Alberta Premier Jim Prentice, who is grasping for ways to secure markets for his province’s stranded crude production, has joined the push to investigate whether Valdez could be the answer.
It’s the first time the recently elected provincial leader has publicly mentioned Alaska as an alternative to the besieged pipeline proposals out of Alberta - TransCanada’s Keystone XL and Energy East, Enbridge’s Northern Gateway and Kinder Morgan’s Trans Mountain expansion - which once offered hope of incremental capacity approaching 3 million barrels per day.
Picking up on previous talks involving Alaska, Alberta, the Northwest Territories and Yukon, Prentice said a Valdez-destined pipeline is “technically feasible” and is now being explored to determine whether it’s “economically feasible” and could result in further meetings being scheduled between Alberta and Alaska.
“Our province needs pipelines in every direction,” he told Bloomberg News in a New York interview earlier in February. “We are pushing on tidewater access in every conceivable venue.”
A spokeswoman for Prentice said a variation on a pipeline connecting Alberta with Valdez could involve a rail link.
Confirming that discussions have taken place, a spokeswoman told Bloomberg that Gov. Bill Walker “welcomes all constructive dialogue on growing Alaska’s economy.”
But state officials have previously cautioned that a new pipeline carrying crude bitumen across Alaska could face the same opposition from municipal governments, environmentalists, Native communities and landowners as the proposed pipelines out of Alberta.
The broad-brush concept involves a pipeline from the northern Alberta oil sands region, down the Mackenzie River Valley, swinging west across the Yukon on the Dempster Lateral into Alaska and ending up at Valdez.
Canadian crude expected to climb
With oil sands projects in the works that would see Canadian crude production climb to 5 million barrels per day from 3 million bpd by 2020, the pressure on the Alberta and Canadian governments to secure new markets is rapidly intensifying.
In extending its reach, the Alberta government funded a study by the consulting firm of Canatec Associates International which determined that three options for delivering crude from Alberta to a deepwater port off Tuktoyaktuk in the Beaufort Sea were all feasible.
But the Valdez alternative offers the advantages of an established tanker port, available space on the Trans Alaska Pipeline System on the final leg to the port and, unlike Tuktoyaktuk, the ability to operate year-round.
Until now, Northwest Territories Industry Minister Dave Ramsay has been the most energetic advocate of the Valdez option, arguing that the four affected governments are “fooling each other if we’re not thinking on a regional basis” about cooperating to open doors to Asian markets for northern oil and gas.
He told Petroleum News in late January that Alaska has consistently been receptive to the proposal as part of the push for economic growth in the Pacific North West economic region of the United States and Canada.
Ramsay said that with all of Canada’s mega-pipeline projects in trouble it’s time to get serious about delving into the full range of alternatives.
