RESEARCH BULLETIN The Cost of Pipeline Constraints in Canada - Fraser Institute
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FRASER
RESEARCH BULLETIN
FROM THE CENTRE FOR NATURAL RESOURCE STUDIES May 2018
The Cost of Pipeline
Constraints in Canada
by Elmira Aliakbari and Ashley Stedman
Main Conclusions
Despite the steady growth in crude oil
From 2013 to 2017, after accounting for
available for export, new pipeline proj- quality differences and transportation
ects in Canada continue to face delays costs, the depressed price for Canadian
related to environmental and regula- heavy crude oil has resulted in CA$20.7
tory impediments as well as political billion in foregone revenues for the Ca-
opposition. nadian energy industry. This significant
loss is equivalent to almost 1 percent of
Canada’s lack of adequate pipeline ca-
Canada’s national GDP.
pacity has imposed a number of costly
constraints on the nation’s energy sec- In 2018, the average price differen-
tor including an overdependence on tial (based on the first quarter) was
the US market and reliance on more US$26.30 per barrel. If the price differ-
costly modes of energy transportation. ential remains at the current level, we
These and other factors have resulted estimate that Canada’s pipeline con-
in depressed prices for Canadian heavy straints will reduce revenues for Cana-
crude (Western Canada Select) relative dian energy firms by roughly CA$15.8
to US crude (West Texas Intermediate) billion in 2018, which is approximately
and other international benchmarks. 0.7 percent of Canada’s national GDP.
Between 2009 and 2012, the average
Insufficient pipeline capacity has re-
price differential between Western sulted in substantial lost revenue for
Canada Select (WCS) and West Texas the energy industry and thus imposed
Intermediate (WTI) was about 13 per- significant costs on the economy as a
cent of the WTI price. In 2018 (based on whole, and will continue to do so. This
the first quarter data), the price differ- reaffirms Canada’s critical need for ad-
ential surged to 42 percent of the WTI ditional pipeline capacity.
price.
fraserinstitute.org FRASER RESEARCH BULLETIN 1
The Cost of Pipeline Constraints in Canada
Introduction Despite the strong economic case for pipelines,
new pipeline projects in Canada continue to
Canada’s energy industry is a major contribu-
face delays related to environmental and regu-
tor to Canada’s economy and provides eco-
latory impediments as well as political oppo-
nomic benefits to all Canadians. However, that
sition. Ultimately, Canada’s lack of adequate
contribution could be larger still: Canadian oil
pipeline capacity has resulted in depressed
producers have been facing depressed pric-
prices for Canadian heavy crude and lost rev-
es for their crude oil relative to other inter-
enue for oil producers and thus the Canadian
national benchmark prices, resulting in fore-
economy as a whole.
gone revenue for the Canadian energy industry.
The price differential between Canadian heavy This bulletin will explain the reasons behind the
crude (Western Canada Select or WCS) and US steep WTI-WCS price differential and will sub-
crude (West Texas Intermediate or WTI) has sequently demonstrate Canada’s critical need
widened substantially in recent months due to for new pipeline projects. We will examine the
insufficient transportation infrastructure and extent to which Canada’s heavy crude is be-
pipeline bottlenecks, which has dramatically ing discounted relative to other benchmark oil
lowered the market price of Canadian crude oil prices and how the price differential for Cana-
relative to other comparable oil prices. dian crude has grown in recent months. Finally,
we will estimate the revenue lost between 2013
Western Canada’s oil exports have been rising
and 2017 due to depressed prices from Cana-
steadily since 2013. Despite the steady growth
dian heavy oil exports, as well as the foregone
in crude oil available for export, construction
revenue for the energy sector associated with
of pipelines to transport crude oil has been lag-
insufficient pipeline capacity in 2018.
ging, as many major pipeline projects have been
delayed or cancelled. Insufficient pipeline ca-
pacity is driving increased shipments by rail- Reasons behind the Canadian crude oil
way—a more expensive (and slightly less safe) discount and the case for pipelines
mode of transportation—leading to higher costs
Canadian oil producers command substantially
for Canadian producers.1 The issue of inad-
lower prices for their crude oil relative to other
equate transportion capacity has also resulted
international benchmark prices. Some part of
in rising crude oil inventories, putting Canadi-
the differential between the Western Canadi-
an oil into storage rather than into the market.
