Cover Graphic: Into the Mist - Bald Eagle by Canadian wildlife artist Terry Isaac
EAGLE SPIRIT PIPELINE
PROSPECTS SOARING
Mike Priaro, P.Eng.
First uploaded September 22, 2014
Last updated Aug. 6, 2016
Calvin Helin’s proposed Eagle Spirit oil pipeline meets all of Albertans’, British Columbians’, First Nations’, and Canadians’ concerns far better than any existing pipeline proposal to the west coast –or anywhere else for that matter because it includes upgrading as an integral component.
Calvin Helin is an attorney, entrepreneur, businessman, activist, volunteer, author of Dances with Spirits: Ancient Wisdom for a Modern World, and motivational speaker. He is president of the Native Investment and Trade Association, and a director of the Vancouver Board of Trade, GeoScience BC, and the Canada-China Resource Development Foundation. Helin grew up a member of the Lax Kw’alaams Band of the Tsimshian First Nation in Port Simpson near Prince Rupert BC. He is president of Eagle Spirit Energy Holdings Ltd., a First Nations-backed company.
Calvin Helin.
Eagle Spirit Energy Holdings is pursuing the construction of a pipeline with First Nations support and involvement to move upgraded and conventional crude, but no dilbit, from Alberta’s vast deposits, the largest on Earth, to Grassy Point near Prince Rupert BC, a safer port than Kitimat -chosen by Enbridge for its Northern Gateway project.
On Sept. 30, 2015 Eagle Spirit Energy Holdings Ltd. announced that it had obtained the support of 95 percent of First Nations' chief along the route of its proposed oil pipeline through northern B.C. A group of aboriginal chiefs in northern British Columbia also declared their support for a pipeline corridor that would connect Alberta oil and gas with the Pacific in a letter delivered to Prime Minister Stephen Harper and the premiers of Alberta, B.C. and Saskatchewan.
Prince Rupert, widely regarded as the safest location for a marine terminal on Canada’s west coast, is the shortest trade route between North America and markets in Asia using the northern Pacific Great Circle shipping route. It is sheltered and ice free year round, has one of the deepest natural harbours in the world, and has modern, state-of-the-art facilities. It has unobstructed entry to shipping lanes and the northern Pacific Great Circle route, and there are no significant hazards such as narrow channels to navigate.
Eagle Spirit already has backing and expression of financial support for their Eagle Spirit pipeline proposal from Vancouver’s Aquilini Investment Group Inc., owners of the Vancouver Canucks. And according to the Financial Post, David Tuccaro, the founder, president and CEO of Tuccaro Inc., a treaty Indian from Fort Chipewyan AB and likely Canada’s most successful aboriginal entrepreneur, is a leading backer of the Eagle Spirit proposal.
According to Helin, Eagle Spirit won’t ship bitumen, extra heavy, or heavy crude as dilbit but rather partially-upgraded or upgraded crude (syncrude) and conventional crude oil. He has said “It will be done with the development of a world-class land and sea environmental model that’s developed with the citizens of northern British Columbia.”
For a discussion of the critical difference between bitumen as dilbit and upgraded crude (syncrude) and conventional crude, see "A Bitumen and Dilbit Primer" elsewhere on this website or at: ( https://www.behance.net/gallery/16654901/A-BITUMEN-AND-DILBIT-PRIMER ).
The pipeline's route, not yet published, is reported to be north of the Yellowhead Highway route shown below:
A 48-inch diameter, 900-mile long pipeline north of the Yellowhead Highway could cost as much as $14 billion due to extremely rugged territory and many river crossings through mountainous British Columbia. Port facilities will cost less than another billion. However for that $14 billion, Eagle Spirit provides more capacity (two million bbl/d of upgraded and conventional crude) than the $7.9 billion Northern Gateway (525,000 bbl/d dilbit containing 367,000 bbl/d bitumen) and the $5.4 billion TransMountain expansion (690,000 bbl/d dilbit containing 480,000 bbl/d bitumen) proposals combined (total, 847,000 bbl/d bitumen). And there is no need for producers to purchase, and for pipelines and tankers to export, and then import, another 425,000 bbl/d of diluent.
A pipeline to ship upgraded and conventional crude to Prince Rupert could be part of a dedicated commercial and/or government energy/economic corridor containing some or all of the following: natural gas pipelines to LNG liquefaction and export terminals, a natural gas liquids pipeline, an upgraded rail line and highway, power transmission lines connected to run-of-river hydro and wind power farms, fibre-optic cables, light service industries, etc.
