School of Energy: Trans Mountain Expansion Considering Future Improvements

North America is an integrated energy market so deeply connected that it functions as one massive, interdependent system for the three “drillbit hydrocarbons”: crude oil, natural gas and NGLs. But the rapid changes happening in the market now — driven not only by supply/demand dynamics and evolving infrastructure but also regulatory policies and political pressures — mean it’s more important than ever to talk about how the ongoing relationship between the U.S. and Canada will evolve and strengthen in the coming years. That was the focus of our School of Energy Canada and the subject of today’s RBN blog. Warning: Today’s blog includes some blatant plugs for a newly available replay of our recent conference in Calgary. 

The 590-Mb/d Trans Mountain Expansion (TMX) project, which is inching closer to its planned early 2024 completion, has been one of the most eagerly anticipated energy infrastructure projects in recent Canadian memory. Preliminary tolls for shipping crude on the expanded pipeline system, submitted to the Canada Energy Regulator (CER) in June, are multiples higher than the tolls currently charged on the original 300-Mb/d Trans Mountain Pipeline (TMP), possibly undermining oil producers’ economics for shipping and exporting crude on the combined 890-Mb/d system. However, the higher tolls are not the only concern. Serious logistical challenges remain in the form of restricted tanker sizes, a circuitous route for ships traveling from the open ocean to the Westridge export terminal near Burnaby, BC, and even a very tight passage under two bridges, all of which will add costs and time for each exported barrel. In today’s RBN blog, we provide more details on the complexities surrounding crude oil exports via the Trans Mountain pipeline system.