an Select (WCS) price, Canada’s primary heavy
crude benchmark, and the West Texas Interme-
1 According to the National Energy Board, “rail diate (WTI) benchmark price is natural and can
costs are roughly double or triple the pipeline tolls” be attributed to two factors: quality differences
(NEB, 2014). Meanwhile, studies show using pipe- and transportation costs.
line and rail transportation of oil and gas are both
quite safe; however, pipelines continue to result in In terms of quality differences, WCS crude oil
fewer accidents and fewer releases of product, when is heavier than WTI crude (an API of 20.5 de-
considering the amount of product transported by grees versus 34.3 degrees) and it contains 3.5
pipeline. Based on data from 2004 to 2015, pipelines
percent sulphur by weight compared to WTI’s
were 2.5 times less likely than rail to result in a re-
lease of product when transporting a million barrels 0.9 percent (BNN News, 2013). Being heavier
of oil (Green and Jackson, 2017). and more viscous, WCS is more costly to trans-
fraserinstitute.org FRASER RESEARCH BULLETIN 2
The Cost of Pipeline Constraints in Canada
port by pipeline (as it requires more energy to While there is and will always be a natural dif-
move a given distance). Further, the heavier the ferential between the WCS and WTI prices be-
crude oil, and the greater the sulphur content, cause of quality differences and transportation
the lower its value to a typical refiner as it will costs, Canada’s insufficient transportation in-
require more complex methods to produce fuels frastructure and pipeline bottlenecks have dra-
like gasoline. For these reasons, oil refiners gen- matically increased the differential beyond its
erally expect to pay less for heavy WCS crude oil natural level in recent years.2
compared to light, low-sulphur WTI crude oil.
Western Canadian oil exports have been rising
The second component of the natural differen- steadily in recent years (figure 1). According to
tial between WCS and WTI is associated with the National Energy Board’s analysis, Canada
the cost to transport oil from Western Canada had 3.95 million barrels per day of oil available
to US refining hubs. WCS is priced at Hardisty, for export in 2017, compared to 2.95 barrels per
Alberta and WTI crude oil at Cushing, Oklaho- day in 2013, an increase of 35 percent. Despite
ma. If it were not for the quality differences and the steady growth in crude oil available for ex-
the impact that this has on refinery demand for port, construction of pipelines to ship oil out of
competing crudes, the difference between the the region has been lagging (as shown in figure
price of WTI and WCS would boil down to just 1) as major pipeline projects have been delayed
the transportation cost between Hardisty and or cancelled. These include Enbridge’s
Cushing. According to the Canadian Associa-
tion of Petroleum Producers, the 2017 tolls to 2 The tight takeaway capacity has penalized both
ship heavy oil from Hardisty to Cushing are be- Canadian heavy and light crude oil in US markets.
tween US$5.45 and $6.85 per barrel, depending However, Canadian heavy crude oil (WCS) suffers more
on which pipeline system is used. than light, sweet crudes due to quality differences.
Figure 1: Canadian oil pipeline capacity and exports, 2013–2018
4.0
Oil available for export
3.5
3.0
Million barrels per day
2.5
2.0
Enbridge Mainline
1.5
1.0 Express
Trans Mountain
0.5 Rangeland/
Keystone
Milk River
0.0
2013 2014 2015 2016 2017 2018
Source: NEB, 2016.
fraserinstitute.org FRASER RESEARCH BULLETIN 3The Cost of Pipeline Constraints in Canada
Northern Gateway Pipeline and TransCanada’s Canadian crude oil exports by rail were more
Energy East and Eastern Mainline projects, than twelve times greater than in January 2012
which have been cancelled due to a number of (NEB, 2017). Of course, those Canadian oil pro-
factors including significant regulatory hur- ducers that have resorted to shipping by rail have
dles, political opposition, and changing market had to absorb the higher transportation costs.
conditions. The Keystone XL pipeline proposal The more that oil producers have to depend on
faced significant delays in the US as this proj- rail because of insufficient pipeline capacity, the
ect was initially rejected by the Obama admin- greater the average WCS transportation cost and
istration in November 2015 and finally got ap- the spread between WCS and WTI prices.
proved by the Trump administration in March
The inadequate transport capacity dilemma
2017. Despite receiving many of the necessary
is also reflected in rising crude oil inventories
regulatory approvals, Canada’s remaining pipe-
in Alberta in recent years. Many oil producers
line projects—the Trans Mountain Expansion
have been forced to put excess production into
and the Line 3 Replacement Project—along with
storage tanks until sufficient capacity is avail-
Keystone XL—continue to face delays related to
able. Specifically, based on data provided by the
environmental and regulatory concerns, politi-
Alberta Energy Regulator, crude oil inventories
cal opposition, and market uncertainty (Scotia-
increased by 47 percent between January 2013
bank, 2018).
and January 2018 (AER, 2013-2018).3
The insufficient pipeline capacity available to
transport Canadian crudes to US destinations has 3 Crude oil closing inventories increased from
forced increased shipments by railway. Accord- 7,055,075.5 cubic meters in January 2013 to
ing to data provided by the NEB, in January 2017, 10,403,507.4 cubic meters in January 2018.
