BP Proposes Pipeline Reversal for Canadian Light Crude Oil

By Brian Luskey Medill News Service

Reminiscent of the late 19th century reversal of the Chicago River, a less momentous but more lucrative reversal may be in the future for BP PLC.

The UK-based oil industry giant’s North American subsidiary BP Pipelines Inc. has launched a so-called “open season” process to gauge the interest of its shipping customers in reversing the flow of the BP No. 1 Pipeline, which currently terminates in Whiting, Ind.

This would boost the flow of Canadian light crude oil from the Chicago area to Cushing, Okla., which dubs itself the “Pipeline Crossroads of the World.”

“”The open season demonstrates the changing nature of North American crude oil movement,” said BP spokesman Scott Dean. “Midwest refineries are taking larger volumes of Canadian crude oil, which has caused a need to transport the oil south.”

Six months ago, BP announced plans to invest $3 billion in Canadian heavy crude oil processing at its Whiting Refinery. With the open season launch, BP is establishing its refineries and pipelines as a potential crude oil gateway in the Midwest

If customer interest proves high enough, BP would begin switching the pumps along the 600-mile crude oil pipeline, a process that could take up to two years.

“You can reverse the direction of the pumps, but it doesn’t happen overnight,” said oil industry expert Jack Edwards.

According to the Energy Information Administration, crude oil imports from Canada to the Midwest have increased by approximately 420,000 barrels per day since 2001.

“The nice thing about Canada is that they are a stable country and our neighbor,” Edwards said.

“American companies know they can rely on Canadian crude. It gives us a stable supply.”

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