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November 17, 1989
As the population of Washington state grows, so does the demand for petroleum products. As that demand grows, so does the tanker traffic through the state's risky waterways. And as the traffic grows, so does the risk of an oil spill.
There is an alternative.
Washington state doesn't have to import its crude oil by tanker. Instead, the state's refineries could be fed through an underused pipeline from Canada that is already in place.
The pipeline, which crosses the border at Sumas in Whatcom County, was Washington's main source of oil in the early 1970s, before Canada decided to keep most of its oil for itself.
Today, Washington can't buy much of the light crude oil it once got in abundance from Canada through the pipeline, because the supply is low. But there is a new and almost unlimited supply of another kind of oil, a very heavy and more expensive type called bitumen, which the Canadians would be more than happy to sell to the States.
Tanker traffic in Washington and British Columbia waters, which more than doubled when Washington began relying on Alaskan oil in 1977, would be virtually eliminated.
The catch is that Washington's refineries would choke on the syrupy stuff, unless the plants were rebuilt at a cost of billions of dollars.
The pipeline option is being considered by a U.S.-Canada task force that is looking at ways to prevent oil spills in the region's waters.
The task force is concerned about the increasing two-way traffic of loaded oil tankers now using the Strait of Juan de Fuca. Big oil ships sail into Washington state waters with Alaskan crude oil every day, and less frequently, tankers sail out of Canada carrying the heavy crude to Asia. They sometimes pass each other on the way, and their numbers are on the rise.
Bill Wolferstan, an oil-spill expert for the B.C. government, says the two-way traffic caught the attention of the task force because it seemed on its face to be unnecessary. Opening a Canadian supply would cancel the need for the Alaskan supply and reduce the export to Asia, thus canceling out much of the two-way traffic.
"Obviously, it takes the risk off the water and puts it onto a pipeline," says Cullen Stephenson, oil-spill specialist for the Washington Department of Ecology.
Pipelines occasionally spill oil, but not in the volumes that tankers do.
The pipeline that connects Washington to Canada is a 70-mile spur line connecting to Canada's Trans-Mountain Pipeline. The Trans-Mountain Pipeline carries nearly 9 million gallons of light and heavy crude oil every day over 710 miles from Alberta's oil fields to Vancouver, B.C.
Most of Canada's light oil is already spoken for by Vancouver's four refineries and other Canadian customers. But the heavy bitumen is so abundant and so few refineries in the world can handle it that Canadian oil producers are hungry for new markets. Alberta produces 95 percent of the world's supply of bitumen oil.
The possibility of using the pipeline may be part of a report to be presented Dec. 20 to the States-B.C. Oil Spill Task Force, consisting of representatives from Washington, Oregon, British Columbia, Alaska and California.
Dick Stokes, president of the Trans-Mountain Pipeline Co., says it would cost nearly $650 million to expand the pipeline to handle the 20 million gallons a day Washington and Oregon need. Washington refineries also supply gasoline and other oil products to Oregon.
But pipeline expansion is a small expense compared with the big-ticket item. Converting refineries to handle bitumen would cost of tens of billions of dollars, says Fielding Formway, manager of the Atlantic Richfield Co. refinery at Ferndale, Whatcom County. The only other option, Stokes says, would be to build a plant in Alberta that would upgrade the heavy oil before it is shipped to Washington, at a cost of about $30 billion. Those costs would be passed on to consumers, he says.
Stokes says his company would love to supply Washington state, but he estimates that the price of crude oil must reach $30 a barrel (it is now around $20) to make a Canadian conversion plant economically feasible.
Formway says few U.S. oil companies would be willing "to spend $30 billion on anything" with Congress talking about laws requiring the use of low-pollution fuels such as methanol.
Alaskan oil which can be sold nowhere else but the U.S. by law is among the world's cheapest crude oil.
But the task force is considering whether a higher-priced option might be worth it compared with the costs of cleaning up a major spill. The toll for Alaska's Exxon Valdez spill is already $1.24 billion and growing.
Washington state lost its Canadian oil connection in 1974 - during the Arab oil embargo when the Canadian government announced it would gradually cut off oil imports to assure its domestic supply. So by 1977 the state was receiving nearly all of its oil by ship from a new source, the just-completed Trans-Alaska Pipeline.
Someday, Washington's refineries may have no choice but to return to the Canadian supply and to take the new bitumen option.
George Jurkowich, a spokesman for the Alyeska Pipeline Service Co., which now supplies most of Washington's crude oil, says production from the Alaskan oil fields has peaked. Next year, for the first time since the pipeline opened in 1977, the amount of oil from the Trans-Alaska Pipeline will probably decline.
No one knows when the supply will run out. But when it does run out, Washington and Oregon may have nowhere to look but Canada.
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