TAYLOR: Low-cost oil from the West piped to the Maritimes? Bring it on1/30/2013
Support is building for a cross-country pipeline that would bring Alberta light crude and oilsands bitumen upgraded to synthetic crude to the East Coast.
Itís about time Nova Scotia got on that bandwagon.
The sooner lower-priced western oil is brought into the Maritimes, the greater the chance that it will positively affect local energy prices. And all sources of energy, not only hydroelectricity, are important factors in future economic development in Atlantic Canada.
For those who havenít been following this issue, Trans-Canada Corp. is contemplating spending $5 billion converting an underutilized east-to-west gas pipeline to ship light crude from Alberta to the Ultramar refinery in Quebec City and potentially to Saint John, where Irving Oil operates the largest refinery in the country.
Besides the 300,000-barrel-a-day Irving refinery, the New Brunswick option would provide western producers with access to a deepwater port. That means the Port of Saint John could be used to ship unrefined Alberta crude to high-priced markets in Europe and elsewhere.
Iíve read estimates that suggested that tankers loading in Saint John could carry as much as one-million barrels a day, brought to the East Coast via the TransCanada pipeline.
Enbridge Inc., meanwhile, has applied to reverse its Line 9 oil pipeline, which currently brings imported crude from Quebec to Ontario. By reversing the line, Enbridge is proposing to deliver 240,000 barrels of western crude to the Suncor refinery in Montreal.
TransCanada has not yet asked for permission for its pipeline reversal and extension to Saint John, but the National Energy Board is expected to hold hearings on the Enbridge proposal as early as this fall.
It is interesting to read what people are saying in Western Canada about the TransCanada plan. It shows how little some people know about the Maritimes.
For instance, I read in one report that an oil pipeline would allow a deepwater port to be created in Saint John and that Saint John is the only place where oil could be shipped from.
It should be pointed out that Imperial Oil is trying to sell its aging 85,000-barrel-a-day refinery in Dartmouth that has access to one of the largest deepwater ports in the world. There is also a deepwater port at the Strait of Canso, where Gulf Oil once operated a refinery.
Not only could the low-cost oil from the west help to lower energy costs in this region, it could encourage Irving to revive its plan to twin its refinery in Saint John, adding hundreds of new jobs to the region.
It is easy for Nova Scotia Premier Darrell Dexter to write off the pipeline proposal as a New Brunswick issue, because there isnít much chance the line will be extended to this province. But more and more these days, projects in one Atlantic province have influence in a neighbouring one.
A larger refinery in New Brunswick would use more natural gas from Nova Scotia as a feed stock for various petroleum products, thus encouraging exploration for natural gas off the Nova Scotia coast. There could be spinoff industries from the refining of western crude that could be located in Nova Scotia, where there is easy port access.
Premier David Alward of New Brunswick will soon be visiting Alberta Premier Alison Redford to show just how anxious he is to bring the Alberta crude east.
The best thing Alward could do, however, is broker a deal between Irving and TransCanada.
(Roger Taylor/The Chronicle Herald)