(AP Picture/Eric Homosexual)
On July 20, the tanker Cabo de Hornos delivered an estimated 450,000 barrels of crude oil to the Irving Oil refinery’s Canaport storage amenities in Saint John, N.B.
What made Cabo de Hornos’s supply totally different was that it was the primary time crude oil had arrived in Saint John by ship from Alberta. It got here by way of the Trans Mountain pipeline to the Westbridge Marine Terminal in Burnaby, B.C., after which by the Panama Canal.
By the top of April subsequent 12 months, a second tanker will arrive at Canaport carrying 350,000 to 1 million barrels of Western Canadian crude oil. On this case, the oil can have come by way of pipeline from Alberta to a crude oil exporting terminal in Texas or Louisiana.
For many of the Saint John refinery’s 50 years of operation, it has relied on crude oil from sources outdoors Canada, together with Saudi Arabia, america, Norway and Nigeria, to fulfill most of its demand. In 2019, about 80 per cent got here from non-Canadian sources, with the rest from offshore Newfoundland and Labrador by tanker and Western Canada by rail.
Any occasion — comparable to a COVID-19 outbreak in any of those oil-supplying nations — that disrupts the circulate of crude oil to the refinery threatens the power safety of most individuals in Atlantic Canada.
Crude oil provide
Counting on non-Canadian suppliers has by no means been a problem for the refinery. Even through the low factors of Canadian-Saudi relations in the summertime of 2018 and durations of elevated stress within the Center East, Saudi Arabia has been one among its principal suppliers. (A part of this can be attributable to the truth that about 60 per cent of the refinery’s output is shipped to New England and U.S.-Saudi relations might be affected if Saudi Arabia’s provides to the Saint John refinery have been disrupted.)
Nevertheless, COVID-19 is a priority for these working the refinery. In April, Irving Oil utilized to the Canadian Transportation Company to make use of tankers from unspecified, non-Canadian suppliers for these two shipments, as per the necessities of the Coasting Commerce Act. In every software it was made clear that the corporate’s overriding concern was the influence COVID-19 might have on about 80 per cent of its crude oil provide shipped from non-Canadian sources.
This can be a legit concern.
(AP Picture/Arnulfo Franco)
Globally, the well being of ships’ crews has grow to be an more and more essential challenge because the begin of the pandemic. In lots of nations, worry of COVID-19 on ships has stopped shipboard crews from disembarking and returning house to their households, and new crews from boarding ships.
That is forcing shipboard crews to proceed working nicely past the top of their contractual interval of employment. Reviews of psychological anguish, self-harm and suicide have additionally been reported.
A COVID-19 outbreak in an oil-producing nation or on board a tanker might disrupt the circulate of crude oil to the Saint John refinery and, consequentially, disrupt the circulate of its refined merchandise to most of Atlantic Canada and New England.
Oil consumption in Atlantic Canada
Atlantic Canadians devour about 20 per cent extra gasoline per capita than Canadians as an entire. With restricted entry to pure gasoline, about 31 per cent of the power used for house heating within the area comes from heating oil (in contrast with 5.1 per cent nationally).
Irving Oil’s choice to search out alternate methods to entry Western Canadian crude oil from British Columbia by way of the Panama Canal or the U.S. Gulf Coast will undoubtedly improve the range of its provide. Nevertheless, Irving’s considerations over COVID-19 and its worldwide suppliers and shippers are equally relevant to Western Canada’s oilfields and any ships used to hold the crude oil.
To be truthful, Irving has few different decisions: crude-by-rail is a risk, however there’s restricted capability in its rail yard; TransCanada killed the Power East undertaking and even when it might be revived, it will take years to finish.
Rules alone did not sink the Power East pipeline
Whereas restructuring Atlantic Canada’s power system to grow to be much less reliant on oil is the apparent reply, there are few short-term options. For instance, though Churchill Falls might meet a part of the area’s power demand for electrical energy, heating and transportation, it is not going to be out there till 2041, when the electrical energy gross sales contract between Newfoundland and Labrador and Québec involves an finish.
With out entry to low-cost electrical autos and simply accessible charging stations, gasoline will stay the principal gasoline of alternative for transportation in Atlantic Canada. However, there are alternate options for house heating, notably electrical energy and wooden, every of which already meet about 30 per cent of the area’s residential demand for heating.
Within the meantime, Atlantic Canadians can hope for an efficient, broadly accepted vaccine and put together for periodic oil provide disruptions.
Larry Hughes doesn’t work for, seek the advice of, personal shares in or obtain funding from any firm or organisation that will profit from this text, and has disclosed no related affiliations past their educational appointment.