Government legislation licenses bad corporate behaviour

By Sean Corbett

We were led to expect a full supply meltdown because of COVID-19. Thankfully, aside from the rare pinch on toilet paper and meat, that didn’t come to pass.

And it’s not just down to the miracle of modern logistics. It’s simply amazing how fast businesses and people can pivot and reallocate resources as required.

What’s not so surprising is that the state nearly always acts as if it must exert pressure on private actors to “do the right thing.”

But just how necessary is it?

Well, regardless of how you feel about hoarding, there was mass outrage over pictures and videos of shoppers buying “more meat/TP than they needed.” In my hometown, this quickly led to stores putting a limit on certain purchases.

No regulations required. No new laws or penalties.

We can wonder, then, what the response will be to a potential lack of oil storage in Canada.

Oil storage levels in danger of reaching capacity

A crash in crude and slumping fuel demand is ravaging oil production.

Now the fear is that global storage levels are reaching capacity.

Demand for incremental crude petroleum storage is high. Particularly in Western Canada. We still need operational flexibility, even if the incentives for production are being tested.

In an effort to maximize existing resources, Enbridge did look to a legacy section of Line 3 pipeline.

Enbridge prepared to provide temporary crude storage

A portion of the Canadian Mainline, between Regina and Cromer, is set for decommissioning in 2021.

This section of pipe has already been tested to meet safety protocols to be used as storage.

They also ran an inline inspection tool and conducted integrity digs.

It could allow the storage of 900,000 barrels (roughly four standard-sized tanks) for an eight-month term. This temporary solution, along with other efforts in the Enbridge storage tank program, has the potential to create about three million barrels of additional capacity for the rest of the year.

Enbridge is positioned to respond to the oil storage need. There are continual moving parts and, at print, Enbridge is not proceeding with using the Line 3 pipeline for storage. Just another example of the nimble market response when a business is left to its own devices.

Sean Corbett is an Okanagan writer and filmmaker who runs a marketing consulting company. He also operates the high culture publication Action-Result.com

Published in PIPELINE OBSERVER Summer 2020