Pipelines are to a landlocked oil economy what supply lines are to invading armies: critical to success but vulnerable to attack.
Canada's prairie oil producers – led by Alberta but including Saskatchewan and now Manitoba – have been wildly favoured in geology but less so in geography. While the provinces are enjoying a boom in production from oil sands and new light oil prospects, they are located far from the massive refining hub on the U.S. Gulf Coast, and far from ocean ports that would allow them to reach energy-hungry customers overseas.
Government and industry are now frantically looking for options. Companies are pursuing a series of pipeline projects through the U.S. and moving west and east in Canada. Recently, they have talked about ambitious plans to use rail cars and river barges to get their oil to market – even shipping crude by rail to Alaska to reach the Pacific.
But their pipe dreams have drawn fierce opposition from environmentalists and some first nations communities, and the regulatory process has at times bogged down.
The current lack of pipeline access is exacting an enormous cost on Canada, and especially Alberta, by driving down the price that Canada reaps for its oil, the country's most valuable export by far. Alberta has long depended on central Canada and the middle of the United States as its oil markets. But those regions are now saturated with crude from booming North American production, and the glut has driven down prices.
That in turn has blown a $6-billion hole in the province's budget, and will result in lower corporate tax revenues for Ottawa.
As protesters flooded Washington this weekend to demand President Barack Obama turn down a proposal to build a major pipeline through the U.S. heartland to the Houston-area refineries, Alberta politicians and industry officials were scrambling to promote other export pipelines, and even rail links.
Proponent: TransCanada Corp.
Volume: 850,000 barrels per day, which is about 85 per cent of the capacity of Canada's existing main export pipeline to the U.S.
Destination: Texas Gulf Coast, home to the world's largest refining market
State of play: The U.S. government is still considering environmental, economic and security implications after Nebraska approved a new route.
Decision expected: TransCanada had hoped for a ruling by March 31, but it is now not expected before the end of June, at the earliest.
Opposition: U.S. environmental groups have targeted the pipeline as a litmus test in President Barack Obama's promise to address climate change. Opponents say it will make U.S. more dependent on a carbon-intensive type of fuel.
Pipe dream: Prime Minister Stephen Harper once called Keystone a "no-brainer," but handicappers would now give it no better than 50-per-cent chance of approval.
LINE 9 REVERSAL
Proponent: Enbridge Inc.
Volume: 300,000 barrels per day.
Destination: Montreal, home of Suncor Energy's refinery
State of play: Enbridge wants to reverse a line that had been delivering imported oil to southwestern Ontario, allowing it to send Western Canadian crude to Montreal to be refined. It has filed an application with the National Energy Board, which last year approved Enbridge's first phase in the project, reversing the flow of the line from Sarnia, Ont., to Imperial Oil's refinery at Nanticoke, Ont.
Decision expected: Following new federal rules enacted last spring, the regulator has until March, 2014 to make a decision.
Opposition: Canadian environmental groups intervened to oppose Enbridge's previous reversal of an Ontario portion of the Line 9 pipeline, but new federal rules will limit their involvement in this application.
Pipe dream: Because Enbridge is reversing an existing line, odds are very good the project will be approved.
WEST TO EAST PIPELINE
Proponent: TransCanada Corp.
Volume: 500,000 to 1 million barrels per day
Destination: Quebec, possibly Saint John, N.B., home of the 325,000-barrel-per-day Irving Oil refinery and a deep-water port that would facilitate ocean-bound exports
State of play: TransCanada says the project – which would convert an existing, under-utilized natural gas pipeline – is commercially viable and the company is now looking to line up support from producers who would need to commit to ship oil on the line. An application to the National Energy Board would follow.
Decision expected: Assuming producer support, the company expects to file later this year, and the regulator would then have 18 months to consider the application.
Opposition: Canadian environmental groups are gearing up to oppose the pipeline, and hope for an ally in the Parti Québécois government, but Premier Pauline Marois has so far been neutral to positive on the project.
Pipe dream: So long as oil producers support it, TransCanada is likely to win approval for transforming its natural gas line to oil as far as Montreal. It faces tougher odds to extend the line to Quebec City or Saint John, since it will need to build a new pipeline, which always attracts greater opposition.
Proponent: Enbridge Inc.
