Building a coker unit is not just a question of economics. It’s also a political question. There’s geopolitical risk associated with importing foreign oils. In Africa and the Middle East, armed insurgents routinely attack and seize energy infrastructure and destabilize national governments. The Americas don’t guarantee the security of assets either: Venezuela is on the edge of a full social meltdown and its crude exports are tanking accordingly. Mexican nationalism kept foreign investment and technology out of that country for so long that its oil and gas production has failed to reach the potential of a modern industry. Even Uncle Sam has bouts of resource nationalism, banning oil exports in the past and electing a new president who sees trade with his neighbors as an economic threat. In contrast, Canadian pipeline operators can lock in long-term contracts with reliable Canadian suppliers.
Building a bitumen coker unit in Montreal or Saint John largely assumes that TransCanada’s 1.1 million b/d pipeline will get built. That may never happen. Furthermore, for TransCanada to actually build the pipeline means it has to be certain that there is a final market for bitumen—and a single 30,000 b/d coker doesn’t deliver that guarantee. If only one Eastern Canadian refinery is upgraded to handle western crude, then TransCanada needs to sell bitumen into the Atlantic market, where the nearest oil import terminals are on the U.S. Gulf Coast. That’s the same market that almost all Western Canadian oil production already supplies via pipelines. Both Ottawa and Washington are fickle pipeline proponents—depending on who says what when in opposition and what they actually do when in power. Taking a final investment decision on a multibillion-dollar project that will last decades, while politicians remain subject to four-year election cycles, requires skillful political risk assessment.