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At home, refineries in Quebec and Atlantic Canada currently import 90% of their crude oil requirements. This market alone represents some 640,000 barrels per day that can be supplied by Western Canada.

While increases in total oil production bring opportunities for expanded markets at home and abroad, challenges persist.

Additional transportation capacity is needed to move product to market. “We have sufficient transportation mechanisms available to move current production, but expansion is needed to take us to the next level,” says Stringham.

Pipelines remain the primary method of moving crude oil because of the relatively low costs and ability to continuously deliver large volumes. A number of pipeline project proposals have the potential to service Canada’s east and west coasts and offshore markets (Trans Mountain expansion, Northern Gateway, Energy East) and the U.S. Gulf Coast (Keystone XL). However, uncertainty remains as to when these expansions may come online. Northern Gateway, a pipeline that would ship crude oil from the Edmonton area to a new tanker port at Kitimat, received approval from the federal government this month, but Keystone XL continues to be delayed.

This delay in pipeline capacity means producers are turning to rail as an alternative means of transportation. Shipments by rail are expected to triple over the next two years, and this is providing the stimulus for capital investment in new loading and unloading facilities. This added flexibility will allow delivery of multiple crude types to multiple destinations for both the short and long term.