Eastern Pipeline Reversal Will Create 1000's Of Jobs

[Anonymous]

Create jobs, fill greedy government coffers and reduce the number of tankers carrying inferior blood crude to Canada. The only bad thing is that Quebec will be the biggest beneficiary of jobs. Maybe Blurt/Gramps/Chickenfeets can apply. Just cuz they are in their 50's doesn't mean it is too late to acquire some market skills and start contributing to society instead of being a burden.

CALGARY – TransCanada Corp. bolstered its case Tuesday that a proposed $12-billion plan to pipe Alberta crude to Canada's East Coast is in the country's national interest.



But a report meant to highlight Energy East's economic benefits was dismissed by environmentalists and met with skepticism by some in Quebec, which has fast become an object of desire for the oil patch as the Alberta-based industry pivots east in a bid to reach tidewater.



Calgary-based TransCanada wants to switch portions of its cross-country natural gas mainline system to carry up to 1.1 million barrels of oil a day east to Quebec, then extend it 1,400 kilometres to an export terminal planned with Irving Oil Ltd. at Saint John, N.B. The company has yet to submit a formal application for the project, but oil sands producers such as Suncor Energy Inc. and Cenovus Energy Inc. have signed firm commitments to ship 900,000 barrels a day on the line.



A report prepared by audit and consulting firm Deloitte & Touche LLP made public Tuesday predicted the pipeline would generate $35.3-billion in economic growth during a period of 46 years, with Alberta, Ontario and Quebec reaping the majority of the benefits.



Deloitte estimates the project, if it goes ahead, would also support 10,000 full-time jobs over five years during development and construction, while generating an additional $10-billion in tax revenue for Ottawa and the provinces through construction and operations.

"I think what we're demonstrating here is that the benefits are spread across the country and that they're significant in each of the provinces," TransCanada chief executive Russ Girling told reporters on a conference call from Fredericton.



But the plan has touched a nerve in Ontario and Quebec. Major gas distributors argue they would lose critical pieces of infrastructure needed to serve factories and homes, leading to higher costs for consumers.



TransCanada has repeatedly dismissed those concerns, saying the conversion is needed to salvage an under-used asset, which in recent years has been undercut by the U.S. shale gas boom.



The oil conversion would also help shift domestic refineries onto a cheaper diet of crude compared to foreign imports, the company maintains.



Tuesday's report pegged annual savings for Quebec plants processing 100,000 barrels of oil per day at between $92-million and $336-million. New Brunswick facilities would save between $51-million and $377-million per year, the report said.



TransCanada expects to file a detailed application for Energy East with Canadian regulators before year-end. The project has secured political support in Alberta, Ottawa and New Brunswick, but Quebec remains non-committal.



The Deloitte report, commissioned by TransCanada, said Quebec would see $1.3-billion in direct economic growth over Energy East's six-year construction window, with another $745-million in direct GDP generated over the project's 40-year life.

Renaud Gignac, a researcher at the Montreal-based Institut de recherche et d'informations socio-économiques, said projected benefits must be weighed against the environmental impact of oil sands extraction. He said Quebec is a point of transit for oil sands producers eager to deliver barrels to global markets. That will make Energy East a tough sell in the province, he said.



"The refining capacity in Quebec with the Valero plant in Lévis and the Suncor plant in Montreal East is nowhere near the capacity that is proposed for the pipelines," he said in an interview, referring to Energy East and a separate plan by Enbridge to pipe crude east.



Energy East's ultimate throughput of 1.1 million barrels a day "is way more than can be treated in Quebec, so certainly we're seeing that this oil is mainly going to go on the international markets."



National Bank Financial geopolitical analyst Pierre Fournier said Tuesday he expects the pipeline to be approved in a "timely fashion." In a note, he said Quebec's two opposition parties have both publicly endorsed the project, as has Quebec City mayor Régis Labeaume.



Alex Pourbaix, president of TransCanada's oil and pipelines division, said the project would bolster refinery margins, boost government revenue and increase producer profits. "To suggest that there's no benefit [of bringing oil east], I think, is disingenuous at best," he told reporters from Fredericton.

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[Anonymous]

I still favour Keystone because I want to see our oil supplanting Venezuelan and Mexican heavy crudes at Gulf Coast refineries. However, whether Keystone is approved or not has little affect on oilsands development plans. Also, it will not halt getting our product to new markets especially tidewater which means international prices.

CALGARY – Joe Oliver, Canada's Natural Resources Minister, arrived on Capitol Hill in Washington, D.C. Monday to stump for TransCanada Corp.'s Keystone XL project.



But he may be pitching the merits of a pipeline that no longer matters.



Analysts at Canaccord Genuity said Monday the project's $5.3-bilion northern leg "is no longer a necessity" for Canadian oil sands producers, thanks to the sudden rise of crude-carrying unit trains and rival pipeline schemes proposed by Enbridge Inc.



"If Keystone does not get approved, the rail capacity is going to be there," Phil Skolnick, managing director and senior oil and gas analyst at Canaccord, said in an interview.



The assessment reflects a deepening sense of indifference toward a project that only six months ago was billed as critical to continued oil sands growth.



It comes as TransCanada plans to detail the economic benefits of its $12-billion Energy East pipeline at a press conference Tuesday.



Exactly how important Keystone XL is to Alberta oil companies has emerged as a key issue as the U.S. State Department weighs approval of the conduit.



A draft environmental impact study released by the department in March concluded construction of the pipeline would not add to greenhouse gas emissions because the oil would find other ways to market regardless of Keystone XL's fate. State Department officials are said to be reassessing that conclusion.



Keystone XL's opponents say the 830,000-barrel-a-day project remains critical for producers. Without it, they contend, plans to more than double oil sands output over the next decade would stall.



TransCanada says commercial support for the project has not wavered. "The market has spoken on Keystone XL clearly and repeatedly since the regulatory process began in 2008. Keystone is largely contracted" with binding commitments that span an average of 17 years, a spokesman said in an emailed statement.



But a growing number of analysts and market watchers say the combination of increased rail capacity and alternative pipeline projects has made the cross-border segment redundant.



Those include Enbridge's 600,000 barrel-a-day Flanagan South line from Illinois to Oklahoma and Keystone XL's southern leg, which would link the storage hub of Cushing to Gulf Coast refineries and is nearing completion.



"It's all about the rail capacity," Mr. Skolnick said. Moving viscous Canadian oil in tank cars used to be "more of a temporary fix" to transportation bottlenecks that earlier this year pushed prices for Western Canada Select to US$40 below the West Texas intermediate benchmark, he said. "It's become more of an economic proposition," he said.



Canaccord estimates roughly 130,000 barrels a day of Canadian heavy crude is currently moving on tracks. Planned investments in loading terminals in Alberta and anticipated deliveries of specially designed tank cars could see an incremental 425,000 barrels per day of heavy oil railed to market by the end of 2014, it said in a report.



The volume compares to the approximately 465,000 barrels a day of raw bitumen – stripped of thinning agents – Mr. Skolnick said Keystone XL is designed to transport.



"We see rail being at least able to do 465,000 [barrels]," he said. "Actually, it will have the ability to do even more than that".

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