There will be billions in capital cost savings to producers if both an oil and one or more natural gas and gas ;liquids pipelines are built at the same time in the same right-of-way sharing river crossings and access roads, and combining at least some compressor and pump station sites. A single right-of-way minimizes land and water disturbances, ecological impact, smooths the road to all approvals, and simplifies future operations, safety, and maintenance.
TransCanada Corp. expects to spend more than C$6 billion (U$4.8 billion) to develop its proposed 650-kilometre Coastal GasLink natural gas pipeline from the Montney gas-producing region, near Dawson Creek, B.C., to LNG Canada’s proposed liquefied natural gas facility near Kitimat, B.C. Shell expects to make a final investment decision (FID) on its proposed LNG Canada facility in Kitimat by mid-2016.
Malaysia’s Petroliam Nasional Bhd. (Petronas) is scheduled to make its FID on its Pacific NorthWest LNG terminal by mid-2015. TransCanada has been selected by Progress Energy Canada Ltd. (Progress) to design, build, own and operate the proposed Prince Rupert Gas Transmission (PRGT) Project. The approximately 900-kilometre pipeline is expected to deliver natural gas from a point near the District of Hudson's Hope to the proposed Pacific NorthWest LNG facility within the District of Port Edward on Lelu Island near Prince Rupert.
It would make sense to construct an oil pipeline along the same right-of-way as one or more proposed Prince Rupert Gas Transmission (PRGT) and Westcoast Connector Gas Transmission (WCGT) pipelines or the Pacific Trail, Pacific Northern Gas (PNG) and Coastal GasLink pipelines shown below.
Proposed Natural Gas Pipelines to Service Proposed LNG Export Plants. Source: NEB.
TransCanada Corporation's proposed Coastal GasLink (CGL) natural gas pipeline to a proposed LNG terminal in Kitimat could use part of a common right-of-way along a Yellowhead Highway route (Highway 16) to Kitimat and/or to Prince Rupert as shown on the map below:
Detailed Route for TransCanada's Coastal GasLink Natural Gas Pipeline to Kitimat on the BC Coast.
Source; TransCanada Corp.
An Eagle Spirit oil pipeline, a Coastal GasLink pipeline shown in the map above, and the Pacific Trail and Pacific Northern gas pipelines could all share a dedicated economic corridor along a Yellowhead route, or along the PGRT/WCGT pipeline corridor to a west coast refinery, marine terminal and LNG plant(s) in or near Prince Rupert. If one or more pipelines were built to Prince Rupert, terminal facilities could be shared as well as a pipeline right-of-way.
Eagle Spirit’s oil pipeline proposal potentially holds every ace in the deck regarding social, economic, First Nations, and environmental licence except from those intent on halting development of Alberta's hydrocarbon resources.
Here is what Helin’s Eagle Spirit proposal needs to succeed;
1. Obtain support from Albertans and their government under Premier Rachel Notley's leadership. Getting BC and First Nations on side should not be an insurmountable problem with a viable Eagle Spirit proposal –it addresses their concerns far better than any other proposal for a pipeline to the west coast.
2. Negotiate for a single dedicated economic corridor through British Columbia and arrange for at least one gas pipeline to be built at the same time in the same right-of-way.
3. Enlist TransCanada Corp. to do the pipeline engineering, NEB applications, and build the pipelines.
4. Implement partial-upgrading, at a fraction of the cost of full upgrading, to be located in Alberta’s Industrial Heartland and/or near Fort McMurray.
5. Obtain financial backing and risk-sharing for the oil pipeline –probably from a consortium of private, investment fund, pension fund, bank, industry (producer and pipeline), First Nations, and/or public (provincial and federal crown corporations) and private participants;
6. Create an organization with the requisite management, financial, engineering, operational, and administrative skills to carry it through (perhaps an Alberta and/or BC provincial, federal, and/or First Nations crown corporation?).
7. Create a world-class land and water spill-response organization.
8. Allow First Nations an equity interest and at least partial responsibility for pipeline and port operations and safety -with support and training from industry.
Partial upgrading means upgrading bitumen just enough to make it pipelinable without the need for any diluent. It eliminates all of the critical environmental risks and liabilities associated with shipping dilbit, adds value to bitumen and dilbit, and makes any subsequent refining easier and cheaper.
The capital cost for a one million bbl/d full upgrader producing syncrude is well in excess of $20 billion depending on the technology chosen. Partial upgrading will cost only a small fraction of that –again depending on the technology chosen. See "Partial Upgrading of All Raw Bitumen in Alberta" on this website at https://www.behance.net/Mike_Priaro
Alberta’s Industrial Heartland north-east of Edmonton and/or Fort McMurray are logical locations for upgrading, for recycling diluent back to the field, and for the start of the pipeline to the west coast.
