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‘Not looking for a Trudeau handout’: Alberta spurns notion of bailout in lieu of Frontier mine approval


OTTAWA — Alberta Environment Minister Jason Nixon flatly rejected any suggestion that Ottawa could placate the province with an aid package if it turns down the $20-billion Frontier oilsands mine.

“Albertans are not looking for a Justin Trudeau handout,” Nixon said in a press conference Friday. “We’re not interested in that. We want Justin Trudeau and the federal government to get out of Albertans’ way, to let hard-working Albertans do what they do best, which is create prosperity for this province and create prosperity for this country.”

Reuters, citing anonymous sources, reported Thursday that if the Frontier mine plan was rejected by cabinet, federal officials were preparing various streams of funding for Alberta, including cash to help clean up thousands of abandoned wells spread across the province.

Nixon said the province has not been approached by Ottawa for a potential deal. “The Frontier mine is not a political gift,” he said.

Alberta Premier Jason Kenney told an audience at the Canada Institute in Washington, “It’s hard to overstate the response of Albertans, not just our government, but Albertans broadly, if this project were to be rejected.”

Teck has already spent $1 billion during the past decade to clear a series of regulatory hurdles, invest in technology designed to lighten the mine’s carbon footprint and forge agreements with First Nations groups, Kenney said. A rejection from Ottawa now would signal to investors that despite such efforts, projects can ultimately be scuttled by an “arbitrary political decision” made without any transparency, he said.

“I think that would be a devastating message to send in terms of investor confidence at a time when we are struggling to attract foreign direct investment to the Canadian economy,” he said, speaking alongside Saskatchewan Premier Scott Moe. “So the response would be very challenging.”

Demand for crude oil will continue during the coming decades even as energy transitions away from fossil fuels, Kenney added, and it’s better that the last barrel of oil come from “a stable reliable democracy with the highest environmental and human rights labour standards on earth. Teck represents a pathway to that.”

Teck Resources’ proposed $20.6-billion Frontier project could produce 260,000 barrels per day of bitumen in northern Alberta, making it one of the largest in the oilsands.

Teck Resources’ proposed $20.6-billion Frontier project could produce 260,000 barrels per day of bitumen in northern Alberta, making it one of the largest in the oilsands.

Norm Betts/Bloomberg files

The Liberal cabinet’s decision on Frontier, proposed by Vancouver-based Teck Resources, will be released by end of month.

Environmental groups and others have called on the prime minister to reject the proposal, saying it conflicts with the Liberal pledge to reach net-zero emissions by 2050. The project would emit around four million tonnes of greenhouse gas emissions per year, over a 40-year period.

Federal Finance Minister Bill Morneau downplayed the Reuters report, saying efforts by federal officials were unrelated to the approval or rejection of the oilsands mine.

Nixon on Friday joined other Conservative voices who have called on the Liberals to support the project “on its merits,” claiming that a rejection would undermine Canada’s regulatory process and further sour intergovernmental relations.

“For the prime minster and the government to come in at the last minute and change the rules will create significant instability within our province,” he said.

“We have been clear with the federal government that we do have a unity crisis brewing within this country.”

The Frontier mine is not a political gift

Frustrations have been mounting in the province amid a more than decade-long failure to build major pipeline infrastructure, causing Canadian oil prices to sell at a steep discount to American rivals. The Trudeau government was completely wiped out in Alberta and Saskatchewan during the 2019 election, largely as a result of growing distrust toward Ottawa.

The election results speak to the “divisions we have in our nation,” Moe said. “I think, in fairness, that manifested itself on election night.”

Industry groups have complained that regulatory reviews in Canada have stretched on years longer than what is appropriate, due at times to legal challenges and political wrangling.

Trudeau is reportedly facing pressure from within his own caucus to reject the project, though a number of cabinet ministers support its approval and later development.

Toronto Liberal MP Adam Vaughan, who serves as parliamentary secretary for housing, told reporters on Friday he had “significant concerns” with some of the environmental impacts associated with Frontier, particularly for those in northern First Nations communities.

“And we talk a lot about Alberta, but I think it’s time we talk more about the Northwest Territories, in particular the health of the Delta, the Mackenzie Delta,” he said.

Alberta MP Shannon Stubbs, the Conservative natural resources critic, said the Teck Frontier decision will be a defining moment for the Liberal government.

