City-B.C. oil pipeline sighted
Enbridge could apply for approval this year, bank says
Edmonton Journal
August 28, 2009
And Scotiabank commodities specialist Patricia Mohr said developing new export markets in Asia is vital if Canada is to fully exploit the economic advantage of owning the world's second-largest oil reserves.
"The Alberta oilsands represent a key 'strong suit' for the Canadian economy; the development of lucrative export outlets and transportation infrastructure for this resource is key to Canada's growth prospects," Mohr said in the report.
While both Enbridge and Trans-Canada PipeLines Ltd. have embarked on major projects to boost the flow from Alberta's oilsands to U. S. refineries, the report warns that continued reliance on the world's biggest energy consumer as the main market is "risky."
Prices in the U. S. may not reflect world levels if American refineries are oversupplied and growth in the next decade "will almost certainly be in China (and) 'emerging Asia' including India and the Middle East."
Enbridge said in May that it expects four oil pipeline projects to emerge as expansion opportunities after 2012. One would link Edmonton with oilsands producers in Fort McMurray, two others are in the U. S., and the fourth is its Northern Gateway pipeline to Kitimat.
The Scotiabank report said "the Northern Gateway Pipeline may begin the permitting process by filing with the National Energy Board by late 2009."
The 1,150-kilometre line would ship 400,000 barrels of oilsandsderived crude a day to Kitimat. It would include an adjacent line to move condensate in the other direction.
At Kitimat, the oil would be loaded onto tankers and shipped across the Pacific Ocean. In 2008, the project was estimated to cost $4.2 billion.
But it faces strong opposition from B. C. natives and environmentalists, who see the potential for a massive oil spill from supertankers loaded at the terminal.
Scotiabank said in its report that "China has led the recovery in global oil consumption in 2009," with demand rising 3.5 per cent year-over-year to 8.1 million barrels per day in July and record crude oil imports of 4.6 mb/d.
While U. S. demand will recover from a 1.5-mb/d recession-induced plunge, it is a "mature" market where changing energy policy is likely to limit consumption growth. Scotiabank cites tighter vehicle fuel-efficiency standards, rising ethanol requirements in gasoline, and a shift away from fossil fuels toward solar and wind power as factors limiting increased demand.
Canada has managed to increase its share of the U. S. market, Scotiabank said.
"Despite little U. S. growth in oil demand in the past decade, Canadian crude-oil exports to the United States increased substantially -- from 1.598 mb/d in 1998 to 2.493 mb/d in 2008--with 'politically secure' Canadian oil gaining market share in an environment of dwindling U. S. domestic supplies."
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