The nearly completed expansion of the Trans Mountain pipeline promises to vault Canada into a new role in global markets by transporting an additional 600,000 barrels a day — on par with the daily output of Azerbaijan — from the country’s vast oil sands to a port on the Pacific Coast.
For Canada’s producers, the government-owned project offers a chance to break their almost total dependence on exports to the US and win higher prices for their crude…
Mountain is a 715-mile pipeline that runs through the Canadian Rockies’ vast swathes of pine trees on its route from landlocked Alberta to the west coast city of Vancouver. The original line, Canada’s only pipeline to the Pacific, is 70 years old and supplies oil mainly to refineries in British Columbia and Washington State. Twinning the line will boost capacity to 890,000 barrels a day from about 300,000 barrels currently.
Yes and no. The existing pipeline is already built and is (supposedly, anyway) working properly. Using the same route for a second pipeline through disputed territory bypasses most legal challenges, so is much easier (legally and politically) to pass because of well-established proofs “it WORKS–with minimal problems”.
Very much so but this is not over. Meaning over time we will move away from fossil fuels. That day will look almost complete within ten to fifteen years.
The pipeline might not pay for itself. If there is an oil spill bettering in Canada than in the US. This takes one nuclear target off the US list for China and Russia. That actually benefits the US. We’d have oil in a major war. If we survive. Limited nuclear war? Who da’ thunk it?
It shall, have no fear. The cost of fuel in the farm belt will go up significantly–and thus driving up the cost of all farm products grown there. In the original TransCanada report to the Canadian govt, the cost to farmers in the central US would be $5B and up. Gasoline prices in the northern central (think between Rockies and Smokies) US states will also go up because they can no longer get cheap oil. It will also end many years of oil trains going to the Gulf refineries. So more personnel to work on other trains? Maybe… Or they retire…
That is huge now if only the Canadians would build a Refinery to process the oil. The Indigenous people in the United States must be very happy. It never made sense to build the line down into the United States. Well done Canada, well done.
Sure it did. The refineries on the Gulf can process the heavy oil. The original Keystone pipeline has been supplying them for years. With the collapse of Venezuelan heavy oil production the US has been importing heavy crude and exporting light.
They only are importing it because it is cheaper and they have the factories. But in order to build the pipeline they had to go over aquifers and Indian tribe lands which are their own nations by treaty. They were unwilling to give the ok on the pipelines. So, unless you could find a way around these problems it just didn’t make sense, or they would have done it.
There is the contradiction. The new pipeline was to not deliver Canadian oil to the US refineries. Instead, it was to deliver that oil to a seaport loading facility in the US Gulf Coast so it could be loaded and shipped to Europe, Asia, and elsewhere. In other words, to whoever would sign a long-term delivery contract with Canada. No XL, no delivery to a port on an ocean to ship anywhere. This new pipeline through Canada reaches the Pacific Ocean, so loading ships and sending to Asia is realistic. Therefore, Canada will realize higher prices for its oil on international markets–and US prices shall go up as a result (from TransCanada impact study submitted to Canadian govt when Keystone XL pipeline first proposed).
This trend is strongest among the refineries closest to the Keystone XL terminus points in the Texas ports of Houston and Port Arthur. These Texas coastal refineries began exporting the majority of their refined product in the final quarter of 2011, years before the ahead of their regional peers.
The refineries are leading a surge in U.S. exports of petroleum products, which have more than quadrupled in a decade, rising from 1 million barrels per day, on average, in 2004, to 4.2 million gallons a day in 2014 according to EIA data.
Valero, which is the largest buyer of capacity on Keystone XL, is at the forefront of this trend. Valero has been increasing the export capacity from its Gulf Coast refineries for years now. In its most recent investor presentation, Valero detailed plans to increase its Gulf Coast export capacity for gasoline and diesel alone to reach 780,000 bpd (slide 44). Given that the company’s total Gulf Coast refinery capacity is less than 1.6 million bpd (slide 37), and gasoline and diesel production rarely accounts for more that 60% of a refineries output, this represents more the 80% of Valero’s production of premium refined products. Moreover, lower quality refined products, such as petroleum coke—of which tar sands crude produces significantly more than conventional crude—tends to have much larger volumes exported than more products such as gasoline and diesel.*