No moratorium on Alberta nuclear plants, minister says December 15, 2009
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Energy Minister Mel Knight said Monday there will be no moratorium on nuclear energy plants in Alberta. (CBC)Alberta will not stand in the way of the construction of nuclear power plants, Energy Minister Mel Knight said Monday, following the release of a telephone survey that suggests 45 per cent of Albertans want nuclear plants approved on a case-by-case basis.
“There’ll be no moratorium,” Knight told reporters at the Alberta legislature.
“We are not proponents of nuclear energy. We’re not working with any company to build nuclear energy. ? We’re saying that we need power, and proponents that want to build in the system in Alberta are welcome to do so.”
In the government-commissioned telephone survey, 45 per cent of respondents said they wanted projects considered on a case-by-case basis, 28 per cent opposed any proposals for nuclear power plants in the province, 19 per cent felt the province should encourage proposals and eight per cent said they didn’t know.
In the intial voluntary online and mail-in survey, about 55 per cent opposed proposals for nuclear plants, about 28 per cent felt the province should encourage proposals and 16 per cent felt projects should be considered on a case-by-case basis.
However, unlike the telephone survey, the results of the voluntary survey are not considered to be a statistically valid sample of Albertans.
The random telephone survey of 1,024 Alberta residents was conducted from July 8 to 20 by Innovative Research Group, Inc. The poll has a margin of error of 3.06 per cent, 19 times out of 20.
The surveys were part of Alberta’s nuclear power consultation that was launched earlier this year after an expert panel in March identified issues around nuclear power but made no recommendations about the direction the province should take.
Plans for 1st nuclear power plant in Alberta
There are no nuclear power plants in Alberta. Bruce Power is working on a proposal to build a plant about 30 kilometres north of Peace River, in northern Alberta.
NDP legislature member Rachel Notley says the government is ignoring what Albertans want by allowing nuclear plants in the province.(CBC)Any prospective applications would go through the Canadian Nuclear Safety Commission, where proponents would have to hold public hearings, Knight said. While Alberta does have the power to put a moratorium on nuclear power, Knight said the province isn’t going to do that.
“This is a really disappointing outcome for Albertans,” NDP MLA Rachel Notley said.
Even though the government engineered the consultation process to get a certain outcome, Notley said, the results showed many Albertans are still concerned about the launch of nuclear power in the province.
“If this government was really interested in listening to Albertans, what they would do is they would close the door [on nuclear power].”
The questions in the telephone survey were developed after an initial consultation period that involved discussion groups with 193 people in 10 communities, an online and mail-in workbook that was completed by another 3,615 people, and consultation with community, business, environmental and First Nations groups.
With files from The Canadian Press (more…)
Links between oil activity, Alberta quakes studied November 14, 2009
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Dave Eaton, a geophysics professor, is looking for links between oil and gas activity and earthquakes in Alberta. (CBC)
A Calgary scientist is looking for links between oil and gas activity and earthquakes in Alberta.
Alberta isn’t known for its tremors, but small ones do happen and can be missed because of a lack of monitoring equipment in the province.
Dave Eaton, a geophysics professor, is leading a project that will see a decommissioned station near Priddis upgraded and eight more set up across the province. The equipment will be able to detect earthquakes that humans can’t.
Eaton wants to know whether blasting liquids underground to extract natural gas or storing carbon in the earth to reduce greenhouse gas emissions can cause an earthquake.
“Earthquakes have been produced that are just on [the] threshold of causing damage to homes and infrastructure and are felt over a large region. So we would really like to understand the nature of those earthquakes better and really make a more solid connection between the types of fluids being injected and earthquake activity,” he said.
No clear link between carbon capture, quakes
The study could have a big impact on the emerging carbon-capture industry in the province. Alberta has set aside $2 billion to fund such projects.
“There’s no proof right now of any causal link between CO2 injection and earthquakes, but that’s one of the reasons we would like to investigate it more,” Eaton said. “We need to be very careful and aware of all the earthquake risks, especially when we are contemplating these sorts of really long-term storage of materials inside the earth.”
Little is known about the possible connection between earthquakes and carbon capture, said John Harper, a geologist with the Geological Survey of Canada.
