The high cost of pipeline obstructionism in Canada
In recent months, Canadian crude oil prices have dropped relative to other international benchmark prices, costing the economy billions in foregone revenues. The recent increase in the Western Canada Select (WCS) price discount compared to West Texas Intermediate (WTI) is largely due to Canada’s insufficient pipeline capacity.
The result is increased crude shipped by rail and higher transportation costs.
Between 2009 and 2012, the average price differential was $13 a barrel. However, in February 2018, the differential reached $34 a barrel, which is a striking increase of two-and-a-half times.
This increase in the price differential reflects Canada’s lack of transport capacity and restricted market access.