Please ensure Javascript is enabled for purposes of website accessibility

Canada’s Oil Sands Exports to U.S. Hampered by Infrastructure

By Oilprice.com – Feb 8, 2014 at 1:36PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Despite arguments that oil sands development will go on with or without Keystone XL, it appears that Canada's oil sands exports to the U.S. have slowed due to a lack of infrastructure.

This article was written by Oilprice.com -- the leading provider of energy news in the world. Also check out this recent article:

The volume of exports to the U.S. Gulf in 2013 coming from Canada's oil sands fell far short of original estimates. The oil industry projected that about 200,000 barrels per day (bpd) of oil from Canada's oil sands provinces would reach Gulf Coast refiners by the end of 2013. But, data from December – expected to be the year's peak – show that deliveries were below 40,000 bpd, according to Reuters. Data from Canada's National Energy Board show higher numbers – about 57,000 bpd – but still far short of the industry's original projections.

In what has become a crucial detail over the fate of the Keystone XL pipeline, exports of Canada's oil sands have been significantly hampered by a lack of infrastructure. The U.S. State Department cited industry figures as evidence that oil sands development would happen regardless of the fate of an individual pipeline. The industry would simply shift to rail to make its deliveries. However, it appears that the industry is struggling to make that happen. Making up for the 800,000 bpd capacity of the Keystone XL pipeline would require 13 trains of oil, a mile long each, to reach the Gulf Coast every day. Shipping crude by rail is already more expensive than using pipelines. But with a series of train derailments carrying crude oil over the past year, the industry is being forced into using reinforced train cars, which could contribute to higher costs.

The data gives ammunition to opponents of the Keystone XL pipeline who argue that blocking its construction will slow the development of Canada's oil sands. The State Department's Final Environmental Impact Statement disagreed, concluding that the pipeline would have little effect on greenhouse gas emissions since the oil sands would be developed anyways.
 

Written by Charles Kennedy at Oilprice.com.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
351%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.