Alberta Energy Minister Hughes Discusses Options if Keystone XL not Approved

An industry source told AOL Energy last November the two greatest challenges companies operating in Alberta’s oil sands region face are access to markets and skilled labor. Alberta Energy Minister Ken Hughes elaborated on these and other issues during a recent phone call.

In a scenario where the Keystone XL Pipeline is not approved by the Obama Administration, Minister Hughes said companies have lots of different options and that rail has become “compelling.” Although generally less efficient than transporting oil via pipeline, rail could be used to bring Canadian oil as far as the Gulf Coast and maybe the West Coast and Mid-continent as well, he said.

Companies “also have other options in terms of pipelines to Eastern Canada,” Hughes told AOL Energy, with 600,000 to 800,000 barrels per day currently being piped into Central and Eastern Canada. TransCanada is converting a natural gas line to carry oil possibly as far as St. John, New Brunswick, he said, and Enbridge is working to reverse its Line 9 “in order to allow for the eastbound transportation of incremental western Canadian crude oil,” according to the company’s website.

With regard to accessing Asian markets, “it’s all about getting to tidewater,” Hughes said, and the Energy Ministry is doing work to build relationships and secure pipeline access to Canada’s West Coast. In the coming years, “energy demand growth with be from the Asia Pacific region and it will be imperative for Alberta to access that market.”