40-year lifespan. What’s interesting about this is that the federal government maintains the claim that the pipeline will have a 100-year lifespan, which conflicts with the lifespan claimed by the PBO.

I get that the PBO is supposed to be more conservative on these kinds of estimates, but considering the fact that the existing Trans-Mountain Pipeline has been functioning since 1953 (70 years by the time TMX is supposed to be complete next year), the federal government claim on lifespan is likely more accurate due to modern materials and construction methods. Either way, I think the big lesson being learned here is that pipelines through the mountains are no easy feat, especially within the modern Canadian political and environmental context. Any future pipelines we see in the country will probably go east instead of west.

Part of the question I guess would be how much oil will really be flowing through TMX in 50 years, nevermind 100.

[ericmacm]

Originally Posted by WarrenC12

Part of the question I guess would be how much oil will really be flowing through TMX in 50 years, nevermind 100.

This is a good point too. It’s hard to predict what the oil market and oil prices will look like in 10 years, let alone 50-100. Nobody expected it to go negative in 2020, and nobody expected it to go as high as it is right now.