By John Stark
While the Keystone XL pipeline and coal export proposals such as the Gateway Pacific Terminal in Whatcom County are getting a lot of attention, crude oil pipeline/export proposals are becoming a focus of greater concern partly because of the potential increase in tanker traffic just north of the border.
In an effort to respond to fears about the Enbridge and Kinder Morgan pipeline proposals, Canadian officials have announced a plan to review oil tanker safety regulations and add new laws and penalties. Read the Reuters report here, via gCaptain.
Here is a recent report from the Financial Post about Kinder Morgan’s existing operations and its expansion plans. This report notes strenuous opposition from First Nations groups, as well as the mayors of Burnaby and Vancouver.
Tankers laden with crude oil enter Whatcom County waters regularly en route to the BP and Phillips 66 refineries, carrying oil from Alaska and other sources.
Canadian energy companies now hope to export Alberta tar sands crude by sea from ports in British Columbia. Canadian federal officials are expected to make a decision on the Enbridge project before the end of the year. The terminal for that pipeline is at Kitimat, east of the Queen Charlotte Islands.
Kinder Morgan, already operating a pipeline with a terminal in the Vancouver, B.C. area, has yet to apply for regulatory approval of its planned expansion of that pipeline. Here is a critical report on its environmental risks, prepared by a coalition of environmental groups.
A map included with this report from the Sierra Club indicates that tankers leaving the Kinder Morgan site would skirt the western edge of the San Juan Islands.
My understanding is that this project is going ahead only because of the Obama Administration’s blocking of the Keystone project. The Canadians are undergoing serious financial damage because of the difficulty of shipping their oil. Frankly The Keystone project is the much preferred route not only because of the worry about increased tanker traffic in the Sound but the jobs that would have been generated by Keystone.
I only wish the environmentalist would have figured this out before they pressured Obama into blocking the Keystone project.
An interesting point. I do understand environmentalists’ dilemma, being confronted with the lesser evil argument here and elsewhere.
…this is all part of a larger dilema Alberta oil sands producers (and the Province) is facing, which is (a) how to get the various unrefined products out of Alberta; (b) whether or not it makes more economic sense to invest in new refining capacity and export the finished products. Alberta is throwing away millions by not upgrading Northwest Redwater is currently in the design stages to build a $6bbn refinery to produce clean diesel.
So there are various options, Keystone is one, Kitimat is another and export to Canadas east coast by reversing flow or expanding capacity along existing right of ways.
The development of the oil sands resource is not going away as it is a strategic resource for the Canadian govt. it’s just where the material will find export solutions and what the commodity(s) will be
It seems that the Canadians preferred the Keystone project until it was blocked by Obama in the interest of being re-elected. I agree they will get the oil to market on way or another. I think it is all working out badly. No Keystone, no advantage to the US and possible continued worry over tanker spills into our waters if it goes to Vancouver. All because Obama put his re-election before the interests of the country.
….the advantage of Keystone is that with the Mexican crudes slowing the Houston refineries can use the dilbit and synbit to fill up their refineries. The downside is the high sulfur and other acids which will require metallurgical upgrades to the crude/vacc units. Ive been in the oil sands development sector since 1997, and there are major capital costs associated with controlling corrosion. Whats the potential spoiler in this whole deal is that the majors are looking at processing the lighter crudes now coming out of the midwest. So the whole point might be moot, and the canadians will be forced to find other markets..
The environmentalists!
If they’d only learn to rely on cost/benefit ratios.
Haida Gwaii and the people it’s named for
will be the reason there will be no pipeline to Kitimat.
The Chinese own tar sands rights so that market will need to be served somehow,
though First Nations tribes will not accept the risk and anyway
Enbridge has a very negligent pipeline operator history.
The move to make stricter rules and set deterrent penalties is out of desperation, that’s all.
How can you tell for sure?
Enbridge is running a PR campaign with swanky CGI TV spots advertising those rules and procedures.
Ever hear any industry bragging about tighter regulation?
….at this point in time, the chinese are ‘investors’ and there is a lot of nationalistic grumbling within Alberta about their presence in the industry and owning partial interests in the leased, sorta like selling part of Canada to the chinese. I know of no agreements,yet, where the crude is committed to chinese refineries. I also do not know if the chinese are capable of processing dilbit.
It all boils down to how difficult the US makes it for them to sell the stuff in the US. They are looking out for their own interests, path of least resistance. If Keystone becomes an issue, then China becomes a major player and Kitimat may be in the game…just my two cents..
An investor that owns a majority stake in a tar sands lease is effectively the owner of that lease.
PetroChina holds a 60% share in two undeveloped leases
and Sinopec owns 50% of Northern Light’s undeveloped properties.
The largest tar sands producer Syncrude is 9% PetroChina since they just bought that stake from ConocoPhillips.
Why are Canadians so happy to have China as a partner?
Chinese investment is a way of getting round the carbon constraints likely to be imposed by America and
Chinese investment is seen to legitimize tar sands developments and allows for that new market where ours is shrinking due to consumer awareness – also known as environmentalism.