Oil Sands - Prices

Crude Bitumen Prices

Supply and Disposition information may be found on the EUB's ST-3 reports; which are available at: 

URL: www.eub.gov.ab.ca/BBS/energystats

EUB also provides Oil Prices; which is obtained from selected oil producers that submit statements to the EUB.  This information is also provided on the EUB ST-3 reports.
[ crude bitumen is found under the 'oil' section ]

The heavy oil royalty factor can be found on the Information Letters named:
"Petroleum Royalty Regulation, A.R. 248/90, as Amended
Prices and Factors"

The last section of these letters provide a table called:

CRUDE OIL ROYALTY CALCULATION DATA TABLE - Heavy

The Hydrocarbon Upgrading Task Force (HUTF)

The HUTF

Alberta is continually seeking new ways to enhance the viability and value-added upgrading of its energy resources. Alberta Energy is focusing on developing an integrated energy strategy that looks beyond extraction and maximizing the potential of our resources to enhance the growth of Alberta’s refining and petrochemical industries.

The Government of Alberta and industry representatives have developed a vision that expects and enables opportunities for hydrocarbon upgrading and bitumen to play a leading role in Alberta's broader energy strategies. Given the size of the oil sands resource, it has the potential to be a long-term supply of competitively priced refining and petrochemical feedstock.

The HUTF was established in February 2004 to produce an action plan for achieving maximum upgrading of Alberta’s bitumen resources. The task force consists of over 75 representatives from government and industry (including bitumen producers, refiners, and petrochemical stakeholders). The priority objectives and subsequent actions of the HUTF include the following:

• Develop a business case to support an eco-industrial complex for the upgrading of bitumen into transportation fuels and petrochemicals in Alberta.
• Develop an environment that supports the development of technology and processes that will secure a favourable competition position.
• Review best practices and benchmarks for successful jurisdictions that have developed concentrated energy industrial complexes.
• Identify the labour, infrastructure and logistical challenges to development in Alberta.

HUTF - Vision and Mandate

Vision 2020
Alberta to achieve a competitive hydrocarbon upgrading industry through refining and petrochemical plants that expand the markets for Alberta’s bitumen resource and produces higher valued products in Alberta.

Mandate
To develop information, strategies and recommendations for attaining the vision:

• Describe the prize (e.g. benefits for both Albertans and industry).
• Build the market-based business case for upgrading hydrocarbon resources in Alberta.
• Identify opportunities and challenges.
• Conduct additional studies such as market effects, capital cost and downstream integration.
• Develop and evaluate strategies for industrial integration, market penetration and technology development.
• Provide advice to government on how to achieve the vision.

The HUTF vision of what success looks like by 2020

• World-scale integrated industrial complexes that upgrade bitumen to produce competitively priced, higher value products such as synthetic crude oil, base and specialty chemicals and other refined products.
• Bitumen production reaches three million barrels per day with a significant portion upgraded in Alberta.
• Flexible manufacturing and transportation infrastructure provides broad access to various markets.
• Albertans benefit from increased resource royalties, a higher tax base, a well-paid and skilled workforce and an increased proportion of higher value product exports.

Action Plan
In order to successfully achieve the vision and mandate for the HUTF, an action plan has been established. The action plan includes the following three main initiatives:

1. Develop the general business case for upgrading hydrocarbon resources to higher value products in Alberta:
   • Complete market analysis studies that include an investigation of market logistics, refined products and chemicals market.
   • Additional studies may be required to provide further information and insight, such as, capital cost benchmarks, technology development, market access, downstream integration studies (industrial and consumer products) and infrastructure requirements.
   • Identify opportunities, barriers and options.
   • Confirm economic advantages/disadvantages to upgrading bitumen in Alberta versus other locations based on delivered cost to market approach, including capital depreciation.
   • Conduct detailed analysis of economic benefits of upgrading to Albertans.
2. Communicate and market the opportunities:
   • Develop strategies to publicize and promote the business case(s) that highlight Alberta’s opportunities and advantages for upgrading and market access for refined products, petrochemicals and fence line industries. The target audiences are local and international investment communities and governments.
   • Continue to work with industry to build consensus as to information, facts interpretations and attractiveness.
   • Develop strategies to communicate the short-term and long-term benefits of hydrocarbon-based manufacturing in Alberta to the public.
3. Provide advice to government:
   • Communicate short-term and long-term benefits of hydrocarbon-based manufacturing to senior bureaucrats and elected representatives.
     