“Not a lot of research has been done relative to carbon capture and storage and earth movements so it is the kind of research that is extremely valuable,” he said.
Eaton is also interested in what’s happening deep underground.
“We are also hoping to understand better the deep geology of this region and some of the forces that cause the North American plate to move.”
The University of Alberta in Edmonton also has earthquake research stations, but the University of Calgary’s stations will be online, accessible through the Geological Survey of Canada. Researchers have to go to the U of A stations in person to collect the information.
Alberta lifts ban on sour gas projects November 14, 2009
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The government agency that regulates Alberta’s oil and gas industry lifted its ban on new sour gas projects Friday.
The Energy Resources Conservation Board (ERCB) suspended the issuing of licences for sour gas drilling, pipelines and other projects on Nov. 3, after an Alberta Court of Appeal ruling.
The ERCB says companies planning sour gas projects will still have to determine whether more residents need to be included in public hearings(CBC)
Sour gas contains hydrogen sulphide, which can be fatal, even in small concentrations. It occurs naturally as a result of the decay of organic matter, and is present in one-third of Alberta’s natural gas wells.
The court decided on Oct. 28 that the ERCB erred by not following its own regulations when it denied three women living near Drayton Valley, 140 kilometres southwest of Edmonton, their right to participate in public hearings on the drilling of two sour gas wells by Calgary-based Grizzly Resources Ltd. The board had said the three women did not live close enough to the well site to be affected by any leak.
The board said it has now corrected its error, but the changes will be controversial. Previously it had required oil and gas companies to identify two zones, one within which a gas leak would cause death, injury or damage, and a wider one in which sour gas could still drift from wind but in lower concentrations.
It said the larger zone will be reduced and be the same size as the smaller one. Although the court ruling requires that the public hearing be held again, and that the three women who won the court ruling be consulted. The change means they would still be excluded from a similar future hearing.
‘Public safety has been in no way lessened or compromised’?Dan McFadyen, Chairman, ERCB
“Public safety has been in no way lessened or compromised at any time,” said ERCB chairman Dan McFadyen. “The ERCB still has the most stringent sour oil and gas regulations in the world.”
Board spokesman Bob Curran told CBC News the risks outside the smaller zone are “negligible” but “in any situation it’s impossible to get down to a risk of zero.”
One of the women who won the case, Lillian Duperron, told CBC News earlier that she was concerned that the sour gas even at low concentrations would affect her asthma or the large number of school-aged children in the area.
The suspension by the board affected applications for 69 wells, pipelines and other facilities. Curran said all companies will have to review their applications to determine whether more residents need to be included in public hearings.
“There’s going to be some work for industry to do on that front,” he said.
Alberta suspends sour gas drilling November 3, 2009
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The government agency that regulates Alberta’s oil and gas industry Tuesday temporarily suspended the issuing of licences for sour gas projects.
The move followed a court ruling which may have far-reaching effects on the industry and on the rights of people living near sour gas wells.
A court ruling has led to the suspension of sour gas drilling in Alberta.(CBC)
Sour gas contains hydrogen sulphide, which can be fatal, even in small concentrations. It occurs naturally as a result of the decay of organic matter, and is present in one-third of Alberta’s natural gas wells.
Before gas can be moved through the pipeline system, the hydrogen sulphide must be removed not only because it’s poisonous but also because it is highly corrosive.
The decision by the Energy Resources Conservation Board (ERCB) affects applications for 69 wells, pipelines and other facilities.
The move follows a court decision on Oct. 28 by the Alberta Court of Appeal. The court ruled that the ERCB erred when it denied three residents living near Drayton Valley, 140 kilometres southwest of Edmonton, their right to participate in public hearings on the drilling of two sour gas wells by Calgary-based Grizzly Resources Ltd.
The board had refused, saying the three women did not live close enough to the well site. All three live between three to six kilometers from the wells.
Gas could drift up to nine kilometres
Modelling done for the company suggested any gas leak would spread only a little over two kilometres. But a new regulation enacted by the ERCB last year creates another zone around wells where the gas might be spread by wind and that extended, in this case, beyond nine kilometers.
The court said the ERCB’s own regulations did, in fact, give the residents the right to take part and ordered the board to re-hear the application.
