Lately the oil news in Alberta has centered around the price differential applied to Alberta oil and heavy oil. In simple terms, I suppose that supply exceeds our ability to move the resource out of the province. This has renewed the debate regarding pipelines to the USA and across BC to reach Asian markets. Recent developments seem to indicate that pipelines to Oklahoma may become a reality in a few years: for example Nebraska’s Governor Heineman notified Obama that he has approved the proposed Keystone XL crude oil pipeline’s new route across the state.
BC seems a bit more intransient in their position. Initially BC Premier Clark insisted on a royalty for this pipeline to be hosted in the northern part of the province. Then the situation evolved into a more complex beast regarding First-Nations interests and environmental concerns. Regarding the prior: ludicrous. A friend of mine—Astrid Arts, a geoscientist in Calgary posited “do we charge a royalty for their beer or lumber that crosses Alberta into the other 8 provinces east of us?” A cut of the Kokanee tax sounds fine to me! Kidding aside, Astrid made a fair point. Regarding the latter, fair enough. But consider that presently we are shipping bitumen by rail to Oklahoma:
And this is being considered for Alaska.
Rail is not the most efficient nor—in my opinion the safest—way to move oil. There is no reason pipelines cannot be made safe. The technology is simple and the solution probably should revolve around appropriate monitoring and inspection of the pipeline.
However, other solutions come to mind. 1. Refine more product in Alberta. 2. Have a Provincial development plan for heavy oil resource that is an actual plan. 3. Take less money for the product.
What do you think?