March 31, 2014

South Portland to Block Alberta Bitumen

South Portland, Maine, could be the first U.S. city to pass a law to block Alberta oilsands crude from getting anywhere near its waterfront.The city of 25,000 people is turning into a test case for local communities that don’t want oilsands bitumen shipped from their ports.

Tom Blake, the former mayor of South Portland, gave CBC News a tour of his city this week where a temporary moratorium has been imposed on any new structures used by oil companies to help load oil from a pipeline on land, to oil tankers in their port for export.

“We have no interest in having the world’s dirtiest oil come through our community," said Blake, who currently sits on city council.

South Portland sits across the bay from Portland, Maine. It’s the third-largest oil port on the U.S. East Coast.It has provided imported oil by pipeline to Canada since 1941, when it was built to help provide a safe source of energy to this country during the Second World War.

The oil moves north from Maine through New Hampshire to Montreal via the Portland Montreal Pipeline, a subsidiary of the Canadian parent company that is owned by three companies involved in the Alberta oilsands: Shell, Suncor and Imperial Oil.

In 2008, the company applied for a permit to reverse the flow of the pipeline to bring Canadian oil to the U.S. east coast.The plan was scrapped because of the recession and there is no current project on the books. But the company president Larry Wilson has been quoted as saying he is looking for every opportunity to revive the plan.

“The current president has stated publicly many times and to me personally that he would love to bring tarsands to South Portland,” said Blake.

So when Canada's National Energy Board approved the reversal of Enbridge's Line 9B to bring oilsands bitumen east to Montreal in early March, many in South Portland figured it was only a matter of time before that oil would be heading south to their port for export.

"They want to use the existing infrastructure because they're not getting their other pipes done as quickly as they want to," said Crystal Gooderich, a spokeswoman for local citizen's group Protect South Portland.
Last fall the group of residents formed a vocal anti-oilsands campaign and narrowly lost a citywide vote on a restrictive new ordinance on all waterfront development.

But it was enough to convince the city to pass a six-month moratorium in November on proposals to build new structures to transfer oil onto marine vessels.

Portland Pipeline's original plan included two 21-metre industrial stacks on the city's scenic waterfront to burn off gas from the piped oil before its transfer to a tanker.
The council may extend the moratorium for a further six months to allow a committee to draft an ordinance for a permanent ban.

Health and safety concerns

For Gooderich and her neighbours, it's a health and safety issue. Local neighbourhoods are dotted with more than 120 oil storage tanks that have sprouted up since the 1940s.And the current Portland Pipeline runs right through backyards and streets lined with trendy Cape Cod style homes.
People worry about air pollution and heavy oil spilling in their scenic bay.

South Portland, Maine Jamie Py
Jamie Py, the executive director of the Maine Energy Marketers Association, sees no reason to block Alberta's oilsands crude from reaching South Portland's waterfront. (CBC News)

"The tarsands product is so difficult to clean up, almost impossible," said Gooderich.
"If we were to have a disaster in Casco Bay, or in our drinking supply in Lake Sebago, it would be something we'd never recover from fully."

The moratorium and the possibility of a precedent-setting local law have sparked a sharp response from the oil industry, which is running a series of pro-oilsands ads in local papers.

The American Petroleum Institute, which represents more than 500 oil and gas companies, called the current moratorium "ill-advised, unnecessary and unsupported."In a letter to the city in December 2013, it warned "the proposed moratorium could cause harm to local, state and national interests."

"The development of oilsands promotes North American energy security and brings substantial economic benefits to the state of Maine." writes API, which predicts this will all end up in court.

Moratorium bad for business

Local businesses say a vocal minority have lost sight of how important the oil industry is the region's economy.

"It’s been an oil port for a long time, said Jamie Py, the executive director of the Maine Energy Marketers Association. "Eighty per cent of the shipping business that comes into the port is related to the oil business."
"It’s not unprecedented that people want to ban things, that happens all the time. On this one all I can say is look at the facts, ladies and gentlemen, let’s look at the facts of what this product is. And I think the facts will show you it's not any more dangerous or any more difficult to handle than traditional crude oil, so why do we have this big issue here?"

South Portland is being closely watched by people on the U.S. West Coast. Local environmental groups in six California communities are also trying to use local laws to prevent oilsands and Bakken crude from coming to their ports by train.

"We don't want to be the pass-through sacrifice zone for crude oil transiting through California and being exported," said Diane Bailey, senior scientist with the Natural Resources Defence Council in an interview from San Francisco.

