This article was published by the Canada Energy Regulator on May 11, 2022.
Canada’s natural gas and crude oil production is concentrated in the Western Canadian Sedimentary Basin (WCSB). Pipelines carry oil and gas out of the WCSB for delivery to Canadian and United States (U.S.) destinations. For the last several years, the major pipelines exiting the WCSB have generally remained very highly utilized. The pipelines remained highly utilized in the fourth quarter (Q4) of 2021 (October to December) despite several impacts to pipeline capacity, discussed below.
The CER is responsible for regulating multiple pipelines. Since 2016, major companies are required to report, on a quarterly basis, how much capacity their pipelines were expected to have for oil, natural gas, or refined petroleum products to flow through.Footnote1 This is called available capacity. They also report how much product actually flows through their pipelines. This is called pipeline throughput.Footnote2
All pipelines have a physical limit to the amount of product that they can carry.Footnote3 This is known as the pipeline’s nameplate capacity. Available capacity, on the other hand, is how much can actually flow through a pipeline at any given time. The available capacity of a pipeline usually differs from its nameplate capacity, and may vary on a monthly basis. This difference may be due to the type of product being transported, unplanned outages, maintenance, downstream constraints, pressure restrictions, and outside temperature, among other factors. The capacity numbers reported in this snapshot are for available capacity that the operator was expecting at the beginning of the reporting period.Footnote4
In addition to these operational complexities, frequent pipeline maintenance means it is generally not possible for a pipeline to operate at 100 per cent of its nameplate capacity all the time. Some pipeline systems, such as the Enbridge Mainline, are more difficult to operate at full nameplate capacity due to their size and the complexities of managing flows of multiple products across multiple lines.Footnote5 At times, it is not possible to operate at 100 per cent of previously planned available capacity either, due to these same operational complexities and pipeline maintenance. As a result, utilization rates (comparison of throughputs relative to available or nameplate capacity) should not necessarily be used to draw a conclusion regarding potential spare capacity.
Oil pipelines: trends from Trans Mountain, Enbridge Mainline, and Keystone
Canada has four major oil export pipelines to the U.S.: the Trans Mountain Pipeline, Enbridge Mainline, Keystone Pipeline, and Express Pipeline.Footnote6 The first three pipeline systems report, on a quarterly basis, their monthly available capacity and throughput data. Data is not currently available for the Express Pipeline (310 000 barrels per day nameplate capacity).Footnote7 In Q4, the three systems that report throughput and capacity data to the CER operated at almost full capacity.
Throughputs on the Trans Mountain Pipeline decreased in Q4 due to the pipeline’s precautionary shut down in November 2021 following extreme weather events and flooding. The pipeline was shut down for 21 days, the longest period in the pipeline’s history. It was restarted in December at a reduced capacity and did not return to normal operations until January 2022.Footnote8 Nevertheless, the utilization rateFootnote9 over Q4 was at 100 per cent. Throughputs averaged 151 thousand barrels per day in November, before increasing to 214 thousand barrels per day in December. For comparison, October throughputs averaged 308 thousand barrels per day before the shutdown of November 2021.
Capacity on the Enbridge Mainline at the ex-GretnaFootnote10 key point increased from Q3 to Q4 by approximately 12 per cent to average 3.17 million barrels per day. This increase was the result of the Enbridge Line 3 Replacement ProjectFootnote11 coming fully into service in October 2021. Enbridge Mainline throughputs also increased, from an average of 2.67 million barrels per day in Q3 to 3.01 million barrels per day in Q4, as shippers utilized the new capacity.
December 2021 capacity averaged 3.27 million barrels per day and throughput averaged 3.14 million barrels per day, for a December monthly utilization rate of 96 per cent.
Keystone Pipeline throughputs in Q4 averaged 613 thousand barrels per day, an increase of almost 3 per cent over Q3. Capacity in Q4 also averaged 613 thousand barrels per day.
December 2021 capacity on the Keystone pipeline averaged 627 thousand barrels per day and the pipeline had a utilization rate of 100 per cent.
Figure 1: Quarterly Throughput and Capacity on Major CER-regulated Oil Pipelines out of Western Canada
Natural gas pipelines: trends from NGTL West Gate, NGTL East Gate, Alliance, and Westcoast
Canada has multiple pipelines that export natural gas. Supply from western Canada is transported to markets primarily on three pipelines: the NOVA Gas Transmission Ltd. (NGTL) System, the Alliance Pipeline, and the Westcoast Pipeline (also referred to as the Enbridge BC pipeline). These three pipeline systems either export directly to the U.S. or interconnect with other pipelines that supply natural gas to domestic and export customers (including the TC Canadian Mainline and the Foothills Pipeline). All production must pass through four key points before being exported – East Gate and West Gate on the NGTL system, and the Canada/U.S. border points on the Alliance (Elmore) and Westcoast (Huntington) pipelines. In Q4, these four key points operated at almost full capacity.
In general, natural gas pipeline capacity and utilization increases in the winter. Capacity increases because the colder weather allows more gas to run through existing pipelines. Colder weather also increases demand for space heating.
