Petroleum industry in Canada
Because of its geographic isolation, the area was settled relatively late in the history of Canada, and its true resource potential was not discovered until after World War II.
As a result, Canada built its major manufacturing centres near its historic hydroelectric power sources in Ontario and Quebec, rather than its petroleum resources in Alberta and Saskatchewan.
Not knowing about its own potential, Canada began to import the vast majority of its petroleum from other countries as it developed into a modern industrial economy.
Most of these are located on what is known as Refinery Row in Strathcona County near Edmonton, Alberta, which supplies products to most of Western Canada.
In addition to refined products such as gasoline and diesel fuel, the refineries and upgraders also produce off-gases, which are used as feedstock by nearby petrochemical plants.
[25] The majority of the province's refining capacity is in a single complex in the provincial capital of Regina:[25] Oil and gas activity is regulated by the Saskatchewan Industry and Resources (SIR).
[32] Manitoba produced an average of 7,283 cubic metres per day (46,000 bbl/d) of light crude oil in 2015, or about 1.2% of Canada's petroleum production.
The Northwest Territories produced an average of 1,587 cubic metres per day (10,000 bbl/d) of light crude oil in 2015, or about 0.2% of Canada's petroleum production.
None of the finds were big enough to pay for the multibillion-dollar production and transportation schemes required to bring the oil out, so all the wells which had been drilled were plugged and abandoned.
[36] In addition, after the Deepwater Horizon explosion in the Gulf of Mexico in 2010, new rules were introduced which discouraged companies from drilling in the Canadian Arctic offshore.
[37] Ontario produced an average of 157 cubic metres per day (1,000 bbl/d) of light crude oil in 2015, or less than 0.03% of Canada's petroleum production.
[43] Production from the Alberta oil sands is still in its early stages and the province's established bitumen resources will last for generations into the future.
In addition, the Alberta Energy Regulator has recently identified over 67 billion cubic metres (420 Gbbl) of unconventional shale oil resources in the province.
These are the major carriers of crude oil, natural gas, and NGLs within provinces and across provincial or international borders, where the products are either sent to refineries or exported to other markets.
If pipelines are near capacity or non-existent in certain areas, crude oil is then transported over land by rail or truck, or over water by marine vessels.
Development of the massive oil sand reserves in Alberta would be facilitated by enhancing the North American pipeline network which would transport dilbit to refineries or export facilities.
The hydrogen sulfide removed in the refining and processing of crude oil and natural gas is subsequently converted into byproduct elemental sulfur.
[54] Bitumen from the oil sands requires blending with a diluent in order to decrease its viscosity and density so that it can easily flow through pipelines.
[54] The current takeaway capacity in Western Canada is tight, as oil producers are beginning to outpace the movement of their products.
With regard to the claim that Canada does not have access to “international prices”, many economists decry the concept that Canada does have access to the globalized economy as ridiculous and attribute the price differential to the costs of shipping heavy, sour crude thousands of kilometres, compounded by over supply in the destinations able to process aforementioned oil.
[60] Due to a doubling of a “production and export” model bet on by the biggest players in the tar sands, producers have recently (2018) encountered an over supply problem, and have sought further government subsidies to lessen the blow of their financial miscalculations earlier this decade.
[62] In the United States, Democrats are concerned that Keystone XL would simply facilitate getting Alberta oil sands products to tidewater for export to China and other countries via the American Gulf Coast of Mexico.
[66][56] It was invigorated in 2013 after the deadly Lac-Mégantic disaster in Quebec when a freight train derailed and spilled 5.56 million litres[67] of crude oil, which resulted in explosions and fires that destroyed much of the town's core.
That same year, a train carrying propane and crude derailed near Gainford, Alberta, resulting in two explosions but no injuries or fatalities.
Numerous studies, however, indicate that pipelines are safer, based on the number of occurrences (accidents and incidents) weighed against the quantity of product transported.
[70][71] Between 2004 and 2015, the likelihood of rail accidents in Canada was 2.6 times greater than for pipelines per thousand barrels of oil equivalents (Mboe).
[74] For crude oil transported from the North Dakota Bakken Formation, air pollution and greenhouse gas emission costs are substantially larger for rail compared to pipeline.
[78] Although quantities decreased to 48 million in 2017, the competitive advantages offered by rail, particularly its access to remote regions as well as lack of regulatory and social challenges compared with building new pipelines, will likely make it a viable transportation method for years to come.
[78] Both forms of transportation play a role in moving oil efficiently, but each has its unique trade-offs in terms of the benefits it offers.
Offshore oil Atlantic Canada is administered under joint federal and provincial responsibility in Nova Scotia and Newfoundland and Labrador.
