Sarnia already refines tar sands oil, proponents advocate increasing production with existing infrastructure

Sarnia is already refining tar sands oil with some operations being expanded and new ideas being put on the table despite the recent decision of U.S. President Barrack Obama to reject the Keystone XL pipeline project two weeks ago.

The Keystone XL pipeline, which was designed to transport tar sands oil from northern Alberta to refineries on the Texas Gulf Coast, is stalled, and U.S. President Barack Obama has postponed a decision on whether the project is in that country’s national interest until 2013.

In January, Obama told Canadian Prime Minister Harper that the decision was not a decision based on the “merits of the project” and that TransCanada, the company looking to build the pipeline, could reapply for permission after a new route had been developed.

Local officials and industry experts argue that Sarnia could increase local production using the existing pipeline infrastructure. Proponents say that redirecting bitumen from Alberta’s oil sands to Sarnia for refining would boost the Canadian and local economy.

Walter Petryschuk, who is a former Polysar site manager and industry analyst with ties to the Western University Research Park and Canadian Academy of Engineering, was quoted saying, “The whole idea here is to upgrade this stuff into something useful.”

Petryschuk is part of an advocacy group that includes renowned oil sands scientist Clem Bowman, who argues Sarnia’s existing pipelines and infrastructure make it a logical destination for oil sands bitumen. Bitumen is a black, oily, viscous material that is a naturally-occurring organic byproduct of decomposed organic materials.

Petryschuk believes that instead of shipping these jobs outside the country, we should ship them inside the country.

In the aftermath of Keystone XL pipeline project being stalled, Sarnia Mayor Mike Bradley said that the city could still be positioned for an upgrader plant.

Bradley supports an in-Canada solution when it comes where to upgrade Alberta's tar sands oil and thinks that such a solution could be given consideration noting recent talks about a Canadian national energy policy are encouraging.

“One of the big issues in the states is putting in a new pipeline,” he said. “We have the pipeline.”

"An upgrading facility, like one Shell Canada considered and rejected for St. Clair Township in 2008, would create jobs and stabilize the local industrial base," he continued.

Last August, Enbridge announced a plan to reverse flow on a pipeline that presently runs oil from Montreal to the Sarnia refinery. Enbridge is asking the NEB to approve the additions and modifications required to allow the reversal of crude oil flow within a segment of Line 9 – a 762-millimetre (30 inches) outside diameter crude oil pipeline – from the Sarnia Terminal to the North Westover Station in southwestern Ontario en route to the Gulf of Mexico.

Local analysts agree that upgrading more oil and making better use of the existing pipeline infrastructure in Sarnia would help the area, noting that there have been 7,000 Chemical Valley layoffs during the past three decades.

Tags: alberta, business, Canada, City of, keystone XL pipeline, Sarnia, Tar Oil Sands