Enbridge tells federal panel new pipeline makes more sense than new refineries

Send to a friend

Send this article to a friend.

EDMONTON - Economists for pipeline builder Enbridge say it makes more financial sense to ship crude oil to Asia than trying to refine it first in Canada.

Economist Robert Mansell told a federal review panel in Edmonton that the heavy startup costs and the thin profit margins don't make refineries feasible without heavy government subsidy.

Mansell says given the construction boom on refineries in Asia, it just makes more sense to ship the crude oil there.

Enbridge (TSX:ENB) is seeking federal approval to build a pipeline from the Edmonton area across B.C. to a port at Kitimat where crude would be shipped by supertanker to Asia.

Mansell was answering questions from a lawyer representing the Alberta Federation of Labour.

Outside the hearing, AFL President Gil McGowan said he doesn't accept the argument from Enbridge, given that existing Canadian refineries are profitable and that Asia is building them as fast as it can.

Organizations: Enbridge, TSX, Alberta Federation of Labour

Geographic location: Asia, EDMONTON, Canada B.C. Kitimat

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page



Recent comments

  • David
    September 20, 2012 - 14:01

    I'm not so sure on the refining assessment. The last new refinery was built in the US in 1976. They have been converting their current facilities to handle heaver feed stock such as 1000 kg/m3 (extra heavy), as we have in Alberta. I'm assuming the Chinese facilities are going to be able to handle the heaver products as well. Refiners have been subject to slim margins for some time but with the older North American infrastructure facilities needing billions in maintenance and upgrades It's sounds like basic supply and demand economics. This of course all hinges on Governments letting the natural course of crack spreads to play out without political influencing, which I'm not sure that realistic either.