Canada Ping!
Posted on 03/20/2015 5:01:11 AM PDT by thackney
While Congress and the White House continue to wrangle over the Keystone XL pipeline extension, the oil industry is taking matters into its own hands.
Markets are primed for an influx of Canadian crude oil, but with pipeline transport off the table for the foreseeable future, producers have built alternative modes to meet the demand. The problem is, recent disasters have soured legislators and environmentalists on road and rail for moving oil.
Alongside political uncertainties are other wild cards like extreme weather and the unknowns that arise from an emerging logistics infrastructure, which can all impact the flow of goods. That makes the proposition of a non-pipeline solution particularly thorny. How should supply chain decision makers position to connect with premium energy markets, manage the attendant risks, while also addressing the strong likelihood of an increased regulatory burden?
From the source of the commodity to the end consumer, the ability to track Canadian oil assets in real-time is set to become more important than ever.
Boom Times For Oil Producers
Production from Canada's oil sands is on the rise, with output expected to nearly double by 2030 to 6.7 million barrels per day. That accounts for about 98% of the country's oil reserves.
Primary market opportunities exist in both Canada and the US, where replacements for offshore imports are desired. Getting the oil to premium and secondary markets however is another matter.
Considering the gooey consistency of Canada's pure bitumen, rail makes sense as the main pipeline alternative. Rail transport doesn’t require dilution prior to shipping, as it does in pipeline transport; so shipping bitumen in its pure form would require fewer barrels. That creates an incremental netback on rail transport of about $6 per barrel, compared to pipeline processing.
(Excerpt) Read more at oilprice.com ...
canada
“The problem is, recent disasters have soured legislators and environmentalists on road and rail for moving oil.”
Haven’t heard anything from the environmentalists in the US about trains loaded with oil crashing, causing millions in environmental damage.
Why?
Warren Buffet?
And for once, Canadian Crude does not refer to Howie Mandel or Tom Green.
Canada Ping!
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