After the death of the Keystone XL project, the US will still import a record amount of oil from Canada
Despite the death of the Keystone XL pipeline project, the US will still be able to import a record amount of oil from Canada over the next few years through an expanding pipeline system.
|Pipeline storage for construction of Keystone XL project in Gascoyne village, North Dakota state, USA in January 2017. Photo: Reuters|
New US President Joe Biden has canceled the license of the $ 9 billion Keystone XL oil pipeline project on the first day of his inauguration, dealing a fatal blow to a long-standing project. capacity to transport 830,000 barrels of oil sands / day from Alberta (Canada) to Nebraska (USA).
Environmental activists and indigenous communities welcome this move by the new US president, but traders and analysts say the pipeline between the US and Canada still has enough capacity to handle the block. daily crude oil is transferred out of Canada – the main oil supplier of the United States.
Canada currently exports about 3.8 million barrels of oil a day to the US, according to data from the US Department of Energy. Analysts expect this figure to rise to 4.4 million barrels a day in the next few years, from 4.2 million barrels.
Energy consulting firm Rystad Energy estimates that expanding oil pipeline projects will help increase oil exports. Canadian up more than 950,000 barrels of oil / day by 2025.
Meanwhile, the Canadian Energy Administration said it currently has the capacity to export more than 4 million barrels of oil a day to the US.
The administration of President Joe Biden has set a goal of carbon reduction, reducing the US dependence on oil and gas and limiting air pollutants. Much of the US energy supply still comes from fossil fuels.
Gina McCarthy, President Biden’s Lead Domestic Climate Policy Coordinator, said: “Whatever the benefits of the Keystone project, time needs to be reexamined with the current economic situation. “. Even without the Keystone XL project, the US is still dependent on oil supplies from Canada because more than half of the oil imports come from this country. Meanwhile, a number of crude oil pipeline projects between Canada and the US are in the process of expansion.
For example, the project to replace the pipeline number 3 that the energy transportation group Enbridge is implementing will help double the shipping capacity to about 760,000 barrels of crude oil / day from Alberta to Superior City, Wisconsin. (US) later this year.
The Government of Canada is also upgrading Trans Mountain oil pipeline with capacity increased from 590,000 barrels / day to 890,000 barrels / day. This pipeline ends at Vancouver port, from where it can transfer oil to ships to the US.
Away from the Keystone XL pipeline project, last year TC Energy was approved by the US to expand the Keystone copper pipeline project, helping additional 170,000 barrels / day in current capacity of 590,000 barrels / day to the Midwest and Gulf of America.
“We will have a redundant pipeline when other oil lines are on schedule,” said Mark Oberstoetter, Research Director of Wood Mackenzie Research and Consulting Group. “Adding all those pipeline projects together could make the Keystone XL project redundant.”
Construction of the Trans Mountain pipeline project and the 3rd pipeline replacement project may still be delayed by protests calling for environmental protection. However, unlike the Keystone XL project, both of these pipelines have overcome legal and regulatory barriers.
According to RBN Energy estimates, oil production in Western Canada in 2021 will hit a new 4.45 million barrels a day, from 3.9 million barrels a day in 2020, but most of this will be. are exported to America.
Canada is currently the fourth largest crude oil producer in the world, but has faced oil pipeline congestion over the years. This caused a surplus of oil in the reservoirs in the province of Alberta, sending oil prices down and forcing the province to take production cuts to free up record inventories.
In November 2020, oil production cuts in the province of Alberta were lifted, resulting in an increase in oil production in the region. However, oil transport companies have enhanced the transportation efficiency on existing pipelines through the use of drag-reducing agents.