Webber academy oil sands and benefits to canada

987 views
834 views

Published on

Webber Academy, November 2013

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
987
On SlideShare
0
From Embeds
0
Number of Embeds
360
Actions
Shares
0
Downloads
11
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Webber academy oil sands and benefits to canada

  1. 1. Canada’s Oil Sands Webber Academy November 2013 Looking Forward Continuing Responsible Growth 2
  2. 2. Oil Sands by Subject 3 Global Primary Energy Demand 20,000 18,000 16,000 14,000 million tonnes oil equivalent Other Renewables Bioenergy Hydro Nuclear Natural Gas Oil Coal 12,000 10,000 8,000 6,000 4,000 2,000 0 2010 Ongoing reliance on fossil fuels (share of energy consumption): 2010: 81% 2035: 75% Source: International Energy Agency – New Policies Scenario World Energy Outlook 2011 2015 2020 Source: International Energy Agency World Energy Outlook 2012 4 2025 2030 2035
  3. 3. Oil Sands Source: Cenovus Oil Sands – Resistance to flow 1,000,000 Viscosity @ Room Temperature (cP) 100,000 10,000 Ketchup Honey 1,000 Pancake Syrup 100 Olive Oil 10 Light Crude Oil 1 Water 0 Source: Imperial Oil Cold Lake Bitumen Peanut Butter Athabasca Bitumen
  4. 4. Global Crude Oil Reserves by Country Restricted (81%) 173 155 150 141 102 100 92 80 48 Source: Oil & Gas Journal Dec. 2012 Canada’s Oil Sands Resource 8 Libya Russia Abu Dhabi Kuwait Iraq Iran Canada Saudi Arabia Venezuela 50 0 Other 44% 37 30 26 25 21 United States 200 Oil Sands 56% Open to Private Sector Qatar billion barrels 250 Open to Private Sector China 265 Kazhakhstan 298 Nigeria 300 World Oil Reserves els arr n b ves illio er 9 b res 16 nds es a lud il s Inc of o
  5. 5. Natural exposure of the Oil Sands near Ft. McMurray Courtesy of R.G. Skinner Photo: ConocoPhillips - Surmont Two Methods of Oil Sands Recovery Drilling: 80% of reserves Schematic: Devon - Jackfish 10 Mining: 20% of reserves
  6. 6. Canadian Oil Sands (Bitumen and SCO) & Conventional Production 11 Light/Tight Oil Production 12 + 1,000,000 b/d in 2 years Eagle Ford (Texas) N. Dakota SK Light Jul-2012 Jul-2011 Jan-2012 Jul-2010 Jan-2011 Jul-2009 Jan-2010 Jan-2009 Jul-2008 Jan-2008 Jul-2007 Jan-2007 Jul-2006 AB Light Jan-2006 Jul-2005 Jan-2005 Thousand b/d 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Sources: Eagle Ford : Railroad Commission of Texas N. Dakota: EIA SK: Government of SK AB: ERCB
  7. 7. U.S. Imports of Crude Oil and Petroleum Products by Country of Origin #1 Petroleum Products Crude Oil 3,000 thousand barrels per day 2,500 Canada is the largest supplier of crude oil and of crude oil and petroleum products to the U.S. 2,000 1,500 1,000 500 0 Canada Saudi Arabia Mexico Venezuela Russia Iraq Nigeria Colombia Kuwait Algeria Source: EIA, Jan-Dec 2012 KXL is intended to meet U.S. needs – especially for Gulf Coast Refineries Venezuela 2500 2000 Mexico’s imports are decreasing due to the natural decline of its oil production Canada Mexico 1500 1000 Source: EIA 2012 Jan-Nov 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 0 2001 500 2000 Thousand barrels per day 3000 Venezuela’s imports are decreasing due to its political choice to focus on other markets such as China and Cuba
  8. 8. 2012 Canada and U.S. Demand for Crude Oil by Source Thousand Barrels per Day 15 Access to Markets – Pipeline Expansions in Development
  9. 9. WCSB Takeaway Capacity vs. Supply Forecast Crude Oil Rail Exports Western Canada vs. North Dakota • Opportunities: • • • • Relatively quick Flexibility Less diluent Use in both directions • Challenges: • • • Recent safety Higher costs Limited loading and tank car availability Source: Peter’s & Co. Limited = Sept 2013 18
  10. 10. Changing Global Oil Import Needs Net oil imports in the New Policies Scenario 14 12 mmb/d 10 8 2005 2011 6 2020 4 2035 2 0 China India European Union United States Japan Korea Source: IEA World Energy Outlook 2012, EIA 19 Canada’s Proximity Advantage to Asian Markets • Prince Rupert/Kitimat Prince Rupert/Kitimat • China • Persian Gulf • 0 ~ 4,500 N Miles Japan • Taiwan Taiwan Taiwan ~ 8,600 N Miles N 1,400 Miles 3,84 Korea Japan Japan Los •LosAngeles Angeles 1,7 90 SantaCruz • ~ 5,400 N Miles Far East Target Markets U.S West Coast Competitive travel distances for Canadian supply to both markets Source: Enbridge Pipelines Jose/ Jose/ La Cruz La Cruz •
  11. 11. Environmental Performance 21 Environmental Performance • Production § GHG emissions § Water – quantity & quality § Land/tailings reclamation • Pipelines, Rail § Integrity & operations • Marine, Tankers § Prevention, response and recovery – tankers/ports • Regulation and Monitoring § Enhanced oil sands monitoring – more sites, more transparency § Up to $50M/yr paid by industry 22
