Oil Sands and its Future 31st CAPL Conference September 30, 2009 1 Oil Sands and its Future 31 st CAPL Conference Negotiating the Road Ahead Lake Louise, Alberta September 30, 2009 Bob Dunbar 12-1 Photo Source: Syncrude Canada Limited Bob Dunbar Strategy West Inc. www.strategywest.com Presentation Outline Oil Sands Overview Industry Outlook Industry Outlook Industry Challenges • Overview • Tailings Disposal and Reclamation • Greenhouse Gas Emissions • The Oil Sands Industry’s Public Image Conclusions: “Negotiating the Road Ahead”
Transcript
Oil Sands and its Future 31st CAPL Conference September 30, 2009
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Oil Sands and its Future
31st CAPL ConferenceNegotiating the Road Ahead
Lake Louise, AlbertaSeptember 30, 2009
Bob Dunbar
12-1
Photo Source: Syncrude Canada Limited
Bob DunbarStrategy West Inc.
www.strategywest.com
Presentation Outline
Oil Sands Overview Industry Outlook Industry Outlook
Industry Challenges• Overview
• Tailings Disposal and Reclamation
• Greenhouse Gas Emissions
• The Oil Sands Industry’s Public Image
Conclusions: “Negotiating the Road Ahead”
Oil Sands and its Future 31st CAPL Conference September 30, 2009
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Resources and Reserves (ERCB)
Initial volume in place (bitumen): 1,731 billion barrels
Initial established reserves: 176.8 billion barrels
Cumulative production:6.4 billion barrels
Remaining established reserves:
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established reserves: 170.4 billion barrels
Remaining established reserves under active development: 27.1 billion barrels
power generation facility adjacent to EPCOR’S existing Genesee power plant, west of Edmonton
• Shell/Chevron/Marathon Integrated carbon capture and storage project at the Scotford
Upgrader in the Alberta Industrial Heartland
Source: Alberta Energy
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Proposed Federal GHG Emission Strategy
Introduced April 2007
GHG emission intensity reductions E i ti f iliti• Existing facilities 6% annual reduction every year until 2010
(18% reduction in intensity by 2010)
2% annual improvement thereafter
• New facilities 3-year grace period - 2% annual improvement thereafter
Clean fuel standard
Alternative compliance options• Climate Change Technology Fund
• Various trading mechanisms
Credit for early action
The expectation is to achieve a total reduction in GHG emissions of 20% by 2020 and 50-60% by 2050
Source: Environment Canada
US Clean Energy and Security Act
Also known as the Waxman-Markey bill Progress:
• Passed by the House of Representatives in June 2009
• Now before the Senate
GHG emission reductions: • Reduce GHG emissions from major sources by
17% by 2020 and 83% by 2050 relative to 2005 levelslevels.
• National cap-and-trade scheme • Possible penalties on imports
The bill might allow the President to impose tariffs on imports with a larger carbon footprint
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Saudi Arabia
Canada
US Petroleum Imports by Country of Origin
Angola
Algeria
Iraq
Nigeria
Venezuela
Mexico
Saudi Arabia
Total US Petroleum
0 500 1,000 1,500 2,000 2,500
US Petroleum Imports in 2008 (kb/d)
US Virgin Islands & Puerto Rico
Russia
Angola Total US Petroleum Imports in 2008 –
12,870 kb/d
Source: US Energy Information Administration; July 2009
Industry Options
Improve Existing Processes• Reduce energy use• Reduce energy use
• Capture fugitive emissions
Employ New Recovery Technologies
Carbon Capture and Storage
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CO2 Capture and Storage
Capture• At large industrial
sourcessources
Transport• Through pipelines
using existing technology
Storage• In mature oil/gas• In mature oil/gas
reservoirs & deep geologic formations.
• Potential for enhanced oil recovery (EOR)
Source: ICO2N
CO2 Supply Potential
Source: ICO2N
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Selected Industry CCS Initiatives
Integrated CO2 Network (ICO2N)
CO2 Enhanced Oil Recovery (EOR) P j t Alberta Saline Aquifer
Project (ASAP) CO2 Sequestration
Projects• Heartland Area Redwater
Project (HARP)
Boundary Dam
Projects• EnCana Weyburn
(Saskatchewan)
• Anadarko Enchant Arcs (southern Alberta)
• Apache Zama Keg River (northwest Alberta)
• Boundary Dam Integrated Carbon Capture and Sequestration Demonstration
• Devon Swan Hills (central Alberta)
• Penn West Pembina Cardium (central Alberta)
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The CCS Challenge
Closing the Funding Gapp
Energy Consumption
Public Safety Concerns
Legal and Liability Legal and Liability Issues
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Image Source: Alberta Carbon Capture and Storage Development Council; March 2009
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The Oil Sands Industry’s Public Image Issues
“Dirty Oil”/“Tar Sands” Reports of possible abnormally high cancer rates and
possible fish deformities downstream of oil sands miningpossible fish deformities downstream of oil sands mining operations along the Athabasca River and at Fort Chipewyan
Calls for a development moratorium by aboriginal leaders Calls for a slower and more orderly development of the
industry by former Alberta Premier Peter Lougheed 1,600 ducks killed in the Syncrude tailings pond in April
2008 - subsequent charges Books/television and movie productions Actions by environmental lobby groups – Greenpeace and
others Actions by US federal and state legislators
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Industry Response
Canadian Association of Petroleum Producers• canadasoilsands.ca – “a Different Conversation”
• Newspaper and Television Ads
• Google Ads
• Twitter Feeds
Oil Sands Developers Group• “Setting the Record Straight” Presentations
• “Oil Sands Facts” Publication
Industry Studies (i.e., AERI-sponsored Life Cycle Analyses)
Washington Lobbyists46
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Is the Industry Doing Enough?
“Wake up, people! It's no wonder what we are getting [out are] the wrong messages.” • Pat Nelson, Former Alberta Energy Minister
and Vice-Chair, In Situ Oil Sands Alliance
“Consumers today are largely blind to the very real connection that exists between their light switch, thermostat or gas pedal, and the coal fired generation stations theand the coal-fired generation stations, the nuclear power plants and the oilsands developments.” • Pat Daniel, President & CEO, Enbridge Inc.
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Is the Industry Doing Enough?
“Once seen as an engineering marvel, they [the oil sands] are now seen as an environmental challenge.”g• Eddy Issacs, Executive Director, Alberta Energy
Research Institute
"The world has changed. You have a big problem and it is going to get worse unless you get your story out there." • Richard Edelman, CEO, Edelman - the leading
independent global PR firmp g
“It is unfortunate that this is still being framed as a public relations battle. The statistics argument is not resonating with the public.”• Simon Dyer, Oil Sands Program Director, Pembina
Institute48
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Conclusions: “Negotiating the Road Ahead”
Canada’s oil sands deposits are among the world’s largest hydrocarbon g yaccumulations.
The oil sands industry is well established and making a significant contribution to global oil supply.
The industry has considerable growth The industry has considerable growth potential; however:• Major challenges must be resolved
