Expanding Market Access for Alberta s Oil Resources Presentation for the Crude Markets & Rail Take Away Summit Richard Masson, CEO Alberta Petroleum Marketing Commission (APMC)
Agenda Alberta s Challenge The Canadian Energy Strategy Improving Performance Accessing New Markets 2
Oil Sands Investment Outlook 64 proposed and under construction projects valued at $115 billion Projects by CNRL, Cenovus, ConocoPhillips, Devon, Husky, Imperial Oil, Grizzly Oil Sands, JACOS, KNOC, Laricina, MEG, Shell, Suncor, Sunshine Oil Sands, Syncrude, Total and others as of March 2013. 3
Oil & Gas Investment in Alberta 4
Our Challenge 1. Saturated market with increasing production. 2. Energy infrastructure has not kept pace with expansion of oil production. 3. Social license to continue oil sands development and build new energy infrastructure. 5
The Canadian Energy Strategy Provinces are working together Newfoundland and Labrador, Manitoba and Alberta are co-chairing several initiatives The CES will enhance understanding of the benefits of energy development for Canada, and will: open new markets create jobs strengthen regulatory systems reinforce environmentally responsible energy development 6 support the transition to a lower carbon alternatives
10 CES Action Items Sustainability and Conservation Manitoba Promote energy efficiency and conservation Transition to a lower carbon economy Enhance energy efficiency and awareness Technology and Innovation Nfld. & Labrador Accelerate technologies for efficient energy production, transmission and use Develop and implement human resource strategies Facilitate renewable, green and cleaner energy sources 7
10 CES Action Items (con t) Delivering Energy to People Alberta Develop and enhance safe and reliable, environmentally safe, and efficient transportation networks Improve timeliness and certainty of regulatory decisions Promote market diversification Provincial participation in international energy discussions 8
Improving Performance Climate change Pipeline Safety First Nations Biodiversity - Integrated resource management system Water management Tailings management Regulatory Excellence 9
Climate Change 1 st jurisdiction in North America to require large industry to curb greenhouse gas emissions Emissions/barrel have dropped 26% since 1990 $1.3 billion provided to 2 large scale carbon capture and sequestration projects Alberta has a price on carbon and has raised over $300 million so far to invest in greenhouse gas reductions 10
Alberta Pipeline Safety Review Alberta Energy Minister released results for public comment. Independent review commissioned in early 2012 after some high profile incidents, and completed by an external third party. Overall results show robust regulatory regime in Alberta. Found to be generally comparable to U.S. regulations (PHMSA). Some recommendations for continued improvement, including more specific standards for water crossings. 11
U.S. and Alberta Pipelines Update to Alberta s past pipeline incident data completed with review. Shows rates in Alberta nearly identical to those in the US, with Alberta s infrastructure handling much more oil sands production. U.S. National Academy of Sciences released a report in June 2013 that found that transportation of oil sands (diluted bitumen) is no more problematic from a pipeline integrity standpoint than other crude oils. 12
Accessing New Markets 13
Alberta Petroleum Marketing Commission (APMC) Crown corporation responsible for marketing Alberta s conventional oil royalties of 70,000 bpd Mandate to implement Bitumen Royalty in Kind (BRIK) for strategic purposes: Value added processing (e.g., Sturgeon Refinery) Infrastructure and market development Pipelines (e.g., Energy East) Rail Ports International customers 14
Oil sands region and reserves Gateway Conventional oil reserves Feeder Pipelines Edmonton Hardisty Alberta Clipper Enbridge Market Hubs Export Pipelines Trans Mountain Rangeland, Bow River, Express Keystone Keystone XL 15
TransCanada Mainline Conversion New Pipe Quebec City Port Montreal Port Saint John Port Enbridge Mainline Upgrade Pipeline to Maritimes Keystone XL Enbridge Line 9 Reversal Stage 1 Stage 2 Other expansions and reversals: Gulf Coast (Southern leg of Keystone XL), Flanagan South, Seaway, Southern Access Extension, etc. 16
Churchill Rail Line Quebec City Port Montreal Port St John Port CN Rail Main Lines CP Rail & Partners Main Lines Oil hubs Refining hubs Note: the rail system in the U.S. is far more extensive than shown and integrated with CN and CP systems 17
Crude Oil Transloading Facilities
G7G Rail & Trans Alaska Pipeline Route Rainbow & Norman Wells Pipeline reversal and potential extension Valdez CN Rail Lines Northern Gateway Pipeline Prince Rupert Kitimat CP Rail Lines Vancouver U.S. West Coast Kinder Morgan Pipeline TMX Expansion 19
Market Potential 20
Questions 21