http://www.cbc.ca/asithappens/episode/2012/09/04/the-tuesday-edition-45/

Why the creation of the Gateway pipeline from Alberta to Kitimat BC will raise the price of crude oil for Canadian refineries?

Indeed, there is controversy that the creation of the Gateway pipeline from Alberta to Kitimat BC will have a negative impact on Canadian refineries, consequently on consumers, and businesses.

Due to Gateway pipeline’s access to new markets, called Asian premium, oil companies will move to seize new export that pay a higher price for crude. Therefore, the price for crude oil will be expensive at least higher than a current price. As a result, the domestic refinery will face competition with global customers for oil by paying a higher price for crude oil. The result will be crucial for local refineries because the production cost will increase significantly leading to unemployment in this sector.

It seems that the process has already begun. The impact on Chevron Canada refinery has been significant in recent years. According to an article “Flood of Pacific oil exports leaves West Coast refinery thirsty for crude” by Nathan Vanderklippe, “In November of 2010, the refinery received 51,609 barrels from the pipeline. In the first four months of 2012, it averaged 33,744. During that period, the pipeline was roughly 70 per cent oversubscribed, as huge volumes of oil sought to find their way to Pacific markets.” (http://www.theglobeandmail.com/report-on-business/pacific-oil-exports-not-waiting-for-new-pipelines-considering-foreign-crude/article4525395/) In other words, the Chevron has been struggling to obtain sufficient domestic oil to fill its refinery. The Gateway pipeline is going to be a significant issue for local refineries. If supply of crude oil continues to be insufficient, pushing price up, this situation is not maintainable because it definitely threatens the domestic refineries.