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Opinion: Northwest energy corridor is key to national economy – Mike Priaro

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The multi-partner project has received 95% of inland First Nations’ approvals

Mike Priaro is an engineer and consultant with 25 years in the oil patch who has given a presentation to parliament’s House Committee on Natural Resources.

BY MIKE PRIARO

An energy corridor from Fort McMurray through northern British Columbia to a west coast port at Prince Rupert could contain the proposed: 2 million b/d Eagle Spirit oil pipeline, TransCanada’s Prince Rupert Gas Transmission pipeline, and a potential liquefied petroleum gas (LPG)/natural gas liquids (NGL) pipeline. This would create a highly efficient energy corridor that would dramatically reduce the cost and the environmental footprint of energy development in Northwest Canada and provide vastly improved access to markets in the Pacific Rim.

eagle_spirit_googleearth_pipeline-map-story

Map © 2016 Google Earth

An energy corridor offers many business, economic, and environmental incentives and benefits, as well as benefits to affected First Nations.

The Prince Rupert area is sheltered and ice-free year-round with many deep, natural harbours. It is widely regarded as the safest location for marine terminals on Canada’s west coast. There are no significant hazards such as narrow channels to navigate, giving unobstructed entry to the high seas and to the northern Pacific Great Circle shipping route, which provides the shortest trade route between North America and Southeast Asia.

Along with the Port of Vancouver, Prince Rupert is part of the Canadian government’s Asia-Pacific Gateway Corridor and Initiative to connect ports, road, and rail connections across western Canada to the economic heartland of North America.

Calvin Helin, Chairman and President of Eagle Spirit Energy Holdings, has obtained 95 percent of all inland First Nations’ approvals for the oil pipeline from Fort McMurray to Prince Rupert. This oil pipeline creates the foundation for a northwest energy corridor.

A Northwest Energy Corridor would also include electric power transmission lines to supply low-carbon hydroelectric power from B.C.’s Peace River region, and from Alberta hydroelectric projects, while facilitating greater penetration and use of renewable energy sources, as follows:

  1. Westward to provide low-carbon hydroelectricity to power LNG liquefaction plants at Prince Rupert.
  2. Regionally to field operations and facilities developing and producing the immense shale gas, gas liquids, and oil resources of Northeastern B.C. and Northwestern AB.
  3. Regionally to provide hydroelectric power to meet expanding residential, commercial and industrial demand.
  4. Eastward back to the oil sands to provide low-carbon hydroelectric power to reduce GHG emissions by displacing some of the 3.1 billion cf/d of natural gas used in the oil sands.
  5. Regionally to provide access points to store renewable, but intermittent, energy via hydroelectric projects.

Additionally, large reservoirs behind hydropower dams will provide reliable quantities of water necessary for shale fracking operations with minimal affects on river flows during natural seasonal variations.

Running power lines and other services such as fiber-optic cables together with oil, natural gas, and LPG/NGL pipelines requires a wide Right-of-Way (ROW) but dramatically reduces construction costs, and minimizes the environmental footprint and wildlife habitat fragmentation when compared to clearing multiple ROWs through B.C.

I estimate savings in the range of ten billion dollars if oil, gas liquids, and gas pipelines are laid down at the same time in the same ROW.

There is also potential to capture added value for Alberta’s bitumen resources using low-carbon hydroelectric power to:

  • partially-upgrade bitumen, thereby eliminating the need for diluent, to add value and reduce the significant handling and transport costs of dilbit and diluent, which I estimate at $10/bbl of bitumen
  • fully upgrade more bitumen to syncrude, and refine bitumen, and batch the products down pipelines to markets.

Several recent export applications to Canada’s NEB have been made to export LPG totaling 233,000 bbl/d. This easily achieves economic threshold for an LPG pipeline especially if volumes of NGLs are added.

An energy corridor from Fort McMurray to Prince Rupert offers large efficiencies, economies-of-scale, and cost reductions in manpower, operations, management, infrastructure, and emergency spill response, as well as a reduced environmental footprint, and lower pipeline tariffs, if oil, natural gas, and LPG/NGL pipelines all terminate together in the Prince Rupert area.

This proposed Northwest Canada Energy Corridor provides multiple tie-in points to TransCanada’s extensive existing NOVA Gas Transmission gas gathering system infrastructure in Northwest Alberta and to Spectra Energy’s growing gas gathering system in Northeast B.C. which are helping develop the immense shale resources of Northeast B.C. and Northwest Alberta.

A northwest energy corridor to Prince Rupert BC could also tie into future Mackenzie Valley pipelines transporting Arctic, Beaufort Sea, Mackenzie Delta, and Northwest Territories resources to Canadian and U.S. markets.

Along with the existing Keystone pipeline to the U.S. Gulf Coast, Enbridge’s Mainline system to the U.S. Midwest, and the proposed Energy East pipeline to Canada’s east coast, the result would be a major, inter-connected oil, natural gas and LPG/NGL pipeline network, and major pipeline hub, that would efficiently tie together the vast hydrocarbon resources of northwest Canada and provide flexibility of access to the best prices available on world markets.

Canada exports about 80 percent of its oil production. Ninety-nine percent of those exports go to just one customer—the U.S. which is striving to become self-sufficient in oil. What business worthy of the name allows itself to be so reliant on just one customer?

A Northwest Canada Energy Corridor respects the concerns, needs, legal responsibilities to, and desires of, First Nations, as well as environmental concerns, far better than any other oil pipeline proposal to Canada’s west coast. It ties in well with current Canadian federal government priorities to improve the economic and social well-being of First Nations.

There must be direct, long-term economic benefit to First Nations from pipelines and facilities on First Nations lands. This could be achieved through federal loans providing a measure of capital participation by affected First Nations. There would also be significant benefit to First Nations, as well as project proponents, through their involvement designing, constructing, operating, and managing the energy corridor and associated pipelines and facilities with training and oversight provided by industry.

Coordinated leadership for a Northwest Canada Energy Corridor will challenge Canadians. It is a complex mega-project that requires the leadership and support of the Canadian federal government, provincial governments of British Columbia and Alberta, First Nations, affected municipalities, provincial power companies, and, of course, companies in the oil and gas industry.

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