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Garfield Marks; “Oil-by-Seaway” proposal still draws interest.

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The proposal to by-pass Quebec in shipping oil to refineries in New Brunswick via Thunder Bay then shipping through the St. Lawrence Seaway still has legs.

Nov 9 2019, Comments by D.B. Chalcroft on the

PROPOSAL TO SHIP OIL TO EASTERN CANADA VIA ST. LAWRENCE SEAWAY by Garfield Marks

Garfield Marks published his “Oil-by-Seaway” and it has subsequently been covered in the CBC media and more recently on CHQR 770 radio.

The Garfield Marks “Oil-by-Seaway” Proposal

Concept – To replace the eastern half (about 2600 km) of the proposed Energy East Pipeline with tanker shipping from Thunder Bay via the Great Lakes and the St. Lawrence Seaway to St. John, New Brunswick.

The Energy East pipeline proposed by TC Energy in 2014, would have converted about 3000 km of the existing natural gas pipeline from Hardisty, Alberta to the Ontario-Quebec border, to diluted bitumen transportation; and would have built 1600 kms of new pipeline from the Ontario-Quebec border to St. John, New Brunswick. The capacity of the pipeline was to have been 1.1 million barrels (200,000 tonnes) of crude oil per day, was estimated to cost $12 billion, and at 4600 km would have been the longest pipeline in North America. TC Energy subsequently cancelled the project in October 2017, citing regulatory rule changes. In addition the Government of Quebec has stated that there is no social license for the Energy East pipeline through Quebec.

“Oil-by-Seaway” Tanker Shipping Option

The “Oil-by-Seaway” proposal would include converting 2000 km of the existing TC Energy Natural Gas pipeline from Hardisty, Ab, to Thunder Bay to carry diluted bitumen, and creating a new oil tanker shipping system from Thunder Bay through the existing St Lawrence Seaway and by ocean to the major Irving oil refinery at St. John , NB.

The existing St. Lawrence Seaway has more available shipping capacity than is presently being utilized. During the 1970s and 1980s, cargo shipments from Thunder Bay, for example, averaged about 20,000,000 metric tonnes per year with between 850 and 1470 vessels per year leaving the port. Since 2009 cargo shipments from Thunder Bay have averaged only about 8,000,000 tonnes/year on some 400 vessels per year.

The existing locks in the St. Lawrence Seaway at the Welland Canal and near Montreal, impose length, width, and draft, size restrictions (maximums of 225.5 m long by 23.8 m wide and draft of 8 m) on the vessels that can use the Great Lakes shipping system. The maximum size of bulk cargo that can be shipped through the system is about 29,000 tonnes per Seaway-capable ship – these ships are known as “lakers”.

The St Lawrence Seaway averages about 275 days of navigation per year – the other 90 days being closed to shipping due to winter conditions.

In order for “Oil-by-Seaway” shipping to deliver the 1,100,000 BPD (200,000 tonnes per day) of oil to the St John, NB terminal as envisaged by Energy East, in a shipping season of 275 days, would require the daily shipping deliveries to be 265,000 tonnes/day during the navigation season. This would require close to 10 “laker-tankers” per day to unload at St. John, NB. Assuming the turn-around time for a “laker-tanker” from Thunder Bay to St. John to Thunder Bay is about 16 days including 2 days for loading and unloading – means that a fleet of about 160 “laker-tankers” would be required to achieve this delivery commitment, plus storage facilities at St John of about 100,000,000 barrels.

The Welland Canal currently has about 1500-1800 vessel transits each way per year, or on average 5-7 transits per day each way. However in 1960 the total number of vessel transits was as high as 4500 each way (an average of 16 /day) although vessels were smaller carrying an average of only 3,400 tonnes of cargo. The Oil-by-Seaway proposal would add 2700 passages per year bringing the total to around 4500 per year or 16 per day each way, very similar to the 1960 record rate albeit with larger average vessel sizes.

