By Peter Lang
First published in the Chronicle Journal Oct 13, 2017
MAKE no mistake about it, we were played, big time, by TransCanada Pipelines (TCP) and Big Oil producers over the Energy Ease pipeline proposal. And while Energy East is now cancelled, we, the little people, should still try to understand what happened. For it’s never over when the game is for big profits.
When they told us that the re-purposing of the existing mainline gas pipeline was to supply Eastern Canada with domestic oil from Alberta our tendency was to approve the conversion from natural gas. But then we discovered that the ‘oil’ was actually dilbit (diluted bitumen), and that the Eastern Canada refineries really didn’t have the capacity or the massive capital needed to refine dilbit. By their ‘tidewater marketing scheme’ TCP really wanted to export it.
The fact is that the tarsands are remote and landlocked and, compared to conventional oil, dilbit is very costly to extract. It’s also too heavy, too voluminous, and thereby too expensive to ship by rail. Yet the Alberta tarsands are the third largest deposit of fossil fuels in the world. So in order to expand and exploit that resource, the big oil producers ‘needed’ TCP to ship their product by a designated pipeline – Energy East.
As for natural gas, in 2013 the mainline natural gas line had lost capacity across Canada, as cheap, fracked gas had been discovered in the eastern U.S. So rather than shipping by pipeline across the continent the gas producers opted to ship it north from those new eastern sources. Thus TCP ‘needed’ more product to fill its east-west mainline gas pipeline.
Meanwhile, with the spectre of the deadly explosions in Lake Megantic, we were being duped by another falsehood. We were told that we needed to ship ‘oil’ by pipeline because it was safer than shipping it by rail. But the Energy East proposal was never a plan to ship conventional oil. It was never an either/or possibility as we were repeatedly told by TCP, NOMA and some of Thunder Bay’s city council.
The reality is that the light crude oil from the vast Baaken oil fields in southern Saskatchewan and North Dakota always did and likely always will be shipped by rail. Rail systems are extensive and link most resource fields to refineries, ports, and domestic consumers. Accordingly, from 2008 until today rail shipments of conventional crude oil have expanded exponentially.
Oil producers have built rail loading and unloading infrastructure that was faster and cheaper to build than pipelines. They load what they call ‘unit trains,’ with up to 100 tankers in a single shipment. The Lake Megantic shipment, bound for the Irving refinery in New Brunswick, carried 72 cars of Baaken oil.
As it was, we, the little people, objected to the Energy East project, mainly on the grounds that dilbit endangered our pristine Lake Superior watershed. We were right, of course, but now the game has changed.
On the one hand we would like to think that we won, and that our protests changed Big Oil’s game plan. To some degree, maybe it did. However, based on economics there were two major happenings that may have been more influential than our protests.Ê
Donald Trump and Justin Trudeau have approved the Keystone XL and Kinder Morgan pipelines both of which will take Alberta dilbit to refineries in the U.S. and Western Canada tidewater ports. As well, the National Energy Board has just levied a new shipment price on natural gas which will induce gas producers to fill TCP’s mainline gas pipeline to capacity.
So ‘now’ here’s the game: 1) Dilbit won’t be coming our way in the near future; 2) We’re back to the reality of an old and potentially explosive natural gas mainline pipeline running north of us; and 3) Baaken oil will continue to be shipped by rail, some of it through our city.
If we are to understand anything about the fossil fuel issues that affect us most directly we must first understand that there are three quite different products in the form of dilbit, conventional oil, and natural gas. Each of these three products is subject to the corporate market forces which will always tend to manipulate us for profit. As voters and citizens we must address these issues separately, and with due diligence – in order to take control away from the manipulators.
Peter Lang is a retired teacher, paralegal, and a member of CUSP, and the coalition which opposed the Energy East pipeline. He lives in Kaministiquia