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Oilsands Bitumen Will Travel South Regardless of Kerry Pipeline Decision: Options Are Rail, Barges and Tankers.
10 February 2013
(CRC)—“I hope we will be in a position to make an announcement [on the Keystone XL pipeline] in the near term”, said John Kerry, with Canada’s minister for External Affairs John Baird at his side, at a State Department press conference last Friday . Canadian tar sands oil producers are lobbying the U.S. Congress but are not holding their breath. Even if the Obama administration were to give the green light for Canada to build its Keystone XL pipeline, oil flowing through it would only begin sometime in 2015. A CIBC recent report estimates that overall pipeline delays are costing Canadian oil producers as much as $33 billion a year. In the meanwhile, here are the alternative shipping routes to the United States that Canadian oil companies have already opened up or are considering initiating soon: Rail and Barges: Southern Pacific Resources is shipping tar sands bitumen from Lynton rail yard south of Fort McMurray via leased tanker cars from CN Rail to Natchez, Miss. were it is loaded on a Mississippi barge with destination being refineries in Louisiana. This strategy avoids public hearings and the environmentalist’s protests (for now). Another Canadian oil producer, MEG Energy Corp. is also using this rail-barge combination. With a comparatively small production output of 32,000 barrels a day, MEG is not constrained like larger producers ‘who are constrained by limits on volumes of oil that can be moved by rail or barge”. Rail and Tankers: Discussions are underway to use Canada’s Port of Churchill, on the west coast of Hudson Bay, to gather oil by rail from across Alberta, to be loaded on Panamax-class tankers for deliveries to East Coast and Gulf Coast refineries. [GG] |