"Right now there is a domestic crude oil export ban, but that's not to say that the Canadian tarsands can't come through California coast ports to be exported, and we've very concerned  that it would be all risk and very little benefit to these communities."

Py thinks that national environmental groups waging a war on the oilsands industry as a whole are using local groups to help fight the battle.

"Canadian people have made a decision that this is an OK thing to do, that this is in their best interest to do so. It’s an energy source that’s huge and we would like to do business with the United States, but there are some folks in the United States who said no, we don’t want to do business with Canada. That’s a cultural problem, it’s an economic and it’s a political problem."

In the meantime, a special committee in South Portland is carefully drafting an ordinance to stop oilsands crude from getting anywhere near an export tanker in the city's bay. There's no doubt this local law would have to stand up to intense international scrutiny.

It's expected to be ready sometime in the fall.

Source -CBC News

March 18, 2014

Transporting Bitumen

Canada’s oil sands bitumen spared from new US crude-by-rail rules


Bitumen from Canada’s oil-sands formations is free to ride in older rail cars under an amended set of rules issued by the US that also eased testing for oils that shippers are familiar with handling.

The US Transportation Department clarified requirements for shipping oil by rail issued Feb. 25 after companies were found classifying crudes as less hazardous than they were. The updated order makes clear that the rules apply only to flammable “UN 1267” crudes and that shippers with “sufficient knowledge” of the oils they’re handling will not be required to test for corrosivity.

“So unless the bitumen is categorized as UN 1267, Class III crude oil, the amended EO would not apply,” said Jeannie Shiffer, a spokeswoman for the Transportation Department’s Pipeline and Hazardous Materials Safety Administration Transportation Department. Bitumen diluted with condensate may be classified as a flammable oil and fall under the new rules, she said.

The trade group American Fuel & Petrochemical Manufacturers (AFPM) criticized the original order, saying it left questions unanswered, and warned that the lack of clarity could cause fuel shortages. The revisions are a “judicious response,” AFPM president Charles Drevna said in a statement.

More Shipments

Shippers of bitumen, a thick, tarlike substance found in oil sands, were particularly at risk from the Feb. 25 order. They would no longer have been able to export product in older cars known as AAR-211s, companies including Strobel Starostka Transfer Canada said.

“There are companies that take it out of the ground and call it bitumen or fuel oil from the start, and that would be perfectly legal” under the clarified order, Marvin Trimble, Strobel Starostka’s commercial development director, said by telephone.

Shipments of bitumen by rail to the US are accelerating. More than 200,000 bpd of crude are leaving Western Canada by rail, and Peters & Co., a Calgary-based investment bank, forecast that would reach 500,000 by the end of the year.

The amended order also clarified that only companies “without sufficient knowledge” to classify the oil they’re shipping may be subject to additional tests such as those to detect the level of flammable gases, compounds such as hydrogen sulfide and corrosivity.

“It says that if the shipper is familiar with the material they’re transporting, then those tests are not necessary,” Rich Moskowitz, general counsel for the AFPM, said by telephone from Washington.

The Transportation Department warned of penalties for those who try to reclassify their crude to “circumvent the requirements.” 

March 6, 2014

High Pressure Steaming to Clear the Spill

CNRL wants to start high-pressure steaming near active spill site
Canadian Natural Resources, Ltd. provides media access to spills at its Primrose site near the Cold Lake Air Weapons Range in northeast Alberta. August 8, 2013.
Canadian Natural Resources, Ltd. provides media access to spills at its Primrose site near the Cold Lake Air Weapons Range in northeast Alberta. August 8, 2013.
Vassy Kapelos, Global News
The company whose northern Alberta spills have been oozing bitumen for 10 months nonstop has asked the province to let it start high-pressure steam operations less than a kilometre away from one of the spill areas.

More than a million litres of bitumen have spilled so far from Canadian Natural Resources, Ltd.’s Primrose sites – but it’s hard to tell because that’s lower than what the company said had spilled several months ago. (CNRL says that’s due to “reconciliation” in its numbers; the Alberta Energy Regulator doesn’t collect its own figures)

Either way, that makes this one of Alberta’s top five bitumen spills in 40 years (one other of which was also on CNRL’s Primrose site). And the leaks show no sign of stopping.

Canadian Natural applied last month for permission to start high-pressure steam operations at a Primrose South site. The closest well is about 500 metres away from the one-kilometre exclusion zone the province set up last summer around one of the spill sites.

