|Natural gas and oil pipeline in Northern B.C.
|Alberta Tar Sands
|Suncor Upgrader in Fort McMurray, Alberta's largest
|Oil Refining Process
On top of this Alberta would like to triple its synthetic crude production, and this is where things get nasty. Because of this bottleneck in the supply chain, the price of Canadian crude oil has dropped 20% or more below that of the world market price which means we are losing billions. A list of all the oil refineries in the world quickly identifies the countries that are serious about refining oil and the ones who aren't. Canada's largest, the Irving oil refinery in New Brunswick handles 300,000 barrels a day and is somewhere in the middle of the pack. Even though there is good money to be made in refining products we have historically shipped out the crude oil and let someone else do the dirty work. Now this short term thinking is catching up with us.
|Irving Oil Refinery in New Brunswick, Canada's largest
|Natural Gas Well
While it works well to transport natural gas across land in pipelines, this is not practical for ocean transport and the gas needs to be condensed somehow and loaded into specially designed ships as a liquid gas which is 1/600 of the volume of the gas in its natural state. This liquefaction process at an LNG plant involves the removal of dust, water, and other contaminants such as carbon dioxide and mercury, before the gas can be condensed under pressure to a temperature of -162 degrees Centigrade or -260 Fahrenheit. The liquid is then loaded onto the ship and, once it arrives at its destination, the process is reversed and the gas can then be delivered for its final purpose.
The port of Kitimat is a natural, deep water, ice-free harbour able to handle ships of any size and already handles a variety of bulk cargoes. The reason oil and gas companies prefer Kitimat over nearby Prince Rupert is that it's easier to build a pipeline through the flat Kitimat valley than alongside the mountainous Skeena River to Prince Rupert. But for some reason the opponents of oil tankers having to traverse the tricky Douglas Channel out of Kitimat don't seem concerned about LNG tankers having to do the same thing. Both are carrying petroleum products. Both are similar in size and both are constructed with double hulls to protect against leaks in the event of the outer hull being damaged.
Oil spills and natural gas leaks are one thing but the real issue is the ugliness of the tar sands project itself which has a much larger environmental impact than any conventional oil extraction project. By doing everything in their power to thwart any pipeline construction, the environmentalists are hoping to somehow shut it down in spite of the thousands of jobs it provides, the thousands of products it ultimately produces, and the billions in revenue it generates. This of course is a pipe dream because with this much economic activity at stake, the oil will eventually find a way to get to market. The only question that remains is whether or not we get to process any of it along the way.
|Train of oil tanker cars