Figure 2: WCS vs. global benchmark prices
120
Brent Europe
100
West Texas Intermediate
80
US$/bbl
60
Western Canada Select
40
20
0
Jan-2013 Jul-2013 Jan-2014 Jul-2014 Jan-2015 Jul-2015 Jan-2016 Jul-2016 Jan-2017 Jul-2017 Jan-2018
Sources: US Energy Information Administration, 2017; GMP First Energy, 2017.
fraserinstitute.org FRASER RESEARCH BULLETIN 4The Cost of Pipeline Constraints in Canada
Figure 2 illustrates the depressed value of Ca- months, due to increased Canadian heavy crude
nadian heavy crude oil (WCS) relative to the US oil production and lack of adequate takeaway ca-
benchmark (WTI) and the Brent crude global pacity. The price differential began to increase in
benchmark. The WCS price has been and con- 2017 and it widened even further starting in No-
tinues to be substantially below the prices of vember 2017 when TransCanada’s Keystone pipe-
both WTI and Brent.4 line was shut down because of a spill in South
Dakota. TransCanada Corp’s Keystone crude
Figure 3 illustrates the difference between pric- pipeline is still operating at 20 percent reduced
es of WCS and WTI over the past decade. While capacity after the 5,000 barrel oil leak detected
the difference between WTI and WCS was only in November (Process West, 2018).
US$5.27 per barrel in February 2009, it became
significantly wider in recent months, reaching More specifically, between 2009 and 2012 the av-
a differential of US$28.29 per barrel in February erage WTI-WCS differential was only 13 percent
2018. Between 2009 and 2012, when transporta- of the WTI price. However, in February 2018 the
tion constraints were not apparent, the price dif- differential reached 46 percent of the WTI price
ferential, on average, was approximately $US11.17 (Oil Sands Magazine, 2018). This represents a
per barrel, which can be perceived as the natu- striking 33 percentage point increase in the Ca-
ral differential. However, the WTI-WCS price nadian crude oil discount.
differential has widened substantially in recent
In addition, as forecast by the Canadian Associa-
tion of Petroleum Producers (CAPP), crude oil
production—primarily heavy crude—will continue
4 Generally, the WCS discount relative to Brent
has been slightly greater, in part, because of growing to rise in coming years, increasing by 1.3 million
US oil production and strong Asian demand. barrel per day from 2016 to 2030. The increase
Figure 3: WCS discount to WTI
30
25
20
US$/bbl
15
10
5
Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18
Source: Oil Sands Magazine, 2018.
fraserinstitute.org FRASER RESEARCH BULLETIN 5The Cost of Pipeline Constraints in Canada
in oil production translates into “over 1.5 million sion project, which is meant to triple capacity on
barrels per day of additional crude oil supplies the existing pipeline which transports crude be-
that [will] require transport to markets” (CAPP, tween landlocked Alberta and the Pacific coast,
2017a). Given the steady growth in oil production is currently facing considerable political oppo-
and lack of adequate takeaway capacity, Canada sition. Such political opposition is causing con-
requires new pipeline infrastructure to transport cerns about whether the pipeline will actually be
heavy crude production from Western Canada to built. In particular, in April 2018, Kinder Morgan
Gulf Coast refining hubs and overseas markets. stopped all non-essential spending on the Trans
As reported by Bloomberg, the three current Mountain (TMX) pipeline expansion, explaining
proposed pipeline projects (the Trans Mountain that the company cannot invest more money into
Expansion, the Line 3 Replacement Project, and a project that they can’t ensure will see comple-
Keystone XL) could transport Canada’s additional tion (Graney and Gerein, 2018). Kinder Morgan’s
oil as these pipelines can increase export capac- announcement is not suprising given the recent
ity for Western Canada’s oil producers by 1.5 mil- attempts by the BC government to block the ex-
lion barrels per day (Denning, 2017). However, pansion project, despite federal government and
even if these projects are able to overcome their National Energy Board approvals.
