Oil for Asia, higher gas prices in Canada due to a lack of local refining capacity

Here's economic globalisation for you. Kinder Morgan wants to twin a pipeline from the oil sands so they can sell more oil to Asia. While they say in BC gas prices remain high due to a lack of refining capacity, and the summer driving season is long over. Basically, Asia is getting our energy because they are willing to pay more for it. We in BC have to put up with higher gas prices as a result and we don't get the additional refining capacity to lower our gas prices. I think the oil companies like Kinder Morgan are making a killing off us anyway, and even more off Asia. We should get more refining capacity first, of our energy, not Asia. This needs to change.



Kinder Morgan's Grand Plan to Pipe Oil Sands Crude

Tankers in Vancouver harbour to steeply increase. Second pipeline to Kitimat could eclipse proposed Enbridge project.
By Mitchell Anderson, 2 Jun 2011, TheTyee.ca




Tanker passing through Second Narrows in Burrard Inlet.





A quiet application to the National Energy Board (NEB) may soon vastly expand oil tanker traffic through the waters of Burrard Inlet, making Vancouver the major conduit of oils sands crude and bitumen to China.


Trans Mountain Pipeline, a subsidiary of Kinder Morgan that operates the 300,000 barrel per day (bpd) pipeline from Alberta to B.C. and Washington State has applied to the NEB to enter into long-term buying contracts called "firm service."

They are also requesting to divert more Alberta crude and bitumen capacity to the Westbridge tanker terminal in Burrard Inlet and away from existing land-based refineries in B.C. and Washington. If approved, this would immediately expand crude capacity through

Vancouver from 52,000 bpd to 79,000 bpd -- an increase of more than 50 per cent.

Documents filed by Kinder Morgan also state that revenues from this new funding model would be used to further expand the pipeline capacity to the Burnaby tanker terminal to 450,000 bpd -- a six-fold increase.

Power point reveals aims

A power point presentation for investors by Ian Anderson, president of Kinder Morgan Canada Group, provides a wealth of information that has not been widely shared with the general public or local governments:






• Kinder Morgan plans to dredge Second Narrows channel to allow larger Suezmax tankers that can carry 1 million barrels of crude -- four times as much as spilled from the Exxon Valdez.
• These larger vessels will save shippers $1.50 per barrel.
• Tanker transits through Vancouver will increase to 288 per year in 2016, up from 71 in 2010 and 22 in 2005.*
• Port Metro Vancouver is "supportive of expansion."
• "Trans Mountain can be expanded in stages to access growing demand offshore in China."

All of this is happening with remarkably little scrutiny or even awareness in the Lower Mainland. Of the 18 legal interveners in Kinder Morgan's application, 17 are oil companies and one is from the Alberta government.

The B.C. government specifically declined to be involved in the decision that would greatly scale up tanker traffic off our coast, through our largest city. No environmental or public interest groups applied to be involved in the NEB application.

'Rearguard' pipeline to Kitimat

While there has been enormous interest and opposition to the proposed Enbridge Northern Gateway pipeline, this project is likely years away and must overcome pending legal challenges from several First Nations along the route.
In fact, these obstacles are being trumpeted by Kinder Morgan to their investors. They point out that expanding their existing pipeline to Vancouver is cheaper by $1.5 billion than the proposed Enbridge pipeline, and avoids mounting opposition to constructing a new right of way.




Tanker traffic in Port of Vancouver rose steeply in last decade. Kinder Morgan's proposal entails even more dramatic growth. Source: Kinder Morgan presentation.


The eventual tanker capacity through Vancouver will be more than 80 per cent what is proposed by Enbridge. The waters beneath the Second Narrows bridge in Vancouver's harbour, because of their relative shallowness and strong tidal currents, flowing through a narrow passage that includes the obstacle of the bridge, pose special navigational challenge according to safety experts.
Kinder Morgan is also assuring investors that they could also construct a "rearguard" pipeline to Kitimat from their existing southern route.



Kinder Morgan's proposed alternative to Enbridge 'Gateway' pipeline from Alberta's oil sands. Source: Kinder Morgan power point.



Remarkably, the strongest opposition to the Kinder Morgan application seems to be from another oil company. Tesoro Canada filed a 50-page information request to Trans Mountain Pipeline as part of the NEB process.

Tesoro appears to be hostile to the Kinder Morgan plan because it would divert more pipeline capacity away from land-based refineries to offshore buyers. According to their website, Tesoro "operates seven refineries in the western United States with a combined capacity of approximately 665,000 barrels per day."

The deadline for Kinder Morgan to reply to Tesoro information request is June 3. Stay tuned for updates on this developing story of how Vancouver, the "greenest city in the world," may quietly become the main tanker route for oil sands crude bound for China.

I agree the Western Provinces should have more refining plants and capabilities. Were building the keystone pipeline to send our synthetic crude from our Athabasca Bitmuin feilds to America to only buy back at a premium. Its no wonder china is also outbuying our CRUDE oil also..... If the world wants the oil from out of our "oilsands" they should have to buy the finished product.

To hell with the furure,make a quick buck now.

Does anyone here want a shiny new refinery in their back yard?

We did, but the owners decided last year not to proceed with it. Just as well, as their partner was BP.

Operating a refinery is a very expensive (and dirty) proposition. You can make a pile of money when things are good, but you can also get your *** handed to you as well.

There's a lot of jurisdictional competition that goes on to get a refinery in place...They spend in the range of a billion dollars to build it and they also create a lot of jobs.

That is a large part of the problem. Our part of the world is full of NOPEs, NIMBYs, and BANANAS. And they even wonder why young people are leaving the island to go to Alberta for jobs when there are lots of jobs mowing rich peoples lawns and serving them lattes and changing diapers on rich old retirees right here. Minimum wage of course.

