DerbyX DerbyX:
Ziggy has posted about this alot. We are increasing our refining capacity.
In addition, Dino, I think its cheaper to ship refined product. The US buys ready to use gas in large quantities at cheaper prices because refining happens near extraction sites meaning less crude transport costs.
Win-win.
Well your wrong Derb, it isn't cheaper to ship refined products overland that’s why we don't do it. The way it works is you build a pipeline from the source of supply to an area of demand, Chicago is a good example. At that point it is refined into gas, diesel, polyethylene, propane, O2, natural gas and ect.. One pipeline as opposed to .. up to 20 or 30 (because there are hundreds of products created from raw crude). Not to mention you can't ship many of the products through pipelines such as gasoline, diesel, polyethylene, O2 (not great distances anyways due to safety and regulatory limits) and well pretty much 80% of the materials that are refined.
Now if we had to refine those bi-products here in Alberta and truck them down to Chicago you can imagine the bill. Gas down there would cost close $10 to $20 bucks a liter by the time it was finished. That's why we ship raw crude.
Canada has refineries in every province except Manitoba and PEI (and the NWT for obvious reasons). Refineries are no small business, they are huge plants that require hundreds of people to run and that’s why we don't have an excess amount of them. Simply put, a refinery running at 60% capacity would go broke in a matter of months.
It would be great if e could increase the amount of refining here in Canada and then ship the finished products down to the states through pipelines but like I mentioned it just isn't possable. Oh, and by the way, yes it's true some of the fuel you buy is from the states particullary in southern regions where the distance to the US refinery is closer to the point of sale but the vast majority of gas you and I buy is made right here in Canada.