Pipelines seen limiting Canadian oil sands growth

Nick Snow
Washington Correspondent

WASHINGTON, DC, June 6 -- Pipeline capacity could pose a greater constraint on future Canadian oil sands development than water or natural gas availability, government officials suggested on June 6.

"Pipeline capacity will be tight by 2007. There will be some incremental increases from then until 2009. Beyond that, more capacity will be needed," said Colette Craig, a resource analyst with the Canadian National Energy Board.

Refiners in Canada and the US Upper Midwest, Rocky Mountains, and Washington state are poised to take more crude oil, and export pipelines already have expanded in response, she said.

But future export pipeline growth will depend on factors ranging from overseas competition to blends required for transportation and by environmental standards, Craig said.

"We have identified a number of refinery expansions. Some have been delayed, but with the widening differential between light and heavy crude oil, they may be accelerated," she said.

Her observations came during a presentation in Washington, DC, by three Canadian federal officials on NEB's latest oil sands outlook, which was released on June 1.

That outlook forecasts production from oil sands growing to 3 million b/d by 2015, a 40% increase from the 2.2 million b/d estimate in a report issued 2 years ago (OGJ Online, June 2, 2006). Canada's oil sands production in 2005 was roughly 1.1 million b/d, NEB said.

'A major component'
"Oil sands are going to be a major component of the energy supply picture out to 2030," predicted John McCarthy, the NEB commodities unit business leader, who led the presentation at the Center for Strategic and International Studies.

Proposed new projects are divided roughly evenly between in-situ recovery and mining, with a little more weight on mining, NEB resource analyst Bill Wall said following the presentation.

Each method can present problems, noted Murray Smith, Alberta's Washington-based minister-counselor. In-situ recovery has less visible environmental impact and requires less extensive reclamation than mining but consumes more water and gas.

About 2.5-4 bbl of water are required to produce each barrel of bitumen from oil sands, McCarthy said. Efforts are under way to use water more effectively by recycling it, storing it, or using less pure water, he added.

"You're likely to see that conditions for approval of many new mines will include better water management. It's not so much a matter of running out of water along the Athabasca River than it is maintaining its environmental integrity," McCarthy said.

Smith said ponds near oil sands mines in Alberta contain about 100 million cu ft of water. "There is technology using gypsum to break down the oil sands tailing fines in the ponds, but it's expensive," he said.

He said the province's energy utilities board includes water management requirements in permits. "Progress is being made. I think it's possible that the size of the ponds will be reduced in another 5 years," he said.

Wall said almost all new in-situ recovery processes use steam-assisted gravity drainage instead of cyclic steam generation. Production by both mining and in-situ methods is expected to consume 2.1 bcfd of gas by 2015, the report said.

Supplies from the Western Canadian Sedimentary Basin should be able to meet that need, McCarthy said. "The last 2 years have shown how dramatically conditions can change. It's possible even less gas will be needed to produce bitumen from oil sands. The market will dictate where it's used," he said.

Contact Nick Snow at nsnow@cox.net.

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

Quicksilver Canada gets LNG export approval

07/02/2015 Quicksilver Resources Canada Inc. has received approval from the National Energy Board of Canada to export 20 million tonnes/year of LNG from a pos...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Origin lets contract for Otway basin fields

07/02/2015 Origin Energy Ltd., Sydney, has let a $1.3 million (Aus.) contract to Wood Group Kenny for provision of a detailed engineering design for the onsho...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...
White Papers

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by
Available Webcasts


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected