The Case for the Canso NS Superport
as the Energy East Pipeline Terminus
Mike Priaro, April 16, 2015
TransCanada Corporation announced on April 2, 2015 that it was altering the scope of
its Energy East oil pipeline project proposal as part of a decision not to build a marine
terminal and tank farm at Cacouna, Québec.
Energy East Oil Pipeline Project Conceptual Route Map. Source; TransCanada Corp.
The result of this change in project scope and further, unannounced, refinements of the
project are now expected to result in an in-service date of 2020 rather than the
previously announced 2018.
And delays caused by the reappointment of recused NEB hearing panel members is
likely to delay any project approval even further.
Original Timeline, Energy East Pipeline Project. Source; TransCanada Corp.
That leaves the Irving Oil/TransCanada Canaport marine terminal in Saint John NB as
the only currently remaining planned marine terminal for the proposed Energy East
pipeline project. The Canaport terminal has access to 128 feet of water depth, sufficient
to handle the largest oil tankers.
Aerial View of Canaport Marine Terminal and Storage Tanks near Saint John NB. Source; Irving Oil.
However, it is located about 450 miles west of Canso NS by marine route and is in the
middle of the environmentally-sensitive Bay of Fundy, home to some of the largest tidal
variations and reversing tidal bores on earth.
Bay of Fundy Ecozones. Source; Tourism New Brunswick.
Each day 160 billion tonnes of seawater flows in and out of the Bay of Fundy during
each of two tide cycles —more than the combined flow of the world’s freshwater rivers,
according to Tourism New Brunswick. A major spill near the expanded Canaport
terminal would result in conventional crude or, much, much worse, dilbit being washed
up and down the entire Bay of Fundy coastline twice-daily by tides of up to 63 feet.
In addition to at least 12 species of whales that call the Bay of Fundy home throughout
the summer and fall months, the Bay of Fundy hosts pods of endangered North Atlantic
right whales which seasonally feed on plankton necessitating a voluntary tanker
exclusion zone (dark blue on map above) in the deepest water of the Bay where the
whales feed.
However, extending the proposed Energy East pipeline just 300 land miles further east
of Saint John NB to Canso NS, perhaps with a spur line to a revitalized Dartmouth NS
refinery, helps spread the economic benefits of Alberta's crude oil resource, the largest
on Earth by far, to all provinces of mainland Atlantic Canada. It also lessens the
potential risk and damage by sharing and distributing the risk of any oil spill.
Energy East Pipeline Proposal Showing Extension to Canso, NS.
Source; Mike Priaro. Base map; TransCanada Corp.
Albertans, every one of whom shares ownership of 81 percent of the mineral rights of
the largest crude oil resource on Earth not owned by First Nations, a few private
owners, railway lands, and under national parks, want every Canadian to share in the
economic benefits of this immense bounty.
The Strait of Canso Superport became ice-free year-round with construction of a
causeway between the mainland and the island of Cape Breton. The Superport is
generally regarded perhaps the best and safest, ice-free, deep-water port on the East
Coast, and the closest to Europe, the Suez Canal, and western India.
It is not well-known that shipping routes to the Mumbai terminal in India are shorter
from Canada's east coast (9,173 miles from Saint John NB) than from Canada's west
coast (12,468 miles from Vancouver BC).
The total distance from Edmonton, AB to the Mumbai terminal via the TransMountain
pipeline and Vancouver is 13,180 miles with 37 days on the water but only 11,910 miles
with 28 days on the water via TransCanada's Energy East proposal and Saint John.
Saint John Canaport, Strait of Canso Superport, and the Great Circle Shipping Route.
Source; Mike Priaro. Base Map; Strait of Canso Superport Corp.
However, the distance from Canso NS to Mumbai would be an additional 450 miles
shorter, or about one-and-one-quarter days less on the water at 12 knots, from Canso
NS than from Saint John NB.
It was reported by the Halifax Chronicle Herald that the Indian firm H-Energy of
Mumbai recently secured an option to buy land for an LNG plant and export terminal
at Canso NS. Also, Indian High Commissioner Nirmal Verma said on Oct. 1, 2013
that India would like to see the completion of a pipeline to Canada's east coast that
would carry Alberta crude to Atlantic Ocean ports. Verma told The Canadian Press
that India would consider investing in the proposed Energy East pipeline project, if it
clears regulatory hurdles and moves ahead.
Husky Energy Inc. announced the sale of one million bbl of light crude from its White
Rose field offshore of Newfoundland and Labrador to Indian Oil Corp. during the
fourth quarter of 2013. This was India's first purchase of Canadian crude. That crude
was likely loaded directly into a tanker from the production platform.
Reliance Industries Ltd., operator of the world’s largest oil refinery complex at
Jamnagar on India’s west coast, runs two refineries that can together process 1.24
million bbl/d of crude and can turn heavier crude grades into high-value fuels.
Jamnagar Refining Complex. Source; Wikimedia Commons.
