Brian Zinchuk is editor and owner of Pipeline Online
Port of Churchill, Manitoba. The tank farm needed to store half a year’s oil, at a million barrels per day, would likely cover every single inch of land seen in this photo, and then some.
Alright, it’s time to talk about that idea of an oil pipeline to Hudson Bay, be it Churchill or Port Nelson.
I hate to be a downer for the proponents, who include Saskatchewan Premier Scott Moe, Alberta Premier Danielle Smith and a surprisingly enthusiastic Manitoba Premier Wab Kinew. But it’ll never work, not without a massive investment into a large fleet of multi-billion-dollar icebreakers first.
This has everything to do with the shipping season, which is generally only four months, five, tops.
Unless we can magically conjur up not one or two, but a fleet of massive icebreakers capable of making it from the west side of Hudson Bay, through the entire bay and then the Hudson Strait to open waters off Labrador, this project will never fly.
That’s because oil is produced 24 hours a day, seven days a week, 365 days a year. There is remarkably little in the way of storage throughout the system. And unless your export outlet is similarly configured, you would need massive storage within the system, likely at the port, to handle it. Because of the nature of bitumen, once it is flowing down the pipeline, you really don’t want that flow to stop if at all possible, especially in cold environments.
Doubling the entire pipeline infrastructure
If Alberta and Saskatchewan are serious about both doubling their respective oil production (both premiers spoke to exactly that at an Enserva event in Calgary on June 16), they will need a LOT of pipe, essentially doubling the ENTIRE existing infrastructure made up by the Enbridge Mainline, South Bow (formerly TC Energy) Keystone, Trans Mountain and Express pipelines.
Take all that capacity, built over the last nearly 70 years, and double it. All of it. That’s the scale we’re talking here.
Alberta produced 4.3 million barrels oil per day in 2023, and Saskatchewan produces around 450,000 barrels per day, generally speaking. That means to be of consequence any pipeline to tidewater needs to be in the one million barrel per day range, with future plans of twinning it and beyond. And that’s just for starters.
A standard 36 inch pipe, such as the defunct Keystone XL project, will get you about 830,000 barrels per day capacity – which is pretty close. Energy East, at 42 inches, was supposed to provide 1.1 million barrels per day.
So let’s say we build a 1.1 million barrel per day pipeline to the coast of Hudson Bay, and we do indeed conjur up the production to fill it. Perhaps the defunct 250,000 bpd Teck Frontier project gets resurrected, for example, and three more projects of that size. Maybe Saskatchewan can develop its own oil sands, as I’ve been advocating, and come up with a 250,000 bpd project in northwest Saskatchewan. Let’s take it as a given we’ve now got 1.1 million barrels per day available to ship to Hudson Bay. To make all this easier, let’s round that down to a million barrels per day.
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Impossible storage
Without those numerous icebreakers running, it would mean we would have to stockpile that oil in tanks on the coast of Hudson Bay until the shipping season opens. Being extremely generous, let’s say it’s half the year – 183 days. The reality is that the shipping season typically starts in July and ends in October. That’s four months, not six. But again, let’s be generous and assume six because, you know, global warming and all that.
That means for the 182 days of winter and spring, you need to stockpile all of your product on the shores of Hudson Bay. That’s 182 million barrels of storage required.
Most interestingly, on the day I write this, Conservative Leader Pierre Poilievre released a video touring around past the Hardisty terminal, the pipelines crossroads for Western Canada. In the video he noted, “Hardisty houses over 38 million barrels in these tanks.”
Oilsands Magazine lists storage capacity at Hardisty of 37,615,000 barrels, so that’s pretty close. Let’s call it 38 million.
If you wanted to store up 182 million barrels on the shores of Hudson Bay, you would need to build the equivalent of 4.8 Hardistys – a facility that has been many decades in the making, for storage.
Put another way, the terminal at Cushing, Oklahoma, delivery point for West Texas Intermediate (WTI) contracts, is capable of storing approximately 90 million barrels. You would need TWO Cushings built at Churchill or Port Nelson to store 182 million barrels during the iced-over months.
See every white dot on this Google Earth image of Cushing, Oklahoma? That’s an oil storage tank the likes of which you would find on Edmonton’s Refinery Row or near the Regina Refinery. You would need to build double that amount at Churchill or Port Nelson to handle storing six months of oil at one million barrels per day. Google Earth
And during the shipping season, you’re shipping one million barrels incoming daily, and another million of stored oil. That’s two million barrels per day, or a full Very Large Crude Carrier (VLCC) supertanker, each and every day, for 183 days.
Again, and I can’t stress this enough, this is based on an ice-free shipping season much longer than the one that currently available at Churchill. Port Nelson would purportedly have a longer season – but would it be 183 days?
