In an interview with Bloomberg News, Prime Minister Stephen Harper strongly endorsed the bitumen pipeline from Alberta to Texas, the controversial Keystone XL project and then went on to apparently push for the Enbridge Northern Gateway project by saying “there is all the more reason why Canada should look at trade diversification and particularly diversification of energy exports.”
In the interview with the business news service Harper said U.S. approval of TransCanada Corp.’s proposed $7 billion Keystone XL pipeline is a
“no-brainer” because it will create jobs and add to America’s secure energy reserves.
“The need for energy in the U.S. is enormous, the alternatives for the U.S. are not good, on every level,”
Harper said he’s “confident” the pipeline will be built.
Keystone would link Canada’s oil sands to U.S. refineries on the Gulf of Mexico coast. The 2,673-kilometer pipeline would begin in Hardisty, Alberta, and cross Saskatchewan, Montana, South Dakota and Nebraska.
The alternatives for the United States are not good. And, you know, on every level, not just economic (but) political, social, even environmental, the case is very strong for this…”The fact that there are these kinds of pressures to, you know, to potentially take decisions which would, in my judgment . . . to avoid a decision would be a complete no-brainer.”
the federal government has broadly endorsed the oil industry’s efforts to build new pipelines to the West Coast to open up new markets in Asia.
The National Energy Board is reviewing plans for a natural gas pipeline to Kitimat, B.C., and a plant to liquefy the gas so it can be exported via tanker.
The NEB and Canadian Environmental Assessment Agency are holding a joint review of Enbridge Inc.’s more controversial Northern Gateway oil pipeline to the coast. The Gateway project is opposed by environmental groups and first nations, whose traditional lands would be affected.
Harper has now added his voice to cabinet ministers Joe Oliver and James Moore in pushing for the Northern Gateway Pipeline, which once again raises the question, why have the Joint Review Panel since it appears the decision to go ahead has already been made?
The Globe and Mail publishes an essay by Alberta author Chris Turner, author of The Leap: How to Survive and Thrive in the Sustainable Economy.
The essay appears, on the surface, to be an even handed look at the Northern Gateway Pipeline, balancing the environmental concerns with the economy.
In the end, however, Turner sides with where he lives, the province of Alberta, and his compromise could be the destruction of an area that is a thousand or so kilometres from his home.
There’s a more recent Canadian tradition, though – the one that celebrates moderation, fair play, stewardship and compromise. It gave rise to the national parks, land-claims tribunals, Nunavut, Greenpeace and the Montreal Protocol. It argues that Canada can do more with its natural abundance than extract, export and exhaust it at maximum speed. When Enbridge touts its pipeline-safety measures and marine stewardship – the double-hulled boats, the master mariners tugging the tankers carefully past Great Bear’s salmon streams – it is sincerely attempting to participate in that vision.
Yet sincerity is not the same as authenticity. Avoiding an oil spill is not a substitute for reducing greenhouse gases. The conversation has skipped ahead a generation while Canada slept. Catching up could begin with the simple agreement that the wild land of the spirit bear is no place for pipelines – but also that there will probably be a place for pipelines, at least for the near term. But that would be just the start of an honest discussion of Canada’s uncharted energy future.
For the long term health of the planet, reducing greenhouse gases is vital for the preservation of our current civilization.
For Turner, in the end, the old argument prevails, what is good for Albertans is good for the rest of the country, Alberta=Canada.
There is little doubt that the current management of Enbridge and Northern Gateway is sincere in their efforts, or as sincere as an energy company can be. Unfortunately there is no guarantee that subsequent management will care as much after the approvals are signed and sealed and the pipeline is built.
Apart from those who may actually work for Enbridge if there is an oil spill in the future, Albertans will be able to drive into the wilderness and enjoy the Rockies while, if there is a spill, the salmon, halibut, seals, whales, eagles, gulls, grizzlies, black and kermode bears, not to mention the residents of the northwest First Nations who have been here for thousands of years and the relatively recent non-aboriginal residents will be left to clean up the mess and pay for that cleanup, while Alberta continues to prosper.
Mayors and reeves from the greater Metro Edmonton area are throwing some political weight behind the idea of a pipeline to the west coast.
But, there’s a catch to the proposal of the Northern Gateway.
“Don’t ship all of our bitumen out,” said Coun. Ed Gibbons during a break in Thursday’s meeting Capital Region Board meeting. “Let’s have value added, so we want to look at more upgraders into the future.