NuStar Energy LP of San Antonio, TX, with operations in the United States, Canada,
Mexico, the Netherlands, including St. Eustatius in the Caribbean, the United Kingdom,
and Turkey, has 37 tanks with a capacity of 7,555,000 bbl, and 2 mooring locations
servicing vessels up to 400,000 DWT ( VLCC/ULCC-class tankers of two million
bbl capacity) at its Point Tupper, NS terminal in the Strait of Canso Superport. Used for
import operations, these facilities could easily and relatively inexpensively be converted
to export crude oil, distillates, gasoline, aviation fuel, intermediate petroleum products
and blend components, residual fuels, butane, and condensate.
Aerial View of Part of the Strait of Canso Superport with Nustar Marine Terminal
and Storage Tanks in Far Right Distance with the Atlantic Ocean beyond.
Source; Strait of Canso Superport Corporation.
These facilities could easily and relatively inexpensively be upgraded and converted to
export crude oil and value-added refined products such as distillates (diesel), gasoline,
aviation fuel, intermediate petroleum products and blend components, residual fuels,
butane, and condensate.
Finally, Canada’s Atlantic east coast has two environmental/ecological factors in its
favour aside from the most important one of easily- and safely-accessed deep-water
ports with existing refineries and marine oil terminals. On Canada's west coast,
prevailing winds and currents will tend to push or keep any oil spill on-shore,
maximizing ecological impact and property damage. On the Atlantic east coast, but not
in the bay of Fundy, prevailing winds and currents will tend to push any oil spill out to
sea reducing coastal ecological impact and property damage.
"The ingenuity of human stupidity, error, and conceit eventually trumps any and all safety
systems"
—Mike Priaro.
One can have the best safety systems on Earth but one can never eliminate the human
element. A large dilbit spill in the Bay of Fundy with an incoming tide will be far more
expensive in terms of ecological damages and clean-up costs than the cost of
extending the Energy East pipeline to Canso NS. Consider that Enbridge's spill of just
20,000 bbls of dilbit into the Kalamazoo River in Michigan in 2010 has so far cost U$1.2
billion in damages and clean-up costs.
On Canada's west coast, the Northern Gateway and TransMountain pipeline proposals
respectively call for the export of dilbit down Douglas Channel, the longest fjord on
Canada’s west coast, and through Vancouver’s busy and crowded harbours. Dilbit is
much more damaging, toxic, difficult, and costly to clean up if spilled than conventional
crude, partially-upgraded bitumen, or syncrude. It is less likely that large volumes of
dilbit will be exported from the east coast with TransCanada's proposed Energy East
project because of the opportunity for potential domestic refinery and petro-chemical
capacity particularly at Saint John NB to use partially-upgraded bitumen, syncrude, or
conventional crude as feedstock.
A strong business, environmental and national interest case based on lower marine
shipping costs, reduced marine accident risk, re-vitalization of the Dartmouth refinery,
investment by India, improved crude export efficiency, and reduced potential for
environmental damage should easily justify the cost of extending the Energy East
pipeline to Canso. Furthermore, there may be cost savings, synergies, improved
opportunities for industrial development, and reduction of land impact by combining
upgrades to the existing AC power transmission lines for the proposed Maritime Link
project with the pipeline right-of-way for an Energy East extension to the Canso
Superport. That would result in the creation of the first formal, dedicated energy
corridor in Canada.
Proposed Maritime Link power line route. Source; Government of Nova Scotia.
These reasons favour the Strait of Canso Superport as the main Atlantic Canada port for
the export of western Canadian crude to Europe, Africa, and western Asia through Suez
using Suezmax tankers and the largest VLCC/ULCC-class tankers around the Cape of
Good Hope.
The Saint John NB Canaport is better situated and better suited to ship upgraded crude,
refined products, and petro-chemicals to the U.S. Eastern Seaboard, the Gulf Coast,
Latin America, South America, and through the Panama Canal, using Panamax and
smaller tankers. The largest marine tankers, VLCC/ULCCs, are too large to dock at
most Gulf Coast ports or transit the Panama Canal. Foreign-flagged tankers from a
Canadian port would avoid U.S. Jones Act restrictions which require any vessel
travelling between two U.S. ports to be owned and built in the U.S. and to be manned
by an American crew. Jones Act restrictions can increase shipping costs from $2/bbl to
as much as $6/bbl.
There is more than enough bitumen (see Alberta Crude Oil Reserves Largest On
Earth on-line at: https://www.behance.net/gallery/14198987/ALBERTA-CRUDE-OILRESERVES-LARGEST-ON-EARTH) to support at least two East Coast ports to export
crude oil and refined products, double the capacity of Irving's refinery, supply two
refineries in Quebec, revitalize the Dartmouth NS refinery, and have more than enough
feedstock left to support major petro-chemical industries in Montreal and Saint John,
and perhaps even Sarnia with a new line from Montreal, when an Energy East Line 2 is
built later.
Why can’t pipeline companies get it right — on either of Canada's East or West Coasts?
Mike Priaro, P.Eng.
Calgary, Alberta, Canada
403-281-2156