cepa - state of the pipeline industry
TRANSCRIPT
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State of the Canadian State of the Canadian Transmission Pipeline Transmission Pipeline
IndustryIndustry
July 10, 2011July 10, 2011
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Ensuring a safe and reliable pipeline industry in Canada
Outline
About CEPA Pipeline infrastructure in North America Our key issues and priorities
– Pipeline safety
– Damage prevention
– Market access
– National energy strategy
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Ensuring a safe and reliable pipeline industry in Canada
About CEPA Transport 97% of the crude oil and natural gas
produced in Canada to markets across North America
Operate over 100,000 kilometres of pipeline in Canada and the United States
CEPA members expect to invest in multi-billion dollar expansion projects in the next 15 years
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CEPA Members
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Ensuring a safe and reliable pipeline industry in Canada
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Ensuring a safe and reliable pipeline industry in Canada
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Ensuring a safe and reliable pipeline industry in Canada
Safe and Efficient Energy Highways■ Move 1.2 billion barrels of crude and refined
products and 5.5 trillion cubic feet of natural gas each year
■ Pipeline are underground and safe■ Ruptures on pipelines are rare
■ Between 2002 and 2009■ Ruptures on federally regulated pipelines averaged slightly
more than one per year; a decline of 55% from the previous eight years
■ Average annual volume released from liquids pipelines was just two litres for every million litres transported … 99.9998% of the product was transported safely
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Canadian Industry World-Class Safety Record
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Significant Failures Remain Low
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Pipeline Monitoring and Maintenance■ Monitoring
– 24/7 monitoring at remote control centres using sophisticated computerized sensing and control systems
– Equipped with automated leak detection alarms and shut-down devices
– Regular visual surveys of pipelines by aerial and ground patrols
– Sophisticated “in-line” inspection tools (pigs) inspect the inside of pipes to identify changes
■ Maintenance– Preventative maintenance programs including constant pipeline
excavations and repairs
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Video of Inspection Tool
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Key industry initiatives to ensure safety
Committed to a safety culture Development of Integrity First program Apply effective management systems Damage prevention advocacy Converge on industry leading practices Develop and deploy appropriate advanced
technology Advance national standards
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External Damage: Growing Safety Risk Activity within close proximity to pipeline poses
greatest risk to public safety- External interference was the cause of six failure incidents
and 40 damage incidents (no release of service fluid) on CEPA pipelines during the period 2002-2009
- External interference was the fourth most common cause of failures
- All CEPA external interference failures during the period 2002-2009 were caused by third parties
Increased public education is essential In spite of regular surveillance, not all activities
on the ground can be controlled by pipeline operators
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Damage Prevention
Three key advocacy areas:– Establishment of a 3 digit call number across Canada
– Introduce mandatory one-call across Canada
– Introduce financial penalties for parties undertaking un-authorized digging on or near pipelines
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Market Access
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Pipeline Development Issues
Development of new pipeline assets is critical to open new markets for Canadian oil and gas
New natural gas supply needs to be connected to existing pipeline systems
The industry makes, and must continue to make, huge investments in pipelines to provide cost competitive infrastructure
Infrastructure = Choice & Responsiveness = Energy Security
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Market Access
For the Canadian pipeline industry to continue to strive, it needs access to existing and new markets– Canada is the number one supplier of oil and natural
gas to the U.S. and must remain so
– Canada is the ideal energy partner for the US: business friendly, politically stable and has abundant source of
energy strong, transparent regulation CEPA member safety track record is second to none
– Access to the Asian Pacific market is a key strategic outlet
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Energy Infrastructure Investment Forecast$26 trillion USD – Global Energy Sector, next 20 years (IEA, 2009)
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Pipelines: Delivering a Safe Source of Energy to the United States
Source US Dept of Energy
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2009 Canadian Crude Oil and Equivalent Supply and Disposition
(Thousand Barrels/Day)
78.6
218.9
PADD II
PADD III
PADD V PADD IV
PADD I
30.2
1945.4
2,725.8
23.9 1.
9
276.7
15.0
1167.3
252.8
51.5
68.6
372.9
365.4
106.2
47.7417.