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Flooding the market each year
And then there would be the problem of selling that oil, stored up over the winter and summer, onto the world market. There’s one thing I’ve discovered in 17 years of writing about this – the difference between US$100 per barrel oil and US$40 per barrel is roughly two million barrels on a world daily market of around 100 million barrels. If every July 1 we started selling two million barrels per day – one full supertanker – out of Hudson Bay, we would be flooding the market and crashing prices. Instead of getting the much-desired Brent pricing for our oil, which consistently gets more than West Texas Intermediate and certainly more than the much-discounted Western Canadian Select (priced at the aforementioned Hardisty), we’d be crashing world prices every time our Hudson Bay sales hit the market.
And that’s with only a singular one million barrel per day pipeline. To double production in Alberta and Saskatchewan, we’d need multiple pipelines of that scale. If they can’t go to the West Coast, or East Coast, and our only option was Hudson Bay, we’d be compounding our problems of storage and surge sales.
The only way shipping from Hudson Bay works is with not one or two, but a fleet of icebreakers bringing ships in and out of Hudson Bay through the entire ice season. And remember, when breaking ice, you’re not doing a steady 14 or 16 knots, typical speeds for tankers. You’re doing a small fraction of that – closer to three knots. According to Google Earth, the straight line distance from Churchill to the eastern entrance of the Hudson Strait (the northern tip of Labrador) is 927 nautical miles (1718 kilometres). If fully ice-bound and at a 3 knot speed, that would be a 309 hour transit, or 12.9 days – one way. That just gets you to the Labrador Sea.
Here’s a straigh-line path from Churchill to open, ice-free water at the northern tip of Labrador. Google Earth.
As the ice grows in the fall and is reduced in the spring, clearly these numbers would be reduced. And by using convoys, a singular icebreaker can escort several tankers in and out at a time. But there’s no way you can make it through the depths of winter without numerous large-scale icebreakers.
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The Canadian Coast Guard just recently, finally, announced the construction of two polar-class icebreakers, with year-round operations and capable of breaking 2.5 metres of ice at a continuous speed of 3 knots. The cost of the Quebec-based Chantier Davie-built icebreaker will be $3.25 billion and won’t be ready until 2030. The BC-based Seaspan-built icebreaker is pegged at $3.15 billion, and won’t be delivered until 2032.
This is a graphical representation of what Seaspan’s polar-class icebreaker will look like, when completed several years from now. Seaspan.
Note these are being built before any Hudson Bay port becomes reality, meaning they’re being built for purposes other than Hudson Bay shipping. So we would likely need several more of icebreakers price and capability to enable large-scale Hudson Bay shipping.
Maybe I’m wrong – the Western Producer said in an Aug. 13, 2024 article:
“As well, the ice-free period on Hudson Bay is lengthening and the ice that does form is thinning.
“It doesn’t get as thick as it used to, and it’s salt water ice, which is structurally less solid than fresh water ice,” says (Neestanan board member Robyn) Lore, who added that a local once described first year, salt water ice as more like hard slush than structural ice.
“The metre or so of ice you get across the Hudson Bay is not a big deal for a 300 to 400-metre-long world-class freighter or container ship, as long as it’s built for it,” said Lore. “The Russians operate further north in their Arctic than Hudson’s Bay, and they do it quite successfully.”
The proposed Neestanan Utility Corridor would have Port Nelson as its terminus.
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How many ice-capable tankers are there that are not already in Russian service? Could Polar-class icebreakers go faster than 3 knots in Hudson Bay ice in February? Has any of this even been attempted in Hudson Bay?
There’s also talk about liquified natural gas (LNG) exports from Hudson Bay. All the arguments for oil exports similarly apply to LNG.
Conclusion
Building nearly five Hardistys, or two Cushings, to store oil production for half a year is never, ever going to happen. And even if you did, the market disruption of annually flooding the market with an extra two million barrels per day of Canadian oil would crater prices for everyone, most especially us.
No, you would need continual, year-round shipping. There can be no discussion of a pipeline to Hudson Bay without concurrent discussion of icebreakers and ice-capable tankers.
Any Hudson Bay oil export scheme would require a fleet of icebreakers, with production starting right now, before any pipeline could be built and put into service. And you’d probably need someone to pony up to build several dozen ice-capable tankers to haul this oil.
There are many reasons why Churchill has not seen a lot of success as a port, as can be seen here. We would be much better off building several 36 inch pipelines to the West Coast – Kitimat or Prince Rupert, along a largely existing right-of-way thanks to Coastal GasLink – and ship on conventional tankers from ice free ports.
Brian Zinchuk is editor and owner of Pipeline Online. He can be reached at brian.zinchuk@pipelineonline.ca.
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