webber academy oil sands and benefits to canada
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Webber Academy, November 2013TRANSCRIPT
Canada’s Oil Sands
Webber AcademyNovember 2013
Looking ForwardContinuing Responsible Growth
2
Oil Sands by Subject
3
Global Primary Energy Demand
Source: International Energy Agency – New Policies Scenario World Energy Outlook 2011
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2010 2015 2020 2025 2030 2035
million tonnes oil equivalent
Other RenewablesBioenergyHydroNuclearNatural GasOilCoal
Source: International Energy Agency World Energy Outlook 2012
Ongoing reliance on fossil fuels (share of energy consumption):2010: 81% 2035: 75%
4
Source: Cenovus
Oil Sands
Oil Sands – Resistance to flow
Source: Imperial Oil
0
1
10
100
1,000
10,000
100,000
1,000,000
Vis
cosi
ty @
Roo
m T
emp
erat
ure
(cP
)
Water
OliveOil
PancakeSyrup
Honey
Ketchup
Cold Lake Bitumen
PeanutButter
Atha-bascaBitumen
Light CrudeOil
Global Crude Oil Reserves by Country
26 25 2130
3748
8092
102
141155
173
265298
0
50
100
150
200
250
300Ve
nezu
ela
Saud
i Ara
bia
Cana
da
Iran
Iraq
Kuw
ait
Abu
Dha
bi
Rus
sia
Liby
a
Nig
eria
Kazh
akhs
tan
Chin
a
Qat
ar
Uni
ted
Stat
es
billi
on b
arre
ls
Source: Oil & Gas Journal Dec. 2012
Includ
es 169
billion
barre
ls
of oil s
ands re
serves
Restricted(81%)
Open to Private Sector
Oil Sands 56%
Other 44%
World Oil ReservesOpen to
Private Sector
Canada’s Oil Sands Resource
8
Natural exposure of the Oil Sands near Ft. McMurray
Courtesy of R.G. Skinner
Two Methods of Oil Sands Recovery
Pho
to: C
onoc
oPhi
llips
-S
urm
ont
Schematic: Devon - Jackfish
Drilling: 80% of reserves Mining: 20% of reserves
10
Canadian Oil Sands (Bitumen and SCO) & Conventional Production
11
0200400600800
1,0001,2001,4001,6001,8002,000
Jan-
2005
Jul-2
005
Jan-
2006
Jul-2
006
Jan-
2007
Jul-2
007
Jan-
2008
Jul-2
008
Jan-
2009
Jul-2
009
Jan-
2010
Jul-2
010
Jan-
2011
Jul-2
011
Jan-
2012
Jul-2
012
Thousand b/d
Eagle Ford (Texas)
N. Dakota
SK Light
AB Light
Light/Tight Oil Production
Sources: Eagle Ford : Railroad Commission of TexasN. Dakota: EIASK: Government of SKAB: ERCB
+ 1,000,000 b/d in 2 years
12
0
500
1,000
1,500
2,000
2,500
3,000
Canada Saudi Arabia Mexico Venezuela Russia Iraq Nigeria Colombia Kuwait Algeria
thou
sand
bar
rels
per
day
U.S. Imports of Crude Oil and Petroleum Products by Country of Origin
Petroleum ProductsCrude Oil
#1
Source: EIA, Jan-Dec 2012
Canada is the largest supplier of crude oil and of crude oil and petroleum products to the U.S.
0
500
1000
1500
2000
2500
3000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Jan
-Nov
Thou
sand
bar
rels
per
day
Venezuela
Canada
Mexico
KXL is intended to meet U.S. needs – especially for Gulf Coast Refineries
Source: EIA
Mexico’s imports are decreasing due to the natural decline of its
oil production
Mexico’s imports are decreasing due to the natural decline of its
oil production
Venezuela’s imports are decreasing due
to its political choice to focus on other markets such as China and Cuba
Venezuela’s imports are decreasing due
to its political choice to focus on other markets such as China and Cuba
2012 Canada and U.S. Demand for Crude Oil by SourceThousand Barrels per Day
15
Access to Markets – Pipeline Expansions in Development
WCSB Takeaway Capacity vs. Supply Forecast
Crude Oil Rail ExportsWestern Canada vs. North Dakota
18
• 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
0
2
4
6
8
10
12
14
China India EuropeanUnion
UnitedStates
Japan Korea
mm
b/d
Net oil imports in the New Policies Scenario
2005
2011
2020
2035
Changing Global Oil Import Needs
Source: IEA World Energy Outlook 2012, EIA
19
Canada’s Proximity Advantage to Asian Markets
Prince Rupert/Kitimat
Los Angeles
Jose/La Cruz
3,840
ChinaPersian
Gulf
Japan
Taiwan
~ 8,600 N Miles
~ 4,500 N Miles
Prince Rupert/Kitimat
Jose/La Cruz
Los Angeles
Japan
Taiwan
Target Markets
~ 5,400 N Miles
1,400 N
Miles
Far East U.S West Coast
• •••
Japan
Taiwan
Korea
•
•
SantaCruz• •1,790
Competitive travel distances for Canadian supply to both marketsSource: Enbridge Pipelines