Ballpark Cost Estimate for 160 Laker-Tankers

What would it cost to create a fleet of say 160 “Laker-tankers”? As a very rough comparison, the three Newfoundland Off-shore Shuttle Tankers that pickup roughly 230,000 BPD (47,000 tonne/day) of oil production from the five producing platforms on the Grand Banks, cost a reported $375,000,000 (ie $125M/ship)in 2016, and have a deadweight of 148,000 tonnes and gross tonnage of 85,000 tonnes each, meaning each ship can carry up to about 60,000 tonnes of cargo (oil) . These three Shuttle Tankers deliver the 47,000 tonne/day of Grand Bank oil production to the trans-shipment terminal at Whiffen Head, NL with an average turn-around time of 3-5 days . A rough cost estimate for the Laker-Tankers can be obtained by taking $125M X 29,000 t/ 60,000 t = $60 million. Therefore the cost of one “Laker-tanker” with 29,000 tonne capacity is estimated to be in the order of $60 million, and a fleet of 160 Laker-tankers would be in the ballpark of $10 billion.

Discussion

The St. Lawrence Seaway is currently handling 20-25 million tonnes of cargo per year through the Welland Canal in the Downbound direction, ie towards the east, with total transits of 1400 – 1900 per year. Oil-by-Seaway to equal the Energy East proposal of 200,000 tonnes per day would add 73,000,000 tonnes/yr. to the Downbound traffic. This is a significant increase to nearly 100,000,000 tonnes/year and 16 vessel transits per day each way, through the Seaway System. It would appear that the present Seaway infrastructure may be able to accommodate this magnitude of increase without major upgrades, because it doesn’t exceed the historical highs in vessel transits which occurred in the 1960s. This would need to be confirmed with the St. Lawrence Seaway Management Corporation.

The Oil-by-Seaway proposal would require a fleet of 160 or so “Laker-Tankers” which most likely don’t currently exist, and which would cost in the order of $10 billion . This concept would also require the creation of about 100,000,000 bbl. of incremental oil storage capacity at St. John, NB, that probably wasn’t part of the Energy East proposal, to cover the 90 days each year when the Seaway is closed.

Utilizing the existing Seaway Infrastructure to transport oil by tanker would reverse a long trend of declining commodity traffic through the Seaway system. This scheme could create the impetus to update and modernize Seaway facilities, and could also reinvigorate the communities along the Seaway, with substantially more economic activity in their midst.

Fabricating 160 Laker-Tankers could provide a significant workload for Canada’s ship-building industry, perhaps including the Davie Shipyard in Quebec, and the Irving shipyard in Halifax.

There are undoubtedly many other technical, social, environmental, and regulatory issues to be identified and considered, as well as whether this concept is commercially viable.

Preliminary Conclusion

On the surface, the Garfield Marks “Oil-by-Seaway” proposal seems to have sufficient merit to warrant a more thorough analysis than presented herein.

 

Comments by: David B. Chalcroft, P. Eng.

Previously published;

 

We have not been able to run our bitumen through a pipeline to a refinery in New Brunswick. There has been resistance in parts of Ontario and in Quebec. What if we came up with another plan. Would we consider it? There will be road blocks, but not insurmountable, would we consider it?

Yes how about Thunder Bay?

Thunder Bay, Ontario, the largest Canadian port of the St. Lawrence Seaway located on the west end of Lake Superior, 1850 kms. from Hardisty, Alberta. A forgotten jewel.

So what, you may ask.

They used to ship grain from Thunder Bay in huge tankers to ports all over the world. Why not oil?

The Saint Lawrence Seaway ships fuel, gasoline and diesel tankers, to this day.

We could run oil tankers to the Irving refinery in New Brunswick, bypassing the controversial pipeline running through eastern Ontario and Quebec.

The pipeline, if that was the transport model chosen, would only need to run through parts of Alberta, Saskatchewan, Manitoba and Ontario. Like, previously stated the pipeline would only be 1850 kms. long.