This would be the same kind of high-pressure cyclical steam stimulation CNRL used where these spills occurred: Inject extremely high-pressure steam into a vertical hole in rock; then suck all the heated bitumen out as the high pressure forces it up through the same hole in the rock.

CNRL says it knows what started the leaks in the first place: It blames old wellbores deep within the rock that should have been capped with cement but allowed bitumen to escape.

“We are confident as to the cause and the step we can take to prevent it happening again,” spokesperson Zoe Addington said in an email.

Others aren’t so sure.
“It’s kind of strange to me they’re sort of approving steaming in the absence of knowing officially what went wrong,” said Keith Stewart, climate and energy campaign coordinator with Greenpeace Canada.
“If they start injecting here it could reheat and cause the other one to keep spilling or it could, depending what’s cracked, it could widen cracks more. It certainly won’t make things better.”

Regulator spokesperson Bob Curran said they’re reviewing the application and there’s no set timeline for how long that will take. “As a general policy,” he said in an email, “we do not discuss specifics of applications that are under review.”

But “if CNRL hasn’t proven they can ensure it won’t happen again and if the regulator doesn’t know it won’t happen again, it should be considered a high-risk application,” said Pembina Institute analyst Erin Flanagan.
When the spills were just a few months old, CNRL said there was no way to stop the seeping bitumen until the pressure pushing it up from underground subsided. It appears it still hasn’t, although it remains unclear how much has actually spilled: In September, CNRL said about 1.2 million litres of bitumen had spilled; this week, it said about 1.77 million, chalking the discrepancy up to reconciled numbers.

The company also said the amount spilling now is almost “imperceptible” – about 1,000 litres a month from all spill sites.

Kevin Timoney doesn’t buy it: The Treeline Ecological Research investigator published a detailed report into these spills, figuring that, if previous volume reports were accurate, the real amount of bitumen spilled so far is probably closer to 2 million litres.

“Both AER and CRNL fail to provide accurate, complete, and timely information to the public,” Timoney’s report reads. “Without independent oversight of reported hydrocarbon release and recovery volumes, the public may never know the true volumes spilled or recovered.”

The spills are expected to come up in CNRL’s conference call with investors following its fourth-quarter earnings announcement Thursday.

CNRL’s application to start high-pressure steaming says it has done a risk assessment on all wellbores within a kilometre of the proposed site, and plans to implement “an enhanced monitoring and reporting protocol” within that area.

Others aren’t so sure wellbores are the answer: The Alberta Energy Regulator would say only that it “continues to make progress is its investigation, and will release its findings once the investigation is complete.”

Environmentalists point out it seems statistically unusual for several wellbores in different locations to suddenly fail at once, and strange for one failed wellbore to cause spills surfacing several kilometers apart.
They say it could be that the steam’s just too high pressure – it’s cracking the caprock, creating fissures in the stone where bitumen can escape.

If that’s the case, it could mean trouble – not just for CNRL’s operations at Primrose, but for anyone extracting bitumen by injecting high-pressure steam into the ground. And the number of in situ operations doing that is slated to grow. What happens if it turns out companies don’t know as much about doing that safely as they thought they did?

The regulator’s investigation into a similar CNRL spill in 2009 suggested problems with rock and pressure, but was ultimately inconclusive as to what caused the large spill.

It’s possible the broader implications of such a finding could be holding the regulator back from suggesting the problem lies in the extraction method itself.

“It would be a very brave bureaucrat in Alberta who said, ‘We have a problem with in situ technology’ because it is the future of tar sands development,” Stewart said. “This is why I think they need to make their reviews public and they need to be reviewed by independent experts.”

With a report from Leslie Young

Source- Globalnews

March 4, 2014

Bitumen Refinery in Canada

WorleyParsons has won a $Can130 million ($A132 million) contract to provide engineering and procurement work for a bitumen refinery project in Canada.

The North West Redwater new bitumen refinery project is in Sturgeon County, northeast of Edmonton, Alberta, close to major crude oil and diluent pipelines in Albert, WorleyParsons said in a statement on Monday.

The work will be performed by WorleyParsons in its Edmonton, Toronto and Mumbai offices, beginning immediately.

WorleyParsons already is involved in other work on the $Can8.5 billion Sturgeon refinery project that will process 50,000 barrels a day of bitumen.

The project is a partnership between North West Upgrading and oil and gas giant Canadian Natural Resources.