The court also ruled that the fact that the wells have already been drilled does not mean that Grizzly can go ahead and operate them until the new hearing has been held.
The board said in a release it will not approve any more applications until it can formulate a response to the court ruling. It will, however, continue to accept new applications.
Length of suspension unclear
The extent to which the development applies to other sour gas wells already approved isn’t clear.
A spokesperson for the ERCB, Bob Curran, said it won’t likely result in a long suspension of drilling.
The lawyer for the three women, Jennifer Klimek of Edmonton, said the scope of the ruling remains an open question.
The ruling does appear to require companies in the future to consult with residents over a wider area before they are allowed to drill.
Alberta premier rejects carbon targets that limit western growth November 3, 2009
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Alberta Premier Ed Stelmach on Thursday rejected a new report that says Ottawa can only achieve its greenhouse gas emissions targets by limiting growth in Saskatchewan, Alberta and B.C.
The Calgary-based Pembina Institute and Vancouver’s David Suzuki Foundation conducted the study released Thursday.
It was partly funding by TD Bank.
The study says wealth would have to flow from Western Canada to the east to pay for meeting Ottawa’s carbon targets.(CBC)
The report says a massive restructuring of the Canadian economy will be required to meet the government?s climate-change targets, with wealth flowing from the West to the rest of the country.
Stelmach told reporters there won’t be another wealth transfer to Ottawa on his watch, saying that federal equalization programs have already transferred $117 billion from the province to Ottawa over the last decade.
Stelmach said Alberta is suffering through a recession just like every other province, and “you can’t get blood out of a rock.”
TD helped to pay for the study but has not endorsed any targets, though it has supported a national emissions cap.
Chief economist Don Drummond said TD funded the report to pull together for the first time in one study how proposed targets would be met and what the economic cost would be, especially in different regions of the country.
“No one has ever provided a regional perspective,” he told CBC News. “You don’t get very far in this debate just looking at it at a national level.? There’s been no information on this until now.”
The targets could be met through direct taxation or by capping emissions and requiring companies to buy allowances ?amounting to $100 a ton by 2020 ? to emit carbon.
Would raise $46B in tax revenue
The federal government, in return, would receive approximately $46 billion or more in revenue and redistribute that through spending and cuts to personal taxes.
The study concludes that achieving the government target under one scenario would cumulatively reduce Canada’s real GDP growth by about 1.5 per cent by 2020. That amounts to losing one year’s economic growth over the next decade compared with doing nothing.
“It’s not devastatingly large,” Drummond said, “but it is very significant.”
Economic growth over the same period would be reduced in Alberta by 8.5 per cent, in Saskatchewan by 2.8 per cent and in British Columbia by 2.5 per cent.
“Alberta would still record the fastest growth,” Drummond said, and of all the provinces would “still have the biggest per capita income, but nonetheless it does bear the biggest shock.”
Benefit certain provinces
The report assumed all the emissions revenue would be redistributed to the public, resulting in massive investments in technology and public infrastructure, such as public transit, and a large personal income tax cut.
It also assumed there would be benefits for developing electricity generation that does not involve burning fossil fuels, which would benefit Manitoba, Ontario and Quebec.
The Pembina Institute’s director of climate change, Matthew Bramley, presented the study Thursday to a Commons committee studying an NDP bill, C311, that would set deep emission targets for Canada.
Bramley said the study showed Canada could adopt C311 and “still have [a] strong growing economy, a quality of life higher than Canadians enjoy today and continued steady job creation across the country.”
However, he said, that would only be possible if Ottawa immediately puts a price on emissions.
The report comes ahead of the United Nations climate summit in Copenhagen in December, where countries, including Canada, will attempt to at least make progress on a new global climate treaty to replace the Kyoto Protocol.
As Canada heads into what he expected would be difficult negotiations, Bramley told the committee, passage of C311 before the Copenhagen conference convenes “would send an important signal of Canadian leadership to the world.”
Alberta premier, ministers to take pay cut October 16, 2009
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Alberta Premier Ed Stelmach speaks to reporters after his cabinet was sworn in on Dec. 15, 2006.(Jason Scott/Canadian Press)
Alberta’s premier and cabinet ministers are taking cuts to their salary top-ups, an announcement that comes a day after a televised speech by Ed Stelmach.
