Canadian Fossil Firms Could Lose $100 Billion with No New Pipelines
Western Canada’s fossil fuel industry could lose $100 billion in the next 15 years unless new pipelines are built to carry its product across North America, UK-based energy researchers Wood Mackenzie conclude in a report released this week.
The study looked at the discounts Canadian producers must offer to offset difficulties getting crude oil or diluted bitumen to U.S. refineries. The firm “expects $100 billion in value is at stake over the next 15 years based on how much the differential will grow, multiplied by the anticipated oil production of Western Canada,” CBC explains.
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Wood Mackenzie “expects oilsands growth to reach 3.5 million barrels a day by the mid-2020s, up from 2.3 million barrels a day now. The $100-billion figure assumes the worst-case scenario for industry, that no new pipelines will be constructed.”
In an interview Tuesday with the Associated Press, Quebec Premier Philippe Couillard said he saw little benefit to TransCanada’s controversial Energy East pipeline if his province is no more than a “transit place” for crude oil transported from Alberta to east coast refineries.
In a unanimous resolution last November, Quebec’s National Assembly demanded a say in the pipeline’s climate impacts. A month earlier, the province’s largest natural gas distributor warned that Energy East could bring winter supply shortages and higher retail prices.
Wood Mackenzie senior research analyst Afolabi Ogunnaike commented that “Energy East is a more expensive path than Keystone XL to the Gulf Coast, but there still is a need for additional capacity.”