21
Environmental Performance
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
Global GHG Emissions
GHG emissions from oil sands:§ 0.14% of global CO2 emissions§ 7.8% of Canada’s GHG emissions§ 26% reduction in intensity from 1990
Global Emissions Canada’s 2%
Sources:1. United Nations Statistics Division (2009 Data)2. Environment Canada (2011 Data)
Other Oil & Gas4%
Electricity13%
Other Upstream11%
Emission Intensive & Trade Exposed
Industries11%
Agriculture10%
Transportation24%
Oil Sands7.8%
Waste & Others7%
Buildings12%USA
18%
European Union12%
Other26%
China25%
Russian Federation
5%
Australia/New Zealand
1%
India7%
Japan4%
Canada2%
North American GHG Emissions (2011)for Coal-fired Power and Oil Sands
0-15 mtonnes16-50 mtonnes51-100+ mtonnes
Legend
U.S. Coal fired power generating plants
Canadian coal-fired power generating plants
Canadian oil sands
Sources: U.S. DOE/EIA & Environment Canada
GA
TX
NC
MI
AL
MO KY
IN OH
NE
NM
ND
CO
SC
KS
IA
TN
WY
VA
MN
UT
OK
WI
AZ
AR
AK
LA
IL
NV
OR
MT
SD
NJ
NY
NH
MS
WV
FL
0 100 200 300 400 500 600
North Sea - Forties
Brazil - Tupi
Saudi Arabia - Arab Light
US Barrel Refined in the U.S. (2005)
Iraq - Kirkuk Blend
Cdn Oil Sands: Mining Dilbit (PFT)
Mexico - Maya
Venezuela Bachaquero
US - Mars
Cdn Oil Sands: Low SOR SAGD Dilbit
Iraq-Basra Light
Canadian Oil Sands: SAGD Dilbit
Nigeria - Bonny Light
Cdn Oil Sands: Mining SCO
US -Kern River
Venezuela - Petrozuata
kgCO2e per barrel of refined product
Well-to-tank
Refined productCombustion
The Oil Sands GHG Emissions ChallengeImproving to at least the emissions of Similar Crudes
Source: IHSCERA Oil Sands Dialogue Getting the Numbers Right 2012
+5%
U.S. Barrel Refined in the U.S. (2005)
+2%
25
Greenhouse Gas Emissions
• Carbon regulation § Alberta 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 $3 billion –
partners with industry§ Shell Quest CCS proceeding
0
5
10
15
20
25
Oil Sands GHG Emissions/bbl
26%
g co
2 eq
./mj
1990 2011
26
Less Energy, Less Water and Less Land
• Accelerating innovation environmental performance in the oil sands§ Canadian Oil Sands Innovation Alliance (COSIA)
• Reduce water and energy§ Cogeneration – steam and electric power§ Solvent/steam injection§ Alternative well configurations for SAGD§ Electro-thermal technology
• Water reduction and recycle§ Use of saline (non-fresh) water for steam§ Faster waste water recycle§ Water technology development centre
• Land reclamation§ Faster Forests – 600,000 seedlings in 2011§ Winter wetland planting
Ceramic membranes for water treatment
Faster Forests
27
Jobs andEconomic Benefits
-
20.00
40.00
60.00
80.00
100.00
120.00
140.00
2010 M M J S N
2011 M M J S N
2012 M M J S N
2013 M M J S
US$
/bbl
World Edm Light Cdn Heavy
World vs. Canadian Oil Prices
29
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
Oil Sands Supply Costs
30
Source: ERCB ST98 - 2012
• 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).
The Oil and Natural Gas IndustryA Key Driving Force in the Canadian Economy
Upstream Oil& Gas
AutoManufacturing
Forestry& Logging
Wheat &Barley
Uranium
31
Industry Capital Spending Cdn $billions
Note: Excludes spending on mergers & acquisitions
Western Canada2012 2013E 2014F $37 $39 $39
Western Canada2012 2013E 2014F $37 $39 $39
East Coast Offshore2012 2013E 2014F$2.4 $3.0 $3.5
East Coast Offshore2012 2013E 2014F$2.4 $3.0 $3.5
Oil & Gas Investment Spending:2012: $67 billion2013: $67 billion (estimate)2014: $68 (forecast)
Oil & Gas Investment Spending:2012: $67 billion2013: $67 billion (estimate)2014: $68 (forecast)
32
Northern Canada2012 2013E 2014F$0.1 $0.5 $0.7
Northern Canada2012 2013E 2014F$0.1 $0.5 $0.7
Oil Sands2012 2013E 2014F$27 $25 $25
Oil Sands2012 2013E 2014F$27 $25 $25
Suppliers across Canada
2400 American companies provide goods and services directly to the oil sands
3434
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
Improving Environmental PerformanceGenerating Economic Benefits
Being Part of the Discussion
38
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