..............

[Deer Hunter]

What doesn't get mentioned is the contractually obligated fees that the 35,000 bbl per day of crown oil will incur using this refinery. $26 billion over 30 years. Or $68/bbl

Selling a 40$ barrel of oil gets you 40$

Alternatively paying $68/bbl, losing a percentage of the volume through the refining process and getting a $100/bbl of diesel gives you less than $32.

That's if the additional diesel supply doesn't push down diesel prices as Canada is already a net exporter of fuel.
Selling it to the West Coast?
Sure, but this additional diesel supply was part of the reason to twin the Kinder Morgan Transmountain Pipeline. And the new BC government has made it a top priority to stop this.
So I hope there is a bunch of railcars waiting for this diesel. Because there is no where to take it.

[The Elkster]

Don't forget to factor in the 100's if not 1000's of high paying tax generating jobs over that +30 yrs plus tonnes of maintenance work/contracts that would have otherwise gone elsewhere. Even if the refinery only breaks even on a "profit" basis over its lifetime it is still a net win for the people of this Province. We need work and we need tax money. What is a pure liability to a private company, things like labor and taxes, are not a liability to the Province and its people.

There is a reason why cities and states clamber to drop taxes and add incentives to attract industry around the world.

[normstad]

The biggest take away I got from the article is that there will be a 2 million barrel a day reduction in demand for oil if the current trend line of sales of electric vehicles continues.

The second take away is that we already know oilsand oil is expensive, and the first to get hit will be us.

It scares me what is coming down the pike economically, and not sure how Alberta can impact it in the short period we likely have.

[Deer Hunter]

When a $4 billion project is sitting at over $9 billion 2 years behind schedule, there is no doubt that it is benefitting some workers. You got that right!
Just the average tax paying Albertan? Don't think so.

[The Elkster]

Originally Posted by normstad

The biggest take away I got from the article is that there will be a 2 million barrel a day reduction in demand for oil if the current trend line of sales of electric vehicles continues.

The second take away is that we already know oilsand oil is expensive, and the first to get hit will be us.

It scares me what is coming down the pike economically, and not sure how Alberta can impact it in the short period we likely have.

If you dig deeper you can usually find huge holes in the claims. Partial truths abound. I recently read a counter to the 2mm/d article. I'll see if I can find it and post a link. Basically it was taking on the claim of cutting 2mm worth of demand and putting it in context. Sure they will cut out the equivalent of 2mmbbl over the course of a number of years. But not NET of oil demand growth. Because of modernization of third world countries and population growth oil demand is still growing at 1.2mmbbl per year. So basically it worked out that if they go nuts on electric they will cut the equivalent of less than two years of current oil demand GROWTH over over more than two years so not even enough to stop oil demand growth. Totally misleading headline. The headline should read "Electric making headway but even with tremendous effort electric conversion isn't enough to stem oil demand growth let alone cut into base demand of +90bbl/d". Forget sensational headlines and focus on the baseline numbers. They are what tell the unadulterated story.

[rca]

Originally Posted by normstad

I wonder if there will even be a significant market for diesel 15 or 20 years from now, enough to eventually break even on this boondoogle.

At the time it was conceived, it made all sorts of sense, conceptually. However, now 10 or 12 years later, there appears to be a sea change in what fuel will be used. Volvo is going completely electric by the 2019 model year. Tesla and Nicola are already producing prototypes of self driving electric long haul trucks. India has said only new electric vehicles after 2030,13 years from now, and Britain and France are banning all gas AND diesel cars after 2040, only 23 years from now.

Some diesel will be needed for many years, probably out to 2100, however, the path away from diesel certainly can be seen, even if it's a bit foggy yet. Will there be an excess of diesel? Probably. Will the price plunge? Most likely. How does that effect the plant?

It was probably the right project built too late. Let's hope it at least breaks even.

