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 The race to deliver tar sands oil is intensifying
December 13, 2007
Posted by Brent Patterson
The Security and Prosperity Partnership oil sands workshop report from January 24-25, 2006 states that, "It will be necessary to look at options and plan for a smooth transition towards bitumen production that could be as high as 5 million barrels per day as was envisioned by the Oil Sands Technology Roadmap." This fivefold expansion in current production levels, "will represent many challenges for the pipeline industry," says the report.
Namely, it means more natural gas needs to get from up north to the tar sands where it will be burnt up in the extraction process. It also means more pipelines heading south into the United States. In her February 2, 2007 Globe and Mail article, "A flood of investor money set to come down the pipeline," Deborah Yedlin wrote that, "What's clear is that the need for infrastructure in order to get natural gas and oil to new and existing markets is only going to increase in the years to come."
Now on the front-page of today's Report on Business it says that, "The race to deliver Alberta oil sands output to Texas for refining is intensifying, with a plan for a multibillion-dollar pipeline proposed by Kinder Morgan Inc. emerging for the first time Wednesday, going up against a different plan backed by Enbridge Inc. and Exxon Mobil Corp."
Among the pipelines in the works, as noted by today's article:
KINDER MORGAN - CHINOOK PIPELINE - 300,000 BARRELS A DAY
"Kinder Morgan Canada... is in talks with producers for its 3,300-kilometre Chinook pipeline plan that would link Alberta with Texas, running through Wyoming and Oklahoma...Kinder Morgan, which said its Chinook pipeline would cost several billion dollars but less than $5-billion, wants to carry more than 300,000 barrels a day starting in 2012."
ENBRIDGE - ALBERTA CLIPPER - 400,000 BARRELS A DAY
"Enbridge, in a partnership with Exxon, wants to deliver 400,000 barrels a day starting in 2011 on the proposed Clydesdale line, which would be built alongside Exxon's existing small link... Most exported Canadian oil is currently moved on the Enbridge Inc. system from Alberta to the Chicago region, where it is refined into gasoline." Yedlin had reported in February that, "Enbridge said it is ready to spend $2-billion to ship more heavy oil from the oil sands into U.S. markets and is still waiting to land a commitment with Canadian shippers or refiners in China in order to get its Gateway pipeline from the oil sands to the West Coast under way." The Calgary Herald's Paul Haavardsrud has reported that, "Enbridge Inc. unveiled plans for a $1.8 billion pipeline that would run 3,000 kilometres to the U.S. midwest. Dubbed the Alberta Clipper, the proposed line would carry 400,000 barrels of oil a day from Hardisty, Alta. to Superior, Wisconsin."
TRANSCANADA - KEYSTONE PIPELINE - 600,000 BARRELS A DAY
"TransCanada Corp., archrival of Enbridge, is moving ahead with a $5.2-billion pipeline to move oil sands product to Illinois and to Oklahoma, with a possible connection to Texas." CanWest News Service reported on September 21 that, "The National Energy Board on Thursday gave its long-awaited approval to TransCanada Corp.'s multibillion dollar Keystone pipeline, unleashing a storm of protest from workers over the potential loss of nearly 20,000 oil-related jobs. After it comes into service in 2010, the pipeline will ship almost 600,000 barrels a day (bpd) of bitumen -- about half of Canada's current oilsands output -- from Alberta to Illinois and eventually on to the Gulf of Mexico." To read the October 26, 2006 Council of Canadians presentation to the National Energy Board on the Keystone Pipeline Project by Prairies organizer Lyn Gorman, click here.
ALTEX - 300,000 BARRELS A DAY
"The Altex (Energy Ltd.) pipeline could cost $5-billion, run about 3,000 kilometres and carry roughly 300,000 barrels a day, but because of the competition, details are in flux," according to the Globe article today.
OTHER
"Also on the books is a plan to build a link from Chicago -- the main point of delivery for Canadian crude -- into Philadelphia," wrote Yedlin. "All this is on top of the $1.8-billion (U.S.) Alberta Clipper line from Alberta into Wisconsin as well as the $1.3-billion Southern Lights pipe, which will carry a solution called diluent (used in the oil sands) from Chicago to Alberta."
Additionally, there are the natural gas pipelines to "feed" the increasing production from the tar sands:
IMPERIAL OIL - EXXON MOBIL - TRANSCANADA - MACKENZIE VALLEY PIPELINE
Yedlin had reported that, "The schedule and updated costs for the Mackenzie Valley pipeline are expected some time in the first quarter and Alaska's new Governor is restarting the process on the Alaska pipeline with a call for proposals."
According to estimates from the Alberta Energy Utility Board and the National Energy Board, by 2010 all of the gas coming from the Mackenzie Delta - if the Mackenzie Valley pipeline is approved - will be used to extract oil from the tar sands.
On December 7, the Globe and Mail reported that, "The price tag for the Mackenzie pipeline has soared to $16.2-billion from $7-billion in the past three years, leading the main proponents, Imperial Oil Ltd. and Exxon Mobil Corp., to question whether it makes sense to proceed without more government help." Shawn McCarthy in today's Globe and Mail reports that, "TransCanada Corp. is asserting a new leadership role in the long-stalled, $16-billion Mackenzie Valley Pipeline project, arguing the federal government needs to support the 'nation-building' Arctic energy development."
TRANSCANADA - NORTH CENTRAL CORRIDOR PIPELINE
On November 22 the Globe and Mail reported that, "TransCanada said yesterday that it has filed a regulatory application to build (a $1-billion) 300-kilometre...(North Central Corridor) pipeline to traverse northern Alberta, moving natural gas to 'feed' increasing oil sand production around Fort McMurray. It is expected to be in service by 2010..."
Canada now produces about 40 per cent more oil than it consumes, but has to rely heavily on imported oil from offshore. Thanks to NAFTA, Canada now exports 70 per cent of the oil and 61 per cent of the natural gas we produce each year to the United States. NAFTA prevents us from selling our energy resources at rates lower than we sell them in the U.S. We also can’t ever cut back on the proportion of energy we produce and sell to the United States, even in times when our country runs short.
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