The Globe and Mail and Reuters are reporting that Enbridge has more Chinese support for the proposed Northern Gateway Pipeline project. One large Chinese group, China Petroleum & Chemical Corp. (Sinopec), is already backing Enbridge’s efforts to build the Northern Gateway.
Sources have now told The Globe and Mail that the list of funders also includes MEG Energy Corp., which is partly owned by CNOOC Ltd., another Chinese state-owned energy company. Each funder gains the right to discounted shipping rates and an option to buy an equity stake at a later date…MEG spokesman Brad Bellows said the company is “not commenting on speculation.” But, he added, MEG is “interested in expanded market access, absolutely.”
On its website, MEG describes itself as “part of the next generation of oil sands development. We are an Alberta-based company that uses Steam Assisted Gravity Drainage (SAGD) technology to recover drillable (in situ) oil from the oil sands.”
Enbridge declined to disclose any of the Northern Gateway partners. However, Gina Jordan, spokeswoman for the pipeline company, said they include a mix of oil sands producers and Asian refiners.
Several Chinese companies have invested in the oil sands over the past decade to tap what is currently ranked as the world’s third-largest crude deposit as a way to help fuel their booming economy at home.
Last week, Enbridge said it and would-be shippers had agreed on terms for moving oil on Northern Gateway… before regulatory hearings scheduled to start in January.
The Globe and Mail is also reporting that a growing list of international companies are filing as intervenors for the Joint Review Panel hearings slated for January.
Nearly two dozen companies have asked to be “intervenors” … including small Canadian companies, major multinationals like Exxon Mobil Corp. and foreign companies like South Korean conglomerate Daewoo International.
Companies typically intervene when they want to closely follow a project, are interested in using it – by sending crude through Gateway, for example – or have a financial interest in it.
[T]he project holds the promise of dramatically altering Canada’s energy geography, providing for the first time access to a major new – and growing – export market. That has made it an increasing object of global interest.
South Korean trading and construction firm Daewoo International, for example, is hopeful it can provide steel or engineering to the Gateway pipeline. That’s just one part of its Canadian strategy.
Natural gas–often touted as an abundant, comparatively clean source of domestic energy–has come under intensifying public scrutiny in recent months, with U.S. federal regulators and reporters challenging some of the industry’s rosy business projections.
Natural gas production has grown steadily in the United States since 2006, reaching new highs this year. But who are the leaders in this burgeoning field?
More than 14,000 oil-and-gas companies, many of them small businesses, were active in the United States in 2009, according to the Energy Information Administration. But multinational giants like Exxon Mobil and BP now produce much of the nation’s gas. The 10 biggest drillers account for one-third of all production, data from the Natural Gas Supply Association and the EIA show. The 40 largest producers pump more than half of all domestic natural gas.
We’ve compiled a list of the top 10 drillers in the country, ranked by their daily natural gas production, and pulled together some key facts about their operations. Though there are other ways to measure these companies–revenue, market capitalization, reserves–industry experts say production numbers give the best snapshot of today’s landscape and also separate drillers’ gas operations from oil.
The list features both “integrated” oil-and-gas giants, such as Exxon Mobil, which refines and sells gasoline around the world, and “independents,” such as Chesapeake Energy, which are primarily in oil and gas exploration and production. Though industry P.R. initiatives often emphasize independent mom-and-pop drillers [4], most of the companies on our list are Fortune 500 corporations.
Much of the growth in gas production has come from drilling into shale formations, which provided 23 percent of the nation’s gas in 2010, according to the EIA. Our list shows how integrated behemoths have expanded into this area as production has become proven, sometimes by swallowing up independents that led the way. Last year, Exxon (No. 8 in 2009) bought XTO (No. 2 in 2009) [5] to catapult to the top of the list. Also last year, Chevron (No. 9) bought Atlas Energy [6] (No. 50 in 2009 and an early entrant into Pennsylvania’s Marcellus Shale).
1. Exxon Mobil
The biggest natural gas producer is also the country’s biggest oil company and one of the most profitable corporations in the world. Exxon has operations in every continent but Antarctica. Its oil and gas operations range across several states, from Pennsylvania to Colorado, and it also has wells in the Gulf of Mexico and off the California coast.
With the purchase of XTO, Exxon produces nearly 50 percent more gas than its closest competitor. Earlier this year, Exxon began running ads touting natural gas as a safe [7], clean source of domestic energy. About two-thirds of the company’s domestic reserves are now in natural gas, with the rest in oil.
Average Daily Natural Gas Production: 3.9 billion cubic feet.
Revenue, 2010: $370 billion.
