World Pipelines - May 2021

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campaigned on a promise to cancel it, and one of his first actions as president was to issue an executive order cancelling the previous administration’s permit for Keystone XL. The government of Alberta, which owns a stake in the line, protested vehemently, but chances of the line being built are increasingly slim. Enbridge, which exports over 3 million bpd to the US through its crude network, is working to add incremental capacity. The Trans Mountain Expansion (TMX), a project to triple the capacity of a crude pipeline running from Alberta to the British Columbia port of Burnaby, has faced a decade of obstruction from the government of British Columbia, First Nations and environmental groups, to the point where Kinder Morgan sold the project to the federal government in 2018. The result of delays has been a massive cost escalation, from CAN$7.4 billion to CAN$12.6 billion. While protests continue, construction on the line proceeds apace in both British Columbia and Alberta. Efforts to increase Indigenous support for the pipeline, which runs through a score of reserves, continues. Several Indigenous members from Saskatchewan, Alberta and British Columbia have joined together to form Project Reconciliation to negotiate an ownership stake. “I’m hoping it can happen in this new negotiation that’s taken place and everything comes out in a positive result and it’s a win-win for the First Nations, for TMX ownership and the government,” said Robert Morin, a member of the Enoch Cree First Nation, west of Edmonton. In late 2020, British Columbia health authorities issued an order regarding the workforces at several major construction projects to limit the transmission of COVID. Two lodges housing workers for CoastalLink Pipeline experienced outbreaks in December 2020, just prior to demobilisation for the Christmas holidays. During remobilisation in January, the company was limited to 400 workers in January, 2021, slowly increasing to 1000 by mid-February. The company noted that the order will both increase costs and delay the construction schedule, but was still assessing data in order to determine the extent of the impact.

Renewables As the world gradually moves away from fossil fuels toward renewables, so too is the Canadian oil patch. Hydrogen has great advantages as a clean fuel because, when it is burned in a fuel cell to create energy for electricity, the only emission is water. Analysts project that the global hydrogen market could reach US$12 trillion by 2050, when up to 30% of fuel needs will be met by hydrogen. The key to greenhouse gas (GHG) reductions is to create hydrogen without emitting carbon. Traditionally, hydrogen is made using the steam-methane reforming process, where hightemperature steam is used to strip hydrogen from natural gas. The energy-intensive process also produces large amounts of carbon dioxide (CO2). Blue hydrogen is made the same way, but the carbon dioxide is captured and sequestered underground (CCS). Hydrogen can also be made by electrolysis (running an electric current through water to separate hydrogen from oxygen). If the electricity is sourced from solar or wind power, the output is called green hydrogen. Many nations in Europe are already developing hydrogen hubs (also called hydrogen valleys and hydrogen clusters), that rely on


World Pipelines / MAY 2021

existing production and usage of hydrogen, most notably around refinery and petrochemical plants. Government, researchers and consultants are looking at potential sites in Canada. “There is the potential for a sort of early hydrogen hub in Canada in the Alberta Industrial Heartland, and there’s been some work that’s been done there,” said Debbie Scharf, Director General, Natural Resources Canada, at a recent hydrogen forum. Blue hydrogen is an ideal candidate for production in Alberta. As home to Canada’s oil and gas sector, the province has a long history of hydrogen production, as well as CCS. Royal Dutch Shell employed Fluor Canada to build its Quest Carbon Capture & Sequestration facility at the Scotford Refinery outside of Edmonton. In addition, it designed the nearby North West Redwater Sturgeon refinery, which captures carbon for transport via the Alberta Carbon Trunk Line to enhanced oil recovery projects in Central Alberta. FortisBC, the largest energy transportation company in British Columbia, has a goal to reduce its costumer’s GHG emissions by 30% by 2030. A key facet will be introducing hydrogen into its energy mix; because hydrogen has a tendency to make metals brittle, studies are currently underway to determine what amounts are safe to both the infrastructures of pipeline companies and consumers. The growth of electric vehicle (EV) cars will require massive amounts of lithium. The metal is primarily mined or extracted from brines, both costly and environmentally-damaging processes. Lithium also exists in high concentrations in waste brines from many conventional crude operations, however. A typical mature well in Alberta can produce up to 10 bbls of water for every bbl of crude extracted; every day, the province produces millions of barrels. Normally, the waste water, which can contain over 80 mg/l of lithium, is reinjected. A Canadian company is working to commercialise that resource, however. In early 2021, E3 Metals opened a direct lithium extraction (DLE) testing facility in Calgary. Brine from a Leduc field well is injected into a vessel containing proprietary chemicals that selectively absorb lithium ion. The lithium concentrate (around 5000 mg/l) is then extracted for further processing into battery-grade chemicals. The company will gather information in order to build a larger field test facility.

Future While adversarial events such as the cancellation of Keystone XL have had short-term impacts on the Canadian energy sector, Canadian production and exports are still on an upward trajectory. Oil output in Western Canada is expected to rise from 3.9 million bpd in 2020 to 4.45 million bpd by the end of 2021. Canada now exports approximately 3.8 million bpd to the US, which is expected to rise to 4.2 - 4.4 million bpd by 2026. Pipeline expansions in progress will add almost 1 million bpd by 2025, and crude-by-rail capacity is continually growing. In conclusion, Canada’s potential as an energy producing nation will continue to grow due to perseverance, innovation and a focus on producing oil and gas in an ethical, cost efficient and environmentally-sound manner. To that end, the midstream sector will benefit as new and existing markets for oil, gas, and renewable fuels expand.