China invests billions in Canada oil sands

by Jennifer A. Dlouhy, Houston Chronicle, September 19, 2011

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  Robert Lee, a lab technician at ConocoPhillips' Surmont oil sands project in Alberta, examines a vial of water and oil sediment. Looking on is Perry Berkenpas, vice president of oil sands operations for ConocoPhillips Canada.

   / HC

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Dealmaking

For decades, U.S. and Canadian companies were the biggest investors in Canada's oil sands reserves. But other countries, led by China, have poured billions into Canada's oil sands projects in the past few years.

2005: China's CNOOC buys 17% stake in Calgary-based MEG Energy Corp.

2010: PetroChina International Investment Co. buys 60 percent working interest in Athabasca Oil Sands Corp.'s MacKay River and Dover oil sands projects.

Sinopec (China Petrochemical Corp.) buys ConocoPhillips' 9% stake in Syncrude Canada, the world's biggest oil sands producer.

China Investment Corp. buys 45% stake in an oil sands project owned by Penn West Energy Trust.

Thailand-based PTT Exploration and Production buys 40% share in Statoil's Kai Kos Dehseh oil sands project.

2011: CNOOC acquires the bankrupt OPTI Canada, whose main asset was a 35 percent working interest in Nexen's Long Lake oil sands project.

Source: Houston Chronicle research

FORT McMURRAY, Alberta - As U.S. companies look toward oil riches in northern Canada, they're encountering increasing competition - as well as some much-needed cash infusions - from the Far East.

U.S. and Canadian companies have dominated Alberta's oil sands for decades. Now, though, Chinese firms are rushing to snap up Canadian oil sands resources and invest in ongoing projects - to the tune of $15 billion in the past 18 months in Alberta alone.

They are motivated by a desire to jump into one of the world's lowest-risk oil investments and to quench the exploding energy demands of Asian markets - even though getting the product from Canada to Asia is just a pipe dream now.

The foreign funding can help pay for what research firm IHS CERA estimates will be $100 billion in spending on oil sands projects over the next decade.

And for a growing number of U.S. oil companies, many based in Houston, the infusion of Chinese cash in Canadian projects is welcome funding for some capital-intensive oil sands projects.

"Many of the actual oil companies - no matter where they are from - are very interested in partnering," said Jackie Forrest, the Calgary, Alberta-based head of oil sands research for IHS CERA. "That can help raise capital and, in some cases, also bring expertise and knowledge to the partnership."

Most of the recent deals have been by Chinese companies buying shares in existing projects. For instance, Sinopec spent $4.65 billion last year buying ConocoPhillips' 9 percent stake in Syncrude Canada Ltd., the world's biggest oil sands producer. And earlier this summer, state-owned CNOOC spent $2.1 billion acquiring the bankrupt OPTI Canada, whose main asset was a 35 percent working interest in Nexen's Long Lake oil sands project in Alberta.

Plants want to expand

That influx of capital can help companies ramp up production and expand operations at existing projects, said Alberta Minister of Energy Ronald Liepert.

"Plants that are currently 25,000 barrels a day, they want to expand to 100,000 barrels a day, and they don't have the capital to do that," he said. "So they're actually on the prowl for investment - and there's real money in China."

China isn't the only country getting into the oil sands game from across the Pacific. Companies based in Thailand and Australia also have made plays recently for Canadian oil sands projects and portfolios.

Major draws are the low geological risks of Canada's well-explored oil sands, and the nation's political stability.

"You know the oil is there, so the risk is more in executing the project, getting it online and getting the capital associated with building the project," Forrest said.

The Canadian market offers fewer barriers, said Nick Olds, the senior vice president of oil sands for ConocoPhillips Canada.

"With the oil sands, you've got a significant resource - 173 billion barrels of oil recoverable with current technology, and that's only going to get better," Olds said.

"If you look at other areas of the world," he said, "it is very difficult to get access to (the) resource." By contrast, the oil sands in Canada are "not state-controlled and they're not government-owned."

The "oil" in the Canadian oil sands is bitumen, a hydrocarbon that is as hard as a hockey puck at 50 degrees and can be refined into synthetic crude oil or other products. The oil sands in Alberta are a mixture of sand, water, clay and bitumen that is extracted by open-pit mining and by less invasive in situ techniques that use heat to draw the bitumen directly from the underground reservoirs.

