Friday, February 1, 2013

The next battle over Bitumen?

While the Enbridge hearings work their way back to Prince Rupert for a February 4th return, opponents of the shipment of bitumen or crude in any form are already casting their eyes on the next phase of their efforts.

An announcement by the energy company Nexen (recently the subject of a takeover by China's CNOOC Ltd.)  that they are exploring plans to deliver Alberta crude to BC ports by way of rail, has seemingly provided the next target for those that do not wish to see any form of the transit of crude cross over British Columbia.

The Nexen proposal received a review in the Globe and Mail on Tuesday, which outlined the concept of the oil by rail plan, which according to Pierre Alvarez, Nexen's Vice-President of Corporate Relations would see the Alberta resource travel to Prince Rupert, where an export terminal would provide the loading facilities for shipment.

And while Mr. Alvarez suggested in the Globe story that this has been the subject of discussion with the Port of Prince Rupert, the port had no comments on the proposal for the Globe's report. However, a story in the Edmonton Journal confirmed that discussions had taken place with Nexen, but that the proposal was still more of a concept, rather than a project.

Mr. Alvarez reinforced that point in the Globe story, stressing that the project is very much conceptual and not much more at the moment.

This is not the first time that the prospect of an oil pipeline by train has been suggested, though it has had a bit of a back seat with all the drama surrounding the Enbridge hearings of the last six months.

Now that those hearings are nearing their completion, some of the alternate plans for crude transportation are getting more of a review.

Earlier this month we outlined the proposal by a group known as G7G, Generating for Seven Generations which has a project in mind to take Alberta crude across Northern British Columbia towards the oil terminals of Valdez, Alaska.

The concept of the oil by rail plan however isn't as cheap as the pipeline proposals and isn't considered to be the best solution to the problem. However, with the pipeline project running into opposition, shorter term solutions may be an option.

The prospect does come with some questions however for both CN and the Port, considering the vociferous opposition to the pipeline project of late, do either wish to get wrapped up in what would seem to be a lengthy battle to bring such a project on line.

CN already operates a Crude by Rail system, taking Alberta crude to destinations east and south, whether they wish to send it West will make for an interesting discussion around the boardroom table.

Just the suggestion of such an idea, (even in the concept stage) has provided for no shortage of warnings to CN to rethink the proposal.

Maclean's-- Pipeline opponents cay CN's crude-by-rail car pitch poses 'risk to company' 
Globe and Mail-- Oil pipeline opponents may target rail shipments next
National Post-- Northern Gateway opponents target CN Rail
Edmonton Journal-- Oilsands rail proposal illustrates growing demand, industry group says


Local media outlets picked up on the theme of Nexen's plans, their reports below:

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