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HYDROCARBON
ENGINEERING
N
orth America has seldom, if ever, experienced this
growth in oil and gas production in such a short
period of time. Concurrently, domestic consumption
has been growing slowly, and efforts to build
pipelines to move crude to market have been stymied. While
many oil companies are facing major challenges, dealing with
low commodity prices and midstream constraints,
opportunities for storage are plentiful.
Oil
The oilsands contain approximately 2 trillion bbls of bitumen,
of which 172 billion are considered economically recoverable.
For the last decade, tens of billions of dollars have been
poured annually into mining and in-situ projects; many of
those projects, including CNRL’s recently completed Horizon
mine expansion, ConocoPhillips’ Surmont in-situ project and
Imperial’s Kearl Oilsands expansion, are keeping bitumen
production in an upward trajectory. The Canadian Association
of Petroleum Producers (CAPP) expects current production of
2.5 million bpd to reach 3 million bpd by 2020. And, even
though commodity prices are currently low, the oilsands
remain a long term bet. The International Energy Agency (IEA),
expects oilsands output to rise to 4.5 million bpd by 2040.
The oilsands face difficulties getting product to market,
however. In late 2015, the White House announced that the
Keystone XL project, an 800 000 bpd pipeline designed to
deliver heavy crude directly from Alberta to Gulf Coast
refineries, was rejected. "The State Department has decided
the Keystone XL pipeline would not serve the national
interests of the United States. I agree with that decision,"
President Obama said.
Other options, including accessing tidewater to export
outside of North America, face daunting challenges. Although
Enbridge has been given approval by the National Energy
Board (NEB) to construct the Northern Gateway pipeline
(which is designed to move up to 800 000 bpd to the
deepwater port of Kitimat, British Columbia), Aboriginal First
Nations along the right of way (ROW) have threatened both
court lawsuits and direct action. In addition, the newly elected
federal government headed by Prime Minister Justin Trudeau
