Connect with us

Alberta

Garfield Marks; “Oil-by-Seaway” proposal still draws interest.

Published

18 minute read

The proposal to by-pass Quebec in shipping oil to refineries in New Brunswick via Thunder Bay then shipping through the St. Lawrence Seaway still has legs.

Nov 9 2019, Comments by D.B. Chalcroft on the

PROPOSAL TO SHIP OIL TO EASTERN CANADA VIA ST. LAWRENCE SEAWAY by Garfield Marks

Garfield Marks published his “Oil-by-Seaway” and it has subsequently been covered in the CBC media and more recently on CHQR 770 radio.

The Garfield Marks “Oil-by-Seaway” Proposal

Concept – To replace the eastern half (about 2600 km) of the proposed Energy East Pipeline with tanker shipping from Thunder Bay via the Great Lakes and the St. Lawrence Seaway to St. John, New Brunswick.

The Energy East pipeline proposed by TC Energy in 2014, would have converted about 3000 km of the existing natural gas pipeline from Hardisty, Alberta to the Ontario-Quebec border, to diluted bitumen transportation; and would have built 1600 kms of new pipeline from the Ontario-Quebec border to St. John, New Brunswick. The capacity of the pipeline was to have been 1.1 million barrels (200,000 tonnes) of crude oil per day, was estimated to cost $12 billion, and at 4600 km would have been the longest pipeline in North America. TC Energy subsequently cancelled the project in October 2017, citing regulatory rule changes. In addition the Government of Quebec has stated that there is no social license for the Energy East pipeline through Quebec.

“Oil-by-Seaway” Tanker Shipping Option

The “Oil-by-Seaway” proposal would include converting 2000 km of the existing TC Energy Natural Gas pipeline from Hardisty, Ab, to Thunder Bay to carry diluted bitumen, and creating a new oil tanker shipping system from Thunder Bay through the existing St Lawrence Seaway and by ocean to the major Irving oil refinery at St. John , NB.

The existing St. Lawrence Seaway has more available shipping capacity than is presently being utilized. During the 1970s and 1980s, cargo shipments from Thunder Bay, for example, averaged about 20,000,000 metric tonnes per year with between 850 and 1470 vessels per year leaving the port. Since 2009 cargo shipments from Thunder Bay have averaged only about 8,000,000 tonnes/year on some 400 vessels per year.

The existing locks in the St. Lawrence Seaway at the Welland Canal and near Montreal, impose length, width, and draft, size restrictions (maximums of 225.5 m long by 23.8 m wide and draft of 8 m) on the vessels that can use the Great Lakes shipping system. The maximum size of bulk cargo that can be shipped through the system is about 29,000 tonnes per Seaway-capable ship – these ships are known as “lakers”.

The St Lawrence Seaway averages about 275 days of navigation per year – the other 90 days being closed to shipping due to winter conditions.

In order for “Oil-by-Seaway” shipping to deliver the 1,100,000 BPD (200,000 tonnes per day) of oil to the St John, NB terminal as envisaged by Energy East, in a shipping season of 275 days, would require the daily shipping deliveries to be 265,000 tonnes/day during the navigation season. This would require close to 10 “laker-tankers” per day to unload at St. John, NB. Assuming the turn-around time for a “laker-tanker” from Thunder Bay to St. John to Thunder Bay is about 16 days including 2 days for loading and unloading – means that a fleet of about 160 “laker-tankers” would be required to achieve this delivery commitment, plus storage facilities at St John of about 100,000,000 barrels.

The Welland Canal currently has about 1500-1800 vessel transits each way per year, or on average 5-7 transits per day each way. However in 1960 the total number of vessel transits was as high as 4500 each way (an average of 16 /day) although vessels were smaller carrying an average of only 3,400 tonnes of cargo. The Oil-by-Seaway proposal would add 2700 passages per year bringing the total to around 4500 per year or 16 per day each way, very similar to the 1960 record rate albeit with larger average vessel sizes.

Ballpark Cost Estimate for 160 Laker-Tankers

What would it cost to create a fleet of say 160 “Laker-tankers”? As a very rough comparison, the three Newfoundland Off-shore Shuttle Tankers that pickup roughly 230,000 BPD (47,000 tonne/day) of oil production from the five producing platforms on the Grand Banks, cost a reported $375,000,000 (ie $125M/ship)in 2016, and have a deadweight of 148,000 tonnes and gross tonnage of 85,000 tonnes each, meaning each ship can carry up to about 60,000 tonnes of cargo (oil) . These three Shuttle Tankers deliver the 47,000 tonne/day of Grand Bank oil production to the trans-shipment terminal at Whiffen Head, NL with an average turn-around time of 3-5 days . A rough cost estimate for the Laker-Tankers can be obtained by taking $125M X 29,000 t/ 60,000 t = $60 million. Therefore the cost of one “Laker-tanker” with 29,000 tonne capacity is estimated to be in the order of $60 million, and a fleet of 160 Laker-tankers would be in the ballpark of $10 billion.