Stelmach will take an immediate 15 per cent cut, or $12,196, to his premier’s allowance. Ministers are reducing their cabinet allowance by 10 per cent, or $6,391.
Every MLA makes $78,138, a portion of which is a tax-free allowance. Before the cuts announced Thursday, Stelmach had an additional allowance as premier of $81,312, while cabinet ministers with portfolios made an extra $63,912.
The Canadian Taxpayers Federation estimates the premier makes $226,000 a year once tax savings and top-ups for committee work are taken into account, while cabinet ministers make $196,865. That would mean the actual cut to the premier’s total compensation is 5.4 per cent, and for cabinet members it’s 3.2, said Scott Henning, the group’s Alberta director.
“It was a whole lot less impressive after I saw that,” Hennig said.
‘I have a bit of a reluctance to give kudos to them because of the 34 per cent increase they gave themselves last year.’?Doug Knight, Alberta Union of Provincial Employees
On Corus Radio’s The Rutherford Show Thursday morning, Stelmach said the reductions were discussed at a cabinet meeting Wednesday.
“I asked them to join me in terms of the salary reductions,” said the premier. “I said, ‘I’m taking a 15 per cent reduction. I asked cabinet [for] 10 per cent and they all agreed. Put[ting] it in with the address would have just clouded the message.”
Stelmach’s chief of staff, Ron Glen, and Brian Manning, head of the provincial civil service, are also taking a 10 per cent pay cut. How much money that will save was not announced.
Shortly after almost sweeping the March 2008 election, Stelmach and his cabinet voted themselves a salary increase of more than 30 per cent, as well as a pay hike for committee work by backbench MLAs.
The president of the Alberta Union of Provincial Employees, Doug Knight, said Stelmach’s announcement doesn’t impress him.
“I’m sure the premier and the cabinet ministers are trying to make the point that they’re doing their share,” he said. “I have a bit of a reluctance to give kudos to them because of the 34 per cent increase they gave themselves last year.”
The previous pay hike also prompted Hennig to temper his praise for Thursday’s announcement.
“It’s tough to applaud the premier and his cabinet for doing this after taking a 30 per cent pay hike the year before, but I guess it’s better than doing nothing and it’s at least a start,” he said.
No raises for senior managers
On Wednesday night, Stelmach announced that the Alberta government would also freeze the 6,500 salaries of senior bureaucrats for two years to achieve savings of $22 million.
Stelmach said he was also hoping public sector employees would agree to voluntarily freeze their wages over the next two years to help the province weather the economic downturn.
Both Knight, and his counterpart at the Alberta Teachers’ Association, Carol Henderson, said they have yet to be officially asked to freeze their members’ salaries.
But that would mean opening up collective agreements.
“We have contracts in place that he said he was going to honour and I’m hoping that he will respect that,” Knight said. “I know that the implications of the salaries being frozen [for] management for two years will be weighing heavily when we go back to bargaining.”
Speech meant to reassure Albertans
Wednesday’s recorded television address was a bid to reassure Albertans that Stelmach’s Progressive Conservative government has a solid economic recovery plan amid a rising deficit and plummeting energy revenues.
Stelmach outlined a general four-point plan to get the province ? currently forecasting a record $6.9-billion deficit this fiscal year ? back into a surplus position in three years, without raising taxes.
Alberta NDP Leader Brian Mason called on the Progressive Conservative party to reimburse the provincial coffers for the $134,000 it cost to produce and broadcast the video, because he said it was a partisan political announcement.
“There’s nothing new in what he had to say, it was simply regurgitating the same old story,” said Mason.
Added Alberta Liberal Leader David Swann: “Like many Albertans, I was expecting more. This was a very flat and uninspiring message.”
Feds, Alberta pledge $780M to carbon-capture project October 14, 2009
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Prime Minister Stephen Harper was in Wabamun, Alta. Wednesday to make an announcement about a carbon capture project west of Edmonton. (CBC) The federal and Alberta governments pledged nearly $780 million Wednesday to retrofit a coal-fired electricity generation plant to capture and store some of the CO2 generated from the project.
