While environmental issues hold up approval of the Keystone XL pipeline in the Obama administration, one key fact is ignored.
Tar sand oil is going to flow from Alberta’s Athabasca Basin, regardless of where pipelines are built. Effectively, concerns over the resulting pollution are pointless to consider in the U.S.A. because the net effect will be the same.
The ‘Plan B’ pipeline could even be a bigger problem, according to Canadian environmental groups, because it would be longer than Keystone XL and carry more oil.
The alternative proposal is called Energy East, and involves building a 2,858 mile west to east pipeline from the Alberta tar sands over to an Atlantic port in Saint John, New Brunswick.
At a cost of $10.8 billion, the proposed pipeline would pump 1.1 million barrels per day. 1,865 miles of converted natural gas pipeline would meet up with newly constructed pipeline along the Saint Lawrence River.
The pipeline could be built and fully operational by 2018, and the oil industry can’t wait until either Keystone XL or Energy East is complete.
The Keystone XL delays in the U.S.A. caused supplies to build-up and prices to drop. The Canadian Imperial Bank of Commerce estimated the situation cost Canada about $23 billion in oil revenues in 2012.
At the heart of the proposal is one of Canada’s richest families. Since 2012, the billionaire Irving family has been advocating for the Energy East pipeline. Not the least of the reasons why is the potential business it will bring to Irving Oil.
The proposed endpoint for the pipeline would be a marine terminal the family would build to access foreign oil markets and greatly reduce costs for the Irving’s refinery in New Brunswick.
Irving Oil also still possesses a shelved refinery project with energy giant BP, for which it still holds a valid Environmental Impact Assessment.
Combined with the East coast’s only deep water port for oil tankers and Canada’s largest refinery, Irving Oil has the potential to create a world-class petrochemicals hub, if the oil flows to New Brunswick.
In October 2012, representatives from Irving Oil and New Brunswick’s government traveled to Calgary to present the alternative pipeline to Canadian provincial energy officials, executives from TransCanada, and representatives from Canadian Natural Resources, Imperial Oil, Suncor, and Shell Canada.
The proposal gained immediate traction due to keen interest in getting Alberta’s oil efficiently to the world market, paving the way for higher prices and the potential for expanded production.
New Brunswick’s legislative assembly voted unanimously to endorse “construction of a west-east crude oil pipeline to bring western crude oil to Saint John” eight months before the project was officially unveiled and a mere two months after the meeting in Calgary.
Canada will get the Alberta sand oil flowing, regardless of the route it takes. The resistance to pipelines is much lower in Canada’s more conservative government.
Considering environmental concerns are a wash at best – or even greater for the ‘Plan B’ option – only question remains: Will the U.S.A. see a boost in business at it’s refineries, or will Irving Oil capture all the benefits?
