Oil export markets crisis has been years in the making – by Barrie McKenna (Globe and Mail – February 25, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

OTTAWA — Imagine if the Voisey’s Bay nickel mine in Labrador had gone ahead without a deep water port to ship the ore to smelters.

Or if Hydro-Quebec had opened the floodgates on its massive James Bay project before installing transmission lines and lining up U.S. customers. By the same token, you likely wouldn’t buy a car if you lived in a roadless Newfoundland outport.

Sinking billions into extraction projects without lining up a dependable way to get the resource out is reckless, if not downright stupid.

Oh, wait. Isn’t that the awkward spot Canada’s oil patch has put itself in? “Access to tidewater” is the new and increasingly forlorn mantra of oil executives and their political backers in Ottawa and the Western provinces.

There’s a sudden panic about the dearth of options to get that heavy crude to refiners, and ultimately to customers. Alberta Energy Minister Ken Hughes declared recently that securing market access for the province’s oil is his government’s “single most important imperative.”

There are now proposals for at least three different pipelines – to Atlantic Canada, to British Columbia, and of course, the stalled Keystone XL that would carry the heavy crude south to refineries on the U.S. Gulf Coast.

But none of these pipelines offers relief in the medium and short-term. Even if approved, the pipelines will take years to complete. With options limited, producers are frantically talking of loading the stuff onto rail cars and barges. Pack mules and canoes may be next.

Producers are busily scaling back or cancelling oil sands projects, and if foreign buyers insist on a carbon tax, Alberta’s so-called “bitumen bubble” could grow much larger.

Where was the sense of urgency about pipelines when investors committed billions of dollars over the past decade to double the output of the oil sands?

For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/oil-export-markets-crisis-has-been-years-in-the-making/article9009978/