It’s nice that a Canadian company, Cenovus Energy, has received approval to double the capacity of its Foster Creek thermal oilsands project to more than 200,000 barrels per day. What is not so nice, is that Cenovus will be shipping raw bitumen instead of synthetic crude oil to Conoco Phillips’ refineries in the USA.
Since bitumen sells, on average, for 60 per cent of the price of crude oil, we lose $28 on every barrel of bitumen we export that could have been sold at the current base rate of $70/barrel. So when Foster Creek reaches its new approved capacity, Alberta’s economy will lose $5.6 million a day to the USA. Now this is the case at $70/barrel. The oil price reached $147/barrel and will undoubtedly reach this level again; analysts are predicting that it will go over $200. So our loss could be doubled or tripled.
Building and operating an upgrader plant to process the bitumen produced from Foster Creek would create thousands of construction, service and manufacturing jobs. This would include 12,000 man years of construction employment, 2,500 man years of engineering design work for Alberta based engineering firms, 1,000 permanent jobs in operations and 3,000 jobs in supply, services and maintenance contracts.
Also, Alberta would receive an additional $100 million per year in provincial corporate income taxes.
It is time to stop this leakage of our wealth! The Alberta government must require all new bitumen production to be upgraded to synthetic crude oil in Alberta.