Canada to face oil pipeline shortage: regulator

Canada’s crude-oil pipelines may have to ration space as early as this autumn because of a surge of new oil production from the Alberta oil sands, the country’s energy regulator said on Friday.

The National Energy Board said the pipeline industry may face a capacity crunch as oil output this year rises to 2.9 million barrels a day, 9 percent more than in 2006.
Almost all new Canadian oil supply comes from the oil sands region of northern Alberta, where more than C$100 billion worth of projects to exploit reserves second only to Saudi Arabia are planned or under way.

Most of the that production is destined for the huge U.S. market and a number of new pipelines are on the drawing boards to handle the expected flood of oil.

However none of those new lines, which include projects planned by Enbridge Inc. (ENB.TO: Quote) and TransCanada Corp. (TRP.TO: Quote), is expected be completed before 2009.

Without that new capacity, pipeline firms may have to periodically resort to apportionment — rationing available space — as soon as the fourth quarter, with restrictions remaining in place for 18 months until new lines are built, the regulator said.

Reuters