Now New York is turning hostile to Canada’s oilsands, with bid to block bitumen from ‘Houston on the Hudson’
Monday, Jun. 1, 2015
Oil tankers line up at the Port of Albany Associated Press files
The state of New York has become the latest U.S. jurisdiction to block oilsands transportation, after plans to turn the Port of Albany into a bitumen hub were thwarted by the state’s environmental agency.
U.S. petroleum marketer Global Partners LP had applied for a state permit to install seven boilers to heat oilsands at its Albany terminal, but the state’s Department of Environmental Conservation (DEC) rescinded an earlier approval, demanding a full environmental review and initially gave the company a 10-day deadline to respond, which ended Monday. The DEC has now extended the deadline to the end of June, Global Partners executive vice-president Edward Faneuil, said in an emailed statement, through a public relations company.
“The permit modification application has not been denied, but the DEC has requested additional information in connection with the submission,” Faneuil said in the statement. “The notice of intent does not affect Global’s day-to-day operations or activities at the Albany facility.”
The oil and gas industry does not view the state of New York as being open for business as advertised
New York State under Governor Andrew Cuomo has an increasingly “hostile political climate coming out of Albany mostly from the Democratic-controlled assembly” towards the oil and gas sector, says Brad Gill, executive director at Independent Oil & Gas Association of New York.
“The oil and gas industry does not view the state of New York as being open for business as advertised,” Gill said, noting the state has lost an estimated $1-billion worth of potential oil and gas investments due to its policy.
Last year, Albany County placed a moratorium on expansion of crude oil processing, identifying oilsands refining as a “concern” in the state capital. The state has also enforced a ban on hydraulic fracturing.
Global Partners’ Albany rail terminal can handle around 160,000 barrels per day, in partnership with Canadian Pacific Railway Ltd. according to a company investor presentation. The massive terminal has the capacity to store 1.4 million barrels of oil.
The Waltham, Mass.-based company sources crude from Edmonton for its terminals in Clatskansie, Ore. and the port of Albany and is also building a million barrel storage facility in the Gulf Coast that will initially handle heavy crude from Canada, according to the presentation.
The proposed oilsands heating facility in New York — necessary as bitumen is too thick to be easily unloaded from rail cars and must be heated — is seen as a key piece of Global’s
plan to source more oilsands.
25% of North Dakota oil goes through sleepy, little Albany, so we say Albany has become ‘Houston on the Hudson,
“This effort appears to be aimed at giving industry the option to transport more tar sands oil along the western side of the Lake [Champlain] and into Albany,” according to a report published last week by The National Wildlife Federation along with other environmental groups.
The New York DEC’s move to demand a full environmental review is a “roadblock” for Global, says Tricia Curtis, director at Washington-based Energy Policy Research Foundation Inc. (EPRF).
“It’s not a positive sign because [Albany] is developing as a hub, and it’s a natural fit for Canadian oil — it’s a natural market for the NBF Energy coker facility at its refinery [in Parsippany, NJ.] and they want to take more and more Canadian crude.“
Last year, Houston-based Buckeye Partners Ltd. had also indicated it was in talks with companies to export Canadian crude possibly to international markets from its terminal at Perth Amboy, N.J.
The East Coast accounts for around half of U.S. crude-by-rail shipments, and Canada makes up for 20 per cent of the roughly 500,000 barrels per day shipped via rail to the East Coast, according to EPRF estimates. Ten new rail terminals have cropped up in recent years on the East Coast, as Canadian pipeline projects such as TransCanada Corp.’s Keystone XL and expansion of Enbridge Inc.’s Alberta Clipper have stalled.
As much as a quarter of Bakken shale oil production from North Dakota passes through the state capital via rail from where it floats on barges to the shores of Hudson River to New Jersey, Pennsylvania and East Coast refineries, including New Brunswick.
“Twenty five per cent of North Dakota oil goes through sleepy, little Albany, so we say Albany has become ‘Houston on the Hudson,’ — it’s no exaggeration,” Peter Iwanowicz, executive director at Environmental Advocates of New York, said in an interview.
“We are a major shipping point for crude oil, whether we like it or not, and there has been no exhaustive environmental public health and safety review.”
Last year, the city of South Portland in Maine voted to reject crude exports, pre-empting a move by Portland-Montreal Pipe Line to reverse its pipeline connecting the two cities. On June 6, environmental groups are planning what they claim to be the “largest anti-tar sands event ever to take place in the Midwest” in St. Paul, Minn. to “discuss the serious threat posed to the Great Lakes region by dirty tar sands projects like the Alberta Clipper pipeline expansion, and the growing region-wide movement to stop them,” according to a statement from environmental group Sierra Club.