On the morning of October 11, a handful of climate activists cut the fences of valve stations and proceeded to disrupt more than 80 percent of the crude oil pipeline capacity crossing from Canada into the United States. In quick succession, Enbridge’s 2.66 million bpd Mainline, TransCanada’s 590,000 bpd Keystone pipeline, and Spectra’s 193,000 bpd Express pipeline began showing decreased activity at approximately 9:00 a.m. (EST), according to Genscape. Keystone and Mainline eventually shut entirely. Spectra’s 145,000 bpd Platte pipeline, which shares a tariff with Express, showed decreased activity as the effects of upstream flow being taken offline trickled through the supply chain. Flows on Mainline Keystone and Express would remain down for seven, eight, and five hours respectively. As of October 18 the Platte pipeline remains at low flow volumes for maintenance.
Starting October 24, events like this can be tracked real time with the launch of Genscape’s Canadian Pipeline product, which will provide increased transparency of crude oil movements by pipeline to and from Canada. The featured pipelines entering the United States from Canada represent approximately 87 percent of United States-inbound capacity, and include Enbridge Mainline, Keystone, Express, and Inter Pipeline Fund’s 129,000 bpd Bow River pipeline. Monitored United States outgoing pipes to Canada make up 75 percent of total takeaway pipe capacity, and include Enbridge’s 540,000 bpd Line 5 and 500,000 bpd Line 6B/76, and Kinder Morgan’s 95,000 bpd Cochin.
Prior to its subscriber-based release, the Canadian pipeline data provided Genscape with unparalleled insights into the inner workings of Canadian crude shipments by pipeline. Cumulatively, the data has depicted a particularly volatile season influenced dramatically by the recent climate activist disruptions in October, the Keystone pipeline spill in April, and the Fort McMurray wild fires in May.
On May 1, the most destructive wildfire in Canadian history tore across Fort McMurray, Alberta. The decrease in crude oil production was approximately 600,000 bpd, May versus April with 340,000 bpd of that coming from planned maintenance, according to Genscape’s Canadian Production Forecast. Pipeline imports into PADD 2 and PADD 4 fell from 2.4 to 2.1 million bpd from April to May, a 10 percent decrease, according to Genscape pipeline data. For that same time period, the U.S. Energy Information Administration reported that imports from all sources into PADD 2 and PADD 4 declined six percent (Fig. 1).
Prior to the wildfire outbreak, the Keystone pipeline unexpectedly ruptured on April 2, dumping nearly 400 barrels of oil into Hutchinson County, SD. In an instant, more than 15 percent of Canadian crude oil pipeline capacity into the United States was taken offline. On April 2 at 1:30 a.m. EST, Genscape reported to its customers corresponding decreased flow volumes on the Keystone pipeline, which would remain shut for another eight days (Fig. 2).
The week prior to the spill, the EIA reported imports from Canada of 2.6 million bpd. Imports fell to 2.0 million bpd the week of the spill, a decrease of nearly 24 percent. During the week of the spill, Genscape reported a corresponding 22 percent decrease in imports from Mainline and Keystone (Fig. 3). Prior to any public notice of a restart, Genscape alerted customers to Keystone’s return to service at 3:00 p.m. (EST) April 11. Using data and alerting from Genscape’s Canadian pipeline product, the direction and magnitude of the decline in Canadian imports was successfully captured, and advance notice of pipeline shuts and restarts was provided.
While a number of market participants may have access to daily volumes on Enbridge’s Mainline, Genscape’s Canadian pipeline alerting service renders daily information out-of-date. In September, for example, Mainline flow rates unexpectedly plummeted more than one million bpd on September 14 (Fig. 4), an event which would have triggered a near real-time alert. Real-time alerting provides critical insights into the marketplace when compared with infrequent regulatory data.
Furthermore, Canadian pipeline customers will better anticipate Western Canadian Select (WCS) price movements, given Genscape’s extensive coverage of pipeline capacity into PADD 2 and PADD 4, and the inverse correlation seen between those crude pipeline movements and WCS prices (Fig. 5).
Genscape's soon-to-launch Canadian Pipeline Service provides unprecedented insight into critical crude oil pipeline flows traversing the Canada-United States border. Market participants can use this data to gain insight into U.S. crude imports by pipeline from Canada, as well as crude flows from the U.S. By providing transparency in this area, Genscape has altered the trading landscape, offering market participants an unmatched platform for use in trading and hedging strategies. To learn more about Genscape's Pipeline Service, please click here.