An Oil Transport Option for North America

pipeline

By Harry Valentine 2017-02-19 18:18:52

The new U.S. President Donald Trump has signed his approval for developing the XL oil pipeline to carry oil from western Canada to the southern U.S. The oil pipeline had been stalled by the previous American administration, leaving river barge and railway transportation as the alternative options. 

Trump decreed that the XL pipeline will be built using U.S. steel, creating domestic employment opportunities at steel mills as well as in building the pipeline. His initiative opens possible opportunity for the stalled Canada East oil pipeline that is currently blocked.

Opposition and Opportunity

The Canada East oil pipeline was intended to carry crude oil from Western Canada to refineries in Eastern Canada. Political action to stop construction of that pipeline left two options of railway tanker transportation or seasonal maritime transportation along the eastern section of the Saint Lawrence Seaway to Canada’s Atlantic coast. 

Oil refineries in Eastern Canada and Northeastern U.S. seek access to competitively priced crude oil. The combination of the initiative of the American President and political opposition in Eastern Canada to building the Canada East pipeline in Canada may provide another U.S. oil pipeline opportunity.

Northeastern American Oil Pipeline

The Canada East oil pipeline extends across Canada to a location near the first navigation lock east of Lake Ontario, along a narrow section of the Saint Lawrence Seaway and west of the region of intense opposition to the pipeline. Submerged oil pipelines have been installed under ocean channels and below riverbeds, and it may be possible to build a section of oil pipeline that cross to the south side or U.S. side of the Saint Lawrence River. Such a crossing may be possible at both the first and second navigation locks downstream of Lake Ontario, along that river.

A roadway actually passes under the Seaway navigation channel at the second set of locks located next to an international hydroelectric power dam between Massena NY and Cornwall ON. Given that oil refineries in both Eastern Canada and Northeastern U.S. seek access to low-priced crude oil, there may be scope to build a high-capacity oil pipeline through the northern and northeastern U.S., beginning east of the Port of Ogdensburg NY along the Saint Lawrence River. Oil would arrive at the input point by both an oil pipeline that extends across Canada as well as inland maritime transportation.

Expanded Navigation Locks

A northeastern U.S. oil pipeline would require the construction of a parallel stretch of oil pipeline between the oil fields of Western Canada and an oil terminal on Lake Superior. The ships that sail the Upper Great Lakes are larger than the ships that sail between Montreal and Lake Ontario. There may be an option for the oil industry to bring the big, double-hull oil tanker ships to Lake Ontario. The oil industry could consider a partnership with the Saint Lawrence Seaway to duplicate the precedent of the Panama Canal to transit larger ships

The Welland Canal began as a private undertaking that was expropriated by an earlier Government of Canada. Given that the canal closes for 3-months every winter, there may be scope to engage construction companies to extend the length of the navigation locks, widen the navigation channel, possibly deepen the navigation channel and install water saving technology at the locks. During the construction period, freight trains would have to move cargo between the Ports of Hamilton and Port Colborne in Ontario. An oil terminal would be required at or near the Port of Ogdensburg NY.

Articulated Vessels

One option by which to sail wider and longer ships between Lake Ontario and the Upper Great Lakes would be to duplicate the barge train concept that operates along the Mississippi River and the bulk-freight tug-barge technology that operates domestic American coastal service. A short vessel can be built to shallower draft that a long vessel, while both vessels could be built to identical width or beam.  A two-section articulated vessel can be built to 40 percent greater width that a Seaway-max vessel and 60 percent greater over length, to provide more than double the volumetric capacity.

The University of Michigan examined the possibility of the two-section ship with a powered ship replacing a tug that would otherwise be coupled to the stern of a barge. In the history of Upper Great Lakes ship transportation, ship companies often converted older ships to barges that carried freight and pulled by cable attached to the stern of a powered ship. It may be technically possible to develop double-hull, two-section oil tanker vessels that can carry oil between an oil terminal on Lake Superior and an oil terminal located near Port of Ogdensburg NY. 

Bulk Freight Benefit

Extending the operating range of the larger ships of the Upper Great Lakes to Lake Ontario would provide potential business opportunities for several ports located around Lake Ontario and along the western section Upper Saint Lawrence River, upstream of the Saint Lawrence River navigation locks. During harvest season, the two-section wider ships could carry agricultural produce from ports located around the Upper Great Lakes to bulk freight transfer points located along the western section of the Upper St Lawrence River, where ship-to-ship transfer of bulk freight to extended length Seaway-max ships may occur.  

There is a Canadian precedent where railways carry Western Canadian grain to storage at the Port of Thunder Bay on Lake Superior. Seaway-max size ships then carry the grain between Thunder Bay and the eastern section of the Lower Saint Lawrence River, where ship-to-ship transfer of grain to larger ships would occur. Larger two-section wide ships could carry more than double the volume of dry bulk of a Seaway-max ship while burning 40 percent more fuel due to its additional beam, except that there will be a double ship-to-ship transfer of dry bulk along two-sections of the Saint Lawrence River.

Conclusions

Oil refineries in both Eastern Canada and northeastern U.S. could benefit from having access to lower cost oil from Western Canada. Eastern Canadian opposition to the Canada East oil pipeline provides opportunity to develop an oil pipeline across northeastern U.S. Canadian oil pipeline ends near the Upper Saint Lawrence River, very close to the U.S. to allow a trans-border pipeline connection. High-capacity northeastern oil pipeline could carry Canadian oil to both Eastern Canadian and Northeastern American refineries. 

Maritime transportation of oil between Lake Superior and western section of Upper Saint Lawrence is quite possible. It may be possible to widen Welland Canal and extend navigation locks to transit wider and longer vessels carrying oil and also dry bulk. It may also be possible to modify navigation locks between Montreal and western section of Upper Saint Lawrence River to transit extended length Seaway-max beam and draft size of ships that may carry either containers or dry bulk via Montreal.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

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