Imagine you live an hour from work and take public transit every morning. When you get on the bus, there are lots of open seats. But with every stop, more people pour in. As it fills, it becomes increasingly difficult for passengers to find a place to sit or stand.
Close to your destination, the bus is completely full and the driver has to bypass stops because there isn’t any more room. People are left at the side of the road having to wait for transit congestion to clear just so they can get to work.
The same is true of Canada’s oil pipeline network.
Canada needs to build more pipelines. Our oil pipeline network can move four million barrels of crude oil a day from Western Canada. This is too close to the average 3.981 million barrels a day in supply , which will continue to grow.
Not only is the system unable to handle day-to-day changes in global demand, but supply continues to grow. More than 850,000 barrels a day of oil sands supply will come on stream by 2021, and without energy-transportation infrastructure, Canada will be constrained.
The United States is our industry’s largest customer, but also our largest competitor. President-elect Donald Trump’s platform for energy independence makes it all the more urgent to diversify our customer base and get our product to those who need it globally.
Canada’s economy is suffering and the situation is critical. That is why there are several major pipeline proposals to move more Canadian oil, both to Canadians and to the world.
For example, Kinder Morgan Inc. is looking to expand its Trans Mountain pipeline from Edmonton to Vancouver to export oil to Pacific Rim nations. This pipeline has been operating at capacity since 2010 and the demand for transportation has exceeded the room to move it at all.
If this were one of Canada’s public-transit corridors, only three-quarters of the passengers would be able to make their morning commute.
And just like taking the bus to work, the product put into these pipes has a reason for making the trip: Global demand for energy, including from oil, is increasing.
The International Energy Agency forecasts that energy demand will increase by 32 per cent by 2040. More than a quarter of total energy demand will be from oil.
Canada can help to meet that growing global demand for energy. The Canadian Association of Petroleum Producers’ 2016 crude oil market report forecasts that by 2030, Western Canadian oil supply could grow to 5.5 million barrels a day.
Through this increase in supply, Canada has the opportunity to help deliver a future of more energy with less environmental impact than any of our competitors. Through technology and innovation, we are working hard to break the link between energy growth and emissions growth. Since its inception in 2012, Canada’s Oil Sands Innovation Alliance has shared and developed more than 900 distinct technologies worth more than $1.33-billion. This is private money invested in reducing the footprint of Canadian oil on our air, land and water.
Organizations such as COSIA represent our commitment to doing things the right way – the Canadian way. By producing oil with some of the highest regulatory standards on the planet and showing leadership on climate change, we are showing the world that Canada is a leader in responsibly-produced oil.
But without the pipeline infrastructure necessary to get the product to the people who need it, other countries (such as Saudi Arabia and Russia) will supply it under less stringent environmental standards.
Just like public transit, pipelines are critical infrastructure. They ensure that Canadian energy is transported safely for more customers at home and abroad. Through innovation and safety, Canadian oil can and should be a growing part of the world’s energy future.
View the article on the Globe and Mail site.
President and CEO
Canadian Association of Petroleum Producers
November 15, 2016