  12. 12. Global GHG Emissions Global Emissions Canada’s 2% Buildings 12% USA 18% Agriculture 10% European Union Emission Intensive & 12% Trade Exposed China 25% Waste & Others 7% Industries 11% Japan 4% Canada 2% Oil Sands 7.8% India 7% Other Upstream 11% Australia/New Zealand 1% Transportation 24% Russian Federation 5% Other 26% Electricity 13% Other Oil & Gas 4% GHG emissions from oil sands: § 0.14% of global CO2 emissions § 7.8% of Canada’s GHG emissions § 26% reduction in intensity from 1990 Sources: 1. United Nations Statistics Division (2009 Data) 2. Environment Canada (2011 Data) North American GHG Emissions (2011) for Coal-fired Power and Oil Sands AK MT ND MN OR WY SD NE MI MO NY IA KS NV NH WI UT IN CO OH WV IL AZ NM OK NJ VA KY NC TN Canadian oil sands AR SC Legend 51-100+ mtonnes 16-50 mtonnes 0-15 mtonnes AL GA Canadian coal-fired power generating plants TX LA MS FL Sources: U.S. DOE/EIA & Environment Canada U.S. Coal fired power generating plants
  13. 13. The Oil Sands GHG Emissions Challenge Improving to at least the emissions of Similar Crudes U.S. Barrel Refined in the U.S. (2005) Venezuela - Petrozuata US -Kern River Cdn Oil Sands: Mining SCO Nigeria - Bonny Light Canadian Oil Sands: SAGD Dilbit Iraq-Basra Light +5% Cdn Oil Sands: Low SOR SAGD Dilbit US - Mars Venezuela Bachaquero Mexico - Maya +2% Cdn Oil Sands: Mining Dilbit (PFT) Iraq - Kirkuk Blend US Barrel Refined in the U.S. (2005) Well-to-tank Saudi Arabia - Arab Light Refined product Combustion Brazil - Tupi North Sea - Forties 0 100 200 300 400 kgCO2e per barrel of refined product 500 600 Source: IHSCERA Oil Sands Dialogue Getting the Numbers Right 2012 25 Greenhouse Gas Emissions 25 Oil Sands GHG Emissions/bbl • Carbon regulation • • • Covers 100% of oil sands Mandatory 12% reduction $15 carbon price since July 2007 § Federal Regulation • • Alignment with US (17% target and vehicle emissions standards) Coal sector done, moving ahead with oil sector regulation in 2013 • Reducing GHG Emissions § Using energy more efficiently • Capturing CO2 § Governments investing over $3 billion – partners with industry § Shell Quest CCS proceeding 26 g co2 eq./mj § Alberta Regulation 20 26% 15 10 5 0 1990 2011
  14. 14. Less Energy, Less Water and Less Land • Accelerating innovation environmental performance in the oil sands § Canadian Oil Sands Innovation Alliance (COSIA) • Reduce water and energy § § § § Cogeneration – steam and electric power Solvent/steam injection Alternative well configurations for SAGD Electro-thermal technology • Water reduction and recycle § Use of saline (non-fresh) water for steam § Faster waste water recycle § Water technology development centre Ceramic membranes for water treatment • Land reclamation § Faster Forests – 600,000 seedlings in 2011 § Winter wetland planting Faster Forests 27 Jobs and Economic Benefits
  15. 15. World vs. Canadian Oil Prices 140.00 120.00 US$/bbl 100.00 80.00 60.00 40.00 World Edm Light Cdn Heavy 20.00 2010 M M J S N 2011 M M J S N 2012 M M J S N 2013 M M J S - 29 Oil Sands Supply Costs Project Type Project Size (bbl/d) Capital Cost Range $MM Estimated Supply Costs $US WTI/bbl In Situ SAGD 30,000 $750 – 1,500 $50 - $78 Standalone mine 100,000 $5,500 – 7,500 $70 - $91 Source: ERCB ST98 - 2012 30
  16. 16. The Oil and Natural Gas Industry A Key Driving Force in the Canadian Economy • Industry will invest $67 billion in Canada in 2013 § Largest single private sector investor in Canada • Payments to governments average about $18 billion per year • Oil and gas accounts for 20% of value on Toronto Stock Exchange • Oil and Gas accounts for close to 18% of exports • Industry employs more than 550,000 in Canada (direct & indirect). Upstream Oil & Gas Auto Manufacturing Forestry & Logging Wheat & Barley Uranium 31 Industry Capital Spending Cdn $billions Northern Canada 2012 2013E 2014F $0.1 $0.5 $0.7 Oil & Gas Investment Spending: 2012: $67 billion 2013: $67 billion (estimate) 2014: $68 (forecast) Oil Sands 2012 2013E 2014F $27 $25 $25 Western Canada 2012 2013E 2014F $37 $39 $39 Note: Excludes spending on mergers & acquisitions 32 East Coast Offshore 2012 2013E 2014F $2.4 $3.0 $3.5
  17. 17. Suppliers across Canada 2400 American companies provide goods and services directly to the oil sands 34 34
  18. 18. What’s in it for us? Aboriginal Participation in Oil Sands Development • Aboriginal Companies: • value of contracts in 2010 = $1.3 Billion • value of contracts 1998 – 2010 = $5 Billion • Aboriginal Employees in permanent jobs in 2010 = 1,700+ • Contributions to Aboriginal communities in 2010 = $5.5 Million • Aboriginal/Metis/non status consultation funding 2010 = $12.3 Million Source: OSDG May 2011
  19. 19. Improving Environmental Performance Generating Economic Benefits Being Part of the Discussion @oilgascanada www.facebook.com/OilGasCanada www.oilsandstoday.ca 38

×