Canadian oil not yet at risk from price drop-official

Tue Sep 6, 2011 3:46pm EDT

Related Topics

 * $120 billion in oil sands projects on track-official
 * Some projects require $80 a barrel price, others lower
 * Canada producers wary of US recession that could hit oil
 NEW YORK, Sept 6 (Reuters) - The recent fall in world oil
prices has not been sharp enough to put oil sands output from
Canada's Alberta Province at risk, the province's energy
minister told reporters on Tuesday.   
 U.S. West Texas Intermediate (WTI) crude prices have
dropped by more than a quarter since hitting a 2-1/2 year high
near $115 a barrel in May, and now trade near $85 CLc1.
Current prices are close to the break-even range for some
Canadian projects.
 "Alberta has about $120 billion in projects that have
been announced," said provincial Energy Minister Ron Liepert,
at a news conference in New York.
 "I haven't heard of anybody putting theirs on hold," he
said.
 Canada shipped around 2 million barrels per day (bpd) of
oil to the United States last year, with more than half coming
from oil sands areas.
 New open pit mining projects in the oil sands can require
WTI prices near $80 a barrel in order to be profitable.
So-called in situ projects -- tapping deeper layers of geology
with steam injection or other methods -- typically have lower
break-even points in the $40 to $60 a barrel range, Liepert
said.
 "If you want to put $10 billion into a mine, you probably
need an $80 (a barrel) return," he told reporters.
 Most Alberta oil sands projects are in situ, he said. The
Energy Ministry's long-term oil price projection is around $85
a barrel, a level that would allow all varieties of oil sands
projects to proceed.
 Canadian output has been hit heavily in periods of falling
oil prices, including during the 1980s and late 1990s. Higher
prices since 2003 have triggered major oil sands investment.
 Producers are wary of the risk of a U.S. recession that
could derail oil prices further, Liepert said.
 Alberta has lobbied heavily for the U.S. government to
grant TransCanada (TRP.TO) approval to build the Keystone XL
pipeline, a $7 billion project to bring more than 500,000 more
barrels a day of Canadian crude to the U.S. Gulf Coast in 2013.
 The line requires U.S. State Department approval and faces
opposition from some environmental groups worried about oil
sands' high carbon footprint and the risk of pipeline leaks.
  (Reporting by Joshua Schneyer; Editing by Andrea Evans)






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Comments (2)
EarlRichards wrote:
The high oil prices are the cause of the recession and a decline in the oil price, still has a long way to go, to head-off a depression.

Sep 06, 2011 5:11pm EDT  --  Report as abuse
Predictably, the Oil Sand investors will lose their shirts because of the following new energy technology (I have no financial stake in this):

There is a new clean energy technology that is 1/10th the cost of any other energy technology. Don’t believe me? Watch this video by a Nobel prize winner in physics: http://pesn.com/2011/06/23/9501856_Nobel_laureate_touts_E-Cat_cold_fusion/

Still don’t believe me? It convinced the Swedish Skeptics Society: http://www.nyteknik.se/nyheter/energi_miljo/energi/article3144827.ece

LENR using nickel. Incredibly: Ni+H+K2CO3(heated under pressure)=Cu+lots of heat. Here is a detailed description of the device and formula from a US government contract: www.lenr-canr.org/acrobat/GernertNnascenthyd.pdf

Still don’t believe me? A major US corporation has bought the rights to sell the 1 megawatt Rossi E-Cat, and it will be announced late October in the US, with the unit hitting the market in November. How can any fossil fuel compete with such cheap energy (and clean to boot!).

By the way, here is a current survey of all the companies that are bringing LENR to commercialization: http://www.cleantechblog.com/2011/08/the-new-breed-of-energy-catalyzers-ready-for-commercialization.html

Sep 07, 2011 2:32am EDT  --  Report as abuse
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