Reserves, 2010: 8.9 billion barrels of oil (2.3 billion in the U.S.), 2.1 billion barrels of bitumen (none in the U.S.), 681 million barrels of synthetic crude (none in the U.S.), 78.8 trillion cubic feet of natural gas (26.1 trillion in the U.S.).
Executive Compensation, 2010: Rex Tillerson, Exxon’s chairman and CEO since 2006, received almost $29 million in total compensation.
2. Chesapeake Energy
Chesapeake calls itself the most active driller in the country, with operations in 15 states, from the Rockies to Texas to Pennsylvania. The company is a good example of how “independent” doesn’t necessarily mean small. As of last year, the company owned an interest in 45,800 wells, of which 38,900 were primarily gas wells.
Chesapeake has built itself as a gas company, but it is increasingly looking for “liquids-rich plays,” according to its annual report. Gas wells generally produce oil and other hydrocarbon liquids as well in varying amounts, depending on the geologic formation. With oil prices high and gas prices low, many companies are seeking more wells that are oil- and liquids-rich, particularly in North Dakota, southern Texas and Pennsylvania.
Average Daily Natural Gas Production: 2.6 billion cubic feet.
Revenue, 2010: $9.4 billion.
Reserves, 2010: 14.3 trillion cubic feet of gas equivalent (10 percent of that is oil or other liquids, converted to the equivalent volume in gas).
Executive Compensation, 2010: Aubrey McClendon, the chairman and CEO, is also the company’s founder. He has the unusual option of purchasing a small stake in every well the company drills [8]. He received $21 million in total compensation.
3. Anadarko
Anadarko is one of the biggest independent oil and gas producers in the country, with exploration or production work in all major domestic drilling areas as well as in South America, Africa, Asia and New Zealand. The company was a minority owner in BP’s Macondo well, which exploded last year, killing 11 people and spilling more than 200 million gallons of oil into the Gulf of Mexico [9].
Worldwide, natural gas makes up just over half of Anadarko’s reserves, but 87 percent of the new wells it drilled in the United States last year were gas wells. Like many other companies, Anadarko is increasingly looking for oil- and liquids-rich production this year.
Average Daily Natural Gas Production: 2.4 billion cubic feet.
Revenue, 2010: $11 billion.
Reserves, 2010: 749 million barrels of oil and condensate (458 million in the U.S.), 320 million barrels of natural gas liquids (307 million in the U.S.), 8.1 trillion cubic feet of gas, all in the United States.
Executive Compensation, 2010: James Hackett, the chairman and CEO, received $24 million in total compensation.
4. Devon Energy
Devon is an independent driller primarily active in the United States and Canada. The company is in the process of divesting operations in Angola and Brazil, its only holdings outside of North America.
More than 90 percent of Devon’s U.S. reserves are in natural gas, with most of that lying in Texas’ Barnett Shale. Like its peers, however, Devon says that this year it will focus on drilling in areas rich with oil and other liquids.
Average Daily Natural Gas Production: 2 billion cubic feet.
Revenue, 2010: $9.9 billion.
Reserves, 2010: 681 million barrels of oil (148 million in the U.S.), 479 million barrels of natural gas liquids (449 million in the U.S.), 10.3 trillion cubic feet of gas (9 trillion in the U.S.).
Executive Compensation, 2010: J. Larry Nichols, the chairman, received almost $19 million in total compensation. John Richels, president and CEO, received almost $18 million.
5. BP
Fortune lists BP as the fourth-largest corporation in the world. The company drills in 29 countries and sells its products in 70. While BP is headquartered in London, 42 percent of the company’s assets are in the United States. BP reported a $3.7 billion loss last year after spending nearly $41 billion on cleaning up the Gulf oil spill and compensating those who were affected.
The company remains primarily an oil producer, with about 40 percent of its reserves in natural gas.
Average Daily Natural Gas Production: 1.9 billion cubic feet.
Revenue, 2010: $297 billion.
Reserves, 2010: 10.7 billion barrels of oil (2.9 billion in the U.S.), 42.7 trillion cubic feet of gas (13.7 trillion in the U.S.).
Executive Compensation, 2010: Chief Executive Robert Dudley received $1.7 million in total compensation.
6. Encana
Encana is one of the largest independent gas companies in the world, with operations mostly in the western United States and Canada, where it is based. The company has focused almost exclusively on gas.
Average Daily Natural Gas Production: 1.8 billion cubic feet.
Revenue, 2010: $8.9 billion.
Reserves, 2010: 93.3 million barrels of liquids (38.5 million in the U.S.), 13.8 trillion cubic feet of gas (7.5 trillion in the U.S.).