Discussion

The St. Lawrence Seaway is currently handling 20-25 million tonnes of cargo per year through the Welland Canal in the Downbound direction, ie towards the east, with total transits of 1400 – 1900 per year. Oil-by-Seaway to equal the Energy East proposal of 200,000 tonnes per day would add 73,000,000 tonnes/yr. to the Downbound traffic. This is a significant increase to nearly 100,000,000 tonnes/year and 16 vessel transits per day each way, through the Seaway System. It would appear that the present Seaway infrastructure may be able to accommodate this magnitude of increase without major upgrades, because it doesn’t exceed the historical highs in vessel transits which occurred in the 1960s. This would need to be confirmed with the St. Lawrence Seaway Management Corporation.

The Oil-by-Seaway proposal would require a fleet of 160 or so “Laker-Tankers” which most likely don’t currently exist, and which would cost in the order of $10 billion . This concept would also require the creation of about 100,000,000 bbl. of incremental oil storage capacity at St. John, NB, that probably wasn’t part of the Energy East proposal, to cover the 90 days each year when the Seaway is closed.

Utilizing the existing Seaway Infrastructure to transport oil by tanker would reverse a long trend of declining commodity traffic through the Seaway system. This scheme could create the impetus to update and modernize Seaway facilities, and could also reinvigorate the communities along the Seaway, with substantially more economic activity in their midst.

Fabricating 160 Laker-Tankers could provide a significant workload for Canada’s ship-building industry, perhaps including the Davie Shipyard in Quebec, and the Irving shipyard in Halifax.

There are undoubtedly many other technical, social, environmental, and regulatory issues to be identified and considered, as well as whether this concept is commercially viable.

Preliminary Conclusion

On the surface, the Garfield Marks “Oil-by-Seaway” proposal seems to have sufficient merit to warrant a more thorough analysis than presented herein.

 

Comments by: David B. Chalcroft, P. Eng.

Previously published;

 

We have not been able to run our bitumen through a pipeline to a refinery in New Brunswick. There has been resistance in parts of Ontario and in Quebec. What if we came up with another plan. Would we consider it? There will be road blocks, but not insurmountable, would we consider it?

Yes how about Thunder Bay?

Thunder Bay, Ontario, the largest Canadian port of the St. Lawrence Seaway located on the west end of Lake Superior, 1850 kms. from Hardisty, Alberta. A forgotten jewel.

So what, you may ask.

They used to ship grain from Thunder Bay in huge tankers to ports all over the world. Why not oil?

The Saint Lawrence Seaway ships fuel, gasoline and diesel tankers, to this day.

We could run oil tankers to the Irving refinery in New Brunswick, bypassing the controversial pipeline running through eastern Ontario and Quebec.

The pipeline, if that was the transport model chosen, would only need to run through parts of Alberta, Saskatchewan, Manitoba and Ontario. Like, previously stated the pipeline would only be 1850 kms. long.

The other great thing about Thunder Bay is the abundance of rail lines. Transportation for such things as grain and forestry products from western Canada. If you can’t run pipeline from Hardisty, through to Thunder Bay, use the railroad.

Why Hardisty, you may ask.

Hardisty, according to Wikipedia, is mainly known as a pivotal petroleum industry hub where petroleum products such as Western Canada Select blended crude oil and Hardisty heavy oil are produced, stored and traded.

The Town of Hardisty owes its very existence to the Canadian Pacific Railway. About 1904 the surveyors began to survey the railroad from the east and decided to locate a divisional point at Hardisty because of the good water supply from the river.

Hardisty, Alberta has the railroad and has the product, the storage capacity, and the former Alberta government planned on investing $3.7 billion in rail cars for hauling oil while Thunder Bay has the railroad and an under utilised port at the head of the St. Lawrence Seaway.

Economics are there along with opportunity, employment would be created and the east coast could end its’ dependency on imported oil.

Do we have the vision or willingness to consider another option. I am just asking for all avenues to be considered.

In my interviews in Ontario there is a willingness to discuss this idea.

The St. Lawrence Seaway Management Corporation is still reviewing the idea of shipping crude oil from western Canada through its system, and it’s a long way from happening, according to Bruce Hodgson, the Seaway’s director of market development.

“Obviously, there needs to be an ongoing commitment on the part of a producer, and so that’s going to be required for any project of this nature,” he said.

We could consider it, could we not?

CBC NEWS did a story about this idea on March 7 2019;

A retired oil field worker in Alberta has “floated” a novel solution to Alberta’s oil transportation woes: pipe the bitumen to Thunder Bay, Ont., then ship it up the St. Lawrence Seaway to the Irving oil refinery in New Brunswick.

Marks’ proposal might be more than a pipe dream, according to the director of the Queen’s Institute for Energy and Environmental Policy.

‘I don’t think that it’s a totally nuts idea’

“I don’t think that it’s a totally nuts idea,” Warren Mabee said. “I think that there’s some flaws to it … but this is an idea that could work in certain circumstances and at certain times of year. … It’s not the craziest thing I’ve ever heard.”

