Syncrude

Syncrude Canada Ltd.

Type	Joint Venture
Founded	December 1964
Headquarters	Fort McMurray, Alberta
Industry	Oil and Gas
Products	Petroleum
Employees	5,600 full time (2009)
Website	http://www.Syncrude.ca

Minesite at Syncrude's Mildred Lake plant

Syncrude Canada Ltd. is the world's largest producer of synthetic crude oil from oil sands and the largest single source producer in Canada. It is located just outside Fort McMurray in the Athabasca Oil Sands, and supplies about 13% of Canada's oil requirements, with a production capacity of 350,000 barrels per day (56,000 m³/d).^[1] It has approximately 5 billion barrels of proven and probable reserves (with an additional 2 billion of prospective reserves) situated on 3 leased sites. By 2015, Syncrude expects to extract 185 million barrels (29,400,000 m³) of oil per year, the equivalent to 500,000 barrels per day (79,000 m³/d).^[2] Including fully realized prospective reserves, said production level could be sustained for well over the next 40 years^[3] .

The company is a joint venture between seven partners, including Canadian Oil Sands Limited, Imperial Oil, Petro-Canada (now a part of Suncor Energy), Nexen, ConocoPhillips, Mocal Energy (a subsidiary of Nippon Oil Exploration)^[4] and Murphy Oil. As a result, Syncrude is not traded directly, but rather through the individual partners. However, Canadian Oil Sands Trust's only substantial business is its 37% ownership stake in the project^[5], and it is publicly traded on the Toronto Stock Exchange under the symbol COS.UN.TO

The ownership board must approval all annual operating budgets and proposed capital spending projects, and are required to provide the funding for said activities based on their ownership share.^[6] The partners do not receive direct payment from Syncrude, but rather the company's synthetic crude oil production is allocated in kind to each of the partners based on their ownership share. The partner companies are then free to sell, refine, or store the oil as they see fit.

History

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Syncrude was formed as a research consortium in 1964. Construction at the Syncrude site didn't begin until 1973 and the site officially opened in 1978. In recent years Syncrude has undergone some multi-billion dollar expansion projects, including the construction of a new site 35 km north of the original site called Aurora starting in 1998 and the "Upgrader Expansion 1" project which has added 100 000 barrels per day processing capacity to the original plant, bringing the total to about 350,000 barrels per day (56,000 m³/d). That should boost Syncrude's production capability from about 90 million barrels (14,000,000 m³) to about 125 million barrels (19,900,000 m³) per year by 2007 (actual production is subject to equipment failures and planned shutdowns). The UE-1 expansion finally started up in late 2006 after dealing with ammonia-related odour issues, about 2 years behind schedule and over triple the original budget. Cost overruns on the UE-1 project forced former CEO Eric Newell to retire, and Charles Ruigrok, formerly of part owner Imperial Oil, took over. The UE-1 project continued to experience cost overruns and schedule delays after the replacement of Newell, due in no small part to the tight labour market in Alberta and increases in costs of construction materials such as steel and concrete.

Controversies

Pollution

Air releases of combined gases without volatile organic compounds (VOCs) by Syncrude Canada in 2005 were 129,741,321 (kg) in total, including Ammonia (4,302,361 kg), Sulphuric acid (1,129,425 kg), Xylene (501,461 kg), etc. The company was also ranked as having the seventh highest air releases of combined gases (without VOC) in Canada in 2005.^[7]. Syncrude's Mildred Lake Plant Site is the third largest greenhouse gas emitter in Canada.^{[citation needed]} Syncrude reduced CO2 emitted per barrel produced by 23% from 1990 to 2001, and plans for further reductions in the future, although increased production will prevent a decrease in absolute emissions.^{[citation needed]}

Greenpeace lawsuit

In August 2008, Syncrude Canada filed a lawsuit against Greenpeace Canada for $120,000, plus costs, after 11 Greenpeace activists went onto the company's Aurora North oil sands site July 24, 2008, to unfurl anti-oilsands banners and unsuccessfully block a tailings pipe. Company spokesperson Mark Kruger said the company filed the lawsuit — which also names the activists individually — largely because of safety concerns as the activists were "unfamiliar with an industrial operation, and unfamiliar with some of the safety hazards that can be present... We just want to ensure that, in the future, nobody is putting themselves at unnecessary risk.”

Greenpeace tar sands campaigner Mike Hudema said Greenpeace wished Syncrude "was as diligent in cleaning up the environment as they are in persecuting the individuals that stand up for it."

Greenpeace chose the Syncrude site for the protest because in April 2008, 1600 ducks died after they landed on a toxic tailings pond at the site.^[8]

See also

• Canadian Centre for Energy Information
• History of the petroleum industry in Canada (oil sands and heavy oil)
• Scotford Upgrader
• Suncor

References

External links

• Syncrude Canada Limited
• Canadian Oil Sands Trust
• Pollution Watch Canada