Western Canadian Select
This level of activity would be the highest in the Western Canadian oil sector since the commodity price downturn of 2014-2015, which resulted in a prolonged period of industry contraction.
The curtailment was deemed necessary because of chronic pipeline bottlenecks out of Western Canada which cost the "industry and governments millions of dollars a day in lost revenue".
[74] In June 2012 Fairfield, Connecticut-based General Electric (GE), with its focus on international markets, opened its Global Innovation Centre in downtown Calgary with "130 privately employed scientists and engineers", the "first of its kind in North America", and the second in the world.
"[75] GE's thermal evaporation technology developed in the 1980s for use in desalination plants and the power generation industry was repurposed[75] in 1999 to improve on the water-intensive Steam Assisted Gravity Drainage (SAGD) method used to extract bitumen from the Athabasca Oil Sands.
Tim Simard, head of commodities at the National Bank of Canada, claims "WCS has "some interesting different fundamental attributes than the conventional WTI barrel."
[77] In order to address the transparency and liquidity issues facing WCS, Auspice created the Canadian Crude Index (CCI), which serves as a benchmark for oil produced in Canada.
[83] The CCI can be used to identify opportunities to speculate outright on the price of Canadian crude oil or in conjunction with West Texas Intermediate (WTI) to put on a spread trade which could represent the differential between the two.
Together, these create a fixed price for Canadian crude oil, and provide an accessible and transparent index to serve as a benchmark to build investable products upon, and could ultimately increase its demand to global markets.
[36] In a 2013 white paper for the Bank of Canada, authors Alquist and Guénette examined implications for high global oil prices for the North American market.
As well, Mexico began to strategically and successfully seek out joint venture refinery partnerships in the 1990s to create a market for its heavy crude oil in the U.S. Gulf.
In 1993, (Petróleos Mexicanos, the state-owned Mexican oil company) and Shell Oil Company agreed on a joint US$1 billion refinery upgrading construction project which led to the construction of a new coker, hydrotreating unit, sulphur recovery unit and other facilities in Deer Park, Texas on the Houston Ship Channel in order to process large volumes of PEMEX heavy Maya crude while fulfilling the U.S. Clean Air Act requirements.
In April 2013, Calgary-based Canada West Foundation warned that Alberta is "running up against a [pipeline capacity] wall around 2016, when we will have barrels of oil we can't move".
[108] 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.
[121] Patricia Mohr, a Bank of Nova Scotia senior economist and commodities analyst, in her report[101] on the economic advantages to Energy East, argued that, Western Canadian Select, the heavy oil marker in Alberta, "could have earned a much higher price in India than actually received" in the first half of 2013 based on the price of Saudi Arabian heavy crude delivered to India" if the pipeline had already been operational.
[120] In the long term, supertankers using the proposed Irving/TransCanada deep-sea Saint John terminal could ship huge quantities of Alberta's blended bitumen, such as WCS to the super refineries in India.
[125] Under Prime Minister of Canada Justin Trudeau, Bill-48 was passed in 2015, which imposed a ban on oil tanker traffic on the north coast of British Columbia.
[133] Since 2007, Goldman Sachs has played a leading role in financing USD's "expansion of nearly a dozen specialized terminals that can quickly load and unload massive, mile-long trains carrying crude oil and ethanol across the United States".
Large price discounts for oil in locations poorly served by pipelines have offered traders attractive opportunities if they can figure out how to get the crude to higher-priced markets.
[136] Before the 2019 provincial election, the previous NDP government, had approved a plan that would cost $3.7 billion over a three-year period to transport up to 120,000 barrels per day out of Alberta by leasing 4,400 rail cars.
[136] Chief Executive Hunter Harrison told the Wall Street Journal in 2014 that Canadian Pacific would improve tracks along its North Line as part of a plan to ship Alberta oil east.
[140] "A second tanker, the Stealth Skyros, is scheduled to load WCS crude from Montreal at the end of next week for delivery to the U.S. Gulf Coast, a person with knowledge of booking said today.
[150] WCS crude oil with its "very low API (American Petroleum Institute) gravity and high sulfur content and levels of residual metals"[81][150] requires specialized refining that few Canadian refineries have.
[153][162] Since September 2013 WCS has been processed at Imperial Oil's Sarnia, Ontario, refinery and ExxonMobil Corporation's (XOM) has 238,000 barrels (37,800 m3) Joliet plant, Illinois and Baton Rouge, Louisiana.
[163] By April 2013, Imperial Oil's 121,000 barrels (19,200 m3) Sarnia, Ontario refinery was the only plugged-in coking facility in eastern Canada that could process raw bitumen.
[169] Repsol responded to the enforcement in January 2009 of the European Union's reduced sulphur content in automotive petrol and diesel from 50 to 10 parts per million, with heavy investment in upgrading their refineries.
They were upgrading three of their five refineries in Spain (Cartagena, A Coruña, Bilbao, Puertollano and Tarragona) with cokers that have the capacity to refine Western Canadian Select heavy oil.
[143] In 2012 Repsol completed its €3.15-billion upgrade and expansion of its Cartagena refinery in Murcia, Spain, which included a new coking unit capable of refining heavy crude like WCS.
A "pseudo" Alaskan North Slope substitute, for example, could be created with a blend of 55% Bakken and 45% Western Canadian Select at a cost potentially far less than the ANS market price."
[5] Since 2000, the wider use of oil extraction technologies such as hydraulic fracturing and horizontal drilling, have caused a production boom in the Bakken formation which lies beneath the northwestern part of North Dakota.
The Province of Alberta receives a portion of benefits from the development of energy resources in the form of royalties that fund in part programs like health, education and infrastructure.
