The pipeline debate

[vc_row][vc_column width=”1/2″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″][mk_dropcaps style=”simple-style”]T[/mk_dropcaps]alk to anyone in the oil industry, and they’ll describe pipelines as the “energy highways” that carry Canada’s vast resources to a hungry world market; building more pipelines, they say, will catapult this country into the big leagues of global trade and a future of economic prosperity.

Talk to any environmentalist, or someone living where a major pipeline is proposed to pass through, and you often get a very different picture; pipelines carrying bitumen from the oilsands are just a spill waiting to happen, a toxic conduit through communities and over pristine waterways, carrying Canada head-first toward environmental catastrophe.

When it comes to building new pipeline infrastructure, the stakes are high for Canada, which is why the rhetoric is so highly charged, and the debate so loud and boisterous. Alberta’s oilsands, of course, are at the heart of the issue, since most major pipelines being proposed and awaiting approval are designed to get that product to an insatiable world market.[/vc_column_text][/vc_column][vc_column width=”1/2″][mk_image src=”” image_width=”800″ image_height=”700″ crop=”false” lightbox=”true” frame_style=”simple” target=”_self” desc=”ILLUSTRATION: ANDY MORA” caption_location=”outside-image” align=”left” margin_bottom=”-10″][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][vc_row_inner][vc_column_inner width=”1/1″][/vc_column_inner][/vc_row_inner][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”10″]The oilsands are the third largest oil reserve in the world, after Venezuela and Saudi Arabia, with more than 168 billion barrels of recoverable oil. The Canadian Association of Petroleum Producers (CAPP) projects that production in the region will more than double over the next 15 years — from about two million barrels per day (bpd) currently to more than five million bpd by 2030.

“The oilsands are an island of hydrocarbons surrounded by boreal forest, with no obvious link to the markets they must serve,” explains Jeff Rubin, former chief economist at CIBC World Markets, and the author most recently of The End of Growth. “Going from two million to five million [bpd] in production is all about finding an export market, or it’s not going to happen.” The alternative, he says, would prolong the current supply glut in landlocked U.S. refineries, leaving Alberta bitumen heavily discounted, while ensuring longterm production cost overruns and investors eventually fleeing the oilsands in droves.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][mk_custom_box border_width=”1″ bg_color=”#d9d9d9″ bg_position=”left top” bg_repeat=”repeat” bg_stretch=”false” padding_vertical=”5″ padding_horizental=”5″ margin_bottom=”15″ min_height=”100″ el_class=”ImageBox”][mk_gallery images=”7593″ column=”1″ height=”500″ frame_style=”simple” disable_title=”false” image_quality=”1″ pagination=”false” count=”10″ pagination_style=”1″ order=”ASC” orderby=”date”][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″ el_class=”Image-Description”]Canada’s underground pipeline network covers about 830,000 kilometres.[/vc_column_text][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″ el_class=”Photo-Caption”]Photo: Courtesy Kinder Morgan Canada[/vc_column_text][/mk_custom_box][/vc_column][vc_column width=”1/2″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″]To avoid that predicament  — especially in a world of triple-dig-it prices for a barrel of oil and with no major financial constraints on carbon emissions — building more oil pipelines in Canada seems like an economic no-brainer. Indeed, as former prime minister Brian Mulroney noted to an Ottawa audience during his April 2014 speech on “the next big thing” for Canada, “What we have in Canada represents more than half of the global oil reserves that are open to the private sector for development. Can there be any better magnet for investors?” The wealth generated from developing the re-source would certainly be transformative. And with global energy demand expected to increase by 33 per cent over the next 20 years, industry proponents say Alberta’s oil is one of the best bets to fulfill that demand.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”15″]The economic argument is pretty straightforward. Since most oilsands crude only makes it as far as land-locked Cushing, Oklahoma, and right into a supply glut, refineries there pay between $20 and $30 less for every Canadian barrel. If you do the math, the transportation bottleneck costs the oilsands industry about $40 million every day in lost revenues.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”2/3″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”15″]Proposed way back in 2008, TransCanada’s Keystone XL pipeline was the first option for creating that new market connection. It would carry about 830,000 bpd from Alberta to Steele City, Nebraska, including a link servicing the massive Bakken shale oil deposit in Montana and North Dakota. In April, the U.S. State Department once again delayed any decision on Keystone XL, likely pushing its fate back until after the country’s midterm elections this November.[/vc_column_text][/vc_column][vc_column width=”1/3″][mk_blockquote style=”line-style” font_family=”none” text_size=”19″ align=”center”]When it comes to building new pipeline infrastructure, the stakes are high for Canada.[/mk_blockquote][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”15″]Several other projects are at varying stages of the approval process. Enbridge’s Northern Gateway and the Kinder Morgan Trans Mountain expansion would both send bitumen west through British Columbia and eventually to Asian markets, while other projects would bring the bitumen to refineries and ports in Eastern Canada. TransCanada’s proposed 4,600-kilometre Energy East pipeline would end in Saint John, New Brunswick, while Enbridge has announced plans to replace its “Line 3” pipeline between Edmonton and Superior, Wisconsin, and reverse flow on its “Line 9” pipeline between Sarnia and Montreal.[/vc_column_text][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”15″]All of the proposed pipelines would be required, says Rubin, in order to bridge that gap between oilsands supply and demand. But given such stiff opposition from environmentalists and landowners, he adds, none of them are a sure thing.[/vc_column_text][mk_content_box icon=”moon-reading” heading=”Reversal of fortunes”][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″]A closer look at Line 9[/vc_column_text][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″]The Line 9 pipeline currently pumps about 240,000 barrels of imported crude oil per day (which originates from West Africa, the North Sea and the Middle East) west from Montreal to Sarnia, Ont. But Enbridge is hoping to reverse the pipeline’s flow and increase its capacity to 300,000 bpd, in order to send oilsands crude east to refineries in Quebec.