Pacific Future Energy Corporation announced on June 10, 2014 a plan to build and operate the world's "greenest" refinery on BC’s west coast. The $10 billion refinery is being designed with scalable and flexible modules, each processing 200,000 bbl/d of crude. The refinery will produce gasoline, diesel, kerosene and other distillates. When all of the project modules are complete, the facility could process one million bbl/d of crude. Among others, the Pacific Future Energy team includes Stockwell Day as Senior Advisor and Chair of Advisory Committee, and Mark Marissen, ex-husband of BC Premier Christy Clark, as Exec. VP, Communications and Research.
David Black’s Kitimat Clean Ltd. has proposed to build a green, state-of-the-art, 550,000 bbl/d dilbit refinery near Kitimat, BC at a cost of $21 billion. Black presents it as one of the ten largest refineries in the world and the lowest cost producer of any refinery on the Pacific or Indian Oceans. The refinery will process diluted bitumen from Alberta’s oil sands delivered by pipeline and produce gasoline, jet fuel and diesel fuel primarily for marine export. Unlike bitumen, these refined fuels will float and evaporate if spilled at sea. With Black's proposal, diluent would have to be returned to Alberta with a second pipeline.
The Eagle Spirit pipeline and either the Pacific Future Energy or David Black refinery (modified as to location, volume and feedstock) proposals could mesh perfectly with partial upgrading in Alberta.
It should be obvious to anyone with even the most rudimentary understanding of economics that the economics of upgrading in Canada for private companies are vastly inferior to the economics of upgrading from the perspective of Albertans, the owners of the resource, and of Canadians.
The domestic jobs in construction, engineering, support, administration, and operations of pipelines, export terminals, upgraders, refineries, petro-chemical manufacturing plants, and secondary industries; the property, municipal, excise, customs, export, corporate and personal income taxes; the domestic profits from upgrading, refining and the manufacture of petrochemicals; the economic spin-offs from all that industrial activity; and, the societal benefits from all those increases in government revenues all serve to make domestic upgrading vastly more beneficial to Albertans and Canadians than the export of raw bitumen as dilbit by foreign companies and much, much better than the economics of upgrading from a narrow corporate perspective.
In addition, participation of Albertans, other Canadians, and First Nations in a proposal like Eagle Spirit can only improve domestic ownership and control over Alberta’s vast crude oil resources, and instill a sense of provincial and national pride of ownership and purpose in their responsible and beneficial exploitation.
The Eagle Spirit and Pacific Future Energy proposals will challenge Alberta Premier Rachel Notley's government to capture the greatest benefit for Albertans, British Columbians, First Nations, and all Canadians.
Author Bio
"Mike Priaro, B.Eng.Sc. (Chem. Eng.), U.W.O. '76, P.Eng., Lifetime Member Association of Professional Engineers and Geoscientists of Alberta (APEGA), worked in facilities, production, operations and reservoir engineering, as engineering consultant, area superintendent, and engineering management in Alberta's oil patch for 25 years for companies such as Amoco and PetroCanada.”
“He increased oil production from the historic Turner Valley oilfield and brought in under-balanced drilling technology to drill out, complete, and test several of the highest producing gas wells ever on mainland Canada at Ladyfern. He co-authored ‘Advanced Fracturing Fluids Improve Well Economics’ in Schlumberger's Oilfield Review and developed the course material for the ‘Advanced Production Engineering’ course at Southern Alberta Institute of Technology.”
“Mike has presented his work to Canada’s House Committee on Natural Resources in Ottawa and had work published by the Macdonald-Laurier Institute in the March and April, 2014 and February, 2015 editions of Inside Policy magazine, by U.S. energy industry websites such as RBN Energy, in the July 17, 2014 edition of the Oil and Gas Journal, in Petroleum Technology Quarterly Q3 2014, and in several recent columns in the Calgary Herald daily newspaper.
“Mike has no formal connection to any oil company, environmental organization, think tank, labour organization, lobbying or special interest group, academia, or to provincial or federal politics.” However, Mike was recently retained by Alberta Sulphur Research Limited to help promote, prove, develop, and commercialize a new partial upgrading process for bitumen.
"Mike has incidental, long-time ownership of a modest number of TransCanada Corporation common shares and also owns a few common shares in several small resource companies."
“Mike is the author of “A ‘Canada-First’ Canadian Energy Strategy” (see https://www.behance.net/portfolio/editor?project_id=5808629 ) and is available for speaking engagements, special projects, and consulting work.”