The Spearhead Pipeline will carry 125,000brl/d of oil extracted from Canada’s western tar sand reserves to refineries in Oklahoma, Kansas, and Texas. Spearhead will be operated by a subsidiary of Canadian-based Enbridge, who recently bought the idle pipeline, which had transported crude from Cushing, Okla., to Chicago, and the $160-million project is expected to be in operation by January, 2006.
In its order approving the pipeline’s shipping rates, FERC said the project would benefit the public by offsetting lower US oil production and ensuring refineries have a steady supply of crude. About 95% of Canada’s estimated 179 billion barrels of proven oil reserves are oil sands deposits in Alberta. Bitumen (oil from oil sands) must be cut with lighter hydrocarbons to flow through pipelines.