Diversifying markets for Canadian oil production is vital to ensure Canada receives full value for its natural resources.
Bitumen and oil are transported by a network which involves all modes of transportation; pipelines, rail, marine and trucks.
Today, essentially all of Canada’s oil exports go to one customer – the United States. Access to multiple customers beyond the United States is crucial to strengthen Canada’s energy future.
The West Coast is a critical outlet for Canadian oil and natural gas to reach new customers. Asian markets are an eight-day to an 11-day sail from proposed West Coast terminals – which is two days faster than most international competitors. Canada is well-positioned to meet the growing demand for oil in developing markets in India, China and Southeast Asia with safe, reliable and responsibly-produced oil, but only if Canadian oil can access tidewater.
Eastern Canada currently imports oil from foreign suppliers. Currently, over half of the oil used in Quebec and Atlantic Canada is imported from foreign sources and in 2016, Canada spent more than $19 billion to import foreign oil from the United States, Algeria, Saudi Arabia, Venezuela, Nigeria, and Norway.
Pipelines are the most efficient method of transporting large quantities of oil. Today, Canada has limited pipeline infrastructure to move oil from Western Canada to Eastern Canada and beyond to global customers.
Over the next few years, oil supply is expected to exceed existing capacity, requiring expansions and new pipelines to access new and existing markets. Canada needs more pipelines in all directions to move our growing oil supply to more customers.
A number of pipeline projects are proposed to connect the growing supply with growing markets in India, China, and to continue supporting the U.S.
Source: CAPP, 2017
More than 830,000 kilometres (km) of pipelines crisscross country and they are all regulated. The federal government regulates about 10 per cent of Canada’s pipelines, or more than 73,000 km, which are primarily transmission pipelines. The remaining pipelines are regulated provincially.
Types of pipelines
- Gathering Pipelines: 250,000 km of pipeline move crude oil and natural gas in producing areas from the well to oil batteries or natural gas processing facilities.
- Feeder Pipelines: 25,000 km of pipeline, found primarily in producing areas in western Canada, transport crude oil, natural gas, and natural gas liquids (NGLs) from collection points (batteries), processing facilities, and storage tanks to transmission pipelines.
- Transmission Pipelines: 100,000 km of pipeline move crude oil and natural gas within provinces and across provincial or international boundaries.
- Distribution Pipelines: 450,000 km of pipeline are operated by local distribution companies, deliver natural gas to various industries, homes and businesses.
Pipelines are a safe and environmentally responsible way to move oil and natural gas. 99.999 per cent of all oil and natural gas products transported through transmission pipelines reach their markets safely (source: CEPA 2017).
In Alberta, where the Alberta Energy Regulator (AER) manages provincial pipelines, performance is continuously improving. AER data indicates that over the last decade, the number of pipeline incidents declined 44 per cent while the length of pipelines grew 11 per cent.
In addition to adhering to all regulations to ensure safe transport of energy, industry also follows best management practices to help manage pipeline corrosion and operating in high impact areas.
Oil tankers have been moving safely and regularly along Canada’s West Coast since the 1930s. Each year, about 580 million barrels of oil are safely transported along Canada’s East and West coasts via tanker. (Source: Transport Canada, 2016) Access to tidewater gives Canadian oil access to U.S. and overseas markets.
- Clear Seas
- Chamber of Shipping B.C.
- The Western Canada Marine Response Corporation
- Transport Canada Marine Safety
- Eastern Canada Reponses Corporation
All ships transporting oil are regularly inspected against strict international standards. In Canada, 100 per cent of all oil tankers are double-hulled. Large, single-hulled tankers were prohibited in 2010 and can no longer operate in Canadian waters. Double-hulled means the bottom and sides of a vessel have two complete layers of water-tight hull surface. (Source: Transport Canada, 2016)
Although safety regulations make the probability of a spill extremely low, detailed response protocols are in place. Canadian legislation is based on the “polluter pays” principle. Although probability of a spill is extremely low, a total of $1.36 billion per incident is in place to cover cleanup costs. Learn more about funding for spill response and insurance.
In the unlikely event there is an incident, the Western Canada Marine Response Corporation (WCMRC) is certified by Transport Canada to respond to crude oil spills up to 10,000 tonnes (65,000 barrels within a prescribed time). WCMRC has a fleet of more than 40 emergency response vessels, with the latest response equipment, and maintains a network of response bases, equipment and personnel across coastal B.C.
Rail remains an important piece of the transportation network, allowing producers the flexibility to move to different markets in response to demand opportunities. It also complements pipeline capacity and provides an alternative for markets without pipeline connections.
In recent years, rail transport of oil has grown as an alternative mode of transportation to accommodate the rapid growth from new supply regions that quickly exceeded available pipeline capacity. In 2016, about 100,000 barrels per day of oil were moved by rail. Rail loading capacity in Western Canada is currently about 754,000 barrels per day. (Source: CAPP)
In 2015, measures were taken by U.S. and Canadian governments to enhance and align standards for rail safety. Ongoing safe transport of hydrocarbons is in the interest of oil and natural gas producers and all Canadians – so the industry can continue to deliver jobs and economic benefits.