> Technology improving in oilpatch, but pipelines still essential,

CALGARY — The potential cancellation of the Trans Mountain pipeline expansion is putting a spotlight on oilpatch innovations that might mitigate the need for export capacity as oilsands production rises.

But even the most ardent supporters of the new technologies agree Canada is going to need new pipeline space.

North West Refining president Ian MacGregor said his justopened Sturgeon Refinery near Edmonton will save 80,000 barrels per day of export pipeline space by converting 50,000 barrels per day of bitumen into diesel and returning 30,000 barrels per day of diluent to the local market.

He said the lack of pipeline space from Western Canada has driven down the price of bitumen, which improves refinery profit margins and is a positive factor in eventually expanding it — although expansion would increase production beyond the local need and, again, require export pipelines.

Meanwhile, work continues on partial bitumen upgrading technology that would reduce the amount of diluent tying up pipeline space, leaving as much as one-third more room for the bitumen.

Oilsands producer MEG Energy Corp. said it has proposed but not yet approved funding for a partial upgrading facility that would not only reduce the need for diluent but also produce a partially upgraded product that would see greater demand when exported to U.S. refineries.