Â鶹´«Ã½

This article was originally published on , which features includes relevant and informed articles, written by researchers and academics in their areas of expertise and edited by experienced journalists.

is a Founding Fellow in the MacEachen Institute for Public Policy and Governance and a professor in the Department of Electrical and Computer Engineering at Â鶹´«Ã½.

In mid-August, Khalid al-Falih, Saudi Arabia’s energy minister, announced that the diplomatic rift with Canada wouldn’t affect the flow of Saudi crude oil to the Irving refinery in , N.B.

There are at least two reasons why this decision should not have come as a surprise:

Firstly, in 2017, Saudi crude exports to the Irving refinery netted Saudi Arabia about . This was a small but undoubtedly useful contribution towards their support of .

Secondly, . Cutting supplies to the refinery would have caused shortages of gasoline and other fuels in the U.S. and resulted in unnecessary friction between Saudi Arabia and the U.S.

Although Saudi exports of crude oil to the Saint John refinery are small () compared with their exports to other countries, they’re significant for the Maritimes. For example, in 2017, Saudi Arabia exported and about . Yet the contribution to the Saint John refinery amounts to almost 40 per cent of the refinery’s supply.

The region needs to think more seriously about its reliance on Saudi crude oil and consider replacing these supplies with those from trusted sources.

Maritime oil demand

On the downstream side, approximately one-third of the refinery’s output meets most of the . While unlikely, if Saudi Arabia ever did cut off its oil exports to Canada, the impact would be felt across the Maritime provinces.

In the immediate aftermath of such an event, demand would have to be met from existing stocks of crude oil at the refinery and with refined product stored within the Maritimes. .

To relieve these shortages, crude oil or refined product — or both — would need to be purchased on the spot market, probably resulting in higher prices for petroleum products for consumers.

Pipeline to the east

Prior to the Saudis’ announcement, . Once built, Western Canadian crude could then reach the Saint John refinery to help meet the oil demand in the Maritimes and other countries.

This argument overlooks the fact that it will take years to get the necessary federal and provincial approval before construction of the pipeline could begin. At present, there are very few ways in which Canadian crude oil could improve energy security in the Maritime provinces.

Read more:

One could be Enbridge’s Line 9B pipeline, which sends 300,000 barrels per day from western Canada via Westover, Ont. to Montréal. Â鶹´«Ã½ one-third of Line 9B’s daily capacity, shipped by tanker from Montréal to Saint John, would be sufficient to replace Saudi supply.

Despite this, Line 9B’s entire supply is destined for that operate year-round.

Other Canadian sources

With Line 9B’s supply spoken for, the Maritime provinces are limited to two other possible sources of Canadian crude: Western Canada (by rail) and offshore Newfoundland and Labrador (by ship).
. Since the railway yard already handles crude from across North America, .

of is exported to the U.S. and elsewhere. However, contractual obligations mean that very little of this oil is available to the Maritimes.

Read more:

Events of the past few weeks have shown that the Saudis can act unpredictably. Had maintaining a supply of crude oil to Canada not been in the Saudis’ interest, the situation in the Maritime provinces would be quite different today.

The reliance on Saudi crude oil continues to threaten energy security in the Maritimes. The region needs to improve its energy security by replacing Saudi crude oil with supplies from Canadian and other trusted sources.

Read the on The Conversation.

Â鶹´«Ã½ is a founding partner of The Conversation Canada, a new-to-Canada online media outlet providing independent, high-quality explanatory journalism. Originally established in Australia in 2011, it has had more than 85 commissioning editors and 30,000-plus academics register as contributors. A full list of articles written by Â鶹´«Ã½ academics can be found on .