Investment is pouring into the tar sands, but potential oil exports will outstrip pipeline capacity by 2015.
Pipeline capacity is insufficient, and when oil is exported the companies often have a hard time getting paid.
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Of course the pipeline companies themselves are rushing to build new pipeline capacity to help alleviate these crude oil bottlenecks.
New pipeline capacity is so important to the government that Alberta Energy Minister Ron Liepert thinks it needs national, and even international, consideration.
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Without sufficient pipeline capacity to send it down to the megarefineries on the Gulf Coast, producers are beholden to a handful of regional buyers.
"There has been excess pipeline capacity coming from western Canada for more than a year, and you haven't seen significant production growth, " says Pursell.
Some railroads have already benefited enormously from the inadequate pipeline capacity.
One positive caveat: Prices for Canadian Heavy are discounted now because of the shortage of pipeline capacity for carrying heavy oil sands crude out of western Canada.
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Apache will get control of a BP-operated pipeline, which will give it the ability to open up new fields that it had been sitting on because of insufficient pipeline capacity.
The train wreck illustrates one economic reality of the U.S. shale drilling boom, which is that energy companies have turned to shipping by rail as pipeline capacity has been filled.
Generally, the participants at the FERC hearings all expressed a preference for better sharing of information concerning pipeline capacity scheduled for power generation, individual power plant burn rates, fast notification of major operational changes, and coordination of maintenance work to both systems.
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Further, if there are markets with insufficient pipeline capacity (such as New England and parts of New York), Skipping Stone suggests that by syncing the two markets, economic price signals become more transparent and should stimulate provision of services or construction of additional pipeline capacity.
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In the long run, if the projections of the US Energy Information Administration are correct and gas fired generation continues to grow rapidly, then there is little question the market rules need to be modified to assure reliability and spur more pipeline capacity and flexibility.
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That pipeline is near capacity, but owner Kinder Morgan is considering an expansion.
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"Increasing the nation's use of natural gas for electricity generation could result in adverse economic consequences, " the report said, noting that natural gas prices are fickle and that fuel switching on a large scale would require regulators to approve more pipeline and storage capacity.
Since the USGC pipeline flows are basically base load and at capacity, only pipeline expansion would make a difference and this is more of a question of what customers want to make the ship and pay financial committments to underwrite the pipeline expansions.
The new pipeline let him sell capacity at less than half the going price.
Immediately upon completion, the pipeline will have the capacity to carry 700, 000 barrels per day (bpd) and ultimately the ability to transport 900, 000 bpd.
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With their brand identity and some exciting new products in the pipeline, the high-capacity storage market looks like Iomega's to lose.
If fully realised, these additions could exceed the capacity of the Caspian Pipeline Consortium's first- and second-phase pipelines to the Russian Black Sea coast.
Increasing exports to Iran is also problematic, as the current pipeline from Turkmenistan to Iran has a relatively small capacity.
It moves oil from the Athabasca oil sands region in Alberta, Canada to hubs and refineries in the US. The pipeline system spans 2, 150 miles and currently has the capacity to deliver up to 590, 000 bpd of crude oil from Canada into the US markets.
Semgroup handles more than 500, 000 barrels of crude oil a day in the U.S., operates two pipeline systems and has 6.7 million barrels of oil storage capacity.
Rail and supporting non-pipeline modes should be capable, as was projected in 2011, of providing the capacity needed to transport all incremental Western Canadian and Bakken crude oil production to markets if there were no additional pipeline projects approved.
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