4. TRANSPORTATION:
Enbridge plans to expand pipeline system to move oil sands crude east
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Enbridge Inc. announced a massive plan this week to transport oil sands crude to eastern Canada and the midwestern United States, infuriating environmentalists and winning praise from oil producers.
The Canadian-based company said it would invest some $3 billion to expand its existing oil pipeline network running from Canada to various offshoots, including the Lakehead pipeline system running around the Great Lakes and a crisscross of segments carrying oil to Illinois, Ohio and Michigan refineries. About $100 million would go to reverse the flow of oil on a line running from Sarnia, Ontario, to Montreal, a prospect that is viewed by some as a way to eventually move oil sands crude to Canada's East Coast and into New England.
"These projects and the supporting mainline expansion are attractive investment opportunities for Enbridge and EEP," said Stephen Wuori, president of liquids pipelines for Enbridge, in a statement.
As part of the announcement wave, the company said it would add additional horsepower to the Canadian portion of its Alberta Clipper line -- which moves oil sands crude from Alberta to the Midwest -- so that the conduit would carry 120,000 barrels of additional oil a day to Superior, Wis. That alone is about one-seventh of the capacity of Keystone XL, a proposed oil sands pipeline that would stretch from Alberta to the Gulf Coast if ever constructed.
Overall, the company's expansion plans would lead to new capacity of roughly 700,000 barrels per day around the company's U.S.-Canadian network, although not all of that would be from new production in Alberta. The company said it had commercial support from shippers and that it hoped to have most of the expansions in service by early 2014. The projects would need approval from Canadian regulators.
Wuori said the projects would assist Ontario and Quebec refineries currently paying $20-per-barrel premiums for oil obtained from foreign sources. He added that the projects were not just about oil sands crude, considering that the expansion would move some oil from the Bakken region of North Dakota, as well.
But environmental critics said the announcement was part of a grand plan to ensure that oil from the oil sands is not landlocked in Alberta and finds a way to market via one of Canada's coasts or through link-by-link segments to the Gulf Coast.
Green groups have vociferously opposed expansion of production in the Canadian oil sands partially because extraction of oil there produces more greenhouse gases than does traditional drilling. NASA scientist James Hansen has said that increased extraction of crude from the oil sands would be "game over" throughout the planet when combined with combustion of other fossil fuels.
Green group sees 'double jeopardy'
The Line 9 reversal in particular has been controversial because it could bring oil sands crude into regions of Canada that currently do not import it.
Previously, Enbridge said it would reverse the flow of oil from Sarnia, Ontario, to eastern Ontario. With yesterday's announcement, the company said it intends to reverse the oil flow four times the original distance to eastern Canada -- to Montreal.
"This opens the door to bringing tar sands oil into New England. It is very concerning," said Danielle Droitsch, a senior attorney at the Natural Resources Defense Council. "It also send a strong signal for more production."
In 2008, Enbridge originally planned a partnership with a Portland company to connect a similar oil reversal to a line running into Maine, she said. Those plans were shelved, but green groups charge that Enbridge is trying to revitalize the project by building it in segments.
They also say that the new proposals put the Midwest at greater risk of oil spills. One of the pipelines that will now be expanded -- Line 6B -- was the source of the largest oil sands spill in U.S. history. The spill is still being cleaned up near Marshall, Mich.
The expansion puts the community in "double jeopardy," said Droitsch. Under the plans, the 6B pipeline's capacity will be increased by 260,000 barrels per day, Enbridge said.
In an interview with Michigan radio, Enbridge spokesman Joe Martucci said he hoped that the laying down of new pipe would reduce concerns and decrease the need for repairs.
"We could do the maintenance activities; we do them all the time. But the thinking is, by putting in new pipe, it would reduce the number of them, and there'd be less disruption for landowners and local communities over the long term," he said.
Enbridge also has proposed building a $5.5 billion pipeline known as Northern Gateway that would stretch from Alberta to Canada's West Coast.