Meanwhile, TransCanada’s proposed pipelines to Canada's West Coast, the Northern Gateway, that would carry crude oil from Alberta to the Pacific port of Kitmat, for export to Asia is facing strong opposition in British Columbia by First Nations groups and environmentalists. So now, TransCanada is moving forward with an east-west pipeline entirely in Canada and outside of British Columbia. Russ Girling, TransCanada's president and chief executive officer announced at a news conference last week that TransCanada is moving forward with the 1.1 million barrel per day Energy East Pipeline project. The Energy East Pipeline project would convert a redundant 1,864 mile portion of the TransCanada's Canadian Mainline natural gas distribution pipeline to a crude oil pipeline and build the additional 870 miles of new pipeline to reach the port in Saint John, New Brunswick.
The project is expected to cost approximately $12 billion to upgrade the existing pipeline and extend its run to the coast. The pipeline will transport crude oil from the oil sands in Alberta and Saskatchewan to Montréal, the Québec City region and Saint John, New Brunswick, greatly increasing access by the oil companies to Eastern Canadian and international markets. The pipeline could replace imported oil refined in Montreal and Quebec with Canadian oil. In addition the pipeline will terminate at Canaport in Saint John, New Brunswick where TransCanada and Irving Oil have formed a joint venture to build, own and operate a new deep water marine terminal and be able the supply the United East Coast refineries and other nations.
The Energy East Pipeline, which still needs regulatory approval in Canada, will have a capacity of approximately 1.1 million barrels a day and is expected to be in service by late-2017 for deliveries in Québec and 2018 for deliveries to New Brunswick. After the July train crash in Lac-Megantic, Quebec, that killed at least 15 people, and multiple derailments in recent months as petroleum products have increasingly been transported by railroad as the pipeline projects have languished, there is a growing recognition that pipeline transport of oil is safer. Prime Minister Stephen Harper stated while the pipeline will have a thorough review, it is the safest way to transport oil.
Customers have already pledged to use at least 900,000 barrels a day of the line's capacity, as Canadian producers need a route to export their oil and Canadian refiners need oil, while regulatory hurdles delay the proposed pipelines through Western Canada and to the United States. The Canadian Association of Petroleum Producers has projected that Canadian oil output will more than double by 2030 to 6.7 million barrels per day, with most of the increase anticipated to be from the Alberta oil sands. There is demand in the world for oil and delay or denial of Presidential Permits for border crossing pipelines and delays in crossing the First Nations will not keep the oil in the ground or reduce world demand for oil and fossil fuels.
There is currently a TransCanada Keystone pipeline that runs east from Hardesty Saskatchewan to Manitoba and then south through the Dakotas to Steel City, Nebraska. It is a lower volume pipeline than the proposed Keystone IV. The existing Keystone Pipeline is known as Phase I and run from Hardesty, Canada to Steel City, Nebraska near the Kansas and Nebraska border. Keystone Phase II runs from Steel City to Cushing, Oklahoma where it still terminates, leaving the Canadian crude oil in Oklahoma along with U.S. domestic production from North Dakota that has been using the pipeline to reach the Oklahoma storage facilities.
In 2012 TransCanada began building the Cushing Oklahoma to the Nederland, Texas portion of the Keystone XL pipeline, the Keystone Phase III, a 435 mile extension of the existing Keystone pipeline to Port Arthur and Houston areas. The section of the pipeline did not require a Presidential Permit for it crossed no international borders and received state approval. The Keystone Phase III Project (Oklahoma to Texas) plans to begin operations this year.
In response to the glut of oil in Cushing, Enbridge Inc. and Enterprise Products Partners owners of the Seaway pipeline that runs from the gulf coast area to Cushing, Oklahoma, reversed the flow in their gas pipeline to move crude from Cushing to the gulf coast refineries. The reversal and change to crude required pump station additions and modifications, and was up and running in mid-2012, the capacity of the reversed Seaway Pipeline is up to 150,000 barrels of oil per day.
Enbridge has also applied for a Presidential Permit to increase the capacity of their existing 36-inch diameter Line 67 pipeline, which runs 670 miles from Hardisty, Alberta, to Superior, Wisconsin. With these improvements, the pipeline line will be able to carry up to 570,000 barrels of oil per day up from the current 450,000 barrels a day. The Minnesota project is part a larger plan by Enbridge to upgrade pipelines in the United States and Canada to ship more Canadian oil from the Alberta oil sands to the Midwest and beyond.