Volume: 525,000 barrels per day of exported oil sands bitumen, 193,000 barrels per of imported diluent, an oil-based solvent used as a thinning agent so the thick, heavy bitumen can be shipped by pipeline
Destination: Kitimat, the small British Columbia town at the head of the Douglas Channel. Super tankers would deliver oil to refineries in Asia and California.
State of play: Enbridge is mid-way through regulatory review, and has received financial support from major oil companies and foreign refiners interested in shipping crude on the line.
Decision expected: The National Energy Board has been mandated to provide a decision by the end of 2013.
Opposition: Environmental groups and first nations in B.C. and across Canada have placed massive emphasis on blocking Gateway. The B.C. government has given the project a cool reception, releasing five conditions for its support of a new oil pipeline. Legal challenges are expected if Gateway gains regulatory approval.
Pipe dream: With implacable opposition from some first nations and the B.C. New Democratic Party – which is favoured to win a May election – Enbridge faces extremely long odds in getting Gateway built.
TRANS MOUNTAIN EXPANSION
Proponent: Kinder Morgan
Volume: 590,000 barrels per day (current pipeline is 300,000 barrels per day; expansion will take it to 890,000)
Destination: Burnaby, B.C., home of Kinder Morgan's Westridge Marine Terminal, where smaller tankers would take Canadian oil primarily to California, although Asian shipments are also possible
State of play: Kinder Morgan is mid-way through an application asking the National Energy Board to approve commercial tolls for the project. A formal application seeking authority to build the expansion is expected later this year.
Decision expected: Depending on when Kinder Morgan applies, the regulatory review could be completed by 2015, with construction starting in 2016 and operations commencing in 2017.
Opposition: Local forces have begun to marshal against the project, including some first nations and the mayors of Burnaby and Vancouver. British Columbia's provincial leaders – Premier Christy Clark and Adrian Dix, the NDP Leader expected to gain power this year – have not yet made public their thoughts on the expansion.
Pipe dream: TransMountain hopes its route to approval will be less contentious than the Gateway brouhaha, but the line ends at the waterfront near Vancouver and there is much local opposition to the increased tanker traffic it would bring. 50-50, at best.
ENBRIDGE MAINLINE EXPANSIONS
Proponent: Enbridge Inc.
Volume: 1 million barrels per day by 2015
Destination: The U.S. Midwest, Gulf Coast and possibly eastern seaboard
State of Play: Enbridge carries the bulk of Canada's oil on its complex Mainline network of pipes. The company is mid-way through a broad expansion of that network to push more oil through. It will come in several stages, as Enbridge adds more pumping stations to a number of existing pipelines. It hopes to add 300,000 barrels per day this year, another 600,000 barrels per day in 2014 and one million in total by 2015.
Opposition: Because the pipelines are already built, the Enbridge plans have generated little profile, and little controversy. However, the company needs a presidential permit to expand one of its larger pipelines, Alberta Clipper, by 350,000 barrels per day, roughly a third of the total increase Enbridge is working toward. Seeking that approval – similar to what Keystone XL requires – could expose the company to the complicated U.S. political machinery.
Pipe dream: Since much of the work involves expanding existing pipelines, these are among the surest bests for Canada's industry. But the need for a presidential permit does open this project to some of the same political firestorm that has met Keystone XL in the U.S.
THE DREAMIEST OF PIPELINE DREAMS
Proponent: The Alberta government
Destination: Churchill; Alaska via the NWT
State of Play: Desperate for more money – and equally desperate to show a restive public that it's working to fix pipeline problems – the Alberta government has taken an unusual role as pipeline dreamer-in-chief. In recent weeks, ministers have come up with an array of new pipeline ideas. They have suggested a pipeline to Churchill, Man., which has the virtue of not crossing either B.C. or Quebec – but the significant downside of shipping oil through waters that are heavily choked with ice much of the year. And they've suggested pumping oil north through a small existing pipeline out of Norman Wells, NWT, then building a new pipeline along the Second World War-era Canol pipeline route through Yukon, and on to Alaska. This idea uses existing pipeline rights-of-way, but is unlikely to be celebrated by northern first nations groups.
Pipe dream: These are ideas generated by a government with no ability to actually build a pipeline, and therefore the latitude to toss out suggestions with little regard to their degree of craziness. Take them more as evidence of political desperation.