Canada's oil sands bounty makes it second only to Saudi Arabia in its reserve base. Its recoverable oil is estimated to be more than 10 times U.S. reserves.

Since China doesn't have similar oil sands deposits, the Asian companies investing in Canadian crude aren't so concerned with getting technology and know-how out of their deals. Instead, they are getting the promise of strong returns and the chance of eventually sending some of that oil home.

"There is a long-term plan to get oil to the East, and it will happen," said Liepert, the Alberta energy minister.

Right now, the only real export market for Canada's crude is the United States. But the Midwest refineries that are served by existing border-crossing pipelines are expected to reach their maximum capacity for processing the northern oil supply by 2015, according to IHS CERA.

Plans for pipeline

Asian markets loom as a new and promising opportunity for oil sands developers eager to command global prices for the product, but there is no immediate avenue to deliver the crude to Asia. The most likely corridor - the Northern Gateway pipeline proposed by Calgary-based Enbridge - has been ensnared in disputes with environmentalists and indigenous communities worried about damage from oil spills.

Last month Enbridge disclosed it has enough contracts with shippers to fill the pipeline, which would transport crude 731 miles from Alberta to Kitmat, B.C., for tanker transport to Asian markets.

Although Enbridge isn't saying what companies have signed up to use the pipeline, China's Sinopec has confirmed it is helping to finance the $5.5 billion project.

A new avenue to Asian markets also would benefit U.S. oil companies with big Canadian crude reserves, including Exxon Mobil, ConocoPhillips and Shell.

If it gets past regulatory hurdles, the pipeline could be completed as early as 2017.

"We want to become a global energy superpower," said Liepert. "And you're not going to become a global superpower of anything with one customer."

jennifer.dlouhy@chron.com

http://www.chron.com/business/article/China-invests-billions-in-oil-sands-2176114.php

Brad Johnson: Top Companies Claim To Fight Global Warming, But Sponsor ALEC’s Climate Denial

Top Companies Claim To Fight Global Warming, But Sponsor ALEC’s Climate Denial

by Brad Johnson, ThinkProgress Green, August 8, 2011

The fight against global warming pollution requires the investment of everyone, including the world’s multinational corporate giants. Many companies have taken official stances on climate pollution, pledging to reduce their greenhouse footprint in order to reduce the threat of a destabilized climate.

However, a number of these same companies are sponsoring toxic, far-right denial of climate science. The American Legislative Exchange Council pushes an extremist denier agenda throughout the United States, funded in secret by corporations. ThinkProgress has acquired a list of the sponsors of ALEC’s 2011 annual meeting, held last week in New Orleans, LA.

ALEC denies that global warming is causing glaciers to retreat or sea level to rise. Not only does ALEC deny the threat of climate change, they even argue that “substantial global warming is likely to be of benefit to the United States”:

“There is no ‘scientific consensus’ that global warming will cause damaging climate change.”

“Even substantial global warming is likely to be of benefit to the United States.” [ALEC, Energy, Environment, and Economics, 5th Edition]

At the annual meeting, ALEC hosted a session touting the “benefits of carbon dioxide.” ALEC also supports the repeal of Section 526, which prohibits federal purchases of high-carbon fuels.

The radical anti-science agenda of ALEC stands in direct contravention to the official public policies of its funders, which include top health care companies like Bayer, Merck, Pfizer, and Johnson & Johnson, and top energy companies like Chevron, ConocoPhillips, and Entergy:

Allergan: Specifically as part of its commitment to the UN Global Compact, Allergan has committed to the UN Global Compact Caring for Climate Program and the CEO Water Mandate.

Altria: Altria is committed to reducing the environmental impact of its businesses. Reducing carbon emissions is one way to do so. Our companies rely on agricultural products and we are keenly aware of the balance of nature and how climate change could alter that balance.

AT&T: Climate change is a fact, and the scientific evidence so far seems to implicate greenhouse gases, such as carbon dioxide, as the cause of climate change.

Bayer: The anthropogenic component of the greenhouse effect (which is adding to the natural effect) is what is changing our current climate. The concentration of CO2 in the atmosphere has increased by 1/3 since pre-industrial times as a result of human activity. The anthropogenic contribution to climate change has led to a temperature increase of 0.8 °C over the last 130 years.

