Oilpatch Collapse Thread
Thanos @ Mon Jun 22, 2015 1:29 pm
Going to do this one as an omnibus thread for items about the collapse of the industry in North America.
First one, involving that great ally that 3500 US soldiers died in Iraq to protect:
Saudi Arabia to raise production to maximum levels, escalating oil market share battle
$1:
Not content with the blow it’s dealt to U.S. oil drillers, Saudi Arabia is set to escalate the battle for market share by raising production to maximum levels.
The world’s largest oil exporter has already increased output to a 30-year high of 10.3 million barrels a day in a bid to check growth from nations including the U.S., Canada and Brazil. It will add even more to the global glut, according to Goldman Sachs Group Inc. Citigroup Inc. predicts the kingdom will push toward its maximum daily capacity, which the bank estimates at about 11 million barrels, in the second half of 2015.
Saudi Arabia steered the Organization of Petroleum Exporting Countries in November to protect its market share in the face of swelling U.S. crude output, rather than cut supplies to shore up prices as it did in the past. Having abandoned the role of swing supplier — adjusting production in line with demand — the kingdom will maximize sales to increase pressure on producers outside the group, the banks said.
The world’s largest oil exporter has already increased output to a 30-year high of 10.3 million barrels a day in a bid to check growth from nations including the U.S., Canada and Brazil. It will add even more to the global glut, according to Goldman Sachs Group Inc. Citigroup Inc. predicts the kingdom will push toward its maximum daily capacity, which the bank estimates at about 11 million barrels, in the second half of 2015.
Saudi Arabia steered the Organization of Petroleum Exporting Countries in November to protect its market share in the face of swelling U.S. crude output, rather than cut supplies to shore up prices as it did in the past. Having abandoned the role of swing supplier — adjusting production in line with demand — the kingdom will maximize sales to increase pressure on producers outside the group, the banks said.
Yup, it's nice to have such good friends, the kind so good we can sell what was left of the old Wheat Board to them.
BartSimpson @ Mon Jun 22, 2015 1:37 pm
Now don't anyone tell me that fracking won't lower prices on petrol because it did! ![[B-o]](./images/smilies/drinkup.gif "Drink up")
Thanos @ Mon Jun 22, 2015 1:37 pm
Number Two:
Oilpatch could lose $100B without new pipelines, researchers warn
$1:
Western Canadian oil producers are at risk of losing $100 billion in the next 15 years if no new pipelines are constructed in North America, according to energy research firm Wood Mackenzie.
Canadian oil production continues to rise and pipeline capacity remains constricted, pushing 200,000 barrels of oil a day onto the railways.
"In the past several years, we have seen big increases in supplies of oil from the United States and Canada," said Afolabi Ogunnaike, a senior research analyst in refining and oil product markets for Wood Mackenzie. "Most of the supply is from parts of the country far removed from refining demand centres. That has led to price discounts."
The discounts are the lower prices Canadian producers receive for oil purchased by refineries in the southern U.S. The differential is between the price of Western Canada Select (WCS) and West Texas Intermediate (WTI), the North American benchmark.
Canadian oil production continues to rise and pipeline capacity remains constricted, pushing 200,000 barrels of oil a day onto the railways.
"In the past several years, we have seen big increases in supplies of oil from the United States and Canada," said Afolabi Ogunnaike, a senior research analyst in refining and oil product markets for Wood Mackenzie. "Most of the supply is from parts of the country far removed from refining demand centres. That has led to price discounts."
The discounts are the lower prices Canadian producers receive for oil purchased by refineries in the southern U.S. The differential is between the price of Western Canada Select (WCS) and West Texas Intermediate (WTI), the North American benchmark.
One could suppose that doing something different, like say building a couple of new refineries in Alberta and Saskatchewan to export lighter crude instead of bitumen, would ease up the opposition to pipeline construction. Add on a moderate and sensible carbon price, something that is really now just the cost of doing business, and more of the opposition might ease up even further. But the big boys have always been their own worst enemies. Doing something sensible that would cost short-term money, no matter how much long-term economic sense is makes, won't be done because their thinking entirely revolves around short-term profit making. Cough up, say, $10 billion in 2016/17/18 for new refineries in order to guarantee a future profit of $100 billion a decade from now? Nope. Can't do it. Share-holders and hedge-fund managers want their money now.
martin14 @ Mon Jun 22, 2015 9:53 pm
Thanos Thanos:
One could suppose that doing something different, like say building a couple of new refineries in Alberta and Saskatchewan to export lighter crude instead of bitumen, would ease up the opposition to pipeline construction.
