This is an excerpt from EERE Network News, a weekly electronic newsletter.

September 02, 2009

United States Makes Moves to Increase its Use of Canadian Tar Sands

The U.S. import of heavy oil derived from Canadian tar sands gained momentum recently with the approval of a pipeline to deliver the oil to the United States and the approval of a refinery designed to handle the heavy oil. The U.S. State Department announced on August 20 that it has approved a Presidential Permit to Enbridge Inc. for the 1,000-mile Alberta Clipper pipeline, which will carry crude oil from Hardisty, Alberta, to Superior, Wisconsin. The Alberta Clipper will connect to an existing pipeline running from Fort McMurray to Hardisty, allowing the delivery of heavy oil extracted from Canadian tar sands, also known as oil sands. Heavy oil is extracted from the tar sands using an energy-intensive process, creating concerns about the potential greenhouse gas emissions and other environmental impacts from the mining and extraction process. See the Pembina Institute's Oil Sands Watch Web site for more information about this resource. DOE's Energy Information Administration has also summarized oil sands in its Country Analysis Brief for Canada.

The pipeline will initially carry 450,000 barrels of crude oil per day, but will eventually be capable of carrying 800,000 barrels per day. According to Enbridge, Western Canadian tar sands developments are expected to grow by as much as 1.8 million barrels per day by 2015. In approving the pipeline, the State Department cited the need for diverse, nearby crude oil supplies from a stable and reliable ally and noted that the project would create construction jobs. The State Department also asserted that greenhouse gas emissions are best addressed through each country's robust domestic policies and a strong international agreement. On August 27, Enbridge started construction on the Canadian portion of the pipeline. The Alberta Clipper pipeline is expected to be in service by mid-2010. See the State Department press release and the Enbridge press release and Web page about the project.

Meanwhile, a state board in South Dakota approved a preconstruction air quality permit in late August for a proposed refinery that will refine heavy oil from Canadian tar sands. The proposed Hyperion Energy Center in southeast South Dakota will include a refinery with a capacity to handle 400,000 barrels per day of heavy crude oil, and it will also include an integrated gasification combined cycle power plant. The power plant will gasify petroleum coke from the refinery, producing a synthetic gas, or syngas. Hydrogen will be stripped from the syngas and used in the refinery, and the syngas will then be burned in a gas turbine to convert that gas into electricity. Hyperion Refining, LLC plans to begin construction on the refinery in 2011 and to start it up in 2015. See the press release from the South Dakota Board of Minerals and Environment, as well as the Hyperion press release and project description.