Western oil supply exceeds pipeline capacity by 365,000 barrels a day

National Energy Board to examine existing infrastructure looking for efficiencies and then report to the minister

Mario ToneguzziWestern Canada’s oil supply is 365,000 barrels above the amount of oil flowing daily in existing pipelines, according to a new report on Western Canadian Crude Oil Supply, Markets, and Pipeline Capacity released on Thursday by the National Energy Board.

The NEB said federal Natural Resources Minister Amarjeet Sohi recently asked the board for advice on how to optimize oil transportation capacity on existing pipelines and rail.

“This report will serve as background information while the NEB prepares its advice to the minister in February 2019, after consulting with a number of industry participants,” it said in a news release.

“As Canada grapples with discounted oil prices and pipeline capacity not keeping pace with growth in oil production, the National Energy Board appreciates the opportunity to share our expertise with the minister. We will examine current energy infrastructure to see if efficiencies can be gained in existing systems,” said Jean-Denis Charlebois, chief economist at the NEB.

The report said the Western Canadian Sedimentary Basin (WCSB) is the major crude oil producing region in Canada and includes conventional crude oil and oil sands.

Available takeaway capacity on existing pipeline systems is estimated at 3.95 million barrels per day (b/d), said the report, adding that a supply of 4.153 million b/d of oil was available for export from the WCSB, but only an estimated 3.788 million b/d flowed in pipelines.

Canada’s crude oil is shipped primarily through pipeline systems but also moves by rail and truck, it added.

Crude-by-rail exports have hit a series of record highs in 2018 with the trend continuing in October 2018 at 327, 229 b/d, nearly 2.4 times higher than a year ago,” said the report.

“The Western Canada Sedimentary Basin (WCSB) is the major crude oil producing region in Canada. Crude oil production from the WCSB, in particular from the oil sands, continues to grow each year with production now exceeding pipeline capacity.”

oil supply pipeline

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