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Canadian oil transport close to capacity

Pipes for the Keystone Pipeline. Source: Wikimedia Commons, by By shannonpatrick17
Pipes for the Keystone Pipeline. Source: Wikimedia Commons, by By shannonpatrick17

Current pipelines can’t keep up with production, new pipelines are two years away and rail companies aren’t looking to upgrade routes.

Reuters reported 18 December that Canadian oil companies are struggling to export their crude as production grows and pipelines and railways reach capacity. They’re also struggling to compete with cheaper US production and low oil prices.

Speaking to the wire service, Wood Mackenzie analyst Mark Oberstoetter said, "We have a build-up of supply and that's only going to get worse next year. We are adding more and more pressure into a constrained export system".

Projects like Trans Canada’s Keystone XL pipeline or Enbridge’s Line 3 replacement programme have been delayed by regulatory issues and environmental opposition, dimming any chance of imminent supply upgrades.

While pipelines fill up, railways have said that they are unwilling to make significant investments for what may be only a few months of demand.

Pipes for the Keystone Pipeline. Source: Wikimedia Commons, by By shannonpatrick17