RBN Energy: Western Canadian CBR

I generally don't do this, a stand-alone post on RBN Energy, but this is a nice update on Canadian CBR from RBN.

Some data points:

CBR from Canada has increased ten-fold in two years

• 2012: 16,000 bopd (CBR)
• 2014: 160,000 bopd (CBR)

CBR driven primarily by pipeline capacity constraints
Canadian crude production has expanded steadily over the past few years

• 2003: 2.5 million bopd 
• 2013: 3.4 million bopd
• 2014: 3.6 million bopd
• 2019e: 5 million bopd

most from Western Canadian Sedimentary Basin (WCSB)

• 2012: 1.8 million bopd
• 2020e: 3.6 million bopd

bitumen is very viscous: Canadians using steam to get it out of the ground

• pipelines transport dibit: diluent - bitumen mixture (30% diluent)
• CBR transports purebit (raw) or railbit (20% diluent)

Pipeline onstraints make it unlikely to see significant new pipeline before 2017; the following approved, but many, many hurdles; progress will be slowed significantly

• Kinder Morgan TransMountain Express
• Enbridge Northern Gateway
  TransCanada Energy East

CBR premium: $15/bbl -- cost of diluent PLUS transportation
Two drivers for CBR: small producers and larger producers

• future looks gloomy for small producers
• larger producers looking to put in five new or expanded CBR terminals
• steam facilities required to unload railbit or purebit
• only one US facility can download railbit/purebit: Genesis Energy at Natchez, Mississippi

CBR regulations will likely slow CBR expansion
future of CBR depends on delays in pipeline expansion