What oil glut? Alberta approves trio of oilsands projects worth $4B
Projects could produce 95,000 barrels of oil per day, but faced with tough oil market, it's unclear if any of the three companies will move forward
CALGARY—The Alberta government has approved three oilsands projects that it says represent about $4 billion of potential investments, though it’s unclear whether any of the projects will go ahead.
The projects include the Blackpearl Resources’s Blackrod project, Surmont Energy’s Wildwood project, and Husky Energy’s Saleski project that together total about 95,000 barrels of potential production.
The approvals, announced Sept. 15, are the first projects to get the green light since the government established a 100 megatonne greenhouse gas cap on oilsands emissions.
“They’re not the first to be approved by the (NDP) government, but they are the first under the Climate Leadership Plan,” said Energy Minister spokesman Brad Hartle.
Together the projects are expected to equal about 2.5 megatonnes of greenhouse gas emissions if built to the design capacity.
The government is still working out how to implement the emissions cap, which it says it put in place to encourage innovation and cost-effective emissions reduction strategies.
The government approvals come after multiple environmental assessments, consultations with local indigenous and non-indigenous communities, and recommendations by the Alberta Energy Regulator that the projects be approved.
“This is a major step that’s been several years in the making,” said Mark Smith, chief executive of Surmont.
He said the company’s application process started in October 2012 and Surmont has had to contend with changes to regulations, the energy regulator, and in government along the way.
“It took a lot longer than we imagined it would,” said Smith.
He said the company had interest from backers in the past for the roughly US$375-million, 12,000-barrel-a-day project, but the private company will now have to work to secure firm financial backing.
Husky spokesman Mel Duvall said Saleski is a 3,000-barrel-a-day pilot project that has not been sanctioned yet by Husky.
“It’s something we’ll have to review in light of our current budgeting process,” said Duvall.
The companies still must make final investment decisions on the projects and work with regulators on specific licences and approvals.
The NDP government last approved an oilsands project in October 2015, with Devon Canada’s 9,000-barrel-a-day project near Cold Lake, Alta.
—With files from Dan Healing in Calgary