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Transmission Pipelines:
Delivering Benefits to Canadians
Presentation to the International Energy Agency
April 24, 2009
222
Outline
About CEPA
Energy and pipeline infrastructure in North
America
Enable and Protect the Interests of Canadians
Public Policy and Regulatory Implications
333
Member Facts
Transport 97% of Canadian oil and gas production
Carry two-thirds of all energy used by Canadians
Collective assets must double in next 15 years
444
Meeting Needs of Today and Tomorrow
Central to meeting needs for mobility, heat, electricity
and virtually all industries
CEPA members expect to invest more than $40 Billion
(Cdn) in expansion in the next 15 years.
– $5.5 billion in 2009, $3 billion in 2010
– Represents a doubling of collective assets
– Total invest grows to $80 Billion adding Mackenzie and Alaska
Operate over 100,000 kilometres of pipeline in Canada
and the United States
Pipelines are the safest and most environmentally
sound way to transport oil and gas; we have a world
class industry in Canada
555
CEPA Members – Full
Alliance Pipeline Ltd.
ATCO Pipelines
Enbridge Pipelines Inc.
Foothills Pipe Lines Ltd.
Portland-Montreal Pipe Line
Kinder Morgan Canada
Spectra Energy Transmission West
TransCanada PipeLines Limited
TransGas Limited
Trans-Northern Pipelines Inc.
Trans Québec & Maritimes Pipeline Inc.
666
CEPA Members – Technical & Associate
Technical Access Pipeline
BP Canada Energy Company
Inter Pipeline Fund
Maritimes & Northeast Pipeline
Pembina Pipelines Corporation
Terasen Gas Inc.
Associate
BJ Pipeline Inspection Services
CDI Professional Services Ltd
Deloitte & Touche LLP
Fraser Milner Casgrain
GAZ Metropolitan
Evraz Inc. NA Canada
OSM Tubular Camrose
Pipe Line Contractors Association of Canada
TD Williamson Canada ULC
Toronto Dominion Bank
ROSEN Canada Ltd.
Shaw Pipe Protection Limited
Stikeman Elliott LLP
777
Transmission Pipelines
8
Spectra
Kinder Morgan
Access
Anchorage
Prudhoe Bay
Norman Wells
Whitehorse
Prince Rupert
Kitimat
Prince George
Taylor
Rainbow Lake Zama
Fort McMurray
LloydminsterEdmonton
HardistySundre
Kerrobert
Cutbank
Great Falls
KamloopsVancouver
AnacortesOlympia
Portland
Seattle
Spokane
Empress Regina
WinnipegCromer
Gretna
Mandan
Clearbrook
Thunder Bay
Superior
St. Paul
Lockport Chicago
Moosonee
Timmins
Sudbury North Bay
Ottawa
Montreal
Quebec CitySt. John
Halifax
Port Hawkesbury
St. John’s
Portland
Boston
Philadelphia
Warren
Oakville
Sarnia
Nanticoke
DetroitToledo
CantonLima
Catlettsburg
Memphis
Patoka
Robinson
Wood
RiverMcPherson
El Dorado
Ponca City
CushingBorger
Tulsa
Coffeyville
Wynnewood
Colorado
City Tyler
El Dorado
New Orleans
St. James
Corpus ChristiThree Rivers Freeport
Houston
Port Arthur
Lake
Charles
Longview
Big Spring
Artesia
El Paso
Billings
Casper
Salt Lake CitySinclair
Cheyenne
Denver
Guernsey/
Ft. Laramie
Long BeachLos Angeles
Torrance
BakersfieldSanta Maria
Avon
San Francisco
Trans-Northern
Sunray
BP
Enbridge
Canadian Oil Facts – 2007
2.8 million barrels/day – total production
1.85 million barrels/day – total exports
$41.5 billion (CDN) – value of total exports
205.1 billion barrels – recoverable reserves(Source: NEB)
Non-Member Pipeline
Sedimentary Basin
CEPA Members - Liquid Pipelines
August 2008
Inter Pipeline
Portland Montreal Pipe Line
Pembina
9
Spectra
TransGas
TransCanada
Trans Quebec
& Maritimes
Alliance
BP
ATCO
Enbridge
Anchorage
Prudhoe Bay
Norman Wells
Whitehorse
Prince Rupert
Kitimat
Prince George
Fort St. John
Rainbow Lake
Zama
Fort McMurray
LloydminsterEdmonton
HardistySundre
Kerrobert
Vancouver
HuntingdonOlympia
Portland
Seattle
Spokane
Empress Regina
Winnipeg
Cromer
Gretna
Mandan
Clearbrook
Thunder Bay
Superior
St. Paul
Lockport Chicago
Moosonee
Timmins
SudburyNorth Bay
OttawaMontreal
Quebec City
St. JohnHalifax
Port Hawkesbury
St. Johns
Portland
Boston
Philadelphia
Warren
OakvilleSarnia
Nanticoke
Toledo
CantonLima
Catlettsburg
Memphis
Patoka
Sunray
Colorado
City El Dorado
New Orleans
St. JamesCorpus ChristiThree Rivers Freeport
Houston
Port Arthur
Lake
Charles
Longview
Big Spring
Artesia
El Paso
Salt Lake City
Ehrenberg
Long BeachLos Angeles
Torrance
BakersfieldSanta Maria
Avon
San Francisco
Maritimes
& Northeast
Yorktown
Detroit
Canadian Natural Gas Facts – 2007
16.8 billion cubic feet/day – total production
9.0 billion cubic feet/day – total exports
$24.3 billion (CDN) – value of net exports
58.1 trillion cubic feet – total reserves (Source: NEB)
CEPA Members - Natural Gas Pipelines
Non-Member Pipeline
Sedimentary Basin
Terasen Gas
August 2008
101010
Pipeline Development Issues
Oil pipeline system near capacity
New natural gas supply needs to be connected
to existing pipeline systems
Infrastructure deficit requires significant
investment and timely decisions
Infrastructure = choice and responsiveness =
energy security
111111
Where do non-renewables
fit in the future energy mix?