Chesapeake Energy: The fact is we can, and should, reduce our greenhouse gas emissions because the risks associated with failing to do so are simply too great.

Chevron: Chevron shares the concerns of governments and the public about climate change and recognizes that the use of fossil fuels to meet the world’s energy needs is a contributor to an increase in greenhouse gases (GHGs) in the Earth’s atmosphere.

ConocoPhillips: ConocoPhillips recognizes that human activity, including the burning of fossil fuels, is contributing to increased concentrations of greenhouse gases in the atmosphere that can lead to adverse changes in global climate.

CSX: CSXT understands that what’s good for the environment is good for its customers, its employees and its bottom line. That’s why the company is developing long-term, comprehensive climate change strategies and is leading the way to cleaner air through increased fuel efficiency and reduced greenhouse gas emissions.

Dow: Providing humanity with a sustainable energy supply while addressing climate change is the most urgent environmental issue our society faces.

Entergy: We are virtually certain that climate change is occurring, and occurring because of man’s activities. We’re virtually certain the probability distribution curve is all bad.

ExxonMobil: Rising greenhouse-gas emissions pose significant risks to society and ecosystems.

HP: HP recognizes that climate change is one of the most serious environmental and economic challenges facing the world today and that mitigating its effects must be one of the top priorities of governments, companies, NGOs and individuals.

Johnson & Johnson: As a health care company, Johnson & Johnson understands that climate change can negatively affect human health. We have taken sustained, long term action to address our greenhouse gas emissions and we are encouraging our supply chain to do the same.

Merck: Merck supports the adoption of a global framework to address GHG challenges under which all major emitting countries are committed to emission reduction goals.

Pfizer: Climate change is happening, and experts believe it endangers human health.

Sanofi: Sanofi-aventis continuously seeks ways to limit the environmental impact of its business activities, protect public health, and combat climate change.

Shell: The world must take action to halve CO2 emissions by 2050 in order to avoid the worst effects of climate change.

Spectra Energy: We have committed to our stakeholders to be responsible environmental stewards while striving to help meet North America’s increasing demand for natural gas. For us, that means working to reduce our own carbon footprint and taking a lead role in helping our customers manage energy responsibly.

Takeda: As a pharmaceuticals manufacturer operating on a global scale, Takeda strives to reduce greenhouse gas (GHG) emissions.

Union Pacific: Climate change, including the impact of global warming, could have a material adverse effect on our results of operations, financial condition, and liquidity.

UPS: As a global transportation company, UPS acknowledges that Greenhouse Gas Emissions impact the climate and pose a serious challenge to the environment – and ultimately the global economy.

Wal-Mart: Wal-Mart is looking at ways to reduce its greenhouse gas emissions. Climate change may not cause hurricanes, but warmer ocean water can make them more powerful. Climate change may not cause rainfall, but it can increase the frequency and severity of heavy flooding. Climate change may not cause droughts, but it can make droughts longer.

Even more of ALEC’s sponsors are members of the Carbon Disclosure Project, including Spectra Energy, Kraft, BNSF, CN, and QEP Resources.

ALEC’s climate denial is, however, publicly shared by major funder Koch Industries.

http://thinkprogress.org/green/2011/08/08/289553/companies-sponsor-alec-climate-denial/

Chevron Guilty of Amazon Rainforest Destruction, Judge Issues $8 Billion Fine

BREAKING: Chevron Guilty of Amazon Rainforest Destruction, Judge Issues $8 Billion Fine

by Brendan Demelle, desmogblog, February 14, 2011

Amazon Watch and Rainforest Action Network just announced a major victory for the Amazon rainforest. An Ecuadorean judge today found Chevron guilty of one of the largest environmental crimes in history and ordered the company to pay a whopping $8 billion to clean up its damage in the Amazon.  

Chevron immediately issued a statement condemning the judgement as "ilegitimate and unenforceable" and announced plans to appeal.  This ruling clearly has Chevron riled up, as the statement suggests the ruling is "the product of fraud" and included this ominous line: "Chevron intends to see that the perpetrators of this fraud are held accountable for their misconduct." [What arrogant bastards!]

Chevron apparently fails to see the irony of the phrase "held accountable for their misconduct" since today was a major slapdown of the company's destruction of the Amazon rainforest in Ecuador.

