Bitumen mined from the Alberta oilsands has to be shipped elsewhere before anyone can put it to use. Obstacles lie along all the possible pipeline routes, but sooner or later someone is going to figure out how to do this. The bitumen might be sent east, west, north or south -- and Manitoba might have a role to play. Last week, the southern option was much in the news. Several news outlets published Washington rumours the Obama administration was about to approve the Keystone XL pipeline project of TransCanada Corporation. That line, running from Hardisty, Alta., to Steele City, Neb., would bring Alberta bitumen to the U.S. refinery belt. U.S. environmental groups vociferously oppose it. The U.S. Environmental Protection Agency last week published a letter it had sent to the State Department, objecting that the risk of spills from the line had not been adequately studied and that alternative routes had not been adequately considered. Because it is a transborder pipeline, State Department approval is needed.
The economic logic of the Keystone XL project is compelling, because Alberta has the oil and the U.S. needs it. But if political obstacles delay that project, the bitumen could go another way. Manitoba might do well to talk up the advantages of using the Port of Churchill and encourage investigation of a pipeline route from tarsands country to the shores of Hudson Bay.
The western route from Bruderheim, Alta., runs over a series of mountain ranges to Kitimat, B.C. The Enbridge company's Northern Gateway project is under study by a joint panel for the National Energy Board and the Environmental Assessment Agency. The panel at mid-April issued a 50-page list of 199 conditions the company would have to meet to win approval of the project. The list did not amount to a veto, but it showed approval will be difficult to obtain. The project is vociferously opposed by native peoples who live along the route and by the main political parties in B.C.
The government of the Northwest Territories has for a year been inviting use of the Mackenzie Valley for a bitumen pipeline. The N.W.T. has been advocating that route for the last 40 years as a means of bringing Arctic natural gas south to the cities of Canada and the U.S. native land claims were resolved and a consortium including native people was formed to build the line. Natural gas is now so cheap and plentiful, however, that demand for the line has vanished. The project is in abeyance. The route and its social and environmental implications have been thoroughly studied. The obvious remaining difficulty is that such a pipeline would bring bitumen to Inuvik, at the mouth of the Mackenzie River. Somebody would then have to provide the ice-strengthened bulk carriers that would take it onto the high seas.
The leading eastward option at the moment is TransCanada Corp.'s plan to convert its underused natural gas pipeline to ship bitumen to refineries in Quebec and perhaps the Maritimes. The firm is now receiving bids from shippers who would use such a line. Once the contracts are made, TransCanada can seek regulatory approval and soon start building.
In this context, the Port of Churchill might have a role in solving the oil industry's need for bitumen export routes. Churchill is a whole lot closer than Montreal and a whole lot better developed as a port than Inuvik in the Mackenzie delta. Its shipping season is short, but the mechanics and the economics of shipping through Churchill are well-understood. At the moment there is no pipeline to Churchill -- but the Northern Gateway, Keystone XL and Mackenzie Valley routes, too, are only lines on a map at the moment.
The Manitoba government should team up with the Port of Churchill to make some noise in petroleum industry circles and spark some research on the port's usefulness as a bitumen shipping terminal.