Making the news at the moment is a range of stories about Canada and the struggle between its various provinces to link up the country’s massive oil and gas reserves with consumers. Alberta, for instance, sitting inland between British Columbia and Saskatchewan, produces 2.2 million bpd of oil, 1.7 million of which is derived from its oilsands. Oilsands production is expected to double by 2020, and grow to 5 million bpd a decade later. This huge expansion, made possible by billions of dollars in investment into the Fort McMurray area, will dramatically change Canada’s energy industry, if a way to market can be found.
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Existing pipeline capacity will be filled in 2016.
One of the proposed new export routes is Enbridge’s Northern Gateway pipeline, designed to transport raw bitumen from Edmonton, Alberta to a tanker port in Kitimat on the coast of British Columbia, for export to Asia. I’ve written in this column about the fierce environmental opposition to the project in terms of pipeline safety and the proposed ROW, much of which has originated from British Columbians whose territory the pipeline will cross. Recently, the spotlight has been turned to tanker safety: with studies predicting the potential financial and environmental costs of a major spill, and even the US Coast Guard undertaking a risk assessment for spills in US waters off the coast of Washington state.
Another project designed to increase transport capacity is the proposed extension to Kinder Morgan’s Trans Mountain pipeline. The Cdn$ 4.3 billion project would more than double capacity from 300 000 bpd to 750 000 bpd and would facilitate the transportation of diluted bitumen in the pipeline, rather than the refined oil it currently carries.
The Trans Mountain pipeline runs from Edmonton, AB to Burnaby, BC and feeds local terminals, a refinery and the Westridge marine terminal in Vancouver. If the application to expand the line is approved, construction is slated for 2016, which means that the terminal could find itself handling 28 vessels a month in 2017, of which 25 would be tankers. It currently handles about eight vessels a month, five of them tankers.
Each proposed plan to extend transport capacity is met with opposition over the environmental impact of new pipeline infrastructure along the ROW, and, where relevant, the impact of increased tanker and super tanker traffic. However, there is also deep opposition to the fact that the oilsands industry is being expanded in the first place.
A reporter for www.canada.com has announced that “pipeline politics” is his story of the year for 2012.1 We at World Pipelines tend to think this about every year as it ends, and each one as it begins! Pipeline projects are shrouded in issues of ‘politics’ – be they party politics, social schemes, environmental motives, and so on. But in physical terms, the construction of pipelines is merely the final part of the process in which the oil and gas resources have first been delineated and properly extracted; and the export market has since been identified and agreed upon; and the economic gains of export have been weighed against any subsequent losses. In reality, pipelines appear much sooner, and much more prominently, on the agenda and often come to embody a battleground that should be fought elsewhere. Pipelines are essentially a ‘market access’ tool. Whether you want to reach that market in the first place is the real matter for debate.
1. Jason Fekete, Postmedia News (www.canada.com).