0
179.2
BC
AB
SK
MB
ON
Norman Wells
Hibernia/Terra Nova
Sable
Canadian Production
Source: NEB, EIA
3,214 62
2
3,672
8,440
1,723
2,696.4
Delivery of Canadian Production
809 Imports into Canada
2,034 Canadian Refining Capacity
432.7QC
NB/NL/NS/PE
503.8
536.4
476.7
128.3
450.3
66.6
Legend
91.8
31.4
13.8
Source: NEBOctober 2010
40.2
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Pipelines: Delivering a Safe Source of Energy to the United States
Source: US Dept. of Energy
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AECO HUB
Prudhoe Bay
Anchorage
Norman Wells
Whitehorse
Prince Rupert
Kitimat
Prince George
Taylor
Rainbow Lake
Zama
Fort McMurray
LloydminsterEdmonton
HardistySundre
Kerrobert
Cutbank
Great Falls
KamloopsVancouver
Anacortes
Olympia
Portland
Seattle
Spokane
Empress
Regina
WinnipegCromer
Gretna
Mandan
Clearbrook
Thunder Bay
Superior
St. Paul
LockportChicago
Moosonee
Timmins
Sudbury North Bay
Ottawa
Montreal
Quebec City St. John
Halifax
Port Hawkesbury
St. John’s
Portland
Boston
Philadelphia
Warren
Oakville
Sarnia
Nanticoke
DetroitToledo
CantonLima
Catlettsburg
Memphis
Patoka
Robinson
WoodRiverMcPherson
El Dorado
Ponca CityCushing
Borger Tulsa
Coffeyville
Wynnewood
Colorado City TylerEl Dorado
New Orleans
St. JamesCorpus ChristiThree Rivers Freeport
HoustonPort Arthur
Lake Charles
LongviewBig Spring
Artesia
El Paso
Billings
Casper
Salt Lake City Sinclair
Cheyenne
Denver
Guernsey/Ft. Laramie
Long Beach
Los Angeles
Torrance
BakersfieldSanta Maria
Avon
San Francisco
Sunray
Source: NEB
2009 Canadian Natural Gas Disposition – Distribution by Market (Billion Cubic Feet/Day)
14.8 Canadian Production
1.8 Delivery of Canadian Production
1.9 Imports into Canada
Legend
HENRY HUB
Western Canada
14.8
Total Canadian Consumption
7.8
East Coast Offshore 0.4
Imports From US1.9
0.8
1.81.3
1.50.5
Oil Sands 1.2
1.3 1.0
0.2
Other US Export Points
0.6
October 2010
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The Opportunity
Canada’s pipeline industry can be a key element in employment and GDP recovery
Bringing new projects online near term = – Lower costs for big projects– Support for key industries
Private sector projects bring a multiplier effect throughout the economy
Investments made now ensure infrastructure is in place when investment reoccurs
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The Regulatory Imperative
Regulatory framework must deliver:
Coordination between and within governments, including– One project, one assessment consolidation for new projects
– Coordination of agencies and departments to eliminate duplication, streamline requirements, and share knowledge and expertise
Timely and effective processes
Balanced decision making, integrating environment and economy
– Using facts and expert decision making throughout the life of federally regulated facilities
Clear accountability and transparency of government
Effective Crown Consultation
– Fully addressed across departments and jurisdictions
– Separates assessment from economic negotiations
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Our Asks
Projects that are determined to be in the public interest must proceed responsibly– Focus on outcomes
Cost of those projects is managed so as not to burden Canadian consumers and investors with unnecessary cost– Balance is needed to both protect the Environment
and the Economy while meeting Energy needs (EEE)
Development timelines are predictable and review processes are effective and efficient– Invest in things that matter, not in things that don’t,
and know the difference
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National Energy Strategy
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Ensuring a safe and reliable pipeline industry in Canada
National Energy Strategy
CEPA fully supports the development of a national energy strategy for the following reasons:– Energy is a strategic asset
– Our energy sources need to receive the best value possible in an increasingly competitive global energy market
– The strategy needs to support the underlying attribute of the Canadian economy that we are a trading nation
– Need to balance economic, environmental and social expectations of Canadians
– Innovation, regulation, GHG emission reduction strategies and energy efficiency are key components to Canadian know-how
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Other Key Issues
Aging infrastructure– Pipeline abandonment
Project development costs Technological advances Rail vs. pipeline
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For more information please contact:
Philippe ReicherVice President, Communications & Stakeholder Relations
Canadian Energy Pipeline AssociationSuite 1860, 205 - 5th Avenue S.W.
Calgary, Alberta T2P 2V7
Tel: (403) 221-8778
www.cepa.com