Oil pipelines remain a hard sell, industry working to ‘get the message out’ – by Claudia Cattaneo (National Post – December 12, 2012)

The National Post is Canada’s second largest national paper.

TORONTO — Compare oil production growth from Canada’s oil sands plus nearby tight-oil fields, versus pipeline infrastructure needed to transport it to consumers, and you see why Canada’s energy sector is sweating bullets.

If supplies continue to rise as expected, pipeline capacity will run out around 2015/2016, when combined production from the oil sands and the Bakken tight-oil field surpasses four million barrels a day. When production hits six million barrels a day in a decade, capacity would run out again even if all proposed pipeline plans are approved and built.

It’s a pipeline capacity cliff that’s unprecedented for Canadian oil producers and all eyes are on whether major regulatory decisions in 2013 give the go-ahead to new pipeline projects — or force a rethinking of oil production growth plans.

“On the oil side of things, we have been in and out of that situation … month to month when there are maintenance outages, but never looking forward have we had the delays … like we have seen on Keystone and some of the other regulatory processes,” Greg Stringham, vice-president for oil sands and markets at the Canadian Association of Petroleum Producers, said on the sidelines of the group’s annual investment symposium Tuesday.

Senior pipeline executives said stakeholder expectations are higher than ever — and they are working hard to meet them.

“We are still a year from filing [for regulatory approval] and I am in Vancouver every week,” for meetings with environmental organizations, First Nations, local and provincial politicians, Ian Anderson, president of Kinder Morgan Canada, said at the symposium. “It’s an ongoing, diligent process of getting accurate information out in the hands of people who care to listen to it.”

Kinder Morgan Canada is proposing a big expansion of its TransMountain pipeline from Alberta to Vancouver at a time British Columbia is heading into an election campaign and opposition to oil sands pipelines is front and centre.

Mr. Anderson said he is hopeful pipelines don’t become “the referendum issue” in the spring election, in which the sitting Liberal government is fighting a challenge by a strong NDP opposition.

Meanwhile, the pipeline industry as a whole is investing significant funds to “get the message out” about its safety practices and record, while also looking internally for improvements, Mr. Anderson said.

Alex Pourbaix, president for oil pipelines at TransCanada Corp., said the pipeline industry is a safe industry, but its projects have been “demonized” by the environmental movement, which has realized that by delaying projects it can halt them altogether.

For the rest of this article, please go to the National Post website: http://business.financialpost.com/2012/12/11/oil-pipelines-remain-a-hard-sell-industry-working-to-get-the-message-out/

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