World Energy Demand 1980 - 2030
EIA – International Energy Outlook 2008
0
100
200
300
400
500
600
700
800
1980 1990 2000 2010 2020 2030
Renewables
Nuclear
Coal
Natural Gas
Oil
Quadrillion BTU
121212
Global Crude Oil Reserves by Country
Source: Oil & Gas Journal Dec. 2008
264
178
136
115
102 9992
60
4436
30
21
0
50
100
150
200
250
300
Saudi Arabia Canada Iran Iraq Kuwait Venezuela Abu Dhabi Russia Libya Nigeria Kazhakhstan United States
bil
lio
n b
arr
els
Canada, with 173 billion barrels in oil sands reserves, ranks 2nd only to Saudi Arabia in global oil reserves
131313
0
1 000
2 000
3 000
4 000
5 000
6 000
2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Th
ou
sa
nd
ba
rre
ls p
er
da
y Actual Forecast
Conventional Oil
Oil Sands In
Production and
Under Construction
Oil Sands Future
Potential
W. Canadian Oil Sands and
Conventional Production
December 2008 Update
14
PLATTE & EXPRESS EXPANSION(Kinder Morgan)
SPEARHEAD EXPANSION(Enbridge)
CHINOOK/MAPLE LEAF PIPELINE(Kinder Morgan)
MACKENZIE VALLEY PIPELINE(TransCanada)
ALASKA PIPELINE(Multiple Member Proposals)
Anchorage
Prudhoe Bay
Norman Wells
Whitehorse
Kitimat
Prince George
Taylor
Rainbow Lake
Zama
Fort
McMurray
LloydminsterEdmonton
Hardisty
Calgary
Kerrobert
KamloopsVancouver
Regina
Winnipeg
Clearbrook
Superior
St. Paul
LockportChicago
Quebec City St. John
Halifax
Port Hawkesbury
St. John’s
Portland
Boston
Philadelphia
Memphis
PatokaRobinsonWood RiverEl Dorado
Cushing Tulsa
Coffeyville
Wynnewood
Tyler
Wichita Falls
Houston
LongviewEl Paso
Los Angeles
San Francisco
WAUPISOO(Enbridge)
CANAPORT TERMINAL(Connection to Maritimes & NE)
GATEWAY(Enbridge)
TMX(Kinder Morgan)
KEYSTONE(TransCanada)
ALBERTA CLIPPER(Enbridge)
GROS CACOUNA(TransCanada)
SOUTHERN ACCESS(Enbridge)
Fort Saskatchewan
Gordondale
Springville
Nederland
Corsicana
Foreman
TEXAS ACCESS(Enbridge)
SOUTHERN LIGHTS(Enbridge)
Delevan
RABASKA(Gaz Metro & Enbridge)
BROADWATER LNG(TransCanada)
ENERGIA COSTA AZUL(TransCanada)
CEPA Members – Proposed Crude Oil and Natural
Gas Pipeline Expansions
Energy Infrastructure Investment Forecast
$20 trillion US – Global energy sector, next 25 years (IEA, 2006)
CORRIDOR EXPANSION(Inter Pipeline)
FORT HILLS PIPELINE(Enbridge)
Liquid Pipeline
Gas Pipeline
Sedimentary Basin
LNG Terminal
SUNSTONE PIPELINE(TransCanada)
BISON PIPELINE
PROJECT(TransCanada)
PATHFINDER
PIPELINE (TransCanada)
NORTH BAJA
EXPANSION(TransCanada)
PALOMAR GAS TRANSMISSION PROJECT (TransCanada)
KEYSTONE XL(TransCanada)
KEYSTONE XL(TransCanada)
Sarnia PIONEER PIPELINE (2 Options)(Enbridge)
ALBERTA-CALIFORNIA (TransCanada)
NORTH CENTRAL CORRIDOR(TransCanada)
NIPISI PIPELINE PROJECT(Pembina)
August 2008
151515
Critical issues for pipelines and
Canadians
Canada is facing a once in a lifetime opportunity to
build essential pipeline infrastructure
Similar to the building of the CPR in 1880s
Government decision-
making requires better
coordination
– In uncertain financial times,
government needs to provide
process and time certainty on
projects
161616
Effective and Efficient Outcomes for
Canadians
CEPA supports the changes the government has
made to enable stimulus projects
We support MPMO coordination
Focus on horizontal coordination of federal departments in
the review of a major project
Identify roles of departments, timelines and work-plans as
tools for monitoring progress on a project
“Whole of government” approach to Crown consultation
DM Committee to address cross-cutting issues as they
arise by timely intervention
We also support the legislative change mandate of
MPMO as a next step
171717
Effective Decision-Making is a Partnership
181818
Roadmap
Consider regulatory changes that support private sector investment – appropriate and timely right now in the present economic climate
Legislation CEAA, Regulatory Framework,
