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3/19/2019
Any notable increase in crude oil pipeline or rail capacity in Canada would need to come from major infrastructure projects since pipelines are at full capacity and rail infrastructure is operating at or near capacity, according to a National Energy Board (NEB) report.
Canadian Minister of Natural Resources Amarjeet Sohi asked the NEB to assess available capacity on oil pipelines, examine ways to optimize oil pipeline capacity out of western Canada and explore short-term steps to further maximize rail capacity.
The NEB is an independent federal regulator of several parts of Canada's energy industry. The board's staff members held 30 meetings with representatives from a broad cross-section of industry players, including pipeline companies, producers, shippers, associations and government agencies.
The NEB found that creating predictable timelines and clear policies related to pipeline capacity are necessary to help market participants make more informed decisions. The report also identifies the need to develop better market data to help market participants and policy makers make investment decisions.
Potential long-term solutions in lieu of new pipeline capacity could include using reverse pipelines to export more crude oil and shipping undiluted bitumen in rail cars to increase the volume of bitumen exported by rail.
"The oil pipeline systems are currently running at capacity and market players are operating within the rules set up in tariffs and legislation," said NEB Chief Economist Jean-Denis Charlebois in a press release. "This report points to potential improvements that can be made and we have identified options for governments to pursue."