The chief executive officer of the Port of Thunder Bay said shipping oil from the port “could easily be done.”

“We ship refined gasoline and diesel up from Sarnia. We’ve done that for many many years,” Tim Heney told CBC. “So it’s not something that’s that far-fetched.”

There are, however, plenty of potential drawbacks to shipping crude through the Seaway, Mabee explained, not least of which is the fact that it isn’t open year-round.

The need to store oil or redirect it during the winter months could be costly, he said.

Potential roadblocks

Another potential pitfall is capacity, he added; there may not be enough of the right-sized tankers available to carry the oil through the Seaway.

Finally, he said, the journey by sea from Lake Superior to the Irving refinery in New Brunswick is a long one, so it might make more sense to transport the product to a closer facility such as the one in Sarnia, Ont.

The St. Lawrence Seaway Management Corporation is still reviewing the idea of shipping crude oil from western Canada through its system, and it’s a long way from happening, according to Bruce Hodgson, the Seaway’s director of market development.

“Obviously, there needs to be an ongoing commitment on the part of a producer, and so that’s going to be required for any project of this nature,” he said.

So far, no producer has come forward seeking to ship crude through Thunder Bay, he said.

Asked about the possible environmental risks of shipping oil on Lake Superior, both Hodgson and Heney said shipping by tanker is relatively safe; Hodgson noted that any tankers carrying the product would have to be double-hulled, and crews are heavily vetted.

Time to rethink pipelines?

There hasn’t been a spill in the Seaway system for more than 20 years he said.

Nonetheless, Mabee said, the potential for an oil spill on the Great Lakes could be a huge issue.

“The St. Lawrence and the Great Lakes have a lot of people living in close proximity, a lot of people who rely on it for drinking water,” he said. “There’s a delicate ecosystem there. I think a lot of people would push back against this proposal simply from that perspective.”

 

In fact, one of the reasons Mabee appreciates Marks’ proposal, he said, is because it invites people to weigh the pros and cons of different methods of transporting oil.

“If we’re not going to build pipelines, but we’re going to continue to use oil, it means that people are going to be looking at some of these alternative transport options,” he said.

“And if we don’t want oil on those alternative transport options, we need to give the pipelines another thought.

Time to consider all options, I dare say.

Follow Author

Alberta

Alberta mother accuses health agency of trying to vaccinate son against her wishes

Published on

From LifeSiteNews

By Clare Marie Merkowsky

 

Alberta Health Services has been accused of attempting to vaccinate a child in school against his parent’s wishes.  

On November 6, Alberta Health Services staffers visited Edmonton Hardisty School where they reportedly attempted to vaccinate a grade 6 student despite his parents signing a form stating that they did not wish for him to receive the vaccines.  

 

“It is clear they do not prioritize parental rights, and in not doing so, they traumatize students,” the boy’s mother Kerri Findling told the Counter Signal. 

During the school visit, AHS planned to vaccinate sixth graders with the HPV and hepatitis B vaccines. Notably, both HPV and hepatitis B are vaccines given to prevent diseases normally transmitted sexually.  

Among the chief concerns about the HPV vaccine has been the high number of adverse reactions reported after taking it, including a case where a 16 year-old Australian girl was made infertile due to the vaccine.  

Additionally, in 2008, the U.S. Food and Drug Administration received reports of 28 deaths associated with the HPV vaccine. Among the 6,723 adverse reactions reported that year, 142 were deemed life-threatening and 1,061 were considered serious.   

Children whose parents had written “refused” on their forms were supposed to return to the classroom when the rest of the class was called into the vaccination area.  

However, in this case, Findling alleged that AHS staffers told her son to proceed to the vaccination area, despite seeing that she had written “refused” on his form. 

When the boy asked if he could return to the classroom, as he was certain his parents did not intend for him to receive the shots, the staff reportedly said “no.” However, he chose to return to the classroom anyway.    

Following his parents’ arrival at the school, AHS claimed the incident was a misunderstanding due to a “new hire,” attesting that the mistake would have been caught before their son was vaccinated.   

“If a student leaves the vaccination center without receiving the vaccine, it should be up to the parents to get the vaccine at a different time, if they so desire, not the school to enforce vaccination on behalf of AHS,” Findling declared.  

Findling’s story comes just a few months after Alberta Premier Danielle Smith promised a new Bill of Rights affirming “God-given” parental authority over children. 

A draft version of a forthcoming Alberta Bill of Rights provided to LifeSiteNews includes a provision beefing up parental rights, declaring the “freedom of parents to make informed decisions concerning the health, education, welfare and upbringing of their children.” 

Continue Reading

Alberta

Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn

Published on

From the Fraser Institute

By Tegan Hill

According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.

The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.

For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).

And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.

In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.

This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.

Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.

Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.

Of course, if the government falls back into deficit there are implications for everyday Albertans.

When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.

According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.

Continue Reading

Trending

X