“If the Liberals reject the Teck Frontier mine, Albertans will perceive that as a rejection of Alberta from Canada,” she said in Ottawa. “That is where the vast majority of my constituents are at.”

Don Lindsay, the CEO of Teck, recently said it was “anyone’s guess” whether Frontier would be built due to years of regulatory delays and political pressure. Some analysts have suggested the project would not be viable in today’s oil markets, after global oil prices slumped in mid-2014.

— With files from The Canadian Press





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Cenovus joins Big Oil’s push into Big Data with Amazon and IBM deals


CALGARY — Big Oil is continuing its push into Big Data as Cenovus Energy Inc. has struck deals with tech giants Amazon Web Services and International Business Machines Corp. in an attempt to harness the power of cloud computing and lower its costs.

I don’t want this to be our grandfather’s industry

Ian Enright, Cenovus vice-president and chief information officer

“I don’t want to run our grandfather’s IT shop. I don’t want this to be our grandfather’s industry,” Ian Enright, Cenovus vice-president and chief information officer, said of the Calgary-based company’s plans to move its data out of two local data centres and into Amazon Web Services’ cloud following a deal struck over the summer.

The oil and gas producer is also planning to use Amazon’s cloud computing power to process and analyze its data and run other software programs in a move the company says will lower costs and allow it to better understand the “millions of data points” produced by its steam-based oilsands plants.

“Running machine learning and analytics against these things, as other industries have found, we really feel we’ll be able to enhance our operations and our efficiency,” Enright said.

“Right now, we’re just scratching the surface of the value of that,” he said.

Cenovus did not announce the deal with Amazon when it was struck, but described a broader push at the company to adopt new digital technologies and cut costs. In an interview Enright said the company ran a “bake-off” between cloud computing providers in late 2018 and picked Amazon this year for its big move to cloud computing.

In fact, a series of recent announcements indicate that more Calgary-based oil and gas companies are turning to cloud computing and big data in an attempt to modernize their businesses as the energy industry is trying to shed its reputation of being laggards when it comes to adopting digital technologies.

This month, oilsands rival Suncor Energy Inc. announced a similar partnership with Microsoft Corp. to migrate its data, computing power and processes to the Redmond, Wash.-based company’s cloud services and overhaul many aspects of its business.

While oil and gas companies have been pilloried for being digital laggards, large Calgary-based oil and gas companies have been quietly integrating new digital technologies in a bid to cut costs as they’ve been pressured by low oil prices, a lack of export pipelines.

In 2017, Calgary-based pipeline giant TC Energy Corp. began migrating its data and computer processing onto Amazon’s cloud services and that move to cloud computing is now 90 per cent complete, said Eric Gales, Amazon Web Services country manager for Canada.

TC Energy did not respond to a request for comment.

As we enter the next chapter of digital reinvention, the oil and gas industry is primed for transformation

Ross Manning, IBM’s vice-president, Canadian energy industry

Gales said he’s seen a major change in large companies’ attitudes towards digital technologies in the past four years and said the pace of adoption has increased dramatically.

“Four years ago, I was still having conversations with customers about ‘why?’ Now, it’s about ‘Where do I start?’” Gales said.

Now he said, many of the major companies in the Canadian oilpatch have a “cloud strategy” because “the case for the cloud has been made.”

At Cenovus, Enright said he believes the move to Amazon’s cloud computing service will allow it to run multiple data analyses concurrently — something it wasn’t able to do previously — and also cut down the amount of time it takes to analyze that data.

“When you go to the cloud to look at reservoir simulations or modelling our greenhouse gas improvements, things like that, we can model many things simultaneously,” Enright said.

For example, when Cenovus struck its $17.7-billion deal to buy ConocoPhillips Co.’s Canadian assets in 2017, it took the company nearly four months to acquire the computer servers it needed to process the data for the deal.

As the company integrates more of its processes into Amazon’s cloud, Enright said he’s confident the company could process the same volume and complexity of data in under three weeks.

On Monday, Cenovus also announced a deal with IBM in which the Armonk, New York-based tech giant will implement a suite of new software programs at the oilsands producer.

Enright said the technology will run in the cloud and is part of the broader push to cloud computing and faster decision making aided by digital technologies.

“As we enter the next chapter of digital reinvention, the oil and gas industry is primed for transformation, with companies turning to new platforms that will maximize the value of their assets, lower operating costs and continue to improve on their sustainable operations,” IBM’s vice-president, Canadian energy industry Ross Manning said in a release.

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