regulatory hurdles, no new capacity will come
online until the latter half of 2019. Lost revenue from Canada’s inability to
While building pipelines to secure access to the build new pipelines
US Gulf Coast is important—as it will reduce the
The lack of adequate takeaway capacity in re-
existing price differential—gaining access to new cent years has resulted in depressed prices for
overseas markets is even more crucial. Currently Canadian heavy crude (WCS) relative to the US
nearly 99 percent of Canadian heavy crude gets (WTI) and global benchmarks, and thereby lost
exported to the US, meaning that the US is es- revenue for oil producers and thus the econo-
sentially still Canada’s only export market. Given my as a whole. This section estimates the fore-
soaring US oil production in recent years and gone revenues for Canada’s energy industry
competition from American producers, find- from 2013 to 2017 due to constrained capac-
ing new customers for Canadian heavy crude ity and the subsequent Canadian heavy crude
is critical. As a result, building Keystone XL and discount. It also estimates lost revenue in 2018
the Line 3 Replacement pipeline, which are set given the existing elevated price discount.
to expand capacity to the US market, are impor- According to the analysis summarized in table 1,
tant, but expanding the Trans Mountain pipe- after accounting for quality differences and
line to gain access to new customers in Asia, transportation costs, from 2013 to 2017, the dis-
where demand for oil is growing, would be even counted price for Canadian heavy crude resulted
more beneficial.5 The Trans Mountain expan-
tidewater locations, at a $US40/bbl price the ad-
5 Studies have calculated the additional revenues ditional sales revenue would amount to CA$2 billion
that would result from greater market access, which per year compared with selling those barrels into
would be obtained through building pipelines to the already flooded US market. At an average price
tidewater. According to the analysis by Angevine and of US$60/bbl, the additional annual revenue would
Green (2015), if Canada were able to export 1 mil- be CA$4.2 billion. At US$80/bbl, it would reach
lion barrels of oil per day to markets accessible from CA$6.4 billion in additional annual revenue.
fraserinstitute.org FRASER RESEARCH BULLETIN 6The Cost of Pipeline Constraints in Canada
Table 1: Estimated foregone revenue for the Canadian energy industry, 2013–2017
Year WTI Price Transporta- Quality Natural Potential WCS price Lost Total heavy Total lost
at Cushing tion cost difference discount WCS price at Hardisty revenue crude revenue
(US$/bbl) (US$/bbl) (US$/bbl) (US$/bbl) (US$/bbl) (US$/bbl) per barrel exports (CA$
(US$/bbl) to the US billions)
(Mbpd)
2013 98.02 5.76 5.63 11.39 86.63 73.55 13.08 2.01 9.88
2014 92.89 6.26 5.63 11.89 81.00 74.37 6.62 2.22 5.92
2015 48.80 6.26 5.63 11.89 36.90 35.67 1.23 2.42 1.39
2016 43.42 6.26 5.63 11.89 31.53 29.57 1.95 2.52 2.38
2017 50.91 6.28 5.63 11.91 39.01 38.17 0.84 2.74 1.09
Notes: 1. Transportation cost is an average pipeline toll (based on two existing pipelines of Enbridge and Keystone) to ship crude
from Hardisty to Cushing. / 2. The reason for the adjustment is to allow comparison of the two types of oil: WCS is a much heavier
crude then WTI. In order to adjust for quality differences, we calculated a five year average price difference between LLS (Light
Louisiana Sweet crude, which has similar quality to WTI) and Maya (a Mexican Seaborn heavy crude of similar quality to WCS).
Both LLS and Maya get priced at the US Gulf Coast. /3. The natural differential is a the sum of the transportation costs and quality
differences. / 4. The authors converted US dollars to Canadian dollars based on the actual average exchange rate for each year as
published by the Bank of Canada (2013–2018).
