Bipartisan bill approves pipeline construction

[kentauros]

24. As indicated, your last question is part of the answer.

The other is that refinery plants take time to build and add at least another billion to the cost. It was already a $7 billion project when they started, and before anyone had heard of it. All of the refineries they needed exist already here in Texas, so economically, it didn't make sense for them to build their own refinery. Also, shipping it out of Canada means dealing with all those problems winter causes in the Great White North, versus none of that on the Gulf Coast. That was probably the defining factor in building the pipeline other than cost because if your ships are frozen into place at their docks, that's product that isn't being shipped. Whereas, product constantly flowing through a pipeline and into refineries is product sold and paying for more of the same.

The amount of time it takes to build a new refinery is about two years (not including engineering/drafting time, which is also another two years), and that's the same amount of time for most pipeline-engineering projects to complete. Construction doesn't take as long, because it's a relatively simply process to weld, hydro-test, trench, and bury the pipeline. However, pipeline construction doesn't take place during the winter in the northern states and Canada because the ground is frozen solid.

TransCanada simply did not anticipate the fight that ensued countering them. If they had, they may well have built their own refineries and avoided almost all of the problems they've got now. They probably would have saved money, too. I don't know what the total cost of the pipeline is now, when you add on the delays and legal expenses. Construction materials probably won't go up in price as that would have already been order and manufactured.

Oh, as far as the price difference goes, mining the bitumen fields (oil or tar sands to the uninformed) wasn't either feasible or economically viable until the cost of a barrel of oil was high enough to justify the higher cost of mining and processing.