Lack of Pipeline Capacity results in large discounts on Alberta Oil Prices

OTTAWA — Canada risks stranding its resource bounty unless it adds new pipeline capacity to the West Coast, eastern provinces and the U.S., says Natural Resources Minister Joe Oliver, who believes the issue will be one of the biggest items on his plate in 2013.

But building new pipelines is anything but a sure bet. There’s strong opposition from citizens, some governments and environmental groups over transporting oilsands crude and other petroleum via pipelines such as the proposed Northern Gateway project to the B.C. coast and Keystone XL in the United States.

A glut of oil from multiple continental sources, including the Alberta oilsands, and inability to move it to market due to pipeline bottlenecks is resulting in large discounts for western Canadian crude compared to North American benchmark West Texas Intermediate and international Brent prices.

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