Oil Sands Truth: Shut Down the Tar Sands

US Refineries to Double Tar Sands intake by 2015: CAPP

As the first new refinery in the US for 30 years was announced recently, it is worthy to note the number of new ones that are planned for the future increase in tar sands production. They are needed, since the US sees the tarsands as "domestic" production.


US refinery demand for Canadian crude to double by 2015: CAPP


CALGARY (CP) _ U.S. refinery demand for western Canadian crude oil is projected to almost double by 2015, the Canadian Association of Petroleum Producers says in its annual outlook.

That expected growth will require additional pipeline capacity to meet demand from new and existing markets, says the report released Monday.

''It's very important that pipeline capacity is available on a timely basis and that refineries are able to process both the higher volumes and the changing mix,'' of crude oil types, said Greg Stringham, vice-president of markets and fiscal policy.

Stringham noted that a huge emerging issue for the industry is the variety of crude oil, from traditional conventional crude oil to oilsands upgraded light synthetic crudes and heavy oil blends.

In a recent survey of refineries in traditional markets and some new potential areas, CAPP found demand from American refineries is expected to jump from 1.6 million barrels a day in 2006 to 3.1 million barrels a day in 2015, with an emphasis on heavy crude oil. Growth from Canadian refineries is expected to rise from 765,000 barrels a day in 2006 to almost 1.1 million barrels a day in 2015. That demand is split between heavy crude and light synthetic.

The report noted oilsands development in northern Alberta will have a major impact on pipeline needs in a very short time.

''In light of the expected growth in oilsands supply after 2011, industry will need to decide in the near future on numerous crude oil pipeline options,'' says the report, noting that lead time for regulatory approval and construction is at least four years.

Several pipeline proposals to move oilsands crude south are awaiting regulatory hearings or approval from Canada's National Energy Board.

Canadian refineries with access to Western Canadian crude can process almost 1 million barrels a day, while the United States has the capacity to process more than 17 million barrels a day.

''The major growth is expected to be conventional medium sour and heavy crude oils,'' the outlook says, noting that Canada supplied 12 per cent of U.S crude oil requirements in 2006, ahead of Mexico and Saudi Arabia.

That rise reflects Canada's closeness in geography to the U.S., as well as a secure supply from a safe geopolitical state, CAPP says.

Oilsands production surpassed traditional crude production in 2006 for the first time.

''Current oilsands production makes up roughly half of western Canada's total crude oil production and is expected to grow from roughly 1.1 million barrels a day in 2006 to approximately 3.4 million barrels a day in 2015 and 4.4 million barrels a day in 2020,'' says the outlook.

Although most mined bitumen is eventually upgraded into synthetic crude oil, the vast majority is currently shipped raw to other markets for refining. But this trend is expected to change somewhat as oilsands developers have proposed building upgrading operations alongside the insitu productions.

However, Alberta's labour-strapped market and inflationary economy are causing some companies to rethink their upgrading and expansion plans. A provincial government review of royalty rates, expected to be released by early September, could also have an impact on corporate agendas.

CAPP's projections are based on having enough pipeline capacity _ which is also impacted by the shortage of skilled workers. A more moderate growth strategy, slowed perhaps by cost increases and availability of labour, could scale back those numbers.

The forecast also says conventional crude oil is expected to drop by 400,000 barrels a day. Although East Coast crude oil production is expected to rise this year, that will gradually decline over time.

Oilsandstruth.org is not associated with any other web site or organization. Please contact us regarding the use of any materials on this site.

Tar Sands Photo Albums by Project

Discussion Points on a Moratorium

User login


Syndicate content