The other great thing about Thunder Bay is the abundance of rail lines. Transportation for such things as grain and forestry products from western Canada. If you can’t run pipeline from Hardisty, through to Thunder Bay, use the railroad.

Why Hardisty, you may ask.

Hardisty, according to Wikipedia, is mainly known as a pivotal petroleum industry hub where petroleum products such as Western Canada Select blended crude oil and Hardisty heavy oil are produced, stored and traded.

The Town of Hardisty owes its very existence to the Canadian Pacific Railway. About 1904 the surveyors began to survey the railroad from the east and decided to locate a divisional point at Hardisty because of the good water supply from the river.

Hardisty, Alberta has the railroad and has the product, the storage capacity, and the former Alberta government planned on investing $3.7 billion in rail cars for hauling oil while Thunder Bay has the railroad and an under utilised port at the head of the St. Lawrence Seaway.

Economics are there along with opportunity, employment would be created and the east coast could end its’ dependency on imported oil.

Do we have the vision or willingness to consider another option. I am just asking for all avenues to be considered.

In my interviews in Ontario there is a willingness to discuss this idea.

The St. Lawrence Seaway Management Corporation is still reviewing the idea of shipping crude oil from western Canada through its system, and it’s a long way from happening, according to Bruce Hodgson, the Seaway’s director of market development.

“Obviously, there needs to be an ongoing commitment on the part of a producer, and so that’s going to be required for any project of this nature,” he said.

We could consider it, could we not?

CBC NEWS did a story about this idea on March 7 2019;

A retired oil field worker in Alberta has “floated” a novel solution to Alberta’s oil transportation woes: pipe the bitumen to Thunder Bay, Ont., then ship it up the St. Lawrence Seaway to the Irving oil refinery in New Brunswick.

Marks’ proposal might be more than a pipe dream, according to the director of the Queen’s Institute for Energy and Environmental Policy.

‘I don’t think that it’s a totally nuts idea’

“I don’t think that it’s a totally nuts idea,” Warren Mabee said. “I think that there’s some flaws to it … but this is an idea that could work in certain circumstances and at certain times of year. … It’s not the craziest thing I’ve ever heard.”

The chief executive officer of the Port of Thunder Bay said shipping oil from the port “could easily be done.”

“We ship refined gasoline and diesel up from Sarnia. We’ve done that for many many years,” Tim Heney told CBC. “So it’s not something that’s that far-fetched.”

There are, however, plenty of potential drawbacks to shipping crude through the Seaway, Mabee explained, not least of which is the fact that it isn’t open year-round.

The need to store oil or redirect it during the winter months could be costly, he said.

Potential roadblocks

Another potential pitfall is capacity, he added; there may not be enough of the right-sized tankers available to carry the oil through the Seaway.

Finally, he said, the journey by sea from Lake Superior to the Irving refinery in New Brunswick is a long one, so it might make more sense to transport the product to a closer facility such as the one in Sarnia, Ont.

The St. Lawrence Seaway Management Corporation is still reviewing the idea of shipping crude oil from western Canada through its system, and it’s a long way from happening, according to Bruce Hodgson, the Seaway’s director of market development.

“Obviously, there needs to be an ongoing commitment on the part of a producer, and so that’s going to be required for any project of this nature,” he said.

So far, no producer has come forward seeking to ship crude through Thunder Bay, he said.

Asked about the possible environmental risks of shipping oil on Lake Superior, both Hodgson and Heney said shipping by tanker is relatively safe; Hodgson noted that any tankers carrying the product would have to be double-hulled, and crews are heavily vetted.

Time to rethink pipelines?

There hasn’t been a spill in the Seaway system for more than 20 years he said.

Nonetheless, Mabee said, the potential for an oil spill on the Great Lakes could be a huge issue.

“The St. Lawrence and the Great Lakes have a lot of people living in close proximity, a lot of people who rely on it for drinking water,” he said. “There’s a delicate ecosystem there. I think a lot of people would push back against this proposal simply from that perspective.”

