Albertan Bitumen Heading for the Great Lakes
This article was written by Oilprice.com -- the leading provider of energy news in the world
It is no secret that oil transportation infrastructure in North America is strained and Albertan oil is having a difficult time getting to market. Pipeline construction is chronically delayed and rail companies are running out of oil tank cars, but oil companies are considering a new route. Calumet Specialty Product Partners , an Indiana-based company, is planning to spend $20 million to upgrade a dock in Lake Superior to load bitumen onto barges and ship it through the lake system to other refineries. While approval for the project is far from certain, it does signal a trend in the industry.
"Given a lack of sufficient pipeline and rail capacity to transport crude oil from northern production fields to key refining centers, this project has received significant indications of interest from our customers,"said a company statement. Calumet hopes to see its operations up and running by the 2015 shipping season.
If approved, this transportation method could bring with it considerable risks. Unlike normal oil, bitumen is heavier than water and sinks, making cleanup far more difficult. Michigan's Kalamazoo River incident serves as an example of the risks posed when bitumen and water meet. When an Enbridge pipeline ruptured in the summer of 2010, it leaked 3.3 million litres of oil into the river and it is still considered the largest on-land oil spill in American history. The incident cost Enbridge more than $1 billion to cleanup and, more than three years after the accident, the Environmental Protection Agency ordered Enbridge to deal with the approximately 684,000 litres of bitumen that avoided capture and had since settled in the riverbed.
No shipping method is totally safe, and accidents and spills are a virtual certainty over the long-term. These "submerged" oil spills are a serious problem in any body of water, but are especially concerning if they occur in the Great Lakes, the source of drinking water for over forty million North Americans. The Alliance for the Great Lakes released a report on the subject, voicing concern about the safety of transporting bitumen across the "word's single largest surface freshwater system."
Transportation is a hot topic in the oil industry at the moment and companies are ever searching for new means to get their product to market. As environmentalists continue to use every method at their disposal to block pipelines like Keystone XL, Northern Gateway, and Energy East, these companies are being forced to consider options potentially far more environmentally devastating than a pipeline. While these pipelines serve as large, symbolic battles for the environmental movement, opposing them may do more harm than good in the long run.
Motley Fool's Top Stock for 2014
There's a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.
Recent article from Oilprice.com: Prospects Grim for Libyan Oil Recovery
The article Albertan Bitumen Heading for the Great Lakes originally appeared on Fool.com.Written by Rory Johnston at Oilprice.com
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.