Pipelines Again

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.

http://www.ogj.com/articles/2013/01/nebraska-governor-approves-keystone-xl-pipelines-new-route.html

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:

http://www.cn.ca/en/customer-news-transport-market-bitumen-20120627.htm

And this is being considered for Alaska.

http://www.edmontonjournal.com/business/Group+wants+move+bitumen+rail+Alaska/7763076/story.html

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?

9 thoughts on “Pipelines Again”

  1. Seems like some groups in B.C. are opposed to the Northern Gateway project overall because of environmental reasons, and others are opposed to it only because they feel they deserve some cut of the resource. However the groups that oppose the pipeline because they feel it’s a dangerous liability to the coastal environment seem slightly hypocritical and uninformed to the fact that both the cities of Victoria and Vancouver pour raw sewage into the ocean and frequently rank last on Canada’s list of water quality and treatment centres. While the pipeline is likely to never cause any disaster, it is certain that these two municipalities will continue dumping toxic sewage into their water. These protesting groups seem to have no problem ignoring environmental disasters when there’s no monetary gains involved.

  2. In my opinion implementing railroads as a means of transporting bitumen seems like a waste of money. If a rail line is implemented from Alberta to Alaska wont it will cause the same (if not more) ecosystem disturbance and habitat fragmentation as creating a pipeline to Alaska?

  3. I think that BC thinks that the only practical way for Alberta to get their oil to other markets is through the BC coast, and that is one of the reasons they have such excessive demands. So if Alberta starts seriously looking into other options like shipping oil to Alaska by rail, and the Keystone pipeline. That will hopefully encourage BC to change their stance or else they will miss out on all the possible economic benefits.

  4. In obamas approval of such pipeline he faces much scrutiny from environmental institutions. With this being said, environmental degradation from the manufacturing of the crude oil was a topic that needed addressing. However, technology where it stands today allows for a greener “future” with respect to the energy sector. Change can’t and won’t happen over night. This is why it would be ill advised of Obama not to pass such approval of the pipeline. Nafta insures as well as transport costs that the best option is Alberta oil. Texas and North/south Dakota right now are top ranked in production yet cannot sustain the demand in a fragile economy like the states. The texhnology in retrieving heavy oil from source rock is available yet efficiency is questionable so until it becomes economically viable I feel there will be little chance in change. Sources say there are substantial deposits of tight oil within the borders of the states so this could be a matter of discussion. Yet, do you think that implementing change in supply routes within the “cash cow” energy sector is a good idea right now? I feel Obama has little choice in the matter and is delaying the inevitable and pleasing the environmental groups by delaying. Making the institutions believe there is progress. I’m not against green energy alternatives at all but at the same time it’s just not time for such actions. As for BC charging a loyalty, get real! Exports to china.. Why not! For a rapidly growing economy the demand is always going to be there. As well as the slight potential of the northwest passage opening for trade routes, export costs will drop exponetially. Pipeline to the north? Kind of a catch 22 there that environmentalists cant have there say but Either way you look at it, Alberta is going to continue to boom.

  5. well, pipeline is a good solution, we spend money once to build it up and then we just use it to move oils.
    refine is just too expensive based on today’s tech.
    but turely that we should have a provincial development plan for heavy oil resource

    just one thing pop up in my mind, i have heard of a case, people steal oil from pipeline because it was build above the ground, and …………..they make good money………………….anyway, they got arrested in the end of the story

  6. Even U.S approved the oil pipeline project, what make B.C governors unhappy about? The royalty? Or Environmental issue?
    If it is all about royalty, we could definitely approve of building an oil distributing station in somewhere BC and they could get benifits from it if they have any refinery.
    If they are not happy with seeing destruction of nature, then I would say they don’t know much about oil industry. I not sure about Canadian pipeline construction rules, but in China we only allow construction operating within 20 m wide in order to reduce destroy of nature as much as we can. On the other hand, once the crude oil pipellie has built up,no doubt it will cause almost no pollution as compared to other transportation methods. (the lately long-distance oil pipeline is built of API 5L X70 steel pipes which has ⌀813 or 914mm i believe and it gonna give you a YS 485MPa, TS 600-750 MPa. Anyways, it is safe enough!)
    Broadly speaking, compared advantages of pineline to other modes transportation: 1.large freight volume; 2.low cost; 3. More safe, barely regardless of external climatic factors, little pollution to environment; 4.low loss quality durining transportation.etc. But it has little flexibility.

    As Alberta produced 459,000 barrels per day (3 years ago), we really need to find a safe, economically, and efficient way to export our oil to neighbours, then pipeline will be the best choice without doubt!

    By the way, Dr.Gingras- do you think Canada will import oil pipes from oversea if there is short in domestic production? I am looking forwad to make a contribution to Sino-Canadian friendships and trade.

  7. I strongly believe that we must continue to push for West Coast pipeline access regardless of any environmental or political issues. Our only other market route which is to the US is becoming less and less attractive due to the Americans massive increase in domestic production. They don’t need our heavy oil! A pipeline or rail line east to Ontario is barely ever spoken of and likely then not economic. The bulk of the planetary economy is centred on the Pacific Rim. Countries such as Japan have huge export economies that need oil. If the Americans won’t take our product west coast access is a matter of national economic sovereignty.

    I am unsure about refining more as who would ship hundreds of thousands of barrels of gasoline when you can just refine it at your own ports and keep more jobs in your country? (From an natural resources importer standpoint). This is the problem with primary resource exporting nations with not enough domestic consumption.

    Alberta needs to cater relationships with non North American entities such as Japan, China, Korea, Taiwan, Indonesia, Vietnam, Chile, etc and start marketing our oil to them, even if it is for less and the only way we can do that is through export terminals in Kitimat. Even the seasonally ice free Northern Sea Route could be used to supply Finland, Iceland and Sweden along with other importing European nations that are afraid of Russian influence with its oil, though they appear to be pretty smug with our heavy oil.

    But all of this needs a Pacific export terminal. How about rail to Alaska to export through Anchorage? Not too many towns would be along that route, but as we know rail + oil = more failures than pipelines…

    I hate politics.

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