The Alberta Oil Sands, Fort McMurray Alberta Canada
Midnight oil, morning meeting
He didn’t look like someone who’d spent 18 hours in airline adventures trying to get from Edmonton to Houston, but he did.
David Morhart, Chief of Oil Sands Strategy and Operations for Alberta Energy, had a full room for his opening presentation at the global energy conference called CERAWeek 2011 in Houston this morning.
Morhart explained that Alberta’s energy story goes far beyond oil sands, but that was the focus as Richard Grissom of Gulf Coast refiner Valero, Mike Palmer of oil sands and refining interest Marathon, and Hongbin Hou of Chinese national Sinopec followed up by explaining their respective assessments of that resource.
In a story that may be familiar to Albertans, Palmer said oil majors like Marathon see in the oil sands what they most need for their customers and shareholders: size and ability to access.
“And Canada is a very stable environment,” Palmer noted.
Sinopec’s Hongbin Hu said that company made the relatively recent decision to partner with existing oil sands players for the same reasons, plus another that doesn’t get a lot of attention. While Alberta often points to a west coast export system as a way to diversify its customer base, turn that around.
Right now, he said, the bulk of China’s imported supply comes from the Middle East, with smaller barrels-per-day from a broader base that hasn’t got capacity to rapidly grow.
“We need a diversified import supply,” and whether oil sands crude is directly shipped or displaces competing markets for other crudes, “Canada will be more and more important in the future.”
Richard Grissom noted that California refineries are typically well-suited to handle Canadian heavy oils like oil sands, designed to process heavy oil now from declining production fields in, largely, Latin America.
But while about 100,000 bpd of our oil currently reaches the Gulf Coast refiners, that’s dwarfed by the consumption and capacity – Mexico’s heavy oil export to the Gulf Coast refiners is about 900,000 bpd, Venezeula’s is 800,000 and California itself is a significant producer.
- David Sands