TORONTO, Oct. 17, 2013 /CNW/ – The Ontario Petroleum Institute, which represents Ontario light crude oil producers, appeared before the National Energy Board today in Toronto to explain why the reversal of flow of Enbridge’s Line 9B is crucial for the future growth of the province’s oil production industry.
“The reversal of Enbridge’s Line 9B would offer Ontario producers an enhanced competitive market in Canada for current and future production,” said Jim McIntosh, a petroleum engineering consultant and a member of the Ontario Petroleum Institute’s Board of Directors. “The approval of Line 9B provides an option that enables oil produced in Ontario to be transported to Canadian refineries outside of the Sarnia region at a cost differential superior to road, rail and water.”
In his presentation to the National Energy Board, Mr. McIntosh explained that significant increases in North American oil production have resulted in dramatic changes in the market and specifically to the prices received by Ontario producers. Oil prices have been discounted up to 20 per cent lower than the benchmark set for oil by the price of West Texas Intermediate (WTI) and Brent crude oils.
To remain viable contributors to the Ontario economy, the producers’ ability to market its current and future production is an important priority. This has prompted Ontario producers to look for an alternative market for oil.
“The logical and practical choice for an alternative market for Ontario oil production would be to refineries in Montreal and Saint John,” said Mr. McIntosh. “This option is practical only if pipeline delivery is available. The reversal of Line 9B provides that availability to Montreal.”
Mr. McIntosh added: “Having this new transportation choice helps remove any bottlenecks created by oversupplies at Sarnia. Additional refinery options for oil volumes at Sarnia will firm up the price.”
The Ontario Petroleum Institute strongly believes the Line 9B reversal project will create jobs in the province and advance Ontario’s oil production industry.
“The collateral benefit for the Ontario oil and natural gas industry will be the skilled jobs required for the reversal of Line 9B, most of which are transferable to the Ontario producers,” said Mr. McIntosh. “The reversed system will increase marketing alternatives for local producers, ensuring they will receive prices that more closely reflect oil prices in other parts of North America. Oil prices that are more stable will encourage additional exploration and development in Ontario, and the jobs created by that activity.”
Regarding pipeline safety, Mr. McIntosh told the National Energy Board that its members have been safely using pipelines in gathering and transporting oil for more than 100 years.
“The Ontario Petroleum Institute fully expects Enbridge to meet its responsibilities and commitment to operating Line 9B to the highest standards to ensure the health and safety of the communities along the route and in the surrounding areas of the route.”
About the Ontario Petroleum Institute
The Ontario Petroleum Institute is a non-profit industry association which represents explorationists, producers, contractors, geologists, petroleum engineers and other professionals, individuals or companies directly related to the oil and natural gas, hydrocarbon storage and solution mining industries of Ontario. Fundamental objectives of the Institute are: to encourage responsible exploration and development of the oil, natural gas, hydrocarbon storage and solution-mining industries in Ontario; to maintain close liaison with government agencies which regulate the industry; to disseminate information relevant to member needs; to promote the legislative goals of the membership and to inform and educate the general public on the significance of the industry to the province of Ontario. www.ontpet.com.
SOURCE Ontario Petroleum Institute
For interviews and more information:
Hugh Moran
Executive Director, Ontario Petroleum Institute
Tel: (519) 630-4204
Email: hughmoran@ontpet.com