set course for effective, efficient
decision making and oversight
2010 and
beyond
Regulation As done for government stimulus,
simple changes have immediate
results
2009
Administration Use existing tools like target
timelines, substitution, and full
life-cycle regulation
Immediate
191919
The Opportunity
Financial crisis requires deliberate positioning for Canada to anticipate and take advantage of economic improvement when it occurs
Canada’s natural resources are a key element in the world recovery
Short term reprieve: lower costs for big projects; spending supports key industries – steel, manufacturing
Private sector projects bring an enhanced multiplier effect
202020
Average Cash Returns For Integrated Oil
Companies:Prices better, but cost increases have moderated returns
Source: Goldman Sachs
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007E
Real cash return over cash invested 40-year average 5-year moving average
The revenge of the old economy
creates a rise in returns, which
attracts capital back to the sector
Poor returns in the 1990s
caused capital to be
redirected into the new
economy
But policy constraints put a cap on further increases and on the ability to attract
capital, regardless of price increases
212121
Capital Raised by US Private
Equity Firms:But the growth trend has reversed in 2008
Source: Goldman Sachs
$34.5
$55.4
$34.6
$63.3
$36.9
$17.0$24.0
$42.2
$183.0$197.6
$287.1
$82.0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Q1 2008
$b
illio
ns
22222222
Landowners Feel Safe
Two Generations of Results
83% – Have a favorable opinion of the energy
pipeline industry
83% – Have a favorable opinion of the energy
pipeline company(s) passing through/on their
land
94% - State that the pipeline industry is very
important to the Canadian economy
Environment: Nearly ¾ report that pipelines do
a good job protecting the environment
232323
Climate Change and the Environment
CEPA supports government’s efforts to reduce air
pollutants and greenhouse gas emissions. This will require
innovation and technology development
One key part of the solution is CCS, CEPA members are
ready to develop CO2 pipelines
Policy certainty is necessary to promote a positive
investment environment (Capital is costing more)
Efforts to manage air pollution and climate change issues
must be harmonized among jurisdictions
Compliance mechanisms are needed to enable delivery of
clean fuels and pragmatic solutions to climate change
challenges
242424
TMX Anchor Loop Project
160 km of pipeline construction to loop an existing
oil pipeline
Sensitive area: Jasper National Park, Mount
Robson National Park
Proponent undertook extensive early engagement
with a wide range of stakeholders: federal
departments (DFO, PC), ENGOs, FN
Identified key issues and worked to resolve them
in early project design stages
252525
TMX Anchor Loop: Results
Good relationship building with stakeholders =
trust
Environmental assessment focused on key issues
Creative migitation enhanced habitat and
protected key resources
Objectives of EA were achieved before the public
hearing started
NEB hearing was 2 days in length with no
environmental issues raised
262626
Opportunity Today
Financial crisis requires deliberate positioning for Canada to excel as a nation
Short term reprieve from hectic pace and loss of experience through retirements
Act now to redirect focus and set a course for:
– Real environmental results
– Focus on things that matter
– Robust, transparent and adaptable risk management
– Full life-cycle oversight (rather than primary focus on detailed checks and process)
272727
For more information please contact:
Jeff Angel
Vice President, External Relations
Canadian Energy Pipeline Association
Suite 1860, 205 - 5th Avenue S.W.
Calgary, Alberta T2P 2V7
Tel: (403) 221-8777 Fax: (403) 221-8760
www.cepa.com