Volvo, isn't going "completely" electric

it's BS marketing, just like the Political BS in Britain/France/Europe about banning the gas/diesel engine

first off, Volvo is going to have a small amount of actual all electric
the rest, majority, will be hybirds, which have gas or diesel engines

not the same

plus Volvo, sells almost no cars to speak of, they're insignificant, much like the electric car industry is right now

go read David Booth's articles on this subject, along with the delusions of the supposed self-driving cars BS

and let's not get started on the politicans

making promises, for decades ahead, cause they won't even be in office then, not to mention they don't have a track record, anywhere, to back it up with

remember The Kyoto Accord? lol

or the other numerous failed agreements since

we're decades, maybe a century away from these dreams
just like sufficent wind/solar/hydro power to meet all those insatiable wants

and by then, we'll be so even more over-populated, all these predictions will be even more irrelevant and out of date

weren't we supposed to be in flying cars by now

[79ford]

Originally Posted by normstad

I wonder if there will even be a significant market for diesel 15 or 20 years from now, enough to eventually break even on this boondoogle.

At the time it was conceived, it made all sorts of sense, conceptually. However, now 10 or 12 years later, there appears to be a sea change in what fuel will be used. Volvo is going completely electric by the 2019 model year. Tesla and Nicola are already producing prototypes of self driving electric long haul trucks. India has said only new electric vehicles after 2030,13 years from now, and Britain and France are banning all gas AND diesel cars after 2040, only 23 years from now.

Some diesel will be needed for many years, probably out to 2100, however, the path away from diesel certainly can be seen, even if it's a bit foggy yet. Will there be an excess of diesel? Probably. Will the price plunge? Most likely. How does that effect the plant?

It was probably the right project built too late. Let's hope it at least breaks even.

Humans are hard at it burning more and more everyday....the so called green shift is happening as oil consumption climbs about 1.5 million barrels per day per year.

The 'green shift' is likely a case of tapping other forms of energy to feed humans growing need for energy since hydrocarbons may not be able to keep up with demand in the future.

The green shift is probably more just a guise to tax humans more while funding new forms of energy to fuel more humans.

A green shift if it were to happen would imply that demand for oil is going down while humans use other sources of energy instead... in reality we are just using more oil and more solar power etc. There is no actual reduction in energy use

[Big Grey Wolf]

79Ford, your posts are always so informing. You are correct with 1.2 billion people in China buying more car now even than the US along with 1 billion in India also taking the plunge, the need for more oil/gasoline/diesel has no where to go but up. How many of us are buying smart cars rather than pick-ups?

[79ford]

Originally Posted by Deer Hunter

What doesn't get mentioned is the contractually obligated fees that the 35,000 bbl per day of crown oil will incur using this refinery. $26 billion over 30 years. Or $68/bbl

Selling a 40$ barrel of oil gets you 40$

Alternatively paying $68/bbl, losing a percentage of the volume through the refining process and getting a $100/bbl of diesel gives you less than $32.

That's if the additional diesel supply doesn't push down diesel prices as Canada is already a net exporter of fuel.
Selling it to the West Coast?
Sure, but this additional diesel supply was part of the reason to twin the Kinder Morgan Transmountain Pipeline. And the new BC government has made it a top priority to stop this.
So I hope there is a bunch of railcars waiting for this diesel. Because there is no where to take it.

You miss the entire point of this project... that 9.3 billion is being spent in alberta to build the thing, all the money spent refining stuff and buying oil etc will be spent in alberta, the fuel will be moved around by trucks, trains and pipelines in alberta.... people who live in ALBERTA will reap good steady jobs working at a refinery that is in their backyard. If the thing turns out to be wildly profitable guess what? It will pay taxes in alberta and probably expand to refine more oil from alberta.

Where do you think all this bitumin goes if it doesnt go in one of our refineries? You think people burn the stuff in cars? Lol, i bet some one else probably takes it, refines it and makes some money processing our bitumin if we arent doing it.

Where were all the layoffs in the downturn? Upstream, boom and bust... if alberta wants to get away from the boom and bust stuff we will have to either get some other industry going or start processing our own hydrocarbons more often.

