Alberta looks north for oil pipeline routes

The Alberta government is scouting out possible new ways to get crude oil and refined products to market in the wake of mounting public opposition to crude oil pipelines, said the province's energy minister.


Most recently, the government has hired Canatec Associates International Ltd., a Calgary consultant experienced in northern development, to do some research on the potential for an oil pipeline from the central Mackenzie Valley to a tidewater at Tuktoyaktuk, N.W.T., on the Beaufort Sea, Ken Hughes said. From there, it could be loaded onto tankers for shipment to Asia. There is already an Enbridge Inc. pipeline that transports oil from Norman Wells to Zama, Alta., he pointed out.
In 2014, the Northwest Territories will have full control over its resources and the government knows there are companies that are currently active in exploration, he said. Husky Energy Inc., ConocoPhillips Canada and MGM Energy Corp. in a joint venture with Shell Canada Limited were all active in the central Mackenzie Valley area this past winter. The Northwest Territories government is in the same situation Alberta is, which is looking at ways to get its products to market, according to Hughes.
However, while the Tuktoyaktuk harbour is relatively deep, the Beaufort is a shallow sea and the approaches are in shallow water, according to Doug Matthews, an energy consultant who worked with governments in the north for 25 years. In order to be able to ship out large volumes of crude, considerable dredging or the construction of a 20-kilometre pipeline to deeper waters offshore where large tankers could anchor for loading would be required. "It could be done, but the cost would be very high. But if there is no alternative...." he said.
"If one were a prospective N.W.T. producer, it would be a good news story because then you could get your oil onto this Alberta-funded pipe and that would be great," said Matthews. "But having said that, I think the technical challenges are pretty big and the political challenges are big; we don't build pipelines with ease in the Northwest Territories."
The Alberta government has also just begun preliminary research on another proposal: a railway that could transport products from the oilsands to the existing marine oil terminal at Valdez, Alaska, said Hughes.
The Alaska route is not the only northern proposal under consideration. Hughes said the government is still looking at the Port of Churchill on Hudson Bay as a potential outlet for diesel fuel produced in Alberta and moved to Churchill by rail—once the province has a surplus. Communities in northern Canada would be the likely market for the diesel fuel from the North West Redwater Partnership. The 50/50 joint venture between North West Upgrading Inc. and Canadian Natural Resources Limited is building a refinery in Alberta's Industrial Heartland that will convert 50,000 barrels per day of bitumen into diesel fuel. The long-term plan is to expand to 150,000 barrels per day, in three 50,000 barrel-per-day stages.
"All of these are sort of 'let's do some research, let's get the response back as early as we can and see if it's worthy of more research,'" he said.

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