TD, CIBC reports warn Canadian oilpatch running out of pipeline capacity

CALGARY – Reports from two major banks warn that more pipeline capacity is badly needed to bring Canadian oil to market.

TD says Canada’s oil industry is facing a serious challenge to its long-term growth and that pipeline expansions should be a national priority.

The report highlights four options to expand the market reach of Canadian crude: Asia via the West Coast, the U.S. Gulf Coast, Quebec and Atlantic Canada.

Of those TD says the West Coast is the most economically feasible because of its short shipping distance and access to lucrative Pacific Rim markets.

However CIBC analyst Andrew Potter says projects to access that market — such as Enbridge Inc.’s (TSX:ENB) Northern Gateway project and Kinder Morgan’s Trans Mountain expansion — have a 50-50 chance of going ahead by the end of the decade.

Potter says Canada needs a lot more pipe if it wants to avoid stranding over one million barrels a day of potential crude growth.