Alberta oil would likely fetch a lower price, not the “tidewater premium” fossil boosters have claimed, if projects like Kinder Morgan’s Trans Mountain pipeline expansion brought more product to the British Columbia coast for transshipment to Asia, energy resource specialist David Hughes concludes in a report released last Wednesday by the Parkland Institute and the Canadian Centre for Policy Alternatives.
“My research shows that Canada’s oil is not being unfairly discounted by the U.S.,” Hughes said. “Oil prices internationally and in North America are now nearly identical. That means Canadian crude producers are likely to receive lower prices overseas than in the U.S. because of the higher transportation costs involved in transporting bitumen by pipeline to B.C.’s coast and then exporting it by tanker.”
The report, produced as part of the CCPA- and Parkland-led Corporate Mapping Project, “finds several assumptions used in the National Energy Board’s recommendation for the Trans Mountain were also faulty, including ‘overly optimistic projections of future oil supply’ that ‘did not consider the Alberta government’s cap on oilsands emissions,’” DeSmog Canada reports.
After factoring in production limits that will result from Alberta’s 100-megatonne annual cap on tar sands/oil sands emissions, Hughes concludes that “Kinder Morgan overestimated oil supply by 43% in 2038.” The need for Trans Mountain has also been eroded by the Trudeau government’s approval of Enbridge’s Line 3 project and Donald Trump’s resurrection of the Keystone XL pipeline.
“If these projects are built,” Hughes wrote, “which seems likely, there will be a 13% surplus of export pipeline capacity” without Trans Mountain.