• 4 minutes Pompeo: Aramco Attacks Are An "Act Of War" By Iran
  • 7 minutes Who Really Benefits From The "Iran Attacked Saudi Arabia" Narrative?
  • 11 minutes Trump Will Win In 2020
  • 15 minutes Experts review Saudi damage photos. Say Said is need to do a lot of explaining.
  • 14 hours Iran Vows Major War Even If US Conducts "Limited Strikes"
  • 4 mins Ethanol, the Perfect Home Remedy for A Saudi Oil Fever
  • 12 hours Europe: The Cracks Are Beginning To Show
  • 1 hour Hong Kong protesters appeal to Trump for support.
  • 13 hours Memorize date 05/15/2018 cause Huawei ban is the most important single event in world history after 9/11/2001.
  • 9 hours Ban Fracking? What in the World Are Democrats Thinking?
  • 3 hours Millennials: A boil on the butt of the work ethic
  • 22 mins A little something for all you Offshore swabbies
  • 11 hours When Trying To Be Objective About Ethanol, Don't Include Big Oil Lies To Balance The Argument
  • 13 hours LA Times: Vote Trump out in 2020 to Prevent Climate Apocalypse
  • 4 hours Shale profitability
  • 2 hours US and China are already in a full economic war and this battle for global hegemony is a little bit frightening
  • 4 hours Saudi State-of-Art Defense System looking the wrong way. MBS must fire Defense Minister. Oh, MBS is Defense Minister. Forget about it.
  • 22 hours Yawn... Parliament Poised to Force Brexit Delay Until Jan. 31
  • 9 hours Let's shut down dissent like The Conversation in Australia
Nick Cunningham

Nick Cunningham

Nick Cunningham is an independent journalist, covering oil and gas, energy and environmental policy, and international politics. He is based in Portland, Oregon. 

More Info

Premium Content

Key Pipeline Could Unleash Alberta’s Oil Sands

Canadian energy regulators handed a win to Alberta’s oil sands producers last week, recommending approval for a major oil pipeline expansion to the Pacific Coast.

Canada’s National Energy Board determined that the expansion of the Trans Mountain pipeline is in the public interest, handing the project’s developer, Kinder Morgan, a key victory. Kinder Morgan already operates an existing pipeline that runs from Alberta to British Columbia, moving 300,000 barrels of oil per day to the coast. But the company is trying to expand the pipeline by running a twin line that would nearly triple capacity to 890,000 barrels per day. Kinder Morgan’s share price jumped by more than 3 percent on news of the NEB decision.

The pipeline is one of a handful of major projects that Alberta’s oil industry is desperate to push forward. The lack of pipeline capacity is holding back Canadian oil exports, and the dearth of pipeline space forces Canadian oil to sell at a discount to major oil benchmarks. Heavy Canadian oil from Alberta recently traded more than $14 per barrel lower than WTI. More pipeline capacity will allow oil sands producers to sell oil at a higher price.

There are several other proposed pipelines that have run into a wall of opposition: the Northern Gateway, a separate project that would run from Alberta to British Columbia; Energy East, a project that would span most of the continent from Alberta to the Atlantic Coast; and of course, the defunct Keystone XL project that would run south to the U.S.

“The NEB is sending a clear message to Canada: building the infrastructure to get our resources to market is in the best interest of our country,” Tim McMillan, the CEO of the Canadian Association of Petroleum Producers, said in a statement, calling the decision a “milestone.”

The $6.8 billion Trans Mountain expansion is not a done deal yet. The NEB recommended approval, but the government of Prime Minister Justin Trudeau still needs to give a final up or down decision. The Trudeau government has stepped up environmental scrutiny of major energy projects, demanding that they meet stricter limits on greenhouse gas emissions. And as part of the NEB’s recommendation for approval, the pipeline needs to meet 157 conditions related to the project’s environmental impact and its effects on the lands of First Nations. Related: The Wildest Predictions For Oil Prices In 2016

Moreover, several major constituencies, including the city of Vancouver, still vociferously oppose the project. Vancouver Mayor Gregor Robertson said that the public benefits of the pipeline expansion cited by the NEB were “laughable,” and vowed to keep up opposition to the project. “There’s nothing the company could do to make this acceptable to the West Coast,” Mayor Robertson said, according to the Financial Post. And the mayor of Burnaby, where the pipeline will terminate along the coast, said the NEB’s “conditions are meaningless.” Coastal communities are concerned about potential oil spills both on land and offshore, as well as the expected five-fold increase in tanker traffic along the coast.

Prime Minister Justin Trudeau has until the end of the year to decide on the fate of the project. His administration has a much greener hue than his predecessor’s, which makes approval uncertain. But the country’s economic struggles following the collapse of oil prices – as well as Alberta’s calamity from wildfires, which have cut off more than 1 million barrels per day of oil production for more than two weeks – is putting pressure on the Trudeau government to throw a bone to the oil industry.

The Trans Mountain pipeline expansion offers the first big pipeline decision that the Trudeau government has to make. He has heartened greens with skeptical remarks towards the benefits of the industry’s pipeline proposals, but if any project is to move forward, Trans Mountain probably tops the list because it will run parallel to an existing route. Related: Argentina Makes Good On Debts With These Energy Giants

But Trudeau has also emphasized the rights of indigenous communities with much greater enthusiasm than previous governments, and approving the project will shatter the good will that he has built up with First Nations. He has appointed a three-person panel to consult with indigenous communities along the pipeline route, and the results of the consolations will be reported to the government by November, shortly before Trudeau must make a final decision. If approved, construction could begin in 2017 with completion targeted for the end of 2019.

As a May 22 op-ed in The Toronto Star astutely points out, the Prime Minister will be forced to make a decision between the oil industry on the one hand, and the coastal and indigenous communities on the other. Ultimately, he will upset one side.

By Nick Cunningham of Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • kjk on May 24 2016 said:
    "the Prime Minister will be forced to make a decision between the oil industry on the one hand, and the coastal and indigenous communities on the other". The indigenous communities are >7 billion strong since that's the number of people who have to deal with climate change. Once we leave our native Earth (Mars colony, etc) we won't have to deal with fossil fuels anymore. But for now that's a LOT of aborigines.
  • jobingo on May 24 2016 said:
    the indiginous communities are NOT 7 billion strong. Many of us ( contrary to YOUR belief,) think the GW THEORY is a farce. Drill, BABY DRILL !!!!

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play