Executive Compensation, 2010: Randy Eresman, president and CEO, received $10 million in total compensation.
7. ConocoPhillips
ConocoPhillips is currently an integrated oil corporation, but it recently announced plans to split into two companies, one focused on refining, the other on production [10]. The company has listed acquiring more shale reserves in North America among its top strategic goals over the past couple of years and drills in several western states, as well as in Louisiana and Arkansas. It is exploring for shale gas in Poland and has operations in six continents.
Average Daily Natural Gas Production: 1.6 billion cubic feet.
Revenue, 2010: $198.7 billion
Reserves, 2010: 3.4 billion barrels of oil and natural gas liquids (1.9 billion in the U.S.), 1.2 billion barrels of bitumen (none in the U.S.), 21.7 trillion cubic feet of gas (10.5 trillion in the U.S.).
Executive Compensation, 2010: James Mulva, chairman and CEO, received almost $18 million in total compensation. John Carrig, who retired as president in March, received more than $14 million.
8. Southwestern Energy Co.
Southwestern is another independent driller that focuses exclusively on natural gas. The company has operations in Arkansas, Texas, Oklahoma and Pennsylvania, with most of its production coming from the Fayetteville Shale formation underlying parts of Arkansas.
Average Daily Natural Gas Production: 1.3 billion cubic feet.
Revenue, 2010: $2.6 billion.
Reserves, 2010: 1 million barrels of oil, 4.9 trillion cubic feet of gas.
Executive Compensation, 2010: Steven Mueller, president and CEO, received $5.7 million in total compensation.
9. Chevron
Chevron is the second-largest oil company in the country, and the third-biggest company overall in terms of revenue. It has been building its gas reserves recently, most notably with the purchase of Atlas Energy, an active shale gas driller. Still, more than 60 percent of the company’s worldwide reserves are in oil.
The majority of Chevron’s oil and gas production comes overseas. Domestically, Chevron operates in seven states, including Pennsylvania, Texas and California, and in the Gulf of Mexico.
Average Daily Natural Gas Production: 1.3 billion cubic feet.
Revenue, 2010: $198.2 billion.
Reserves, 2010: 6.5 billion barrels of oil and other liquids (1.3 billion in the U.S.), 24.3 trillion cubic feet of gas (2.5 trillion in the U.S.).
Executive Compensation, 2010: John Watson, chairman and CEO, received $16 million in total compensation.
10. Williams Energy
Williams is an independent producer focused largely on natural gas. It owns 13,900 miles of pipelines, which it says deliver 12 percent of the natural gas consumed in the United States. The company recently announced plans to separate its exploration and production activities from its other operations.
Williams has holdings in many of the major shale basins across the country, from Pennsylvania to North Dakota to Texas. The company also owns interests in several international companies.
Average Daily Natural Gas Production: 1.2 billion cubic feet.
Revenue, 2010: $9.6 billion.
Reserves, 2010: 4.3 trillion cubic feet equivalent (3 percent of that is oil or other liquids, converted to the equivalent volume in gas).
Executive Compensation, 2010: Alan Armstrong, president and CEO, received $2 million in total compensation.
Sources: The production numbers are from the Natural Gas Supply Association and reflect the average for the first half of 2011. Revenue figures are from the companies’ 2010 annual reports and reflect total revenue from all sources, not just gas production. Revenue may include sales and other income and may not be adjusted for taxes. Reserves numbers are from the companies’ annual reports. Bitumen and synthetic crude represent oil from Canadian tar sands or other unconventional reserves. The compensation information is from Forbes and Bloomberg Business Week.
Editor’s Note: Encana, company number six in Pro Publica’s list, is a partner in the Kitimat LNG (KM LNG) project.
Just in time for Canada Day, Alberta Finance and Enterprise Minister Lloyd Snelgrove chose to exhibit why Canadian democracy is devolving into something akin to corporate rule (“Ottawa urged to get behind Enbridge pipeline,” Edmonton Journal, June 23). This particularly appears to be the case in the province of Alberta where, more often than not, it is government of the oil industry, by the oil industry, for the oil industry.
Staff of the Northern Gateway Joint Review panel explain the hearing process to residents of Kitimat at Riverlodge Recreation Centre, June 16, 2011. (Robin Rowland/Northwest Coast Energy News)
It will take more than year for the Enbridge Northern Gateway Joint Review Panel to complete hearings and taking evidence before it even begins to consider a decision whether or not to approve the controversial pipeline proposal.