“Our government is determined that Canada remain a world leader in in the use of this state-of-the-art technology,” Prime Minister Stephen Harper said at an announcement Wednesday morning in Wabamun, west of Edmonton.
“Carbon capture and storage could not only drastically reduce our emissions but by exporting it to other countries we could also make a major contribution to the reduction of global emissions.”
The Alberta government has signed a letter of intent with energy company TransAlta to build Project Pioneer at the Keephills 3 plant west of Edmonton.
Alberta will spend $436 million over the next 15 years on the project, with the money coming from its $2 billion Carbon Capture and Storage Fund. Ottawa is kicking in $343 million from its Clean Energy Fund.
The CO2, which will be captured using a chilled ammonia process, will be injected 2,600 to 2,800 metres underground to permanently store it near the plant. According to the proposal, the technology will capture up to one million tonnes of CO2 a year starting in 2015.
This is the second carbon capture announcement in Alberta in the past seven days.
On Thursday, Ottawa and Alberta pledged $865 million to the Shell Quest project that will use carbon-capture technology to reduce greenhouse gas emissions at the Shell Scotford upgrader east of Edmonton.
TD sounds alarm for Alberta’s natural gas industry September 30, 2009
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Alberta’s natural gas industry faces risks that “are significant and growing,” according to a report released Monday by TD Economics.
The report by Derek Burleton, TD’s director of economic analysis, cites competition from British Columbia’s increasing gas production and the potential loss of the U.S. as an export customer.
Companies have spent $4 billion drilling in British Columbia since 2006.(CBC)
Natural gas exploration and development is a cornerstone of Alberta’s economy, generating $35 billion to $40 billion ? or one-tenth of the provincial economy in 2008 ? and directly employing up to 140,000 people.
In 2009, the industry has been ravaged as prices for the heating fuel have fallen to $3 US from $8 per million British Thermal Units. Natural gas closed Monday in New York down 26 cents at $3.73.
Prices have fallen to seven-year lows not only because of a combination of last year’s mild winter and falling demand because of the recession, but also because of increasing production from shale formations.
Domestic production in the U.S., which in the past has relied on Alberta for up to one-seventh of its consumption, has boomed since 2004, as new technology opens up new areas. The technology fractures and props open formations that were previously inaccessible.
In June, the Colorado School of Mines came out with a report showing shale gas production has boosted American supplies by 35 per cent, its largest jump in the 44 years it has been collecting data.
“There has been some speculation that the U.S. might one day join the small list of countries no longer relying on net imports of natural gas,” Burleton said in the commentary.
At the same time, competition for the American market is heating up. Shale gas formations are opening up in Quebec, Atlantic Canada, and Saskatchewan, but especially in British Columbia’s Horn River and Montney Basins. Companies have invested $4 billion for drilling rights in B.C. since 2006 and are now producing one trillion cubic feet a year, making that province Canada’s second largest producer.
Some win in the shift to shale
Share price performance of oil service stocks over the past month
Company Change
Calfrac 47%
BJ Services 27%
Trican 25%
Trinidad Drilling 22%
Savanna Energy 15%
Precision Drilling 14%
Parker Drilling 12%
Helmerich & Payne 8%
Nabors 4%
Ensign Energy 2%
Patterson-UTI Energy -2%
Source: UBS
The shift to shale is also favouring the stocks of some companies that provide production services that use that new technology. The financial services firm UBS tracked share prices and said in a report released Monday that over the past month, Calfrac, Trican and BJ Services have outperformed their drilling peers by as much as 33 per cent. While it predicted several quarters of weak earnings yet, it expected shale service companies to do better than conventional drillers.
Still, shale gas may end up overrated. What’s uncertain are its decline rates, the rates at which wells are exhausted. Limited evidence shows these to be higher than conventional gas wells. There are also environmental concerns about water contamination, which could discourage investment.
Some companies have blamed the Alberta government increase in royalties for adding to the problem. Burleton’s analysis found, depending on market price and production levels, natural gas royalties were raised to 15 to 50 per cent from 15 to 35 per cent by the changes, which took effect this year.
Natural gas prices have fallen to a seven-year low this year.(CBC)
By comparison, natural gas royalties in B.C. ranged from nine to 27 per cent, depending on price. Despite the complaints, at low natural gas prices, Alberta royalties remained competitive, Burleton said.