Please show me a tree hugging watermelon enviro leftie windbag that actually understands
the difference between those two.
Guy_Fawkes @ Mon Jun 22, 2015 11:19 pm
Thanos Thanos:
like say building a couple of new refineries in Alberta and Saskatchewan to export lighter crude instead of bitumen, would ease up the opposition to pipeline construction.
The Dippers ran on this during the election.
N_Fiddledog @ Tue Jun 23, 2015 12:48 am
martin14 martin14:
Thanos Thanos:
One could suppose that doing something different, like say building a couple of new refineries in Alberta and Saskatchewan to export lighter crude instead of bitumen, would ease up the opposition to pipeline construction.
Please show me a tree hugging watermelon enviro leftie windbag that actually understands
the difference between those two.
Might not be just be the watermelon people. I thought I knew a bit, but now I'm confused.
Bitumen is that black, peanut buttery consistency substance they get out of the oilsands, right? That stuff is then processed into synthetic crude for export, correct? And lighter crude is just the stuff that comes out of a conventional oil well, isn't it?
But either way - processed bitumen into synthetic crude, or light crude - don't they both still have to go to a refinery? Aren't they both unprocessed crude oil?
I might have it wrong. I've been listening to Ezra.
He's not impressed with Rachel Notley's oil knowledge btw, or lack of it.
He likes pipelines and brings up some interesting trivia on refineries including the one they've been building in Alberta.
I'm curious what the full story is on that Northwest upgrader refinery he's talking about. It mostly just refines into Diesel and other by-products rather than gasoline it seems.
I didn't have a chance to look at this one close.
http://www.cbc.ca/news/canada/calgary/a ... -1.3037519
But is that refinery a big boondoggle money pit? If so what does that say about building more refineries in Alberta?
bootlegga @ Tue Jun 23, 2015 5:46 am
Thanos Thanos:
Going to do this one as an omnibus thread for items about the collapse of the industry in North America.
First one, involving that great ally that 3500 US soldiers died in Iraq to protect:
Saudi Arabia to raise production to maximum levels, escalating oil market share battle
Yup, it's nice to have such good friends, the kind so good we can sell what was left of the old Wheat Board to them.
First one, involving that great ally that 3500 US soldiers died in Iraq to protect:
Saudi Arabia to raise production to maximum levels, escalating oil market share battle
$1:
Not content with the blow it’s dealt to U.S. oil drillers, Saudi Arabia is set to escalate the battle for market share by raising production to maximum levels.
The world’s largest oil exporter has already increased output to a 30-year high of 10.3 million barrels a day in a bid to check growth from nations including the U.S., Canada and Brazil. It will add even more to the global glut, according to Goldman Sachs Group Inc. Citigroup Inc. predicts the kingdom will push toward its maximum daily capacity, which the bank estimates at about 11 million barrels, in the second half of 2015.
Saudi Arabia steered the Organization of Petroleum Exporting Countries in November to protect its market share in the face of swelling U.S. crude output, rather than cut supplies to shore up prices as it did in the past. Having abandoned the role of swing supplier — adjusting production in line with demand — the kingdom will maximize sales to increase pressure on producers outside the group, the banks said.
The world’s largest oil exporter has already increased output to a 30-year high of 10.3 million barrels a day in a bid to check growth from nations including the U.S., Canada and Brazil. It will add even more to the global glut, according to Goldman Sachs Group Inc. Citigroup Inc. predicts the kingdom will push toward its maximum daily capacity, which the bank estimates at about 11 million barrels, in the second half of 2015.
Saudi Arabia steered the Organization of Petroleum Exporting Countries in November to protect its market share in the face of swelling U.S. crude output, rather than cut supplies to shore up prices as it did in the past. Having abandoned the role of swing supplier — adjusting production in line with demand — the kingdom will maximize sales to increase pressure on producers outside the group, the banks said.
