TransCanada’s Oil Pipeline to Change Trade Dynamics

TransCanada Corp. is planning to build one of the world’s longest oil pipelines. The pipeline is expected to be 2,700 miles long. The pipeline will bring oil from the refineries in Alberta to the ports on the East Coast. The planned oil pipeline might interfere with the North Atlantic oil trade. This pipeline will compete with oil suppliers from Saudi Arabia and allow the opportunity for Canada to provide oil to the U.S Gulf Coast. The proposed pipeline has the potential to pump 1.1 million barrels per day. The pipeline would provide an equivalent of 6% of the United States daily oil consumption or 30% of Canada’s daily oil production. Initially, the pipeline will be used to supply oil to Canadian refineries. This could be enough to eliminate the need for Canada to import crude oil for its eastern refineries. Also, the ability to export to refineries on the east coast of the United States would be cheaper than other imports. Additionally, the oil producers in Canada hope to be able to export barrels of oil to Asia, maybe even as far as India. It may one day be possible for Canada to compete with Middle Eastern producers in market share in India.

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