Even then, the worries of the residents of northwest of British Columbia will be only one factor in the panel’s decision.
The Joint Review panel information town hall reached Kitimat on the afternoon of Thursday, June 16. One of the information sheets handed out at the town hall explained the Joint Review Panel this way:
In deciding if the Project is in the public interest, the Panel will consider whether Canadians would be better or worse off if the Project was approved. The public interest includes all Canadians and refers to a balance of economic, environmental and social considerations that change as society’s values and preferences evolve over time.
(Emphasis in original)
Here is a summary of how the process will work:
This summer, those who wish to formally participate in the hearing process must register with the panel.
For those who wish full intervenor status, the deadline to apply is July 14, 2011.
For those who wish to make oral statements in the community round of hearings, the deadline to apply is October 6, 2011.
Those formal intervenors who wish to request information from Northern Gateway have two deadlines. August 25, 2011 is the deadline for the first round, after which Northern Gateway must respond by October 6. The intervenors then can ask Northern Gateway a second set of questions, with a deadline of November 3, 2011. Northern Gateway must respond by November 24, 2011.
The deadline for intervenors to file written evidence with the panel is December 22, 2011.
Community hearings
On January 10, 2012, the Joint Panel will begin the “community hearings” phase where anyone who met the registration deadline, either as an intervenor or a community participant, can make a presentation to the panel.
These community hearings will be held across northern BC and Alberta, along the route of the pipeline and down the coast, with, sources say, a significant session slated for Kitimat.
The community hearings are expected to take several weeks.
Those who made oral comments to the panel then have until March 13, 2012 to file follow up letters.
Final hearings
The community hearings are then followed by another round of filing by the intervenors and government participants.
On June 16, 2012 the Joint Review Panel will then open the more formal “final hearings” at a location to be determined.
Around the same time, the Joint Review Panel must prepare an environmental assessment report that will be submitted to the Minister of the Environment.
Again, according to the handout material, there is a caveat in the panel’s mandate
The significance of any negative environmental and socio-economic effect is only determined after considering the actions that are proposed to prevent or reduce the effects. (Emphasis in the original)
In other words, as those who have attended Enbridge’s briefing sessions know, the company has outlined a whole series of safety measures, for example, adding navigation aides to Douglas Channel and parts of the coast.
If the environmental movement wishes to challenge the voluminous reports, likely costing millions of dollars that Enbridge has already filed as part of its application to the Joint Review Panel, the environmental concerns will have to be backed up with solid and expensive expert evidence.
Once the Minister of the Environment has the environmental assessment, the government then responds:
The government response will set out whether the Government of Canada agrees or disagrees with the conclusions and recommendations made the Panel by the panel regarding the potential environmental and socio-economic affects of the Project. The Governor-in-Council [ the federal cabinet] must approve the government response. This approved response will be made available to the public.
The decision
After it hears the government response on the environment, the panel makes its decision, whether or not the project can proceed.
The Panel will issue its Reason for Decision which will include a decision whether or not the Project is in the Canadian public interest.
If the Panel decides the Project can proceed, its Reasons for Decision will include conditions that Northern Gateway must meet before, during and after the construction of the Project.
If the Panel decides that the Project should proceed, the Panel will send its decision to the Governor in Council who can either accept or reject the decision but cannot modify it.
The Governor in Council means the federal cabinet, so the final decision will rest with Prime Minister Stephen Harper.
[F]ights over Canada’s oil sands could have an impact much closer to home. One company is hoping to boost oil-sands shipments to Asia through Northwest waters — plans that would quadruple tanker traffic through Vancouver, B.C., and dramatically increase the amount of oil traveling through the Strait of Juan de Fuca.
Some of the tankers the company hopes to accommodate could carry four times more crude than the Exxon Valdez, the supertanker that spilled 11 million gallons of crude into Prince William Sound….
“That’s definitely a lot more crude carriers,” said Chip Booth, a manager with the Washington state Department of Ecology’s spills program. “It certainly represents a bit of a higher risk.”
Oil Sands Project in Canada Will Go On if Pipeline Is Blocked
One way or another — by rail or ship or a network of pipelines — Canada will export oil from its vast northern oil sands projects to the United States and other markets.
The oil sands have reserves of 171.3 billion barrels, according to estimates by the provincial government of Alberta.
So the regulatory battle over the proposed Keystone XL pipeline, which would link the oil sands to the Gulf Coast of the United States, may be little more than a symbolic clash of ideology, industry experts say. Even if the Obama administration rejects the Keystone plan, the pace of oil sands development in northern Alberta is unlikely to slow