Yup, it's nice to have such good friends, the kind so good we can sell what was left of the old Wheat Board to them.
With 'friends' like Saudi Arabia, we don't need enemies...
martin14 @ Tue Jun 23, 2015 6:22 am
QBC QBC:
And yet, with the crash of oil prices to below $60 a barrel, gas prices are still over $1 a litre. Hmmmmmmmm.........are the oil companies actually hurting?
Prices in Italy are almost back to pre crash levels.
Big surprise.
2Cdo @ Tue Jun 23, 2015 6:23 am
martin14 martin14:
QBC QBC:
And yet, with the crash of oil prices to below $60 a barrel, gas prices are still over $1 a litre. Hmmmmmmmm.........are the oil companies actually hurting?
Prices in Italy are almost back to pre crash levels.
Big surprise.
Same in South Eastern Ontario.
DrCaleb @ Tue Jun 23, 2015 6:42 am
N_Fiddledog N_Fiddledog:
Bitumen is that black, peanut buttery consistency substance they get out of the oilsands, right? That stuff is then processed into synthetic crude for export, correct? And lighter crude is just the stuff that comes out of a conventional oil well, isn't it?
But either way - processed bitumen into synthetic crude, or light crude - don't they both still have to go to a refinery? Aren't they both unprocessed crude oil?
But either way - processed bitumen into synthetic crude, or light crude - don't they both still have to go to a refinery? Aren't they both unprocessed crude oil?
Yes, that is correct. Places like Syncrude and Suncor already have upgraders that reprocess bitumen into synthetic crude oil, and to remove impurities and things like Sulphur. From there they are piped south to be treated almost like crude oil, but because they have much of the unwanted elements in them, they typically sell for more than crude recovered from the ground.
The big thing though, is they are processed before shipping. Many companies want to dilute the bitumen with solvents, to make it less viscous and ship it overseas to be processed in other less labour costly refineries.
N_Fiddledog N_Fiddledog:
I'm curious what the full story is on that Northwest upgrader refinery he's talking about. It mostly just refines into Diesel and other by-products rather than gasoline it seems.
You'll have to be more specific. I won't watch his videos.
http://www.northwestupgrading.com/
http://industrialheartland.com/index.ph ... Itemid=160
But that is fundamentally correct. We have enough gasoline producing refineries here, so that they have just enough capacity to do a 'summer shutdown' and raise the price because of a mild 'scarcity'. Refining things that get piped here would be the thing to refine.
The purpose of the refinery is to process oil that is owed to the Alberta Government as part of the royalty scheme that was brought in under Ed Stelmach.
N_Fiddledog N_Fiddledog:
I might have it wrong. I've been listening to Ezra.
At least you realize that.
Zipperfish @ Tue Jun 23, 2015 7:00 am
martin14 martin14:
Thanos Thanos:
One could suppose that doing something different, like say building a couple of new refineries in Alberta and Saskatchewan to export lighter crude instead of bitumen, would ease up the opposition to pipeline construction.
Please show me a tree hugging watermelon enviro leftie windbag that actually understands
the difference between those two.
I suppose I would be an example of that. Part of the reason gasoline prices are so high is that virtually all the refining cpacity is in the US, so we are essetmnially buying fuel in American dollars, which isn't so good with the CDN dollar at about 80 cents US.
Then you've got a government that has gutted environemntal legislation and thinks it's a good idea to go down south and tell the Americans they "aren't going to take no for an answer" on their pipeline, and they wonder why they can't get a pipeline built.
fifeboy @ Tue Jun 23, 2015 7:05 am
QBC QBC:
And yet, with the crash of oil prices to below $60 a barrel, gas prices are still over $1 a litre. Hmmmmmmmm.........are the oil companies actually hurting?
I doubt if the big oil companies are. However, the small contractors and the workers they hire are!
N_Fiddledog @ Tue Jun 23, 2015 10:39 am
DrCaleb DrCaleb:
Yes, that is correct. Places like Syncrude and Suncor already have upgraders that reprocess bitumen into synthetic crude oil, and to remove impurities and things like Sulphur. From there they are piped south to be treated almost like crude oil, but because they have much of the unwanted elements in them, they typically sell for more than crude recovered from the ground.
