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Why Russian oil — and not Canadian — will keep fuelling the U.S. Pacific Northwest

Opinion: The fact is that if we don’t provide it, someone else will — even if that someone is Vladimir Putin

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Oil tankers coming in and out of the Strait of Juan de Fuca — the waterway between Vancouver Island and Washington state — are nothing special. In this crucial passage shared with the United States, if tankers are noticed at all they are just part of a passing parade shipping every conceivable commodity and manufactured thing.

The recent arrival of the Portuguese-flagged Nordtulip at the Washington State refinery port of Anacortes on July 31 wasn’t particularly noteworthy. Instead, it was Nordtulip’s previous stop that made the ship stand out, in a new twist that speaks volumes about Canada’s aspiration to get fair market value for its oilsands crude.

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The 229-metre vessel — no supertanker — was carrying 600,000 to 650,000 barrels of crude oil for conversion at one of Anacortes’ two oil refineries where gasoline, diesel and jet fuel are produced for use by residents and businesses of Washington State and Oregon.

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The Pacific Northwest derives its refinery feedstock from various sources every day, mainly Alaska by ship (a diminishing source) but also Alberta via the existing Trans Mountain pipeline. That’s the pipeline Ottawa will purchase for $5.4-billion to (hopefully) ensure the proposed multi-billion-dollar expansion project is built over the objection of anti-development protestors and the British Columbia government.

Here’s where things get interesting. Nordtulip wasn’t coming from Alaska. Instead, its cargo originated in Vladivostok, Russia, and the ship carried its cargo for 40 days across the Pacific Ocean to Anacortes.

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It may seem surprising that Russia — a nation that continues to violate Ukrainian sovereignty and disrupts elections with Fake News — is supplying crude oil to the Pacific Northwest. Yet those who follow tanker movements closely are aware that it’s by no means the first time we’ve seen Russia fuelling the U.S. West Coast.

In July 2012, Bloomberg News reported on the phenomenon, stating: “Vladimir Putin, a frequent opponent of American foreign policy, is sending more crude than ever to the West Coast, a region all but cut off from the biggest U.S. oil-production boom since the end of the Cold War.”

Bloomberg said that Russian crude supplies were gaining “market acceptance” in the U.S. as they competed with other imports. In one month in 2012, over 5 million barrels of oil arrived at West Coast ports, a 17-year high. (Most of it went to the refinery complex in Long Beach, California.)

After oil prices tanked in 2014 the trade fell off, but now oil is again touching multi-year highs and the Russians are back. Over the same span, Canada has struggled with three major domestic oil pipeline projects, two of which were cancelled.

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It’s not like Russia is a preferred option. Until earlier this year, one of the Anacortes refineries had hoped its supply issues would be addressed by rail imports of U.S. crude oil from the Bakken shale in North Dakota. But in January, Washington State governor Jay Inslee rejected that plan.

In 2018, the Pacific Northwest remains just as geographically isolated as it was in 2012, and the sourcing issue still has not been solved. The next best hope for this geographically challenged region is the completion of Canada’s Trans Mountain pipeline expansion.

The Andeavor refinery in Anacortes is already a delivery location for Kinder Morgan’s long-existing Trans Mountain Pipeline, via the Puget Sound spur line from Sumas. So is the Shell refinery at Anacortes. The Andeavor facility, however, is much more intimately tied up in the fortunes of Canada’s embattled pipeline expansion project that will triple the throughput. Andeavor happens to be among the companies who have given Kinder Morgan 15-to-20-year commitments to use this new capacity.

In a list of commercial interests backing Trans Mountain, Andeavor stands out as the only company that is exclusively in the refinery business. The others are oilsands producers.

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The arrival of Nordtulip carrying Russian oil serves as another reminder of the pointlessness of the long-running anti-Trans Mountain campaign to try to persuade Canadians that the world doesn’t need Canada’s oil. The fact is that if we don’t provide it, someone else will — even if that someone is Vladimir Putin.

It’s also clear to see that, in 2018, West Coast residents cannot go a day without oil. Yet, Washington’s Democrat governor Jay Inslee is a frequent critic of Canada for daring to exercise its sovereign right to ship the commodities of its choosing. He seems to have no objection to oil from Russia.

Canada is one of the few countries to have voluntarily adopted carbon pricing policies. The greenhouse gas (GHG) emissions intensity of production at Canada’s newest oilsands mine Fort Hills is currently on par with the average refined barrel in the United States, according to Suncor’s sustainability report for 2018.

And Russia? We have no idea, because Russia isn’t concerned with issues like environmental protection. But its oil will increasingly fuel the U.S. northwest economy thanks to Canada’s Greens, environmental pipeline protestors and the B.C. government.

Stewart Muir is a contributing writer for Canadians for Affordable Energy and executive director of Resource Works.

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