Oil pipeline to West Coast makes 'strategic sense'
Syncrude chief says proposal would diversify Alberta's markets
Lisa Schmidt
Victoria Times Colonist
September 19, 2009
The head of Canada's biggest oilsands producer says a pipeline to the West
Coast makes strategic sense to help diversify Alberta's export markets.
But Tom Katinas, chief executive of Syncrude Canada Ltd., told the Global
Business Forum in Banff., that the U.S. will remain Canada's key buyer.
"I would love to see a pipeline that goes from Alberta out to the West
Coast to be able to export some of the Alberta oil," he said, speaking on
a panel yesterday, the last day of the conference.
Even moving a small amount of that oil, largely heavier grades from the
oilsands, would help boost Alberta's economic position, he said.
"I would not say that pipeline is going to make a fortune, unless it was
going to bring oil south to California, which I think one day is going to
be inevitable," he added.
There are several proposals for new pipelines to the West Coast, but
projects have stalled as China's much-touted appetite for oilsands crude
has failed to materialize.
However, interest has risen again after PetroChina International
Investment Co. Ltd. snapped up a majority stake in Athabasca Oil Sands
Corp. for $1.9 billion, marking the largest venture by China in the
Canadian oilsands to date. It also appears that Enbridge Inc. has dusted
off its proposal for the Gateway
project, a twin line that would transport oil between Kitimat and
Alberta's oilsands.
Katinas said China's growing energy demand is notable, but the main market
for Canada will still be the United States.
"There's always talk of building a pipeline, putting it on a ship and
sending it to China," he added.
"However one thing we need to keep in mind, oil is a global commodity and
in the absence of political or any other interventions, oil will always
find its natural and common-sense home -- and for Canadian oil, that is
the U.S."
At the same time, pipeline proposals to ship more oilsands production
south of the border are facing increased U.S. opposition.
Fellow panellist David Hill, former general counsel for the U.S.
Department of Energy, said the U.S. administration appears to have sent a
message of support with the recent approval of Enbridge's Alberta Clipper
pipeline, which will ship oilsands crude to the American Midwest.
The line has faced criticism for bringing in emissions-intensive oil at a
time when the U.S. is trying to reduce its carbon footprint.
"The environmental lobby, of course, is very strong influence on this
administration," said Hill.
But he noted there are still many instances where environmental challenges
of projects, especially pipelines, are being decided by judges rather than
permitting agencies.
Consumers and policy-makers in Washington take for granted the safe and
reliable source of oil that Canada is, Hill said.
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