Sources: Bank of Canada, 2013-18; CAPP, 2013-16, 2017b; EIA, 2013-18; GMP First Energy, 2013-17; Oil Sands Magazine, 2018.
in a revenue loss of CA$20.7 billion for the energy Similarly, in 2014, the difference between the
indstury. This significant loss, which is associated potential and the real WCS price was roughly
with an average price differential of US$16.6 per US$6.6 per barrel, meaning that the price re-
barrel, is equivalent to almost 1 percent of Cana- ceived per barrel that was exported could have
da’s national GDP in 2017 (Statistics Canada, 2017). been much higher if pipelines constraints were
Specifically, in 2013, we estimated the natural dif- absent. As Canada exported 2.2 million barrels
ferential (accounting for quality differences and per day, the US$6.6 difference per barrel trans-
transportation cost) to be approximately US$11.4 lates into a revenue loss of CA$5.9 billion in 2014.
per barrel, which is substantially lower than the During 2015 and 2017, the average differential be-
existing differential of US$24.5 per barrel. As a tween WTI and WCS was lower, which resulted
result, while Canadian oil producers received
US$73.5 for every barrel exported to the US, they
could have received a WCS price of US$86.6, a
difference of 18 percent. Given that Canada ex- ing US oil production and a subsequent supply glut
in the US Midwest (TD, 2013). This supply glut in the
ported 2 million barrels per day to the US in 2013,
US is reflected in figure 2 where the spread between
the revenue that was lost due to capacity con- WTI and Brent crude was wider in 2013 and became
straints in 2013 alone was roughly CA$9.9 billion.6 narrower in more recent years. As both US and Ca-
nadian oil production are projected to rise in com-
ing years, and there is no sign of additional demand
6 The significant price differential between WTI from refineries in the US region, the need for more
and WCS in 2013 can be partly attributed to grow- pipelines and greater market access is crucial.
fraserinstitute.org FRASER RESEARCH BULLETIN 7The Cost of Pipeline Constraints in Canada
in approximately CA$4.9 billion in forgone reve- of concerns that demand for their services is
nues for the Canadian energy industry.7 short term (Williams and Ngai, 2017). In addi-
tion, rail companies now demand much high-
In recent months, due to greater excess pro-
er rates to move oil, which results in higher
duction relative to takeaway capacity, the price
transporation costs and thereby lower prices
differential between WTI and WCS has widened
for Canadian crude (Healing, 2018). There is
substantially. In 2018, the average price differ-
also political uncertainty ramping up in regards
ential (based on first quarter) is US$26.30 per
to transporting crude-by-rail between Alberta
barrel, which represents almost a 42 percent
and British Columbia, with the BC government
price differential. As no major pipelines will be
pursuing legal options to restrict the volume
entering service till at least latter half of 2019,
of crude oil being transported by rail (Hunter,
we expect the WTI-WCS differential to remain
2018). Thus, due to the higher costs and po-
elevated in 2018. The existing spread between
litical uncertainty associated with additional
WTI and WCS is much higher than the natural
crude-by-rail, we expect the elevated price dif-
spread of nearly $US11.8 per barrel arising from
ferential to remain.
transportation costs and quality differences
alone, meaning that the costs associated with If the differential stays at the current level
pipeline constraints will probably mount during (US$26.30 per barrel), assuming that Canada
2018. exports 2.4 million barrels of heavy crude per
day in 2018, and given an exchange rate of US$1
Although the significant price differential may
US dollar to CA$1.3, after accounting for the
cause some rail companies to expand their ca-
transportation cost and quality differences, we
pacity to ship crude oil, sources suggest that
estimate that pipeline constraints will reduce
companies have been reluctant to make long-
revenues for Canadian energy firms by approxi-
term investments to expand capacity because
mately CA$15.8 billion—or 0.7 percent of Cana-
da’s national GDP—in 2018.
7 There have been some improvements in access-
ing the US Gulf coast in recent years but the added
capacity has not been enough to solve the price dif- Conclusion
ferential that Western Canadian oil producers face.
With completion of its “MarketLink” crude oil pipeline Canadian heavy crude oil producers continue to
facility (the southernmost leg of the proposed Key- suffer from depressed prices relative to West Tex-
stone XL Pipeline) in 2014, TransCanada Corporation as Intermediate (WTI) and other global oil price
now has the capacity to move crude oil from Cushing, benchmarks. Canada’s steep oil price discount is a
Oklahoma to the Houston, Texas vicinity. Enbridge has result of insufficient pipeline capacity, which has
also been expanding its US Mainline pipeline capacity dramatically lowered the market price for Cana-
from North Dakota to Cushing via the upgrading and
dian crude oil and resulted in lost revenue for oil
addition of pumping stations in states such as Wis-
consin and Illinois (Angevine and Green, 2015). Com-
producers as well as the economy. Canada’s oil
bined with the company’s Seaway Pipeline expansion, producers face transportation constraints and al-
this provides an alternative path to the Gulf Coast for ternatives like crude-by-rail are costly and uncer-
Western Canadian crude oil. As a result, more West- tain. In addition, many new pipeline projects have
ern Canadian crude oil has been able to reach United been cancelled or stalled by regulatory processes
States coastal destinations now that TransCanada and and political opposition, further contributing to
Enbridge have some additional capacity to ship oil
Canada’s transportation constraints.