[mac1983]

This x 10, Break the diesel cartel in Alberta so we get cheaper diesel for anyone who burns it, like my tractor, combine etc.. Supply and demand. That's what Stelmach was thinking. Great for Alberta...

[79ford]

Originally Posted by mac1983

This x 10, Break the diesel cartel in Alberta so we get cheaper diesel for anyone who burns it, like my tractor, combine etc.. Supply and demand. That's what Stelmach was thinking. Great for Alberta...

I would be curious to who if you dig down deep is at the root of opposition to this refinery. This will take away the old boys club monopoly that imperial, shell and suncor have on the alberta fuels market.

I am sure the thought of CNRL/ Murray Edwards getting into the refining market scares the current cartel and their refineries bloated with inefficient bureaucracy. A company like cnrl given'er on the diesel output will definitely bring the price down and they will probably still make money while cleaning the butter off the competitions toast.

Northwest is CNRL and some other calgary guys. It is a canadian company moving in on exxon and shells little monopoly

[silver]

What has been mentioned here is the contamination of the ground over the past number of decades. If you come into Lloydminster from the west, between hiway #16 and the railway tracks, there is quite a bit of land that is nothing but spoil piles. That was the site of an old Husky refinery from back in the day and now they are trying to reclaim the land.

People are talking about a North West refinery, is this one in the Fort Saskatchewan area?

Within one day of the purchase of this refinery in the states, Husky announced the cancellation of the construction of its new refinery at Lloydminster. I am going to guess that the announcement of the new refinery at Lloydminster was merely leverage in their negotiations with the owners in the States.

[lmtada]

Game Changer!!

China oil backed by gold.


Here is something from Nikkei Asian Review that might interest you:
China sees new world order with oil benchmark backed by gold
http://s.nikkei.com/2eKu2pN


Sent from my iPad

[79ford]

Originally Posted by Deer Hunter

When a $4 billion project is sitting at over $9 billion 2 years behind schedule, there is no doubt that it is benefitting some workers. You got that right!
Just the average tax paying Albertan? Don't think so.

Depending on the time there has been 3000-5000 taxpaying albertans working on building that thing for the last 3 years? This was an Allison Redford era project kick off.

Saved alot of peoples bacon when all the raw extraction project plans started getting shelved a few years ago. Many a worker has put food on their families table courtesy of that project during a time while thousands were being kicked out the door province wide to the EI line up.

I work at a mid/downstream facility and have run into many contractors thanking their lucky stars for work at the northwest and at local downstream facilities during these lousy times. When upstream is tossing everyone out the door downstream just keep on trucking along.

Dowstream activity creates local markets for raw products aswell.... look at natural gas, we like to ship lots of it raw and guess what? The united states is producing more and more of its own, that market is disappearing. We can make the products ourselves or rely on some one else to make the products and hope they buy our oil or gas to do so.



Bitumin is a victum just like natural gas. Lots of raw product and a very far away customer. The other competitors in the bitumin marketing area are venezuela columbia and mexico...they can see texas from a derrick with some binoculars probably... we are trying to compete with 5$ per day workers 3 thousand miles away shipping the same low grade product. You think it is even remotely smart to try and compete with mexico and venezuela for the lowest tier part of the oil market?? Lol that is basically selling out just to prove a point.

Oil might not be 100$ per barrel but diesel is, same with gasoline.

[Suzukisam]

If it's in Texas the price just went down

[waterninja]

Originally Posted by Deer Hunter

Depends who you are.
Husky buying one in the USA for $435 millionUSD that is pipeline connected and running...
The Alberta government backing the construction of Northwest Upgrader (cost $9.3 billion) and committing $26 billion worth of crown oil royalty fees. With no place to take the diesel...

Unbelievable.




http://www.huskyenergy.ca/news/relea...ase_id=2182808

I agree. This is good news. Construction means jobs. No pipeline? Perfect. More jobs to build one. Don't let the $$$ fool you. It's just ##'s. Govt's have a short guaranteed shelf life, but working people need to pay the rent, and feed thier children.




http://business.financialpost.com/co...2-98913f93e58b

OK

[waterninja]

..Sigh..