Tuesday, November 01, 2011

Ethical Oil Ethics For Dummies

Ethical Oil's new spokesy Kathryn Marshall had a little think yesterday about whether the tarsands are still ethical even if bits of it are owned by China and its unethical oil company, and even if Ottawa and Alberta are successful in their bid to hawk the stuff to communist China.

"Is Canadian oil suddenly less ethical, " she asks, "when it's produced and used by unethical countries?"
No! she answers, it's still ethical! 
You're shocked, I'm sure.

Meanwhile, over at the Christian Science Monitor :
"The whole notion of ethical oil sets up a false dilemma because the very viscous Canadian crude needs to be cut with lighter oils from places like Saudi Arabia in order to be transported down a pipeline, says Chris MacDonald, a visiting scholar for the Clarkson Centre for Business Ethics at the University of Toronto. 
"So what's the point of having ethical oil if you are mixing it with this 'conflict oil'?"
Andrew Nikiforuk @ The Tyee
"By 2025, for example Canada could be importing more than two million barrels of foreign or so-called "unethical" oil a day, just to transport bitumen to U.S. refineries."
 The problem of adding imported diluents to tarsands crude is of considerable concern to CAPP, the Canadian Association of Petroleum Producers, says Nikiforuk. Seems foreign diluents could be subject to US country-of-origin duty charges both when it is imported into Canada from non-NAFTA sources via US ports, and again when it is shipped from Canada back to US refineries.

CAPP, November 2010 : Rethinking NAFTA Certification of Canadian Heavy Crude Oil

  • After 2005 regional condensate/pentanes + supply was no longer sufficient to satisfy diluent needs
  • This has led to a rapid increase in diluent imports
  • Initially, diluent imports were small and were sourced from the U.S.
  • With development of the EnCana/Cenovus Kitimat terminal, non-NAFTA diluent began entering the western Canadian diluent pool
  • Export to U.S. of Dilbit and Diluted Heavy Crude in 2009 – 970,000 BPD
  • Export to U.S. of Light Crude in 2009 - 300,000 BPD
  • If U.S. duty were charged on both streams, annual cost to industry - $30,000,000

When former Ethical Oil spokesy Alykhan Velshi slagged Saudi Arabia's human rights record in a 30 second ad which resulted in Saudi cease and desist lawyery letters sent to CTV/Bell Media, Velshi's former boss Immigration Minister Jason Kenney leapt to his defence, and Dame Ezra, author of Ethical Oil : The Book and The Website, milked the speechey hell out of it over at SunTV. 

This time I'm betting Steve is thinking : Just STFU about ethics, Kathryn, we're trying to do a deal here.

Tune in next week when Kathryn considers whether it's ok for ethical oil to steal a loaf of bread to feed a hungry child ... 
Update : The CAPP Industry presentation "Rethinking Nafta Certification of Canadian Heavy Crude Oil" link appears to no longer be available so here's a google cache copy and a pdf copy
Info quoted above is from pages 5 to 10.


Holly Stick said...

Another good post, Alison. Deep Climate has been keeping an eye on some of their details and finds them surreptitiously making corrections which don't actually improve matters:


Bina said...

"Dame Ezra". I like that!

Simon said...

hi Alison...Excellent post. I had no idea that they had to mix the tar with
oil from Saudi Arabia. So much for "ethical oil." And so much for our mediocre MSM for having reviewed Ezra Levant's ghastly book, and somehow forgetting to point that out...

Anonymous said...

I knew eastern Canada has to import most of its oil from foreign sources but you're saying western Canada does too - just to dilute tarsands crude for export?

thwap said...

If this keeps up people are going to start to think that the whole "Ethical Oil" campaign is a fucking joke.

Anonymous said...

Anonymous sez: "I knew eastern Canada has to import most of its oil from foreign sources but you're saying western Canada does too - just to dilute tarsands crude for export?
Unbelievable. "

Anonymous2 sez in reply:
Yes, it is unbelieveable. It isn't happening now and I wonder where Andrew Nikiforuk is getting his info to think it might happen in the future.

Tarsands stuff either has to be partially refined onsite to make it flow, or diluted/mixed with "Natural Gas Liquids" (relatively abundant from Northern Cdn Shale gas production).

Before we figured out how to produce shale gas, say 5 years ago, there was talk about importing dilutants. Not any more, and not for a LONG time, unless Nikiforuk has some very interesting research to show. But yeah, maybe in 50-100 years when there is still lots of oilsands bitumen there will be a shortage of dilutants.

By that time, my bet is that oil will be passé, and the issue will be moot.

Alison said...

Gosh, Anonymous 2, I hardly know where to begin. Did you not have time to read the post before you commented?
The information on importing diluents from abroad comes directly from CAPP, the Canadian Association of Petroleum Producers, at a November 23, 2010 conference.

I'll repeat part of the pdf from CAPP for you. Link is in the post -
CAPP, November 2010 : Rethinking NAFTA Certification of Canadian Heavy Crude Oil:

"~Traditionally condensate/pentanes + have been surplus in Western Canada
~As heavy oil industry developed this was an obvious source of diluent
~After 2005 regional condensate/pentanes + supply was no
longer sufficient to satisfy diluent needs
~This has led to a rapid increase in diluent imports
~Initially, diluent imports were small and were sourced from the U.S.
~With development of the EnCana/Cenovus Kitimat terminal, non-NAFTA diluent began
entering the western Canadian diluent pool
~Diluent more recently transhipped from offshore, through the U.S., to Canada
~Diluents sourced from certain non-NAFTA countries attract U.S. duty when imported into U.S.
~Introduction into Canada of non-NAFTA diluent has led U.S. Customs and Border Protection to request diluent country of origin documentation for U.S.-destined
dilbit and heavy crude
~As the issue has matured, concerns also have been raised whether foreign diluent could appear in Canadian light crude."

A couple of days ago, Royal Dutch Shell, along with its partners Korea Gas Corp, Mitsubishi Corp and China National Petroleum Corp, bought a marine terminal on the west coast from Cenovus :

"Cenovus, which operates Canadian oil sands projects, uses the terminal to import diluent – ultralight oil or natural gas liquids that are mixed with the tar-like bitumen from the oil sands so it can flow in pipelines.

Cenovus imports about 20 percent of its diluent needs through the marine terminal."

For data tables on crude oil imports into Canada from Algeria, Angola, Russia, Norway, Iraq, Nigeria, Venezuela, and Saudi Arabia, here's StatCan's Energy Statistics Handbook, Second Quarter 2011

Alison said...

StatsCan's link to their Energy Statistics Handbook, Second Quarter 2011 keeps going down so here's its address :


Table 4.5-2 Crude Oil and equivalent- Imports by country of origin begins on Page 53.

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