Hydrocarbon Upgrading Task Force (HUTF) Activities

Industry and government are jointly pursuing studies on the technical and market opportunities for new refining and petrochemical feedstock potential. In 2002, an industry/government study explored opportunities for alternative feedstocks, including oil sands upgrading and co-products of refineries and existing ethane crackers. To date, these studies have shown that returns from increased upgrading and refining are potentially attractive and that export markets may exist for refined product from Alberta.

In 2004, an industry/government Task Force (the HUTF) was established to explore synergies of other competitive opportunities with the refining and petrochemical industries. Two studies have recently been initiated:

1. Integration - assess the product integration opportunities for feedstocks, petrochemicals, fertilizers, syngas and electricity with bitumen upgrading and refining in Alberta.
2. Best Practices - review successful integrated hydrocarbon clusters in various jurisdictions around the world to identify competitive gaps for Alberta.

Value-added upgrading of energy resources in Alberta is a high priority. The HUTF is supporting this priority by developing the business case for adding value to bitumen for new refining capacity and as a source of petrochemical feedstock.

HUTF presentations and studies:

• Petrochemicals from Oil Sands  - T.J. McCann and Associates (July 2002)
• Phase I Summary - Bitumen to Refined Products and Petrochemicals - Purvin & Gertz Inc., (April 28, 2004)
• Phase II Report - Refined Products and Petrochemicals from Bitumen - Purvin & Gertz Inc., CMAI Inc. (Dec. 17, 2004)
• Oil Sands Products Analysis for Asian Markets - Purvin & Gertz Inc. (April 15, 2005)
• Alberta Bitumen Processing Integration Study – David Netzer and Associates (March 2006)
• Hydrocarbon Upgrading Task Force - March 5, 2007
  • Hydrocarbon Upgrading Demonstration Program (HUDP)-Update
  • Action Plan Update
  • Incremental Ethane Extraction Policy (IEEP)
  • Labour Update
  • The Making of Three Energy Complexes-Integration at Work
  • Oil Sands Consultations Update
• Hydrocarbon Upgrading Task Force - June 20, 2007
  • Hydrocarbon Upgrading Demonstration Program (HUDP)-Update
  • Action Plan Update
  • Study of Environmental Benefits of Industrial Integration
  • IEEJ Asia Market Study for Oil Sands and Products
  • Impact of Oil Sands Royalty Regime on Capital Efficiency 
  • Gasification Chair at University of Saskatchewan
  • PTAC-Upgrading, Refining, Petrochemical and Hydrogen Technologies 
  • Capital Region Integrated Infrastructure Planning

Other Links:

• Alberta Economic Development - Chemical & Petrochemicals Website

Bitumen as a Feedstock

Alberta’s petrochemical industry is based on adding valued to natural gas liquids (NGL) feedstocks, mainly ethane with some manufacturing based on propane and butane. While Alberta is currently Canada’s largest petrochemical producing area and one of the most competitive in North America, it is important to continue to seek improvement and innovation to maintain its competitive advantages. Alberta Energy recognizes that innovation is a key to maintaining long-term success and is actively working with industry to explore alternatives to natural gas use in oil sands operations. For example, gasification of bitumen or the production of refinery fuel gas from upgrading and refining operations could become a significant source of fuel and hydrogen for the oil sands industry, freeing up new feedstock supplies for the petrochemical industry.

The oil sands operations present many new opportunities for the petrochemical industry, including :

1. Integration of petrochemical plants with refineries that convert bitumen to refined petroleum products.
2. Gasification of oil sands by-products (e.g. create syngas from petroleum coke).
3. Use of off-gases from the distillation and upgrading of bitumen as feedstock.

Given the size of the oil sands resource, it has the potential to be a long-term supply of competitively priced petrochemical feedstock. Some possible products from these processes could include: ethylene, propylene, benzene, polyethylene, naphtha, diesel, gasoline. The HUTF studies include identification of these bitumen-based opportunities.