 

In fact, one of the reasons Mabee appreciates Marks’ proposal, he said, is because it invites people to weigh the pros and cons of different methods of transporting oil.

“If we’re not going to build pipelines, but we’re going to continue to use oil, it means that people are going to be looking at some of these alternative transport options,” he said.

“And if we don’t want oil on those alternative transport options, we need to give the pipelines another thought.

Time to consider all options, I dare say.

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Protests “A War Against Working Men and Women” Poilievre’s speech goes viral

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Pierre Poilievre made a speech in Parliament Wednesday that has gone viral across Canada.   Since it was posted Wednesday it’s been viewed on Poilievre’s facebook page well over a half million times.  He called this speech “A War Against the Working Men and Women of this Country”.  It’s a pretty powerful argument.

We’ll open comments in case you’d like to weigh in.

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Alberta father irked by charity group (The 3% Project) that targets fossil fuel industry

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David Durda

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#visionCanada2119 engages Albertans and Canadians in the types of conversations we need to move ahead as a province, a country, and an economy serving both.   Please consider posting your comments at the end of this article, or in the social media thread.   In some cases we will use these comments in future posts.   
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PHOTO David Durda at his office with the Three Percent Project handout that was given to his son in school in Airdrie, Alberta, December 5, 2019.

David Durda is normally happy to have his 15-year-old son exposed to as many points of view as possible.

But the Airdrie, Alberta dad was deeply troubled when he learned an environmentally-focused non-profit, the 3% Project, was given the green light by school administrators to deliver what he believes is a misleading presentation to some 400 students at his son’s high school in October.

Some of the educational materials provided as part of the presentation contain what he considered to be misleading or incomplete information, and appear to directly target the fossil fuel industry and Alberta’s oil sands.

In just under two years, the 3% Project, the flagship campaign of the Toronto-based Foundation for Environmental Stewardship, has made presentations in 355 schools in more than 250 communities – from Mangilaluk School in Tuktoyaktuk, NWT, to Holy Heart of Mary High School in St. John’s, Nfld. – delivering the message that students represent “the final generation” who can solve a potentially “apocalyptic future.”

By next year, the project, according to its website, aims to make presentations in 600 high schools and ask 1 million Canadian youth (representing three per cent of Canada’s population) to sign the following pledge:  “I am more certain that climate change is happening right now, that it is mainly caused by human activities, and that we’re the final generation who can solve it.”

In its stated goals, the group says it also aims to “identify and heavily invest in three youth climate leaders,” cultivate a further 20 “youth advocates” to spread its message, and plans to have 200 youth identified by name in local media outlets sharing the group’s message.

After hearing that his son was required to go to what he called a mandatory presentation at his school, Durda, who works for a Calgary oil and gas firm, began digging into the group, founded by a 25-year-old climate activist who, according to the group, attended climate leadership training led by former U.S. vice-president Al Gore.

“They have pretty ambitious plans and I believe the school was misled about what the presentation was about,” Durda said.

“In my mind, they just presented one view.”

Much of the information in the campaign is straight-forward.

But some of the educational materials being provided to children as young as Grade 6 contain questionable information.

A review of the 43-page 3% Project handbook, available through the group’s website, finds several questionable statements and data points:

