Page 8 - NorthAmOil Week 40 2021

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Canadian oil exports to US

jump on Line 3 start-up

NORTH AMERICA CANADIAN shipments of crude to the US rose volumes will average closer to 3.7-3.8mn bpd,
to levels not seen since January following the from previous levels of around 3.5mn bpd.
start-up of Enbridge’s Line 3 replacement oil The 760,000 bpd replacement roughly dou-
pipeline from Alberta’s oil sands last week. bles the amount of oil that can flow through Line
According to preliminary data from the US 3, after the pipeline had previously operated at
Energy Information Administration (EIA), a reduced capacity of around 390,000 bpd on
weekly crude deliveries from Canada to the safety concerns related to its age. The boost will
US reached 4.04mn barrels per day (bpd) in be a welcome one for refiners on the US Gulf
the week up to October 1 – the day oil started Coast, which are mainly geared towards pro-
flowing on Line 3. This marked the high- cessing heavy crude and have been struggling
est level of deliveries since 4.2mn bpd was with supply owing to lower deliveries from the
recorded in the week up to January 29, and OPEC+ countries and Latin America.
was also an increase of around 1mn bpd on Hurricane Ida, which hit the Gulf Coast in
the previous week. This is only the third time late August, came as a further hit to the region,
that shipments rose above 4mn bpd since the knocking both upstream and downstream facili-
EIA began compiling weekly data on the Can- ties offline. Refiners have increasingly been turn-
ada-US crude trade. ing to Canadian crude to meet demand as crude
Bloomberg cited an ESAI Energy upstream production volumes in the US Gulf of Mexico
analyst for North America, Elisabeth Murphy, remained shut in.
as saying it was likely increased flows would be Gulf production is taking time to restart. For
the new norm, largely as a result of the Line 3 example, Royal Dutch Shell only restarted its
replacement. However, she anticipates weekly Olympus platform this week.™

Ottawa invokes 1977 treaty

amid Line 5 dispute

NORTH AMERICA THE Canadian government invoked Article Six Enbridge has been fighting against Whit-
of the 1977 Transit Pipelines Treaty on October mer’s shutdown attempts in federal court, but
4 amid a dispute over Enbridge’s Line 5 pipeline court-ordered mediation between the two sides
with the State of Michigan. broke down last month. On October 1 the pipe-
The move kicks off a dispute resolution pro- line company said it remained committed to
cess contained in the treaty, paving the way for reaching a negotiated solution with the Michi-
direct talks with the administration of US Pres- gan government.
ident Joe Biden over the pipeline. This comes The 1977 treaty states that no public author-
Michigan Governor after Michigan Governor Gretchen Whitmer ity in either the US or Canada shall institute
Gretchen Whitmer is has made several attempts to shut down Line any measures “which are intended to, or which
seeking to have Line 5 5, which carries 540,000 barrels per day (bpd) would have the effect of, impeding, diverting,
shut down in federal of oil from Alberta to refineries in Ontario via redirecting or interfering with in any way the
court. Michigan. transmission of hydrocarbon in transit”. It has
The Canadian government also asked the US never been invoked before, and the move now
federal judge presiding over the case involving forces the Biden administration to become
Whitmer’s shutdown order for Line 5 to halt involved in the dispute.
proceedings. In an October 4 statement, Canadian For-
Whitmer has called the pipeline’s safety into eign Affairs Minister Marc Garneau said: “In
question. Even though Enbridge is proposing response to Michigan’s efforts to shut down Line
to replace an underwater section of pipeline 5, Canada has raised its significance for Cana-
that runs under the Straits of Mackinac, hous- dian economy and energy security to the highest
ing the replacement in a new tunnel, the gover- levels of the US federal government.”
nor is pushing to have the pipeline shut down The US Department of State (DoS) has not
altogether. yet commented on the matter.™

P8 www. NEWSBASE .com Week 40 07•October•2021