Engineering & Mining Journal

JAN 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

Issue link: https://emj.epubxp.com/i/1070726

Contents of this Issue

Navigation

Page 3 of 59

2 E&MJ • JANUARY 2019 FROM THE EDITOR Happy New Year! Most miners were ready to bid adieu to 2018. The year started off well, but forces beyond our con- trol caused prices for most mined commodities to decline and jeopardized some business models. Canada's oil patch is probably feeling the most pain. As of January 1, a plan put in place by Alberta Premier Rachel Notley curtails crude production (See Alberta Initiates Oil Production Cuts, p. 6). This comes at a time when Albertans are swimming in oil. Recent decisions from federal judges in Canada and the U.S. are preventing the province from exporting more crude. The irony in Canada abounds. In August, a Canadian federal court overturned approval for the Trans Mountain pipeline expansion, which would have doubled the pipeline's capacity to carry crude through British Columbia to Canada's West Coast. Canadian Prime Minister Justin Trudeau convinced Ottawa to purchase the project from Kinder Morgan, believing Ottawa would prevail in the lawsuit. Now, Notley has threatened to pull Alberta out of Canada's federal cli- mate-change policy to gain approval for the Trans Mountain project. Readers might remember that she and the Alberta National Democratic Party (NDP) submitted Alberta's climate-change policy for the Paris climate accord independently and initiated a carbon tax on the province two years ago that threatened jobs in the oil patch and at coal operations. The Trans Mountain situation leaves Canadian crude producers with one pipeline customer, the U.S. In a way, it puts the NDP in the uncomfortable position of rely- ing on the Trump administration, which also suffered a recent pipeline setback. In November, a federal judge in Montana blocked the Trump administration's permit allowing the Keystone XL pipeline, which prevents construction until a supplemen- tal environmental review can be completed. The decision further delays a pipeline project that has been blocked for a decade. Anger would best describe Alberta's oil sands miners at this point. The NDP curtailment policy, which will be administered by the Alberta Energy Regulator (AER), caps production based on the highest production level for a six-month period in 2018. In a statement, Suncor Energy said the government intervention doesn't recognize the investments it has made to integrate vertically and shield itself from price swings and it may impact future investments in the province. This is a big deal. Canada is the fourth largest crude-producing country and energy accounts for 11% of Canadian GDP. Trading at a steep discount to world markets, Alberta's oil producers are leaving a lot of money on the table. The price for Western Canadian Select recently dropped below $20 per barrel (bbl) from a high of nearly $60/bbl in May. Estimates of the daily provincial loss due to the price differential range from C$30 million/day to C$80 million/day. Despite the government-imposed 2019 production caps, Suncor said it will con- tinue to work with the Government of Alberta and the AER to manage and mitigate the "unintended consequences of the curtailment orders on Suncor's business." Environmental activism, whether it be through lawsuits or federally appoint- ed judges, has so far blocked Alberta from gaining the excess export capacity it needs. Seeing a government led by an activist intervene does not instill confi dence. Instead, it creates uncertainty and reduces the incentive to invest and solve the problem. The Government of Alberta is picking energy winners and losers and, if it continues down this path, it does so at its own peril. Alberta's Crude Conundrum Steve Fiscor Publisher & Editor-in-Chief Steve Fiscor, Publisher & Editor-in-Chief sfi scor@mining-media.com Mining Media International, Inc. 11655 Central Parkway, Suite 306; Jacksonville, Florida 32224 USA Phone: +1.904.721.2925 / Fax: +1.904.721.2930 Editorial Publisher & Editor-In-Chief—Steve Fiscor, sfi scor@mining-media.com Associate Editor—Jennifer Jensen, jjensen@mining-media.com Technical Writer—Jesse Morton, jmorton@mining-media.com Contributing Editor—Russ Carter, rcarter@mining-media.com Latin American Editor—Oscar Martinez, omartinez@mining-media.com South African Editor—Gavin du Venage, gavinduvenage@gmail.com Graphic Designer—Tad Seabrook, tseabrook@mining-media.com Sales Midwest/Eastern U.S. & Canada, Sales—Victor Matteucci, vmatteucci@mining-media.com Western U.S., Canada & Australia, Sales—Frank Strazzulla, fstrazzulla@mining-media.com Scandinavia, UK & European Sales—Colm Barry, colm.barry@telia.com Germany, Austria & Switzerland Sales—Gerd Strasmann, info@strasmann-media.de Japan Sales—Masao Ishiguro, ma.ishiguro@w9.dion.ne.jp Production Manager—Dan Fitts, dfi tts@mining-media.com www.e-mj.com Engineering & Mining Journal, Volume 220, Issue 1, (ISSN 0095-8948) is published monthly by Mining Media International, Inc., 11655 Central Parkway, Suite 306, Jacksonville, FL 32224 (mining-media.com). Periodicals Postage paid at Jacksonville, FL, and additional mailing offi ces. Canada Post Publi- cations Mail Agreement No. 41450540. Canada return address: PO Box 2600, Mississauga ON L4T 0A8, Email: circulation@mining-media.com. Current and back issues and additional resources, including subscription request forms and an editorial calendar, are available at www.e-mj.com. SUBSCRIPTION RATES: Free and controlled circulation to qualifi ed subscrib- ers. Visit www.e-mj.com to subscribe. Non-qualifi ed persons may subscribe at the following rates: USA & Canada, 1 year, $90. Outside the USA & Can- ada, 1 year, $150. For subscriber services or to order single copies, contact E&MJ, c/o Stamats Data Management, 615 Fifth Street SE, Cedar Rapids IA 52401, 1-800-553-8878 ext. 5028 or email subscriptions@e-mj.com. ARCHIVES AND MICROFORM: This magazine is available for research and retrieval of selected archived articles from leading electronic databases and online search services, including Factiva, LexisNexis, and Proquest. For mi- croform availability, contact ProQuest at 800-521-0600 or +1.734.761.4700, or search the Serials in Microform listings at www.proquest.com. POSTMASTER: Send address changes to E&MJ, 11655 Central Parkway, Suite 306, Jacksonville, FL 32224-2659. REPRINTS: Mining Media International, Inc., 11655 Central Parkway, Suite 306, Jacksonville, FL 32224 USA; email: subscriptions@e-mj.com; phone: +1.904.721.2925, fax: +1.904.721.2930; www.mining-media.com. PHOTOCOPIES: Authorization to photocopy articles for internal corporate, personal, or instructional use may be obtained from the Copyright Clear- ance Center (CCC) at +1.978.750.8400. Obtain further information at copyright.com. EXECUTIVE OFFICE: Mining Media International, Inc., 11655 Central Park- way, Suite 306, Jacksonville, FL 32224 USA phone: +1.904.721.2925, fax: +1.904.721.2930, www.mining-media.com. COPYRIGHT 2019: Engineering & Mining Journal, incorporating World Mining Equipment, World Min- ing and Mining Equipment International. ALL RIGHTS RESERVED. Happy New Year! Most miners were ready to bid adieu to 2018. The year started off well, but forces beyond our con- trol caused prices for most mined commodities to decline and jeopardized some business models. Canada's oil patch is probably feeling the most pain. As of January 1, a plan put in place by Alberta Premier Rachel Notley curtails crude production (See Alberta Initiates Oil Production Cuts, p. 6). This comes at a time when Albertans are swimming in oil.

Articles in this issue

Links on this page

Archives of this issue

view archives of Engineering & Mining Journal - JAN 2019