The Company seeks to go beyond the traditional regulated utility business model to create additional value for customers. In addition to incentive tolling models, the Liquids Pipelines strategy focuses proactively on understanding Western Canadian supply and downstream demand fundamentals and then proposing timely new or reconfigured infrastructure solutions to improve customer profitability.
Future Prospects for Liquids
Historically, Western Canada has been a key source of oil supply serving U.S. energy needs. For the past five years, Canada has surpassed both Mexico and Saudi Arabia to become the largest crude oil exporter to the U.S. Canada's oil sands, one of the largest oil reserves in the world, are becoming an increasingly prominent source of supply. Combined conventional and oil sands established reserves of approximately 178 billion barrels compare with Saudi Arabia's proved reserves of approximately 264 billion barrels. The NEB estimates that total Western Canadian Sedimentary Basin (WCSB) production averaged approximately 2.4 million bpd in 2008 and 2007. Development of the Alberta Oil Sands is expected to moderate due to declining demand and commodity prices and it is unlikely that all announced and planned oil sands projects will proceed as planned. The Canadian Association of Petroleum Producers' (CAPP) December 2008 estimates indicate that future production for the Alberta Oil Sands is expected to steadily increase to more than 1.8 million bpd by 2018 based on a subset of currently approved applications and announced expansions. The Company is actively working with customers to ensure that Enbridge mainline system will allow Canadian crude oil greater access to markets in the United States.
Crude oil price volatility in 2008 has caused some crude oil producers to cancel or defer projects that were planned to commence over the next decade. Cancellations and project deferrals are expected to temper the rate of growth over the next several years relative to prior forecasts. If the rate of crude oil production from the WCSB declines, immediate need for new pipeline infrastructure will likely decline. In addition to Enbridge's expansions, a significant competitor is expected to complete construction of a pipeline system to Wood River, Illinois. This competing pipeline, together with the Southern Access and Alberta Clipper expansions, may provide sufficient capacity for the near term. In this case, expansion activities will be more modest than experienced over the last several years. Although a number of oil sands projects have announced delays, the supply from the oil sands is forecasted to grow at a steady pace.
Enbridge System Deliveries
Deliveries on the Enbridge System includes Canadian mainline deliveries in Western Canada and to the Lakehead System at the U.S. border and Line 9 in Eastern Canada.