Canadian oil sands majors form alliance

CALGARY, Alberta, March 2 (UPI) — Major producers of Canada’s controversial oil sands have formed an alliance aimed at addressing environmental challenges.

Canada’s oil sands, the second largest reserve of oil after Saudi Arabia, are a mixture of sand, water, clay and bitumen that is extracted mostly via open-pit mining.

Critics say oil from oil sands, also called tar sands, creates more greenhouse gas emissions and is more toxic to the environment than conventional crude oil.

Canada’s Oil Sands Innovation Alliance, launched Thursday, said it will establish structures and processes through which oil sands producers and other stakeholders can work together for the benefit of the environment.

So far, 12 companies, accounting for 80 percent of oil sands production and including BP Canada, ConocoPhillips, Royal Dutch Shell PLC, Suncor Energy Inc. and Total S.A., have signed the COSIA charter.

“We have listened to Canadians and we know that our operations have an environmental impact and we have heard what you want our companies to do better,” said Steve Williams, president and chief executive officer-designate of Suncor, at the launch in Calgary.

“We believe environmental stewardship is a shared responsibility, whether on tailings, water, land or greenhouse gases. This is a recognition and genuine desire to do better.”

While the 12 companies will continue to compete “rigorously and vigorously” in all other areas, they will cooperate in the environmental arena to bring about collective improvement faster, under a legal framework, said Shell Canada Executive Vice President John Abbott.

Some environmental groups criticized the alliance’s lack of concrete goals, with the Financial Post quoting Greenpeace campaigner Keith Stewart as saying that “in the absence of any commitments to real reductions in pollution, with penalties for not meeting them, this is simply another example of ‘greenwash.'”

Ed Whittingham, executive director of Calgary think tank the Pembina Institute, a staunch critic of oil sands production, said he is “cautiously optimistic” about the new alliance, adding that “we’ll have to see what the targets look like.”

COSIA maintains that its focus won’t be on lobbying or media campaigns.

“COSIA is a science organization, run by scientists for scientists,” said COSIA CEO Dan Wicklum, adding that “we want to stick to our knitting, which is accelerate the pace of improvement around environmental performance.”

In signing the charter, the companies agreed to open their environmental research repositories to each other allowing for technology sharing.

API challenges Obama on oil subsidy claims

WASHINGTON, March 2 (UPI) — U.S. President Barack Obama has it backward when he says the government is backing a billion-dollar oil subsidy, the American Petroleum Institute said.

Obama told an audience in New Hampshire that the oil industry was the recipient of $4 billion in subsidies backed by U.S. taxpayer dollars.

“Every time you go to the gas tank or fill up your gas tank, they’re making money. Every time,” the president said. “Now, does anyone really think that Congress should give them another $4 billion this year?”

But Jack Gerard, president and chief executive officer at trade group API, said the president had it wrong.

“The president has it backwards, our industry pays the government nearly $90 million dollars a day — the biggest contributor of government revenue than any other industry in the United States,” said Gerard.

U.S. lawmakers are sniping over domestic energy policies as gasoline prices in most U.S. markets move closer to $4 per gallon. Republican critics of the White House say Obama is blocking domestic energy production, which means higher oil prices.

Analysts, however, said tensions in the Middle East are likely contributors to escalating prices.

The White House states that U.S. dependence on foreign oil has gone down every year since Obama came into office in 2009. The president has said there “are no short-term silver bullets when it comes to gas prices.”

London takes hard look at nuclear power

LONDON, March 2 (UPI) — Nuclear operators in the United Kingdom will have to put money aside to address waste costs in the country’s evolving energy strategy, a secretary said.

British Energy Secretary Edward Davey said polices that would ensure nuclear energy operators cover the cost of waste and decommissioning means the public won’t have to pay the price.

The government of British Prime Minister David Cameron sees nuclear power as a vital part of a balanced energy mix.

“It is secure, low carbon and will support thousands of jobs in construction and operation,” Davey said. “But there will be no subsidy, operators will be required to put money aside from Day One to meet future cleanup and waste costs and we intend to substantially increase operators’ third-party liabilities.”

Davey added London was committed to taking a lessons-learned approach to its nuclear legacy. Delays by the government in addressing nuclear liabilities and the military origins of early nuclear energy work meant nuclear power was more complex and expensive.

“This kind of short-sightedness cannot and will not be allowed to happen again,” said Davey. “We will not place a costly new millstone around the neck of future generations.”

China boasts of shale gas reserves

BEIJING, March 2 (UPI) — The Chinese government said there are trillions of cubic feet of exploitable shale gas reserves in the country but it lacks the technology to explore it fully.

The Chinese Ministry of Land and Resources said there was an estimated 886 trillion cubic feet of natural gas deposits in onshore shale reserves.

“China is rich in shale-gas resources, which are suitable for scaled development,” the ministry said in a statement. “But the geological conditions are complex and our exploration technology, which lags behind advanced countries, requires innovation.”

The ministry said it discovered shale natural gas reserves in exploration blocks that could hold significant volumes of reserves. The country aims to start developing shale by 2015, though there are no commercial shale gas developments yet in China.

Beijing aims to add more natural gas to its energy mix in an effort to control pollution. Shale gas could play a dominant role by 2020 if reserve estimates meet expectations, the government said.

China Petroleum Corp. announced recently it landed a $900 million deal with U.S. energy company Devon to tap into shale natural gas reserves in the United States.

Riyadh denies accounts of pipeline blast

RIYADH, Saudi Arabia, March 2 (UPI) — Reports of an oil pipeline explosion in the Eastern Province of Saudi Arabia are a ruse perpetrated by Iran, a Saudi official said.

Iran’s state-funded broadcaster Press TV said there had been an explosion on an oil pipeline. Those reports are attributed to a spike in oil prices overnight.

A Saudi industry official told the Financial Times on condition of anonymity the report was a hoax meant to stir panic in the oil market.

“This report is completely false,” the official said. “(There’s been) no incident whatsoever.”

A decision by Iran to halt crude oil exports to British and French markets, though largely symbolic, helped push oil prices to 9-month highs. The Financial Times reported oil prices soared overnight to the highest levels since July 2008 when crude oil prices topped $147 per barrel.

Iran, the Financial Times said, views Riyadh’s moves to offer more crude on the market as a form of economic warfare. Saudi Arabia had said it would supply more oil to some countries that have decided to lower imports of Iranian crude.

“In the oil market, they are competitors, and in the context of Iran’s nuclear crisis (Riyadh and Tehran) are regional rivals,” Michael Wittner, oil analyst at Societe Generale, told the Financial Times.