Why I Love To Blog -- Reason #354 -- February 20, 2019 -- Alberta To Launch Huge CBR Scheme

A recurring theme on the blog is that oil companies will find a way to get their product to market.

Two days ago I wrote:

The problem will be the "right" kind of oil. The oil companies had that figured out years ago when they went forward with the Keystone XL. Unfortunately, now the perfect storm:

• Canada's western Canadian oil sands (heavy oil) remains landlocked
• the Keystone XL is dead;
• TransMountain is on life support; and,
• Enbridge Line 3, is intensive care but likely to survive; however, it won't be nearly enough to make up the shortfall
• fortunately, CBR is scalable
• it will be interesting to see if BNSF will be allowed to "assist" in Canadian CBR (I doubt it; I'm sure there are rules and regulations; if not, politics will impede)
• Venezuela, heavy oil -- we all know that story
• Mexico, heavy oil -- some think Pemex is doomed and based on policies taken by their newly-elected president, that may be correct
• Saudi Arabia, heavy-enough oil -- cutting back because it can't make it on $65-oil; needs $80-oil as a minimum; probably $100-oil when you get right down to it

Me? Not a bit worried. The refiners will take a hit on margins and the price of gasoline might go up, but "they" will find ways of getting heavy oil if they need it.

Now, today from Bloomberg via Rigzone: Alberta proposes huge CBR project; eyes a $1.7 billion profit. Data points:

• the Alberta provincial government will lease 4,400 rail cars; no locomotives; over three years
• will add 120,000 bopd 
• province hopes to shrink Canadian crude discount by $4/bbl over two years
• to move heavy oil (railbit) from Alberta to refiners along the US Gulf Coast
• the province will invest C$3.7 billion to lease tanks cars and services
• will generate C$5.9 billion in sales
• will net: C$2.2 billion ($1.7 billion)
• service providers: Canadian Pacific Railway Ltd; Canadian National Railway Co.

Folks in Minnesota, Nebraska will be screaming for more pipeline once they see all those oil trains creeping through their towns and villages at 5 mph.