Canadian Oil Choke Point

Barack Hussein Obama.

Crude-on-crude competition for export pipeline space is moving up predictions for a pinch point faced by oilsands producers that some observers warn will have to postpone or scrap future expansions, unless new pipe is laid.

Fast-growing supplies of conventional crude from North Dakota and western Canadian provinces are fighting for room in pipelines with rising bitumen output, the Canadian Energy Research Institute said in a report Monday, forecasting that by 2015 oilsands growth could grind to a halt should no additional lines be built...

...With the recent U.S. denial of the proposed Alberta-to-Texas Keystone XL line and extended regulatory hearings faced by the Northern Gate-way project envisioned to the West Coast, new capacity is not certain, she said.

The warning comes as Canadian oil producers already grapple with per-barrel price discounts relative to the U.S. benchmark that have hit $38 for the heavy oil benchmark and $26 for light in the last couple months, differentials blamed on growing production confronting pipeline pressure restrictions, as well as a glut in supply and refinery downtime south of the border.