Oil Sands Truth: Shut Down the Tar Sands

Building Pipelines for Tarsand oil to Texas, Okla. & Louisiana

These plans are happening in the wake of the document-- only leaked, not for the public-- calling on the Federal government of Canada to quintuple tarsands development. Allowing the continuation of the tarsands process means allowing this infrastructure construction, as well. After all, if the water and the land is destroyed to feed a market, the oil must get to that market. Stopping these pipelines is part of stopping the tarsands.

A moratorium is not enough.

Enbridge Plans Expansion of Pipelines
Feb 06, 2007
By BajaNergyBLOG

After less than a year in service, Enbridge Inc. wants to expand the Spearhead heavy oil pipeline to the United States, its chief executive said Wednesday.

Enbridge CEO Pat Daniel said the company will hold an "open season" before the end of March, to gain firm support for an expansion.

Spearhead "validated to Canadian producers the benefits of having new markets" and is the centrepiece of the company's ambitious expansion agenda, he told a conference call. "Canadian producers immediately started getting better prices for heavy crude," he added.

The Spearhead link came into service in March 2006 and ships 125,000 barrels per day (bbl./d) of Canadian heavy oil from Chicago to Cushing, Okla. and on to refineries in Texas and Louisiana.

Daniel credited the link with lowering the differentials, or discounts, applied to Canadian heavy oil — effectively increasing prices producers receive back home.

Demand for Canadian oil is growing south of the border as American refiners seek deals with Canadian producers such as EnCana Corp. to supply their refineries with more oilsands production.

Along with Spearhead, Enbridge is moving ahead with the 450,000-bbl./d Alberta Clipper project, the Southern Access expansion and the Southern Lights diluent pipeline to supply blending components for oilsands producers.

Enbridge is also going ahead with the proposed Gateway pipeline to the West Coast even though the project has been delayed.

Daniel said the in-service date has been pushed back to 2014, "but this could change very quickly" depending on the ability of Asian refiners to secure Canadian oil supplies.

Enbridge plans to spend about $2 billion on growth projects in 2007 designed to increase capacity to about 1.5 million bbl./d by the end of the decade.

Daniel predicted the new pipes would fuel growth of eight to 10 per cent over the next five years.

"This provides a very solid foundation for future earnings," he said.

Andrew Kuske, a pipeline analyst in Toronto, said the results were "slightly shy" of expectations but maintained a "buy" rating on Enbridge shares.

Kuske agreed that Enbridge's "abundant" project inventory would pay dividends when they start to come on stream.

"Enbridge's asset position is likely to fuel a significant portion of highly visible corporate growth over the next five years."

In a research note, he said Enbridge also benefited from its natural gas distribution network in Ontario and its 43-per-cent interest in the Aux Sable natural gas liquids extraction facility near Chicago. In addition, Enbridge owns 50 per cent of the Alliance natural gas pipeline from northeast B.C.

Though it's primarily known for its oil pipelines, Daniel said Enbridge plans to expand its natural gas network. "We continue to evaluate opportunities to strengthen our gas business," he said.

To help pay for the company's aggressive expansion plans, Calgary-based Enbridge announced earlier this month that it would raise more than $523 million by issuing 13.5 million shares at $38.75 each.

The company will gain a further $58 million in a private placement of 1.5 million shares to Noverco, allowing it to maintain a 9.5-per-cent holding in Enbridge. Enbridge shares fell 32 cents in Toronto Wednesday, to $38.31.

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