aardvarkcola

Warning sounded: billions could be exported by pipeline to the U.S.

Posted on: September 30, 2008

Prime Minister Steven Harper’s announcement that a re-elected Conservative government would ban export of oil sands bitumen to countries with lower emission standards is getting reaction not only from Alberta, but from a rural municipality where a number of proposed upgrader projects would be located.

Here is the September 26 Conservative Party news release. Note the points outlined. While the ban might include China- there was a serious plan to export diluted bitumen from Alberta by pipeline to Kitimat where it would be tankered to China- the ban may not include the United States. In fact, the points in the news release include the continued promotion of ” the development of northern pipelines to bring oil and gas to markets in Canada and throughout the world.”

A news item on the reaction to that announcement from Alberta expresses its resource jurisdictional concern, but also the concern of a negative impact to oil patch investment. The federal government has jurisdiction over pipeline to foreign markets.

Meanwhile, a much better reaction- citing a national concern of job and tax revenue loss- is from an Alberta mayor of a rural municipality, warning that the Harper government’s pledge doesn’t go far enough.

Sturgeon County Mayor Don Rigney – his rural municipality borders Edmonton to its north- says Canada could ship oil processing jobs and billions in potential tax revenue to the United States.

Rigney says if oil sands product is piped for processing in the United States instead of being processed here, it could ship $6 billion in potential tax revenue along with it, and oil processing jobs would also be shipped south.

See a previous post, Alberta not immune to downturn, on the changing plans of companies that had announced intentions of building upgraders in Sturgeon County.

Rigney is warning that changing plans of oil companies now balking at those upgrader projects due to increasing costs and the credit crunch will make it more economical to simply pipeline oil sands product south. The rural mayor has asked all Canadians to express that concern to their member of parliament.

Here’s that story from Marketwire, released this morning.

Upgraders take oil sands bitumen and upgrade it to synthetic crude oil. From there a refinery process cracks off finer products like gasoline. Upgraders do not take the synthetic crude to that level.

These are not small projects. As recently as two years ago upgrader projects proposed for the Industrial Heartland would have been equal to- in dollar terms- of the $27 billion in assessed value of all of Edmonton’s buildings and infrastructure. It would literally take thousands of tradespeople to build them, Once built, hundreds of well-paying technical jobs would result.

To close, here is an article from Theenergynews.com on Connacher Oil and Gas Limited -they have a Montana refinery that processes Canadian diluted bitumen- shows they have perked their ears up at the Conservative Party announcement. Note in the release the company’s indication of confidence that they will pass any Canadian emission standard test that would determine who we export to. Scroll down to find Connacher’s reaction- it’s in the middle of the article.

Thank you for reading Aardvark Cola

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  • wordbeeps: No, he doesn't deserve an apology. Who tweets during a funeral? If you do, expect feedback. I didn't say the mourners were faking it. I think they we
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