More oil to market in Canada requires more pipelines: NEB
Report says moving more oil by rail is also not a ``perfect substitute'' because doing so is more expensive and complex.
OTTAWA — The National Energy Board says Canada’s existing export pipelines are running at maximum efficiency and the only way to realistically get more oil to market on pipelines is to build more of them.
The board is responding today to questions posed last fall by Natural Resources Minister Amarjeet Sohi, who wanted to know if there was any way to improve the efficiency of pipelines while Canada struggles to expand or get new ones built.
Put simply, the board says, the amount of oil Canada is producing has increased while the number of pipelines to carry it has not.
The report says moving more oil by rail is also not a “perfect substitute” because doing so is more expensive and complex.
It also tells Sohi that while there is room to streamline the system used by oil producers to get access to pipeline space, doing so would only reallocate existing capacity, rather than create more.
Sohi’s request to the board came last fall as Canadian oil prices plunged thanks to temporary refinery closures in the midwest, creating a price differential with the US of $50 per barrel.
That price gap has since closed to less than $10 a barrel after refineries came back online and the Alberta government imposed a mandatory drop in production.