Dumpy: I hate to be the one to break your bubble but Kinder Morgan does not own the oil or the wells. They are just the transportation company and are not responsible for the price rise.

I am familiar with NIMBYs, but NOPE's and BANANAS are foreign to me.

Can you expand on those 2 please?

If you read through the OP a bit, you'll see the reference to China is willing to buy the oil at a higher price... DTM should be directing his angst towards the Asian buyers that are driving the price way up, not to mention the fed and prov taxes that double and triple the cost of the product at the pumps.

Vancouver already has two. Apparently two too many. I'll take them.

Gotta pay off the Socialist Action Plan some how right?

.. There's something wrong with that?

Socialism? It can work.

Sure it can, just as long as it's not unbridled.

Unbridled? Like free pizza for OWS protesters?

Yeah, or like free electricity and other goodies that are not made available to the public at large.... Things like that.

If they like tenting they should go clearing the right of way. The moonbeam greens can plant trees once the line is in.

Won't work... It'd be too much like working

Pay them in weed. It will be a camp job so that is taken care of. Maybe some coolie hats too.

KM is just the vehicle. The fact is our corporate elites are willing to sell out to foreign interests because now they know they are now the power to be reckoned with. Oops, there are no more foreigners with globalisation, we're all one happy family now under the big daddy that will tell us how it is.

It's like journalists supporting immigration, they get no competition from Asians or Africans coming into the country. And like economists, they are little affected in the price of gas because they make above the average wage. Economists just talk mumbo jumbo from their puppet masters. We need a govt commission here to make sure we get the cheap fuel first.

Now why the hell would you want to piss Canadians off by ensuring their needs are met first and foremost. Bloody commie.

NIMBY-Not In My Back Yard
NOPE- Not On Planet Earth
BANANA- Ban Anything Near Anywhere

I would support a made in Canada price for domestic consumption that reflects a fair profit on the cost of production and anything over and above our domestic needs can be exported to the highest bidder. Provided the governments get a fair royalty and taxes.

This is nothing new, we have known for decades there would be shortage of refined crude.
The environmentalists want to take us back to a simpler time, when you holiday to the Prairie
will be by covered wagon. Those environmentalists of a simpler time want to take us back to
the simpler time of farming with horses instead of tractors. That's where you use half the
food supply field to feed the horses instead of using the economy of tractor fuel.

Transportation costs are higher, commuter costs are higher, and not just in Canada but in the
United States, as well. Oh we can't have a refinery because its dangerous, it is not friendly
and at the same time these people stop and complain about the cost of fuel on the way to the
latest demonstration. We need to get on with producing a fuel supply in our own country that
will bring costs down and provide steady full time jobs. Who wants a full time job at good pay?
It is time for everyone else to speak up and demand that we build more refineries.

BANANA - build absolutely nothing anywhere near anyone

I kind of agree. Canada has been exporting resources for a long time because there not supposed to sit there forever and rural people need the jobs. The govt really has to set up a commission to ensure we get an ample supply of our resources first. There is no pure free market. All the NDP does though is support higher immigration from Asia because if they don't they are white racist pigs.

Wrong, this is very very new. Size matters. Business wets their pants over the Chinese market. The idea was to sell them millions of shirts and shoes, but the tables got turned, now China makes the shoes and sells them to us. I say we have a white bizman peril to worry about.

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CBC and CTV show the Nymex crude future price, right now its $94
Here Bloomberg show the North Sea Brent price, it is $110.

China is paying $16 more per barrle than we pay in Canada. Yet we still can't get enough refining capacity. Business has totally sold us out. And the govt gives them subsidies.

Energy & Oil Prices: Natural Gas, Electricity and Oil - Bloomberg

Different grades.

More refineries would not lower the price as the cost of building the facility would be made back by raising prices.

Even making vehicles that get better gas mileage will not happen as the refineries start with a certain product and after processing it they have a certain quanity of finished products to 'get rid of' for $$$. If they start having vehicles that don't use all the gasoline then there is a glut and storage facilities get full and gas does have a shelf life.

Still a very vague. Profits are high in the oil business. Sounds like someone thinks demand is going to dry up one day. Who's going to get rid of their car? Electrics are a long way off. It's just greed.

I agree that greed plays a big role when it comes to banks, day traders, and other investment
companies. In the oil industry, the wages are very good. The reason is not greed however.
wages are high because the design, and planning is subject to ever increasing environmental
demands, and sensitive land area, like watersheds, and difficult land mass areas.
Getting supplies to remote locations costs a lot of money and sometimes depending on location
these supplies are required nearly a year ahead of time.
There are pipelines to install and people to transport to and from remote locations. Not to mention
the years of exploration before hand.
The cost to find, and develop the oil site in the first place is enormous and there really isn't a great
deal left over.
Take into consideration the taxes you pay on the fuel at the pump. There are all those taxes for
environmental causes, for transit that drivers don't use but pay for, and development of trans link
rail.
It is easy to point to greed but the hard facts of life and the work that produces a gallon of fuel don't
demonstrate that greed is the prime factor. And yes the companies need to make a profit.
Should you not believe that look at Greece, they haven't made a profit on anything for years and
we know what their fate holds don't we.

Wages were high for bankers a long time ago. Now they are higher despite all those regulations because they would say they have to work so much harder to work through (manipulate) those regulations. Caanda likes to pay the good capitalist lackey servant. That's not why we elect them. In Canada, compared to China, Russia, Africa and othr coutnries and continents, profits are guaranteed, yet the public still gets hosed.