  • In making its case to battle “climate indifference” over Alberta’s oil sands, the non-profit suggests the International Monetary Fund (IMF) has estimated Canada is subsidizing its fossil fuel industry to the tune of $46 billion annually, which would account for 13 per cent of Canada’s entire 2019 federal budget. Not mentioned in the literature is the fact that that figure came from an IMF working paper, which according to a prominent disclaimer accompanying the report, doesn’t “necessarily represent the view of the IMF.” According to a 2016 study conducted by Canadian climate advocacy group Environmental Defence, annual subsidies from both provincial and federal governments amount to about $3.3 billion annually.
  • The 3% Project also suggests that between 2003 to 2010, the fossil fuel industry “invested $558 million in climate denial groups.” The source of that information, a 2013 study from Drexel University, only reviewed donations from the United States during that period, and of the 140 foundations identified as funding these groups, the “overwhelming majority of the philanthropic support comes from conservative foundations,” while the fossil fuel industry itself barely warrants a mention in the academic paper. The literature provided to students suggests industry fosters campaigns of misinformation, with one of the project’s key rationales suggesting: “Public education for youth influences their parents and is the best weapon against disinformation by the fossil fuel industry.” The document also makes no mention of the millions of dollars invested by U.S.-based environmental charities to help disrupt Canada’s energy industry as well as derailing some critical pipeline projects.
  • The report vilifies Canada for being “one of the most environmentally destructive populations per capita on earth,” citing, in particular, its globally high per capita rate of CO2 emissions. The literature fails to mention the fact Canada is middle of the pack when it comes to G7 countries, according to the World Bank, and its 537,000 kilotons generated are a bare fraction of those produced by the world’s top three emitters: China, the United States and India, which in 2014 contributed about 18 million kilotons between them. As well, Canada is quickly becoming a world leader in cleantech oil and gas development while making significant progress in lowering the intensity of greenhouse gas emissions in Alberta’s oil sands.
  • The literature also talks about “the possible apocalyptic future we may inherit.” While the United Nation’s Intergovernmental Panel on Climate Change’s most recent special report on climate, released in October 2018, highlights several risks associated with climate change, including increasing global temperatures, potential droughts, increased flooding, incremental sea level rising and significant risk to some ecosystems, participating scientists consider many of its predictions to be “medium confidence,” compared to other designations of low and high confidence used by the scientists who make up the panel.

A 3% Project spokesperson, through its website messenger system, declined to make anyone available to comment on any of the concerns raised prior to the publication deadline.

In a statement, the Calgary Catholic School Division said individual school principals are encouraged to invite external groups, and are given guidelines to aid in making those decisions.

“The Calgary Catholic School District recognizes the value of external agencies and organizations to provide information to enhance the curriculum and benefit student learning,” it read.

“Principals are encouraged to invite various external organizations to present information that strengthens the curriculum. Principals are given guidelines to assist their decision-making regarding the circulation of any balanced, approved materials or information at the school level.”

However, correspondence from the school’s principal to Durda included an apology for how the presentation came to be, suggesting it wasn’t thoroughly vetted beforehand.

“I did … apologize and agreed with you that we learned from this, that we need to vet the presentation more thoroughly, but also shared the 3% presentation wasn’t one we would bring back because it didn’t hit home with the kids,” read an email, in part, sent to Durda following the presentation.

Durda said he had recommended a separate presentation from Modern Resources CEO Chris Slubicki, who has emerged as a measured voice from industry touting the innovations and benefits of Canadian energy, which could educate students on the positive improvements that continue to be made, including a 30 per cent reduction in greenhouse gas emission intensity of oilsands crude since 1990, and producing increasingly cleaner burning natural gas.

However, he was told such a presentation should be initiated by his son and like-minded peers, and would only be in front of a much smaller assembly of students who showed an interest in attending, which Durda feared would put his son in an unfair position.

According to documents from Revenue Canada, as a registered charity, the Foundation for Environmental Stewardship received some $545,000 from other registered charities in 2018. Among their sponsors are the Butterfield Family Foundation, Lush Cosmetics, the City of Vancouver and Service Canada.

In the group’s handbook, its authors suggest children are not being given all the facts about climate change and the fossil fuels industry. And it aims to mobilize kids as a conduit to influence their elders.

“Children engaging their own parents and grandparents most effectively cultivates behavioural change. Parents start taking action on climate out of love for their children, not of principle,” the handbook reads.

“And they can’t be lied to. Public education must engage youth with the facts before they are thoroughly confused with climate disinformation.”

For Durda, the fact the group was able to get into his son’s school has left him concerned about how many other Canadian students will be influenced by the 3% Project’s message.

“They only presented one view and I thought that view was pretty misleading.”

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