Chevron made waves in the business world when it announced its October 6 sale of 30-percent of its holdings in the Alberta-based Duvernay Shale basin to Kuwait Foreign Petroleum Exploration Company (KUFPEC) for $1.5 billion.

It marked the first North American purchase for the Kuwaiti state-owned oil company and yields KUFPEC 330,000 acres of Duvernay shale gas. Company CEO and the country's Crown Prince, Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah, called it an "anchor project" that could spawn Kuwait's expansion into North America at-large. 

Kuwait's investment in the Duvernay, at face-value buying into Canada's hydraulic fracturing ("fracking") revolution, was actually also an all-in bet on Alberta's tar sands. As explained in an October 7 article in Platts, the Duvernay serves as a key feedstock for condensate, a petroleum product made from gas used to dilute tar sands, allowing the product to move through pipelines. 

And while Kuwait — the small Gulf state sandwiched between Iraq and Saudi Arabia — has made a wager on Alberta's shale and tar sands, Big Oil may also soon make a big bet on Kuwait's homegrown tar sands resources.

"Kuwait has invited Britain’s BP, France’s Total, Royal Dutch Shell, ExxonMobil and Chevron, to bid for a so-called enhanced technical service agreement for the northern Ratqa heavy oilfield," explained an October 2 article in Reuters. "It is the first time KOC will develop such a big heavy oil reservoir and the plan is to produce 60,000 bpd from Ratqa, which lies close to the Iraqi border [in northern Kuwait]…and then ramp it up to 120,000 bpd by 2025."

In the past, Kuwait has said it hopes to learn how to extract tar sands from Alberta's petroleum engineers.

Canadian Tutelage

Back in 2007, Kuwait had much more ambitious plans for the Ratqa oil field.

Though the current goal is to suck 120,000 barrels per day of heavy oil out of the field, back in 2007 the goal was 900,000 barrels per day by 2020. And Alberta's petroleum engineers would lend their expertise to the cause, or at least that was the plan for Kuwait Oil Company at the time. 

"Unless we seek the experience of the industry here, we will not be able to reach our target," Ali al-Shammari, at the time the deputy managing director for finance for the Kuwait Oil Company, told the Calgary Herald. "We will need [international oil companies'] help in developing the reservoirs and may also consider the options of signing enhanced technical services agreements."

Kuwait's entrance into Canada depicts how important Alberta's tar sands have become for the global geopolitical landscape. And Kuwait opening its doors to the oil majors depicts the country as an emerging player in the global oil market.

Geopolitics At Play 

The Islamic State — formerly known as the Islamic State in the Levant (ISIL)— has established what it calls a Caliphate in both northern Iraq and large swaths of Syria.

Fueled by $25 to $60 per barrel oil sold on the black market, Kuwait has largely escaped from the day-to-day newscycle. But as the famous Mark Twain quip goes, "History doesn't repeat itself, but it does rhyme."

The Ratqa oil field is the same geological formation as the Rumaila oil field, which sits in southern Iraq. Iraq and Kuwait fought a war over the field in early-1990s, in which the United States led the call to arms against former President Saddam Hussein: Operation Desert Storm, the first Gulf War. 

In 2010, Iraq and Kuwait signed an agreement — an armistice really — to share the border oilfield. 

Further, Wikileaks U.S. Department of State diplomatic cables made public by whistleblower Chelsea Manning show that the U.S. government has kept a close eye on the Ratqa oil field, as well as on which U.S.-based oil companies stood to win and lose if developed. 

Though almost two and a half decades have gone by since Operation Desert Storm and Saddam Hussein is no longer even alive, one thing remains constant: oil still runs the show in the Persian Gulf region. And this time around, it's tar sands oil — the same oil running the show in Alberta.

Photo Credit: esfera | ShutterStock

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Canada's tar sands are one of 14 energy megaprojects that are "in direct conflict with a livable climate."

According to a new report released today by Greenpeace, the fossil fuel industry has plans for 14 new coal, oil and gas projects that will dangerously increase global warming emissions at a time when massive widespread reductions are necessary to avoid catastrophic climate change. In conjunction these projects make it very likely global temperature rise will increase beyond the 2 degrees Celsius threshold established by the international community to levels as high as 4 or even 6 degrees.

"The disasters the world is experiencing now are happening at a time when the average global temperature has increased by 0.8 degrees Celsius, and they are just a taste of our future if greenhouse gas emissions continue to balloon," the report states.

The report, "The Point of No Return: The Massive Climate Threats We Must Avoid," [PDF] emphasizes the urgent need to move beyond dirty energy if we are to avert catastrophic global warming and includes research provided by Ecofys, a consulting firm specializing in sustainable energy and climate policy.

The research focuses on 14 megaprojects slated to produce as much new carbon dioxide emissions in 2020 alone as the United States produces in an entire year. Together these projects would add 300 billion tonnes of CO2 equivalent into the atmosphere by 2050, through the "extraction, production and burning of 49,600 million tonnes of coal, 29,400 billion cubic metres of natural gas and 260,000 million barrels of oil." By 2020, these projects would increase global CO2 emissions by 20 percent, placing the world on the path of a 5 or 6 degree Celsius temperature rise.

According to the International Energy Agency (IEA), global emissions increased by 5 percent in 2010 and 3 percent in 2011, right on track for a 5 or 6 degree long term warming. What will guarantee that level of warming is the continued construction of dirty energy projects. What could mitigate the dangerously high temperature rise is the halt of such projects in the next five years.

The Filthy Fourteen

The world's largest and dirtiest energy projects include coal production in Australia, China, the U.S., and Indonesia, oil production in Canada's tar sands, the Arctic, Brazil, the Gulf of Mexico, Iraq, and Venezuela's tar sands, and gas production in the U.S., Kazakhstan, Africa, and the Caspian Sea.

The Impacts

Ecofys estimates that a business-as-usual approach to energy production would entail "a clear scenario for climate disaster with a 5-6 degree celsius increase in average global temperature." An alternative scenario would involve a carbon budget designed to keep the global average temperature increase below 2 degrees.

"To stay within this carbon budget," according to Ecofys, "cumulative emissions between 2010 and 2050 cannot exceed 1,050 gigatonnes of CO2 equivalent (Gt CO2e), and global emissions need to start decreasing at the very latest by 2016." Cumulative emissions associated with the 14 megaprojects are estimated to be 2,340Gt CO2e, far beyond the acceptable rate if any progress is to be made to avoid "climate chaos."

The report states "the problem is that investment in energy infrastructure for fossil fuels locks the world into using coal, oil and gas for decades. The IEA estimates that 590 Gt CO2 is already locked in by existing fossil fuel-dependent infrastructure, and building new coal, oil and gas based infrastructure must stop by 2017 to avoid locking in more emissions than can be emitted without overshooting 2 degrees celsius warming."

"After that, the only way to stay below 2 degrees celsius warming is to shut down the many new coal, oil and gas power plants and the new coal mines and oil operations that could be operating, making the task of meeting the target hugely expensive and politically difficult."

The 14 projects would bind us to new carbon intensive investments, further entrenching the problem of fossil fuel reliance within the global economy. The solution, as recommended by Ecofys, is to make a quick and committed switch to clean energy projects which would "provide almost one third of the reduction needed to have a 75 percent chance of avoiding climate chaos."

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