The big thing though, is they are processed before shipping. Many companies want to dilute the bitumen with solvents, to make it less viscous and ship it overseas to be processed in other less labour costly refineries.
The big thing though, is they are processed before shipping. Many companies want to dilute the bitumen with solvents, to make it less viscous and ship it overseas to be processed in other less labour costly refineries.
I think I'm starting to get it.
So dilbit, (diluted bitumen) is different than synbit (synthetic crude) in the density, but dilbit is what goes through Keystone and Enbridge pipelines.
https://en.wikipedia.org/wiki/Dilbit
It also appears to be what will hopefully one day go to the Northwest upgrader in Alberta.
But you can send either synbit or dilbit through a pipeline, right?
The Northwest upgrader refinery has been 8 years to get going so far and they expect it might take at least another two. We're not sure yet how economically viable it will be for Albertans depending on oil prices. Many proposed, oil refinery projects in Alberta were stymied for that reason.
Oil could be piped South or East much quicker, and most likely cheaper it seems.
If companies don't want to build Albertan refineries who's supposed to pick up the tab, while they wait another 10 years for the next one?
DrCaleb @ Tue Jun 23, 2015 11:01 am
N_Fiddledog N_Fiddledog:
DrCaleb DrCaleb:
Yes, that is correct. Places like Syncrude and Suncor already have upgraders that reprocess bitumen into synthetic crude oil, and to remove impurities and things like Sulphur. From there they are piped south to be treated almost like crude oil, but because they have much of the unwanted elements in them, they typically sell for more than crude recovered from the ground.
The big thing though, is they are processed before shipping. Many companies want to dilute the bitumen with solvents, to make it less viscous and ship it overseas to be processed in other less labour costly refineries.
The big thing though, is they are processed before shipping. Many companies want to dilute the bitumen with solvents, to make it less viscous and ship it overseas to be processed in other less labour costly refineries.
I think I'm starting to get it.
So dilbit, (diluted bitumen) is different than synbit (synthetic crude) in the density, but dilbit is what goes through Keystone and Enbridge pipelines.
https://en.wikipedia.org/wiki/Dilbit
Correct. What will go through the proposed pipelines, though. Some already does, to the Husky Upgrader, and the proposed one near Redwater.
N_Fiddledog N_Fiddledog:
It also appears to be what will hopefully one day go to the Northwest upgrader in Alberta.
But you can send either synbit or dilbit through a pipeline, right?
But you can send either synbit or dilbit through a pipeline, right?
Yes, but one is significantly less 'dangerous' than the other. Dilbit, from what I'm told, is very caustic and requires pipelines capable of handling it's higher PH levels. Synthetic Crude acts much like regular crude, but is chemically more inert because it's missing things like the naturally occurring gas and sulfur that the dilbit has.
N_Fiddledog N_Fiddledog:
The Northwest upgrader refinery has been 8 years to get going so far and they expect it might take at least another two. We're not sure yet how economically viable it will be for Albertans depending on oil prices. Many proposed, oil refinery projects in Alberta were stymied for that reason.
Oil could be piped South or East much quicker, and most likely cheaper it seems.
If companies don't want to build Albertan refineries who's supposed to pick up the tab, while they wait another 10 years for the next one?
Oil could be piped South or East much quicker, and most likely cheaper it seems.
If companies don't want to build Albertan refineries who's supposed to pick up the tab, while they wait another 10 years for the next one?
It could be piped elsewhere cheaper, but it could also be upgraded here more safely. Piping and shipping gasoline or light synthetic crude through BC would have a far lighter environmental toll should an accident occur with oil tankers. No one knows what would happen if the tanker were full of dilbit. Most dilbit now is shipped by trucks and trains.
Synthetic crude is already piped to refineries in Texas and Louisiana. Has been for almost 30 years now.
Companies don't want more refining capacity, so that's why the Alberta Government stepped in and created the North West Upgrader project.
Thanos @ Tue Jun 23, 2015 11:36 am
DrCaleb DrCaleb:
N_Fiddledog N_Fiddledog:
I might have it wrong. I've been listening to Ezra.
At least you realize that.