from Cushing OK to Texas refineries.
fraserinstitute.org FRASER RESEARCH BULLETIN 8The Cost of Pipeline Constraints in Canada
From 2013 to 2017, Canada’s energy industry Canadian Association of Petroleum Producers
lost $20.7 billion in foregone revenue as a re- [CAPP] (2017b). 2017 Canadian and US Crude
sult of this country’s lack of pipelines, after ac- Oil Pipelines and Refineries. CAPP.
counting for quality differences and transpor- Congressional Research Service (2014, Decem-
tation costs. In 2018, Canada’s transportation ber 4,). US Rail Transportation of Crude Oil:
constraints are estimated to reduce revenues Background and Issues for Congress. CRS Re-
for the energy sector by $15.8 billion. The re- port.
ity has resulted in substantial lost revenue for Denning, Liam (2017, November 13). Forgot
Canada’s energy industry and will continue to about Keystone? Canada’s Oil Majors Haven’t.
do so, and thus imposes signficiant costs on the Bloomberg.
pipeline capacity. GMP First Energy (January 2013–2018). Price
Differential Data (Daily). GMP First Energy.
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Green, Kenneth P., and Taylor Jackson (2017).
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Hunter, Justine (2018, April 12). B.C. Will Ask
Canadian Association of Petroleum Producers Court for Authority to Limit Oil by Rail. Globe
[CAPP] (2013–2016). 2013–2016 Canadian and and Mail.
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Markets and Transportation. CAPP.
All websites retrievable as of April 28, 2018.
fraserinstitute.org FRASER RESEARCH BULLETIN 9The Cost of Pipeline Constraints in Canada
National Energy Board [NEB] (2016). Canada’s Elmira Aliakbari is Senior Econo-
Energy Future 2016: Energy Supply and De- mist at the Fraser Institute. She
received her Ph.D. in Economics
mand Projections to 2040. Government of
from the University of Guelph in
Canada. and an M.A. in Economics from
the University of Tehran in Iran
National Energy Board [NEB] (2017a). Estimated
(2003 and 2007). She has studied
Production of Canadian Crude Oil and Equiva-
public policy involving energy
lent. Government of Canada. bari was Director of Research, Energy, Ecology and
Prosperity with the Frontier Center for Public Policy.
National Energy Board [NEB] (2017b). Canadi- Her commentaries have appeared in major Canadian
an Crude Oil Exports by Rail. Government of newspapers such as the Globe and Mail, National
Canada. Post, Financial Post and Edmonton Journal.
Oil Sands Magazine (2018). Oil & Gas Prices: Ashley Stedman is a policy analyst
Monthly Average Oil Prices. Oil Sands Magazine. working in the Centre for Natural
Resources. She holds a B.A. from
Process West (2018). Keystone Crude Pipeline Carleton University and a Master
Still Operating Below Pressure. co-author of a number of Fraser
Institute studies, including the
Scotiabank (2018, February 20). Pipeline Ap- annual Global Petroleum Survey
proval Delays: the Costs of Inaction. Scotia- and Survey of Mining Companies.
bank Global Economics. appeared in major Canadian newspapers such as the
National Post, Financial Post, Vancouver Sun, and
Statistics Canada (2017). CANSIM table 380- Edmonton Journal.
0064. Gross domestic product, expenditure-
based, quarterly. Statistics Canada. Acknowledgments
Toronto Dominion [TD] (2013, March 14). Drill- The authors thank the anonymous reviewers of early
ing Down on Crude Oil Price Differentials. TD drafts of this paper. Any errors or omissions are the
Economics. sole responsibility of the authors. As the researchers
US Energy Information Administration (2013- worked independently, the views and conclusions ex-
2018). Petroleum & Other Liquids Spot Prices. pressed in this paper do not necessarily reflect those
Government of the United States.
Copyright © 2018 by the Fraser Institute. All rights re-
Williams, Nia, and Catherine Ngai (2017, Decem- served. Without written permission, only brief passages
may be quoted in critical articles and reviews.
ber 17). Canada Oil Producers Exhaust Options
As Pipelines, Railroads Fill. Reuters. tions@fraserinstitute.org
Support the Institute: call 1.800.665.3558, ext. 586, or e-
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