Natural gas pipelines report, on a quarterly basis, their daily throughput and capacity data at key points to the CER.
NGTL West Gate
At the NGTL System’s West Gate key point, Q4 2021 capacity remained steady at approximately 2.97 billion cubic feet per day, while throughput increased by almost 12 per cent to average 2.67 billion cubic feet per day due to seasonal winter demand. December 2021 capacity averaged 2.97 billion cubic feet per day and throughput averaged 2.86 billion cubic feet per day, for a monthly utilization average of 96 per cent.
At West Gate, the NGTL system interconnects with the Foothills Pipeline. Gas travels through the Foothills system to supply communities in south-eastern British Columbia, and for export into the western U.S., serving markets in the Pacific northwest and California.
NGTL East Gate
At the NGTL System’s East Gate key point, Q4 2021 capacity decreased 7 per cent to approximately 4.59 billion cubic feet per day, while throughput increased by almost 4 per cent to average 4.30 billion cubic feet per day. December 2021 capacity averaged 4.42 billion cubic feet per day and throughput averaged 4.30 billion cubic feet per day, for a monthly utilization average of 97 per cent. Capacity at East Gate is forecasted to increase in 2022, as new pipeline facilities approved by the CER are commissioned and placed into service.Footnote12
At East Gate, the NGTL system connects with two pipelines – the TC Canadian Mainline (near Empress, Alberta) and the Foothills Pipeline (near McNeill, Alberta), which supply natural gas to markets in central and eastern Canada, as well as markets in the U.S. northeast and mid-west.
Capacity at the Alliance Pipeline border key point near Elmore, Saskatchewan, averaged 1.63 billion cubic feet per day in Q4, an increase of 4 per cent from Q3. Throughput also increased by approximately 4 per cent in Q4 to an average of 1.55 billion cubic feet per day.
In December 2021, capacity averaged 1.61 billion cubic feet per day and throughput averaged 1.56 billion cubic feet per day, for a monthly utilization average of 97 per cent.
Capacity at the Huntingdon/Fortis BC Lower Mainland key point on the Westcoast Pipeline increased by 11 per cent in Q4 to average 1.71 billion cubic feet per day. Winter capacity at the Huntingdon/Fortis BC Lower Mainline key point increased by 0.1 billion cubic feet in November of Q4, following the commissioning of new CER approved facilities.Footnote13 Throughput in Q4 averaged 1.49 billion cubic feet per day, an increase of 25 per cent over Q3 due to increased seasonal winter demand.
December 2021 capacity averaged 1.8 billion cubic feet per day and throughput averaged 1.63 billion cubic feet per day, for a monthly utilization rate of 91 per cent.
Figure 2: Quarterly throughput and capacity at key points on major CER-regulated natural gas pipelines
- Pipeline companies regulated by the CER are divided into two groups for financial regulatory purposes. Group 1 consists of those pipeline companies with extensive systems and several third-party shippers. Through the CER’s Filing Manual Guide BB.2 Traffic Data filing requirements, they are required to report capacity and throughput data. Group 2 consists of the remaining pipeline companies that operate smaller, less complex pipelines with few or no third-party shippers. These companies are not subject to the same reporting requirements as Group 1 companies.
- The CER combines the throughput and capacity data and uploads it quarterly to Canada’s Open Government website as the Pipeline Throughput and Capacity dataset. It is also used to update the dashboards in the Pipeline Profiles.
- See description of pipeline capacity in the CER’s Canada’s Pipeline System 2021: Economics of CER-Regulated Infrastructure.
- As an exception, in Q4 of 2021, Trans Mountain reported monthly capacity figures that adjusted for the impacts of the extreme weather events in British Columbia, rather than the available capacity number expected at the beginning of the month.
- CER, Optimizing Oil Pipeline and Rail Capacity out of Western Canada – Advice to the Minister of Natural Resources
- The Trans Mountain Pipeline and the Enbridge Mainline also serve Canadian destinations. Therefore, not all capacity on these two pipeline systems transport products to international markets.
- Express Pipeline is regulated as a Group 2 company, and therefore exempt from reporting monthly capacity and throughput.
- Trans Mountain Pipeline was shut down from 16 November to 5 December 2021. See the Trans Mountain news release.
- Utilization rate is calculated as throughput divided by available capacity.
- The ex-Gretna key point is located near Gretna, Manitoba, at the Canada/U.S. border between Manitoba and North Dakota. At the Canada/U.S. border, the Enbridge Canadian Mainline interconnects with the Enbridge Lakehead system. Together, the two systems form the Enbridge Mainline. The CER regulates the Canadian portion of the Enbridge Mainline.
- See Enbridge’s Line 3 Replacement Project. CER regulatory documents for the Canadian portion of the project are available [Folder 2545522].
- For additional information, see the 2021 NGTL System Expansion Project Update on the NGTL Bulletin Board.
- For additional information, see regulatory filings for the T-South Expansion and Reliability Project [Folder 3596844].