Page 10 - NorthAmOil Week 49

NorthAmOil COMMENTARY NorthAmOil

opening up, though, Alberta’s oil producers have laid off in Alberta over the past year have skills
other uncertainties to contend with. that can be used to produce cleaner forms of
energy. However, the development of hydro-
Going greener gen and geothermal industries is still in its early
The advancing energy transition could pose an days, and would also have numerous hurdles to
existential threat to Alberta’s oil industry, at least surmount.
according to some, even as others tout the poten-
tial for the province’s oil producers to co-exist What next?
with greener industries. The most pressing challenge for Alberta is its
In October, Alberta’s government proposed surge in COVID-19 infections. The province
a law that would provide a regulatory frame- hopes that new lockdown measures introduced
work for investment in geothermal energy. this week could help contain the spread of the
Also in October, Alberta Premier Jason Kenney virus, but the new wave poses a threat to the
announced that Alberta would seek to use its Alberta oil industry, among others.
natural gas to produce and export hydrogen. However, global oil prices have been buoyed
Indeed, the province has increasingly been this month by optimism over the roll-out of a
talking up its potential to be a leader in the COVID-19 vaccine. Canada approving the
development of so-called blue hydrogen, which Pfizer-BioNTech vaccine this week, and if it
is produced from natural gas with a carbon performs as expected, it could help to contain
capture and storage (CCS) component. Alberta the outbreak, in the coming months, though any
already operates CCS facilities, and hopes to resulting rally in oil demand would likely not be
harness its expertise in this area for blue hydro- immediate. Canadian Natural
gen development. Nonetheless, the introduction of vaccines
Kenney has also joined the premiers of three has come as a positive sign for the oil industry. Resources Ltd
other provinces to promote the development Meanwhile, some of Alberta’s leading produc- (CNRL) said it
of small nuclear reactors. And Alberta’s gov- ers are cautiously boosting production, spurred
ernment recently set up a council to explore both by the end of the province’s oil curtailment would increase
increased production of minerals such as lith- programme and by hopes that a gradual recov-
ium and vanadium, which are used to make ery has started. its production
batteries. This week, Canadian Natural Resources Ltd
The Economist noted in a December 5 arti- (CNRL) said it would increase its production by 5% in 2021
cle that all of these moves mark a change from by 5% in 2021 compared with this year, while compared with
Kenney’s all-out support of the oil industry dur- raising its capital expenditure budget by 19%
ing his election campaign – or at least a greener year on year. This comes after Suncor Energy this year.
tinge to his policy. This, the newspaper sug- and Imperial Oil both said in recent weeks that
gested, may have been encouraged by a growing they would raise spending and output in 2021.
realisation that investors are serious about using Alberta’s production still remains vulnerable
environmental criteria to inform their deci- to oil price volatility in the shorter term, while in
sion-making. Provincial government support the longer term, the direction of the energy tran-
for the oil sands could mean little if producers sition will help shape the provincial oil indus-
struggle to find markets for their output owing try’s future. However, despite current and future
to environmental concerns. challenges, some bright spots have emerged in
In addition, oilfield workers that have been recent weeks.™

P10 www. NEWSBASE .com Week 49 10•December•2020