Oil Producers, Consumers to Benefit from Reversing Oil Flow of Line 9B

CALGARY, ALBERTA--(Marketwired - March 6, 2014) - The Canadian Association of Petroleum Producers welcomes the National Energy Board's decision today to conditionally approve the reversal of the oil flow of Enbridge's Line 9B.

Line 9B is an existing pipeline built to move crude oil from Western Canada to Montreal. Oil flow was reversed in the 1990s to move imported crude oil from Montreal to Sarnia. Today's decision returns Line 9B to its original purpose of connecting western Canadian crude oil to eastern Canadian markets.

"The NEB's decision is an important milestone that again opens the way for Eastern Canadian markets to use Canadian oil instead of imports from foreign sources, including Africa, the Middle East or the North Sea," said Greg Stringham, vice-president oil sands.

Refineries in Quebec and Atlantic Canada currently import 86 per cent of their requirements, or about 700,000 barrels per day. Total refinery capacity in Eastern Canada is about 1.3 million barrels per day and includes refineries in Ontario, Quebec and Atlantic Canada.

"Increasing supplies of Canadian crude oil to eastern Canadian markets benefits refiners and consumers in the region by offering access to Canada's vast oil resources, more supply reliability and flexibility, and an attractive, competitive alternative to offshore oil," Stringham said. "Pipelines are one of the most effective, safest ways to move oil to markets."

As the Montreal Economic Institute indicates, connecting eastern Canadian refineries to western Canadian crude oil can provide them with a stable, secure source of supply and reduce their vulnerability in the event of unexpected interruptions in the supply of oil from politically less stable foreign sources. The institute also indicates the importance of competitive crude oil alternatives to Montreal's petrochemical industry.

Canadian crude oil production is forecast to more than double from 3.2 million barrels per day to 6.7 million barrels per day by 2030. As a result, CAPP supports market growth and diversification.

"East, west and south - all are important," Stringham said. "It is not a question of one or the other as Canada's strong resource endowment will need additional transportation capacity to all markets over the longer term."

The Canadian Association of Petroleum Producers (CAPP) represents companies, large and small, that explore for, develop and produce natural gas and crude oil throughout Canada. CAPP's member companies produce about 90 per cent of Canada's natural gas and crude oil. CAPP's associate members provide a wide range of services that support the upstream crude oil and natural gas industry. Together CAPP's members and associate members are an important part of a national industry with revenues of about $110 billion a year. CAPP's mission is to enhance the economic sustainability of the Canadian upstream petroleum industry in a safe and environmentally and socially responsible manner, through constructive engagement and communication with governments, the public and stakeholders in the communities in which we operate.