• 4 minutes US-backed coup in Venezuela not so smooth
  • 7 minutes Why Trump will win the wall fight
  • 11 minutes Oil imports by countries
  • 13 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 4 hours Climate Change: A Summer of Storms and Smog Is Coming
  • 21 hours Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 22 hours The Quick Read On MBS's Tour of Pakistan, India And China
  • 23 hours Iran Starts Gulf War Games, To Test Submarine-Launched Missiles
  • 22 hours BMW to add 2,000 more jobs at Dingolfing plant
  • 21 hours Teens For Climate: Swedish Student Leader Wins EU Pledge To Spend Billions On Climate
  • 2 days Itt looks like natural gas may be at its lowest price ever.
  • 1 day Saudi A to Splash $100 Bln on India
  • 23 hours Venezuela: Nicolas Maduro closes border with Brazil
  • 2 hours Washington Eyes Crackdown On OPEC
  • 2 days Amazon’s Exit Could Scare Off Tech Companies From New York
  • 20 hours Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
  • 1 day NEW FERUKA REFINERY
No End In Sight For Libya’s Oil Struggles

No End In Sight For Libya’s Oil Struggles

Libya’s oil production continues to…

A Worrying Trend For International Oil Giants

A Worrying Trend For International Oil Giants

Fitch has awarded Abu Dhabi’s…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

More Info

Pipeline Bottleneck for Canada-U.S. Routes Costs $5 Per Barrel

pipeline construction

The widening gap between supply and demand for pipeline capacity linking Canada and the United States is causing higher fuel costs in North America, according to a new report from the C.D. Howe Institute.

Oil and gas producers in the north are struggling to stay competitive because of rising transportation costs as pipeline projects fail to materialize time and time again. Canada plans to create a new system for the approval of major energy projects.

"If Canadian governments allowed pipelines to be built expeditiously, the competitiveness of western Canadian oil producers would be greatly improved," Benjamin Dachis of C.D. Howe said.

Carbon taxes tend to get the most media attention, but the measures do less to stifle competitiveness than pipeline capacity shortages, the researcher said. The study estimates that the bottleneck cuts profits by around $5 a barrel when all is said in done.

New projects in Canadian oil sands tighten competition further. The Fort Hills oil sands project in Alberta, Canada, achieved first oil this week, with production expected to ramp up over the coming months to 180,000 bpd, France’s Total—which holds 26 percent in the project—said on Monday.

Existing pipelines are facing scrutiny from U.S. regulators as well. TransCanada said earlier this week that U.S. regulators are still requiring the Keystone pipeline to operate at 80 percent capacity after the key vein suffered a 5,000-barrel leak a couple of months ago.

TransCanada said last week it had secured 500,000 bpd worth of 20-year commitments from shippers willing to use its future Keystone XL pipeline in an upbeat update on the progress of the notoriously controversial project. This amount is about 60 percent of the 830,000-bpd pipeline. The company has seen share prices surge as the pipeline’s prospects seem rosier, but the company still needs to make a final investment decision on the project.

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News