The oil and gas deposits in Western Canada are a long term generator of wealth for all Canadians, including those who whine about the oil sands. We are an oil exporter and as such we need to do what’s necessary to maximize our profits by opening new markets.
Now that Enbridge is looking west through its Northern Gateway pipeline project, Transcanada is looking east through the conversion of the Canadian Mainline natural gas transmission that extends from the Alberta/Saskatchewan border east to the Qu??bec/Vermont border.
The project is ‘technically and economically’ feasible, the company’s president and CEO said during a third quarter earnings call.
The cost of reversing the pipeline would be in the $5 billion range, a similar cost to the Northern Gateway pipeline. It would be able to ship anywhere between 500,000 to 1 million barrels of crude.
Opening new markets for our western oil producers should be the number 1 priority of our federal political establishment. Besides the economic benefits in terms of revenue and employment, we would no longer be under the mercy of price differentials and lowers risks to supply due to an Arab spring like event in the future.
Refineries on Canada’s East Coast import approximately 600,000 barrels per day or about 44% of their feedstock from the likes of Saudi Arabia, Nigeria and Libya. As an east coaster, I hate being reminded of my money ending up in a kingdom that is an example of religious tolerance, human rights and an exporter of Peace Corps activists.
The idea of sending crude east is essentially leveraging existent infrastructure (pipeline + refineries). The Main Pipeline is facing competition from the??north-eastern??US natural gas export market (Marcellus Shale). The project would require a good chunk of investment in significant refinery upgrades in order to handle heavy oil from Alberta.
A commercial decision is expected in early 2013.