Province says there's no concern with oil storage in Alberta despite Trans Mountain pipeline shutdown

Oil industry officials in Alberta do not expect the temporary pipeline shutdown will have a significant impact on Canadian oil production.

Temporary closure won't have significant impact on oil production, industry official says

In this file photo, an oil pumpjack pumps oil in a field near Calgary. Oil industry officials in Alberta do not expect the temporary shut down of the Trans Mountain pipeline will have a significant impact on Canadian oil production. (Todd Korol/Reuters)

More than two weeks since the Trans Mountain pipeline temporarily shut down amid devastating flooding in British Columbia, industry officials in Alberta still do not expect it will have a significant impact on oil production.

The pipeline is considered one of the main arteries shipping oil from Alberta to B.C., typically transporting about 300,000 barrels per day of light crude as well as refined gasoline and diesel to the West Coast. 

Trans Mountain Corp., the federal Crown corporation that operates the pipeline, shut down the line as a precautionary measure on Nov. 14 but said Wednesday a restart is "only a few days away," though it will be at reduced capacity.

An official with the Canadian Association of Petroleum Producers (CAPP) told CBC News this week that the temporary shutdown of Trans Mountain "will not have [a] significant impact on oil production in Canada." 

"It is contributing to gasoline supply constraints in the near-term as this is a main conduit for oil and refined products to British Columbia," CAPP vice-president Ben Brunnen wrote in an email. 

"The startup of the Line 3 pipeline just weeks ago does offer some redundancy at this time to get crude oil supplies to the West Coast." 

Alberta's provincial government said Friday it is in "constant communication" with Trans Mountain officials "as the difficult situation in B.C. continues."

A spokeswoman said some limited rail transport has resumed, with CP Rail restarting limited operations last week. She also said the government is monitoring oil product storage capacity in Alberta and "there are no concerns right now."

When crude storage begins to fill up, there can be a drag on price. An extreme example occurred three years ago when pipeline bottlenecks saw the price gap between Canadian crude and the North American benchmark widen dramatically, costing some oil producers dearly.

Analyst Tommy Chu is keeping an eye on developments with the Trans Mountain pipeline, which typically accounts for about 10 per cent of crude exports from the province.

Chu said Alberta's oil sector was seeing elevated inventory levels last month due to refinery outages in the U.S. Midwest and the Gulf Coast, where the bulk of Alberta oil typically flows. 

"So Trans Mountain going down for an outage like this wasn't what we would have liked to see, given that there's other factors going on," said Chu, a senior research associate at Enverus, an energy data analytics firm.

"But luckily we've seen utilization in the U.S. start to pick up, as we would expect toward the end of December."

Chu said some crude is being moved from Alberta to B.C. by train and truck, but he added that it's mostly refined products, like gasoline, that are being prioritized. 


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