- Pipelines connect the centers of Canadian production with refining and export centers in eastern provinces, the West Coast, and especially the United States. Pembina, Plains Midstream, Spectra Energy, Access Pipeline, and Inter Pipeline operate some of the largest domestic pipeline systems in Western Canada.
- Three companies operate the most export pipelines: Enbridge, Kinder Morgan, and TransCanada.
- In total, members of the Canadian Energy Pipeline Association transport 3.2 million bbl/d of oil over almost 25 thousand miles of pipeline. However, an increasing amount of oil is transported by rail to overcome infrastructural constraints in the midcontinent region.
Operational export pipelines
- Enbridge operates the largest export oil pipeline network. In combination, two of its related systems – the Canadian Mainline from Edmonton to Quebec and the U.S. Mainline (Lakehead) to Chicago – transport 2.5 million bbl/d.
- The Lakehead system includes the Alberta Clipper Pipeline to Superior, Wisconsin that was completed in 2010, which expanded the system capacity by 450 thousand bbl/d with an ultimate capacity of 800 thousand bbl/d available.
- The Southern Lights Oil Pipeline is parallel with the Alberta Clipper but runs in the opposite direction in order to transport lighter hydrocarbons back to Alberta for use as a diluent in transporting and processing bitumen. Along with its other smaller pipelines on both sides of the border, Enbridge's large pipeline systems transport 65 percent of the oil exported from Western Canada.
- Kinder Morgan operates the Trans Mountain Pipeline, which is the only pipeline system that transports crude oil and petroleum products to the West Coast of North America. The pipeline originates in Edmonton, Alberta and travels to various marketing and refining stations near Vancouver, British Columbia. Its capacity is rated at 300 thousand bbl/d.
- Kinder Morgan also operates the cross-border Express Oil Pipeline System (280 thousand bbl/d), which connects with the smaller Platte Crude Oil Pipeline in Casper, Wyoming and then travels to Illinois.
- TransCanada has established a foothold in Canada's crude export market through its Keystone Pipeline system, which includes two operational phases, one in construction, and another awaiting regulatory approval. The first phase of Keystone, which travels from Hardisty, Alberta to Illinois, commenced operation in June 2010 at a capacity of 435 thousand bbl/d. A second phase became operation in February 2011, connected the Keystone system to the Cushing, Oklahoma hub, and increased the system's rated capacity to 591 thousand bbl/d.
Proposed export pipelines
- TransCanada's proposed addition to the Keystone system, Keystone XL, has become a controversial front in broader political debates about energy policy, climate change, and oil sands development. Keystone XL would travel from Hardisty, Alberta to Steele City, NE, with a capacity of 830 thousand bbl/d. Since it would cross an international border, a presidential permit must be granted stating that the project is in the national interest.
- In May 2012, TransCanada reapplied for a presidential permit after the U.S. Department of State denied its initial application due to environmental concerns that had not been resolved as of the deadline for a decision. While environmentalists urged the administration to reject the pipeline for a variety of reasons, the controversy ultimately centered on risks that pipeline spills might pose to the Ogallala aquifer in Nebraska's Sand Hills region.
- TransCanada's new application includes alternative routes through Nebraska, and the Department of State tentatively expects to rule on Keystone XL in the first quarter of 2013. If granted the requisite permits, TransCanada expects to begin construction soon thereafter with a potential in-service date of 2015.
- While Keystone XL was initially proposed as an integrated pipeline from Canada to the U.S. Gulf Coast, a shorter section that is entirely within the United States was pursued as a separate project when the presidential permit for the cross-border segment was rejected. The TransCanada pipeline to connect Cushing, Oklahoma with the Texas refining sector is now known as the Gulf Coast Pipeline Project, and would resolve some of the infrastructural constraints that have led to a glut of oil at the Cushing hub. Construction on the Gulf Coast Pipeline Project commenced in August 2012 following final approval of its permits by the U.S. Army Corps of Engineers, and the company aspires to achieve an in-service date of mid-to-late 2013. The pipeline will have an initial capacity of 700 thousand bbl/d with the potential to expand to 830 thousand bbl/d.
- Enbridge and Kinder Morgan have proposed new or expanded pipelines to the West Coast, which are only in the preliminary stages of planning and regulatory review. Kinder Morgan aims to expand its existing Trans Mountain system by building a second pipeline within the same right-of-way. The expansion would increase Trans Mountain's capacity to 850 thousand bbl/d. The company has yet to file a permit application with the NEB, but construction would begin in 2016 and the pipeline could come online in 2017 if the project proceeds according to the company's timeline.
- Meanwhile, Enbridge is pursuing the Northern Gateway Oil Pipeline Project, which would have its terminus at a deepwater port in Kitimat, British Columbia. Northern Gateway would include a 525 thousand bbl/d crude oil pipeline and a smaller parallel pipeline to carry condensate back to Alberta. Enbridge has already filed regulatory applications associated with Northern Gateway and is in the midst of public consultations and government review. If approved on time in 2014, Northern Gateway could be commissioned in 2017.
- The completion of either or both of the competing Kinder Morgan and Enbridge projects would create a new export outlet for the oil sands. Additional pipeline capacity to the West Coast would reduce Canada's overland dependence on the United States market while providing access to growing Asian economies in the Pacific Basin, which could have important implications for trade flows and the prices received by Canadian oil producers. Yet like Keystone XL, the proposed West Coast projects must overcome differing degrees of opposition, particularly due to concerns about the risk of pipeline or tanker spills in British Columbia and among affected aboriginal First Nations groups, in order to be completed.
Natural Gas Pipelines
- Canada's natural gas pipeline system is highly interconnected with the U.S. pipeline system. TransCanada operates the largest network of natural gas pipelines in North America, including thirteen major pipeline systems and approximately 37,000 miles of gas pipelines in operation. Within Canada, TransCanada Pipeline operates a 25,600-mile network that includes the 10.6-Bcf/d Alberta System and the 7.2-Bcf/d Canadian Mainline.
- Spectra Energy operates a 3,540-mile, 2.2-Bcf/d pipeline system connecting western Canadian gas supply regions with markets in the U.S. and Canada.
- Spectra Energy also operates the Maritimes and Northeast Gas Pipeline linking eastern Canadian supplies with consumers in the eastern United States.
- Finally, the Alliance Gas Pipeline, a 2,311-mile pipeline system, is a significant source of natural gas for the U.S. Midwest that delivers 4.6 Bcf/d to both Canadian and U.S. markets.
- After six years of regulatory review, the NEB approved the Mackenzie Gas Pipeline Project, part of the MacKenzie Gas Project, in 2011. Imperial Oil would construct and operate the pipeline; other partners are ConocoPhillips, Shell, ExxonMobil, and the Aboriginal Pipeline Group. The 1.2-Bcf/d pipeline would travel 745 miles from Canada's Beaufort Sea to Alberta, where it would join existing pipeline networks.
- However, the outlook for the pipeline is uncertain, as more permits are required, it is competing with the Alaska Gas Pipeline, and natural gas prices and import needs are projected to remain low due to shale gas and other developments.