Part of the project has already been approved and completed: the section called Line 9A between Sarnia and North Westover, Ont., near Hamilton, now flows east. The second section of the reversal project, Line 9B, extends through north Toronto all the way to Montreal, and was approved in March 2014 by the National Energy Board, pending 30 conditions that Enbridge must meet. The regulator’s conditions are largely focused on ensuring the company effectively monitors and maintains the integrity of the 38-year-old pipeline to prevent any ruptures, and that all potential safety concerns and environmental impacts have been assessed, with appropriate emergency response plans in place should a spill occur.

The approval was a major step forward for Enbridge. However, the project is still opposed by a vocal group of environmentalists, First Nations and community groups along the route. And since the NEB turned down Enbridge’s request to be exempt from a final check to ensure all 30 conditions are met, the Line 9 project still has some hurdles to overcome.[/vc_column_text][/mk_content_box][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][mk_button dimension=”three” size=”large” outline_skin=”dark” outline_active_color=”#fff” outline_hover_color=”#333333″ bg_color=”#13bdd2″ text_color=”dark” icon=”moon-next” url=”” target=”_self” align=”right” fullwidth=”false” margin_top=”0″ margin_bottom=”15″ animation=”scale-up”]Next Page[/mk_button][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″]

5 thoughts on “The pipeline debate”

  1. Berton W. Cosman

    What Product is Energy East intended to carry ?
    I thought is was crude oil- either light or heavy.
    However George Watson Chairman of CRITICAL CONTROL was a guest on CBC BNN channel
    this afternoon around 4:25 PM Atlantic Time and he stated that” Energy East is a gas pipeline” .
    Can and will you clarify this for me?

    B.W. Cosman P.Eng

  2. OK . If the pipe lines start outside of the United States of America. (Canada) Mr. President what is the tax going to be on these companies bringing the product into the USA from the pipe line? Help me out . Any thoughts. Am I fishing?

  3. Sorry I made a mistake what I meant to say if oil spills in the lakes and streams where a native reserve lives and once there is an oil spill and the fish are polluted with oil from an oil spill the fish are poisoned and once a native person eats the fish with the oil poison they get sick with cancer and then they die.

  4. I do believe the pipeline will create jobs and boost our economy but the problem I have about the pipelines is oil spills for our native friends of Canada say oil spills in their lakes and streams, poisons their fist and once the native people eat the fish with oil poison in it and they start to develop cancer in their bodies and then they die. Also what about the endangered sea creatures in our ocean, if there is another oil spill we can damage the life of a whale and endanger the rest of the wild life already black bears are having problems finding fish to eat and berries to eat and they go where people have their summer cabins and the bears go through the garbage and then they get shot and killed for the bears are the threat to the Canadian public.

  5. Hoping we won’t have another incident like Standing Rock. Greedy Corporations and government that have no regard for our environment and the impact it could have on all of us Canadians.

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