Increasing oil-by-rail exports show need for more pipelines: premier

Premier Scott Moe will be pressing the issue of getting oil off railroads when he meets with his provincial counterparts later this week.

A recent National Energy Board (NEB) report is showing crude-byrail exports from Canada grew to a record 193,500 barrels per day ( bpd) in April, up 13 per cent from the previous month, as full pipelines forced more producers to use trains to get their products to market.

The oil shipping tally beat the previous record of nearly 179,000 bpd in September 2014 and was well ahead of the 150,000 bpd moved in April 2017.

In response to that report, Premier Scott Moe said in an online statement that it is “dangerous and completely unacceptable when there are better, safer means of transporting oil to market.”

He added he will “call on the (federal) government to act quickly to expand market access for our national resources” and pledged to raise the issue during Council of the Federation (COF) meetings, taking place later this week in New Brunswick.

In a followup statement, the premier’s office said the study shows the relevancy of the need for more pipelines.

“Increased rail capacity displaces other essential export products from Saskatchewan’s agricultural, mining, and manufacturing industries at a great cost to the jobs and businesses that depend on these industries,” it said.

“Moe will speak to the economic benefit that all Canadians will see from increasing market access, not just the benefit that Saskatchewan will see. This conversation starts with the immediate construction of the Trans-mountain Pipeline, and extends to gathering support for future nation-building projects that will increase Canada’s export capacity,” the statement continued.

Andrew Botterill, a partner with accounting firm Deloitte, said he expects rail shipments will continue to grow this year.

He said the increased use of rail will allow prices for Western Canadian Select bitumen-blend crude oil to strengthen as compared with New York benchmark West Texas Intermediate crude.

Botterill said demand for Canadian heavy oil is expected to increase as it will be needed in the U.S. Gulf Coast refining complex to replace shrinking volumes from Venezuela.

Deloitte forecasts global oil prices will fall back from recent threeyear highs in the coming months as OPEC countries increase output and international demand for oil declines.