Posthaste: Why Enbridge is planning to build a deepwater crude oil export terminal in Texas
Canadian energy companies continue to invest heavily in the United States, eyeing a slew of opportunities down south. This morning Canadian energy infrastructure stalwart Enbridge Inc. said it was teaming up with Enterprise Products Partners LP to jointly develop and market a deep-water offshore crude oil export terminal capable of fully loading Very Large Crude Carriers (VLCCs).
Enbridge also said it will advance the development of a new wholly-owned Jones Creek Crude Oil Storage Terminal in Houston, featuring up to 15 million barrels of storage space, access to crude oil from all major North American production basins fully integrated with the Oklaholma-Texas Seaway Pipeline system that gives it access to Houston-area refineries, existing export facilities and other facilities in the future.
It’s part of an overall shift in infrastructure spending from Canada to U.S. where oil production is surging. In Canada, the progress of oil and gas pipelines is being delayed due to increasing environmental concerns and strict government regulations.
“The Canadian government introduced Bill C-69, which stipulates additional measures for environmental assessment of major infrastructure projects such as inter-state pipeline projects in the country,” Sunrita Dutta, oil and gas analyst at GlobalData, told the Financial Post. “The bill essentially discourages investment on big infrastructure projects and is already gained notorious recognition as ‘no more pipelines bill’. Other measures such as the imposition of the carbon tax (are) also discouraging investment on pipelines.”
“In the U.S., oil and gas trunk pipelines are relatively less subjected to stringent environmental and government regulations than in Canada,” Dutta wrote in an email. “The booming oil and gas production in the U.S. created pipeline transportation bottlenecks and necessitated the construction of new pipelines for increasing domestic consumption and exports. Especially, new pipelines are being planned from production sites in the Permian basin to export, refining and liquefaction facilities located along the U.S. Gulf of Mexico coast.“
As much as 6,900 kilometres of oil and gas pipeline construction is announced or planned in Canada, compared to just over 34,000 kilometres in the States, as its infrastructure catches up with robust production increase over the past decade, according to GlobalDaata.
Enbridge’s focus on export infrastructure also comes as the U.S. Department of Energy expects the country’s total crude oil and petroleum net exports to average record levels of 750,000 barrels per day in 2020.
Here’s what you need to know this morning:
Alberta Premier Jason Kenney will address the Ottawa business community at Canadian Club of Ottawa
Ontario’s Financial Accountability Officer will release his fall 2019 economic and budget outlook in Toronto
November housing starts data released at 8.15 a.m. ET
October building permits data released at 8.30 a.m. ET
The private sector lost more than 50,000 jobs as hiring froze in November. It was part of a deeper rout that saw Canada lost 71,000 jobs in total, registering the biggest drop in employment since 2009 and casting doubt on the resiliency of the domestic outlook.
“It seems that Canada’s labour market has turned ice cold over the past couple of months,” said CIBC in a note. “Employment had been running well ahead of other growth indicators, but with GDP being revised higher and employment reversing earlier gains, the two sets of data are no longer in such sharp contrast now. The Bank of Canada wouldn’t have had the labour market data in hand when they drafted their interest rate announcement, and this set of numbers might have them rethinking their on-hold messaging, particularly if the weakness continues.”