As the L.A. Times notes in its piece about the verdict,

"Residents of Ecuador's Amazon region have said that faulty drilling practices by Texaco, which was bought by Chevron in 2001, caused damage to wide areas of jungle and harmed indigenous people in the 1970s and 1980s."

Head over to The Understory blog of the Rainforest Action Network for more details.

AmazonWatch and Rainforest Action Network have released the following statement in response to the verdict:

“As of today, Chevron’s guilt for extensive oil contamination in the Amazon rainforest is official. It is time Chevron takes responsibility for these environmental and public health damages, which they have fought for the past 18 years.

“Today’s ruling in Ecuador against Chevron proves overwhelmingly that the oil giant is responsible for billions gallons of highly toxic waste sludge deliberately dumped into local streams and rivers, which thousands depend on for drinking, bathing, and fishing.

“Chevron has spent the last 18 years waging unprecedented public relations and lobbying campaigns to avoid cleaning up the environmental and public health catastrophe it left in the Amazon rainforest. Today’s guilty verdict sends a loud and clear message: It is time Chevron clean up its disastrous mess in Ecuador.

“Today’s case is historic and unprecedented. It is the first time Indigenous people have sued a multinational corporation in the country where the crime was committed and won.

“Today’s historic ruling against Chevron is a testament to the strength of the Ecuadorian people who have spent 18 years bringing Chevron to justice while suffering the effects of the company’s extensive oil contamination.”

http://www.desmogblog.com/breaking-chevron-guilty-amazon-rainforest-destruction-judge-issues-8-billion-fine

The attorneys representing Amazonian communities in a lawsuit against Chevron have submitted their final argument to a judge in Ecuador, the latest development in a legal saga involving the oil giant that that began nearly two decades ago

Amazon Case Against Chevron Enters Final Stage

by Kate Sheppard,

Mother Jones, January 24, 2011

— Photo by Rainforest Action Network, via Flickr.

The attorneys representing Amazonian communities in a lawsuit against Chevron have submitted their final argument to a judge in Ecuador, the latest development in a legal saga involving the oil giant that that began nearly two decades ago. The plaintiffs are seeking up to $113 billion in compensation for environmental damages in the Amazon.

This particular case started in 2008, though the legal challenges stretch back to 1992. The plaintiffs argue that Texaco dumped 16 billion gallons of heavily polluted waste water from their oil production operations into waterways in the Amazon between 1964 and 1990. Chevron acquired Texaco in 2001, and claims that its subsidiary "fully remediated its share of environmental impacts" before 1992.

But the Amazonian communities orepresented in the case say otherwise. The oil company, their lawyers state in the final argument obtained by Mother Jones, knowingly dumped millions of gallons of the toxic waste into the rainforest, taking no action to minimize the risks it posed to communities in the region. The company also dug 900 open, unlined pits for dumping "drilling muds," which the plaintiffs describe in their filing as "a toxic soup of oil drilling byproducts that includes barium, heavy metals (e.g., chromium, lead, and zinc), chloride, petroleum compounds, and acid." Thousands of gallons of oil also leaked from the pipeline running through the region, which the company repeatedly failed to report or address, they argue.

The plaintiffs report contamination from toxic chemicals at 45 sites in the area. Further, they point to Chevron's own internal memos obtained in the case as evidence that the company knew about legacy of pollution at the sites. And they say that the remediation work the company took at the sites was a "sham" intended to fend off lawsuits.

The oil company succeeded in getting the case moved to Ecuador, but has since sought to dismiss the case there as well, claiming misconduct on the part of plaintiffs and the judge. Most recently, Chevron also attempted to obtain raw footage from Joe Berlinger, a documentary filmmaker, that they say will reveal inappropriate interactions between the plaintiffs and one of the experts in the case. Earlier this month, a US court ruled that thefilmmaker will have to turn over his tapes.

The case has been bogged down in wrangling for months, with the judge in the case changing multiple times amid accusations of misconduct. It's unlikely that a judgment in this case will end the years-long fight. Meanwhile, the issue at the heart of it—whether and how much Chevron should compensate Amazonian indigenous communities for the pollution—still remains unresolved.

"After almost 20 years of Chevron's legal sideshows, delay tactics, false accusations, and intimidation, the time has come for Goliath to face David head-on," the plaintiffs wrote in their final appeal to the court.

Link:  http://motherjones.com/blue-marble/2011/01/amazon-case-against-chevron-enters-final-stages