Canadian oil producers seeking to expand existing pipelines to get tar sands oil to the US market.
The battle over TransCanada’s Keystone XL pipeline continues to rage as both sides dig into their strategic playbooks for the Hail Mary pass that might tip the contest in their favor. The stakes, of course, are high. The multi-billion dollar project would see hundreds of thousands of barrels of diluted bitumen piped every day from Alberta across the border into the United States and to refineries on the Gulf of Mexico.
Each side’s arguments are well known by now. Pipeline supporters promise jobs and North American energy security. Environmentalists warn of a climate change time bomb and oil spills, and argue that now is the time to end reliance on fossil fuels altogether and commit to a renewable energy future.
As the Keystone battle continues to grab all the attention, Canadian oil producers are quietly seeking to expand existing pipelines so they can boost exports to the US and other countries.
There is no shortage of new pipeline and pipeline expansion projects in development. The projects are in various stages – from initial concept phase to application process to those close to approval. Combined, the proposed projects would, if completed, dwarf Keystone XL in terms of how much petroleum they would move.
Houston-based Kinder Morgan is seeking to triple the amount of crude oil that currently moves through the 60-year-old Trans Mountain pipeline that runs from Alberta to British Columbia. The $5.4 billion expansion would pump 890,000 barrels per day from the tar sands mines to an expanded Westridge Marine Terminal in Burnaby, BC. (Keystone XL, by comparison, would move 830,000 barrels daily.) Once it reaches the ocean, the crude would have to be placed on oil tankers to get it to markets in the US or Asia. According to The Council of Canadians, approval of the Kinder Morgan project would "add up to 360 oil tankers per year in the Burrard Inlet and the Strait of Georgia.” Last week Kinder Morgan filed preliminary plans for the expansion; a formal application will be filed later this year with Canada's National Energy Board.
Meanwhile, Calgary-based Enbridge is still trying to push its Northern Gateway pipeline, a twin 1,170-km pipeline from Bruderheim, Alberta to Kitimat, BC. On May 31, the provincial government of British Columbia officially stated its opposition to Northern Gateway. But Enbridge has other plans in the works. The company wants to double the capacity of its Line 67 (sometimes called the Alberta Clipper Pipeline), which runs from the Hardisty Terminal in Alberta to Superior, Wisconsin. If all goes according to Enbridge’s plan, the expanded line would carry south 800,000 barrels of diluted bitumen per day by 2015.
Like Keystone XL, the project would require US State Department approval in the form of a presidential permit. The Minnesota chapter of the international climate-change group 350.org opposed the project in a submission to the Minnesota Public Utilities Commission earlier this spring. "If 67 is expanded, it will increase tar sands development to almost the same impact as Keystone XL," Kate Jocobson, a lead coordinator for MN350, told the local community newspaper, the Pioneer Press. "If that happens, it will essentially be game over for the climate."
Line 67 is also being opposed by the group Nizhawendaamin Indaakiminaan (“We Love Our Land”) that is composed of tribal members from the Red Lake Band of Chippewa in northwestern Minnesota and other native communities. The group argues that Enbridge has been illegally trespassing on Red Lake land since 1949. Activists with the group have set up a blockade on an Enbridge easement road directly above the pipeline. They are demanding the company "shut down oil pipelines and remove them from Red Lake Tribal lands."
Enbridge has also applied to both expand (to a total of 300,000 barrels per day) and reverse its Line 9 pipeline, which currently moves oil from Montreal to Sarnia, Ontario. Reversing the pipe’s flow would enable the company to ship diluted bitumen from Alberta to refineries east of Montreal. In addition, a smaller pipeline, the Portland-Montreal, could be a gateway for tar sands crude to make its way to the US. Currently, the pipeline is co-owned by Shell, Suncor and Imperial Oil. The current owners have indicated they are open to selling Line 9 to Enbridge if Canada's National Energy Board approves the reversal.
There is also preliminary talk of a new west-east pipeline within Canada that would send approximately 800,000 barrels per day of diluted bitumen from Alberta to refineries in Quebec and the Canadian East Coast, most likely Irving Oil's massive Saint John refinery in New Brunswick – the largest in Canada and one of the top 10 biggest oil refineries in North America.
Canadian oil producers are even considering a pipeline to the Arctic Ocean, presumably hoping that the emerging ice-free shipping routes (open thanks to climate change) could be a path to get their crude to market. The province has hired a consulting firm, Canatec Associates International, to study the feasibility of a pipeline to Tuktoyaktuk in the Northwest Territories. According to Sun News, energy minister Ken Hughes called the $50,000 study a "preliminary scouting expedition."
All signs point toward continued efforts to expand tar sands extraction in Alberta. Prime Minister Stephen Harper’s Tory government is doing everything it can to lobby US officials to approve new cross-border crude oil shipments. And the provincial government in Alberta continues to provide massive subsidies for further tar sands development. With an estimated 173 billion barrels of recoverable bitumen at stake, the economic incentives for continued growth are immense. According to the International Energy Agency, North American daily oil production is forecast to grow by 3.9 million barrels between 2012 and 2018. "North American oil production will be as transformative to the market over the next five years as was the rise of Chinese demand over the last 15," the IEA says.
Environmentalists say that would be a disaster. According to Greenpeace, "Greenhouse gas emissions (GHG) from tar sands production are three to four times higher than those caused by the production of conventional oil, which makes the tar sands the largest contributor to the growth in Canada's GHG emissions and one of the world's largest sources of GHGs."
As both tar sand proponents and opponents know, that oil will stay in the ground unless there’s a way to get it to market. Until now, most attention has focused on Keystone XL. No matter the ultimate fate of Keystone, it will be just one small battle in a war that is opening up along multiple fronts from coast to coast to coast.