Energy research firm Wood MacKenzie says that oil producers in Western Canada could lose up to $100 billion if no new pipelines are built within the next 15 years.
The CBC outlines the findings in this article.
It predicts that Canadian oil production will continue to rise and expects to see more oil shipped by rail as pipelines become more restricted. Almost 200,000 barrels are being shipped by rail every day.
The research suggests that price discounts are hurting Canadian oil producers because of bottlenecks in transportation.
Refineries in the southern U.S. are currently buying Western Canada Select for about seven dollars per barrel cheaper than the market standard West Teas Intermediate. That leaves oil producers and the government on the losing end, the differential can swing as high as $20 which was the case last summer.
It predicts that Canadian heavy crude oil could supply up to 50 per cent of the oil refined in the U.S Gulf Coast by 2025, way up from the five per cent in 2011. But it says that the Keystone X-L pipeline which would send oilsands crude to the refineries on the U.S. Gulf Coast would be a big help.
Wood MacKenzie doesn’t think that the pipeline will be built before 2020.
It says that pipelines like Enbridge’s Alberta Clipper and Line 3 replacement have a better chance of being constructed and being operational within the next five years.
