Most Canadian crude by rail gets shipped to the U.S. Gulf Coast
The Western Canadian Sedimentary Basin (WCSB) has approximately 1.2 million barrels per day (MMb/d) of crude rail loading capacity. Crude oil shipped from the WCSB can access refineries across North America through several large rail networks, according to a market snapshot by National Energy Board.
The actual amount of crude oil loading capacity may vary based on factors including the size of the unit trains, the size, type and capacity of the railcars used, and the type and specifications of crude oil loaded, among other factors.
Facilities known as rail loading terminals load the crude oil into specialized tank cars so it can be moved by train.
Approximately 60 per cent of total loading capacity in the WCSB is concentrated in northern and central Alberta, in the Edmonton and Hardisty regions. Both Edmonton and Hardisty are junction points for crude oil infrastructure and have become major hubs for crude oil exports to the United States (U.S.).
Canada’s Energy Future 2017 contains crude oil production projections. In the Reference Case total Canadian crude oil production is expected to increase by 21 per cent from 2016 to 2020 – from 3.97 MMb/d in 2016 to 4.79 MMb/d in 2020.
This increase is due to new and expanded mining facilities: Suncor’s Fort Hills and CNRL’s Horizon Phase 3, as well as new in situ projects and expansions and increased production from existing in situ facilities. Additionally, no major new WCSB pipeline capacity is expected to come online before 2019.
These two factors suggest crude by rail may be relied upon even more in the near future.
Shipping crude by rail is often more expensive than pipelines.
However, it can offer a flexible alternative. Pipelines are good at connecting relatively large supply basins to major markets but rail has the ability to send product and reach a variety of different sizes of markets because of its expansive reach.
Canada ships numerous types of crude oil by rail to various destinations throughout North America, with much of the supply getting shipped to the U.S. Gulf Coast.