TransCanada Corp’s decision this week to scrap its CAN$12 billion Energy East pipeline, and delays to other export pipeline projects, look set to increase producers’ reliance on costly crude-by-rail to bring barrels to market.
TransCanada announced last week that it will abandon Energy East, which would have taken crude from Alberta to the Atlantic Coast.
The announcement came after Canada’s National Energy Board (NEB) on 23 August announced a tougher review process that would consider indirect greenhouse gas emissions.
Shipping crude by rail is more expensive than by pipeline for producers already struggling with weak global oil prices. It is also considered more dangerous than pipelines because of derailments like the 2013 Lac-Megantic, Quebec, disaster, in which 47 people died in an oil train crash.
Oil industry participants say regulatory requirements for major energy projects in Canada are now so stringent it is unlikely any company will try to build a new export pipeline.
A global oil market slump has also diminished appetite for building multibillion-dollar pipelines.
While pipeline congestion is bad news for producers, it will prove a boon for rail terminal operators.
Read the article online at: https://www.worldpipelines.com/project-news/09102017/crude-by-rail-to-increase-in-canada/