What’s not debated in Alberta is that companies have laid off workers, drilling rates have plummeted, and firms have “shut in” production by turning off wells.
‘…natural gas will never return to the same prominent place it occupied in the Alberta economy only five to 10 years ago.’
?Derek Burleton, TD Economics
“It appears that Alberta’s economy continues to contract as most other regional economies in the country show signs of renewed life,” said Burleton.
“The potential for an accelerated long-term decline of an industry that does so much of the heavy lifting in the Alberta economy is arguably the number one risk facing the province’s standard of living,” he wrote.
Burleton concluded that Alberta’s natural gas industry will never return to as prominent a position in the Alberta economy as it enjoyed only five to 10 years ago. Still, he refused to count out Alberta natural gas. Future markets would suggest prices will return to $5 or $6 per million British Thermal Units by March of next year. That would help some, but not all producers, according to the Ziff Energy Group.
What is certain, said Burleton, is the need for the Alberta government to rein in spending. Already, falling royalties have contributed to a deficit expected to hit almost $7 billion this year.
The “rapid spending years of the past half decade ? when annual outlays rose at a double-digit rate ? will need to be relegated to Alberta’s history books,” he said. “Parsimony in non-priority areas will need to be the watchword even once surpluses re-emerge. On the plus side, the growth-related pressures that drove much of the robust spending increases earlier this decade appear unlikely to return over the foreseeable future.”
New visa requirements for Mexicans hurt Alberta businesses July 16, 2009
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Businesses in Edmonton that bring in temporary workers are taking a hit because of new visa requirements for people from Mexico and the Czech Republic.
The change took effect at 12:01 a.m. ET on Tuesday. For the first 48 hours, Mexicans and Czechs will be able to apply for entry on arrival in Canada. However, after 11:59 p.m. Wednesday, all visitors from those countries must already have a visa when they arrive at a point of entry.
About 30 Mexican workers were expected to arrive in Alberta next week, said Jessica Wegmann-Sanchez. She and her husband own Bidmexico International, a company that recruits temporary foreign workers.
“Alberta businesses have been waiting for these workers, have planned their whole workload around the arrival of these workers within the next week or two and suddenly they can’t come, and they have to go through this whole other process,” Wegmann-Sanchez said
“We don’t know yet how long it’s going to take because it’s all new and because the Mexican Embassy’s going to be so overloaded.”
The businesses will be left without enough staff to complete contracts or staff restaurants at a busy time of the year, she said.
“First it was the fall in the economy … next we had the H1NI virus … suddenly this change in the visa restriction ? it just seems like it’s adding insult to injury, one thing after another and really putting us in a bad situation,” Wegmann-Sanchez said.
The change was put in place to stem a surge in refugee claims by visitors from those two countries, Immigration Minister Jason Kenney said Tuesday.
“It’s an insult to the important concept of refugee protection to allow it be systematically violated by people who are overwhelmingly economic immigrants,” Kenney told CBC in an interview.
Requiring visas of foreign visitors is the norm, and the majority of Canadians will support the decision, he added.
Alberta government extends drilling incentives June 28, 2009
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The Alberta government has announced a one-year extension of two incentive programs introduced last March to help prop up the province’s energy sector during the global economic slowdown.
“Producers need to begin setting budgets for the upcoming drilling season, and we need to provide timely assurance that these programs will be extended,” Energy Minister Mel Knight said Thursday. Both programs were set to expire in March 2010.
This extension provides the certainty needed for oil and gas producers to plan new drilling programs, Knight said.
“Additional drilling results in new, ongoing royalty revenues for the province, keeps businesses going and people employed,” he said.
The new well incentive program will be extended. It offers a maximum five-per cent royalty rate for the first year of production from new oil or gas wells.
The drilling royalty credit for qualifying wells will also be extended. That program provides a $200-per-metre-drilled royalty credit to companies on a sliding scale based on their production levels from 2008.
“This extension responds to market challenges facing oil and gas exploration in Alberta,” Knight said.
A review of Alberta’s overall competitiveness in the energy sector will be completed by fall, the energy minister said.
