There is an ongoing debate about the whether or not an oil pipeline should carry oil from Western Canada, across Quebec, and into Eastern Canada. At the present time, several mayors across Quebec, including the mayor of Montreal, oppose the oil pipeline. Other municipal officials have expressed concern about the safety of carrying oil in tanker trains, citing the serious mishap that occurred in the town of Lac-Mégantic. Following a meeting with the mayor of Montreal, the Prime Minister announced that that the National Energy Board (NEB) will rule on the pipeline.

In response to opposition from Quebec’s mayors, the oil industry has presented a political-economic case to elicit support for an oil pipeline through Quebec, citing manufacturing opportunities for Quebec industries and the number of jobs that the pipeline would create across Quebec. At the present time, the transportation of oil between Western Canada and Eastern Canada does sustain jobs in Quebec, the result of maintenance done to railway tanker cars and locomotives near Montreal. Regardless of how the oil will move across Quebec, that movement will either sustain or create jobs in Quebec.

The oil industry’s objective is to move oil across Canada at the lowest cost based on volume flow rate over distance or cents per barrel-kilometre and pipelines easily outperform railways and truck transportation in this regard. Ongoing opposition to an oil pipeline across Quebec could compel the oil industry to consider the maritime option for part of the journey across Canada, the result of the pipeline west of Quebec passing within close proximity to maritime terminals at several locations. The closest terminals west of Montreal are located along the Upper St Lawrence River at Cornwall, ON and near Morrisburg, ON.

Both terminals are less than five kilometres from the pipeline, and the Cornwall location would allow oil tanker ships to bypass the American navigation locks located near Massena, NY. Over a period of many years, both terminals were the site of oil storage tanks. Underground storage tanks that hold calcium chloride now occupy the site at Cornwall. The oil industry may need to consider building new oil storage tanks adjacent to their pipeline, with short connections to the river terminals.
 

“Opposition to an oil pipeline across Quebec could prompt the oil industry to invest in new double-hull oil tankers and upgrade the eastern section of the St. Lawrence Seaway to include water-saving technology.”

While the St. Lawrence Seaway closes annually between the end of December and the end of March, the Seaway did at one time (in the early 1960s) operate throughout the year, using bursts of compressed air under winter ice at the navigation locks to assure winter navigation. New technology can assist in keeping the navigation locks operational between late December and late March. While oil pipelines fall under the jurisdiction of the National Energy Board, the railways and ships are outside their jurisdiction, as was Montreal’s recent release of 8 billion litres of raw sewage into the St. Lawrence River.

Oil tanker barges already carry oil along the navigable Mississippi River and at much lower cost per barrel-mile that railways, the result of the inland waterway barge industry being able to couple barges into river trains known as “tows” that tugs propel and navigate. Teams of tug boats could navigate coupled tanker barges along the St. Lawrence River and across the Gulf of St. Lawrence between Montreal and a terminal in Atlantic Canada. Tugs would move individual tanker barges through the navigation locks between Montreal and the river terminals in Eastern Ontario.

The future volume of oil moved across Canada could warrant the operation of both river terminals in Eastern Ontario, with future prospects to extend the length of the navigation locks to transit extended-length coupled oil-tanker barges. Opposition to an oil pipeline across Quebec could prompt the oil industry to invest in new double-hull oil tankers and upgrade the eastern section of the St. Lawrence Seaway to include water-saving technology. Most of that investment would occur in the Montreal area, unless the mayors across Quebec protest against upgrades to, and oil tanker shipments along, the St. Lawrence Seaway.

Such protest could affect future traffic along the St. Lawrence Seaway. During late 2014, a vessel carrying agricultural bulk from Southern Ontario sailed from a port on Lake Erie and through the re-opened Erie Canal to an American ocean port. Plans are underway to connect Toledo, OH to the American inland water system, to allow barge navigation to carry bulk freight between Lake Erie and New Orleans. Such developments could divert traffic away from the St. Lawrence Seaway that was built during the late 1950s for the biggest ocean ships of the day to sail to Lake Ontario.

The oil industry is using private capital to develop methods by which to efficiently move massive volumes of oil across Canada. If the NEB upholds the political opposition to an oil pipeline across Quebec, then the oil industry would need to consider the option of maritime bulk transportation along the St. Lawrence River between ports in Eastern Ontario and Atlantic Canada.

Harry Valentine is a free-marketeer living in Eastern Ontario.

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