Canadian Oil Pipeline To Double Output

Canada's Oil Sands Once Considered Too Costly To Refine; Not So Anymore

(AP)  Two major energy companies will spend $7 billion to nearly double the amount of crude flowing through a pipeline from Canada's tar sands to the U.S. Gulf Coast, highlighting intense demand for crude that was once too expensive to pull from the ground and process.

Alberta, Canada-based TransCanada Corp. and Houston-based ConocoPhillips Co. said Wednesday they will add 500,000 barrels of daily capacity to the Keystone Pipeline, a 1,980-mile project connecting Hardisty, Alberta with a delivery point near existing terminals in Port Arthur, Texas.

Demand for oil has driven the price for a barrel of oil up 80 percent above where it was a year ago and up about 40 percent from the start of the year.

That includes demand for crude from oil sands, previously an afterthought in the crude market.

Unlike the benchmark light, sweet crude, oil extracted from the Alberta oil sands of northern Canada is a dirty, bottom-of-the-barrel substance that is more difficult to refine into gasoline and diesel.

U.S. refiners have been converting plants to handle the thicker Canadian crude as supplies for lighter crude continue to tighten, much to the consternation of environmental groups.

The Canadian province of Alberta is home to vast reserves of oil sands. Industry officials estimate the region could yield as much as 175 billion barrels of oil, which would make Canada second only to Saudi Arabia in crude oil reserves.

In western Canada, oil sands production has grown fourfold since 1990 and exceeded 1.2 million barrels a day last year, according to the Canadian Association of Petroleum Producers. That could grow to 3 million barrels a day by 2015 - not an insignificant amount, given that the current global output of oil is roughly 85 million barrels a day.

Gulf Coast refiners have traditionally processed crude oil from Mexico and Venezuela. But output from the Mexican Cantarell oil field is in decline and many Venezuelan contracts will change over the next couple years as the South American country shifts its oil from the U.S. to other markets across the world, said Russ Girling, president of TransCanada's pipelines division.

Stephen Schork, an analyst and trader, said the potential for oil development in Canada is what allowed ConocoPhillips to walk away from Venezuela. The pipeline and its expansion offers the company a more stable crude supply.

"I think that it certainly is a welcome sign, because any sort of event that kind of mutes the geopolitical influences on oil or commodities in general is a good thing," Schork said.

TransCanada said construction has already begun in Manitoba and North Dakota.

The company hopes to begin delivering tar sands crude through its 36-inch pipeline to refineries in Wood River and Patoka in Illinois by late 2009 and Cushing, Okla. by late 2010.

The project, which has now climbed to a total cost of $12.2 billion, will eventually move 1.1 million barrels of oil per day.

TransCanada and ConocoPhillips signed an agreement in 2005 to use the Keystone pipeline to deliver crude to ConocoPhillips' Wood River, Ill. and Borger, Texas refineries, which are being expanded. The deal gives ConocoPhillips a 50 percent ownership stake in the pipeline.

ConocoPhillips spokesman Bill Graham said the pipeline expansion fits into the company's strategy of bringing together its North American assets.

[forthepeopl1]

Concerns about the international breadth of the fallout from Fannie and Freddie''s problems also eased. South Korea''s central bank denied a media report that it had unrealized losses of more than $7 billion in investments in U.S. agency debt including bonds issued by Fannie Mae and Freddie Mac.

Bank of China 3988.HK 601988.SS , meanwhile, may hold roughly $20 billion worth of bonds issued by Fannie and Freddie, according to a research note by analysts at CLSA.

A Bank of China spokesman could not immediately be reached for comment. Because the U.S. government has taken steps to support Fannie and Freddie, CLSA said in its note that it regards the credit risk for the two as near to that of a sovereign credit rating for the government itself.

[oscarez]

"a 1,980-mile project connecting Hardisty, Alberta with a delivery point near existing terminals in Port Arthur, Texas"

Looks to me like they will be exporting oil to China and India.

[ubrew12]

Straight in, suck up and go/Cool it, swallow, swallow/
Breathe deep, take it all/It comes cheap/
Push it through the doors/Because in between the lines/
Im gonna pack more lines/
told, god, Im coming/To your country/
Im going to eat up your cities/Your homes, you know/
Ive got a stomach full its not/A chip on my shoulder/
Ive got this growl in my tummy/

I eat too much
I drink too much
I want too much
Too much

[deacon20081]

Tar Sands Crude is also plentiful in the San Juaquin Valley of California near Bakersfield. In late 1983 I worked on an experimental oil recovery project that injected steam into hoizontal shafts to liquify the sands and pump the oil out. The technology to extract that Crude has been around for a good while but ignored as it is more costly to refine.

[whitemale08]

Nobody else wants the tar sands anyways. It requires a different kind of refining technology to refine it making it more expensive than the rest.


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Posted by edintex at 09:59 PM : Jul 16, 2008-

I hear ya and I would love to believe ya but that''s all about to change my friend.

Just go read their own writings in these CFR documents and their scholarly white papers.

After the so called "dollar" has fully imploded and brought down the American economy the credit will be offered not to Americans for consumption but to Asia, and America will have to pay off it''s debt to the world through exports like every other country in the world has had to do. (study the IMF model).

You my friend can keep believing what you think but this is how the prepare for their New World Order right under your nose.

[eddom949]

They should build a pipeline with Canadian Maple Syrup. Mmmm, syrup.

[cozzicon]

"Mmmmmmmmm. Why would they be building a pipe line to a gulf coast DELIVERY point?"-- Posted by Policrypt

That''s where the refineries are.

[edintex]

That pipeline along with the N.A.F.T.A. superhighway is for exporting to China.
Posted by whitemale08 at 09:49 PM : Jul 16, 2008

Funnt thing...I live near where the exports would be happening. I have NEVER seen a tanker ship, much less ANY ship, sitting low in the water when leaving the ports. No, we are IMPORTERS; Biggest consumer in the world.
Nobody else wants the tar sands anyways. It requires a different kind of refining technology to refine it making it more expensive than the rest.

[whitemale08]

Don''t get all happy because that oil is not for us folks!

We can''t afford oil anymore anyways because the Federal Reserve System has devalauled our currency next to zero.

That pipeline along with the N.A.F.T.A. superhighway is for exporting to China.

We Americans will be the slaves and serfs to manufacture not for domestic use but for export under this W.T.O. IMF New World Order nonsense.

It''s happening folks just sit back and take it.

And that fence that they''re building is not to keep Mexicans from coming here, it''s there to keep Americans from fleeing just like back in the slave days.

[edintex]

Mmmmmmmmm. Why would they be building a pipe line to a gulf coast DELIVERY point?
Posted by Policrypt at 08:53 PM : Jul 16, 2008

Nothing SINISTER is going on!

1. Gulf coast refiners are expanding refining capacity for more of the heavy tar sand crude.

2. Its easier to add another pipeline right next to the existing one (Keystone) than to purchase new lands and fight environmental nuts every step of the way.

3. They are also building a new pipeline to take part of the Tar sand crude to Illinois where they are also expanding their refining capacity and bulding new ones.